|Carlos Silva, Morales Besa & Abogados, Santiago|
A new law on corporate governance entered into effect on January 1 2010 that modifies the securities and stock corporation laws in Chile.
In general, the law imposes a new set of obligations for stock companies, particularly those publicly traded, in order to increase transparency and the flow of information to the market and avoid conflict of interests. The board has new supervision and reporting obligations and duties and must adopt internal rules in several aspects. For example the board must adopt regulations in connection with transactions carried out by the company's directors and executives related to the company's securities, high-equity publicly-traded stock companies must appoint an independent director and new regulations applicable to transactions with related persons and auditing companies must be complied with. Specific amendments to securities and stock corporation laws clarify several legal dispositions and introduce useful flexibility, mostly applicable to closely-held stock companies.
Reporting obligations to the market and the regulator, transactions with related persons and auditing rules applicable to publicly-traded stock companies are clearly more stringent now than for closely-held stock companies.