On March 11th, the Financial Market Commission (“CMF” for its initials in Spanish) issued General Rule No. 533 (NCG 533), which complements and clarifies the Corporations Law regarding independent directors and establishes new obligations for parent companies of regulated entities. It responds to the changes introduced by Law No. 21.314, aimed at strengthening corporate governance and ensuring greater transparency in the appointment of directors.
Key Aspects of NCG 533
1. Requirements to be considered an Independent Director
Article 50 BIS of the Corporations Law requires publicly traded companies with high market capitalization and shareholder dispersion to appoint at least one independent director and a board committee.
The law sets out specific circumstances under which a director is not considered independent, including individuals who, at any time during the last 18 months, have had a significant professional, economic, or credit relationship with the company.
Through NCG 533, the CMF clarifies the conditions under which such a relationship is deemed to exist, establishing the following criteria:
- Having entered into contracts or maintained credits (either directly or through entities) with the company or its corporate group for amounts equal to or greater than 25% of their average gross annual income, calculated over the last three tax years.
- Holding 10% or more of the capital in another entity (or assets of a corporation) in which the company or companies within its corporate group also hold 10% or more.
- Being a founder or director of foundations or corporations that receive significant contributions from the company, defined as 5% or more of the total annual income of the foundation or corporation, based on the average of the last three calendar years.
- Having been a director or senior executive of a company that was merged into the current entity.
2. General policy for electing directors in subsidiaries
Another key aspect of the regulation is the new obligation for the boards of directors of parent companies of regulated entities to establish and disclose a general policy for the election of directors in their subsidiaries.
This policy must include, at a minimum:
- Professional suitability criteria for director candidates.
- The type of desired (or undesired) relationship between the candidate director and the parent company and other group entities.
- Procedures for appointing and electing directors in subsidiaries.
- Mechanisms for publicly disclosing the policy.
This measure seeks to enhance transparency and best practices in corporate governance within business groups, preventing conflicts of interest and promoting more responsible management across all group entities.
This provision is particularly relevant as it also applies to parent companies of subsidiaries regulated by the CMF, regardless of whether the parent company itself is regulated.
Impact on regulated companies and their parent companies
Publicly traded companies with independent directors must carefully review their board composition to ensure that independent directors meet the new requirements before their appointment.
To facilitate a smooth transition, the regulation provides an adaptation period, stating that the provisions regarding independent directors will apply to elections held from November 11th, 2026, onward.
However, the most significant impact will be on parent companies with regulated subsidiaries, many of which are not themselves regulated. These entities must implement and publish the new director election policy for subsidiaries by no later than December 11th, 2025.
For more information on how this regulation impacts your company or for assistance with its implementation, please contact our Firm.