SVS Establishes New Institutional Investors

On July 27, 2016, the Securities and Insurance Superintendence ("SVS") issued the general rule 410 ("NCG 410"), which supplements the list of entities that qualify as "institutional investors" according to article 4(e) of the Securities Market Law N°18,045 ("LMV"). The published version of the rule was preceded by three different drafts proposed by the SVS and submitted for comment to the market (in November of 2015 and in January and February of 2016), undergoing several changes in comparison to its first draft.

The relevance of the concept of "institutional investor" is principally related to rules applicable to funds and portfolio management (Law 20.712, also referred to as "LUF"). In the event that one of the shareholders of an investment fund is an institutional investor, the LUF grants certain flexibility in relation to the requirements of organization and structure of such fund, for both publicly traded investment funds and private investment funds. For