Chile's Superintendencia de Pensiones has launched a public consultation on a regulation raising requirements for AFP directors and investment executives. The measure, sparking industry debate, demands at least 10 years of experience managing assets over US$1,000 million. Existing administrators have until April 2027 to comply.
Chile's Superintendencia de Pensiones released a regulation this week for public consultation to implement pension reform elements, targeting new AFP creation and stricter rules for existing ones. The initiative aims to bolster sector governance but has raised concerns among executives and potential investors.
The text states that AFP boards must have at least five members, two independent. The majority of directors, including principals and alternates, must demonstrate 10 years of accumulated experience in asset management at entities supervised by the Comisión para el Mercado Financiero (CMF), the Superintendencia itself, or foreign equivalents that are IOSCO members. These entities must have managed at least US$1,000 million in third-party assets at the end of the director's last working year.
Industry executives note that these demands could limit professional diversity, narrowing candidate pools with varied expertise. Some analysts argue the rule goes beyond the law, though the regulator specifies a transitional period until April 2027 for current AFPs.
Further, standards rise for investment teams: principal professionals and the investment risk manager need seven years of experience in similar asset management, with 10 years for the investment manager. The public consultation ends on December 16, accepting comments until then.