Chile: Competition court recommends Stock Exchange integration

Chile’s Commercial Exchange has approved for a partial de-mutualization of assets. Touted as a pro-competition measure, the stock-echange regulator has also limited operators to a maximum 25% ownership of the total, hoping to strengthen competition and efficiency in the country’s financial capitals market.

The measures, however, were criticized by the country’s competition authority, the TDLC. The specialized competition court launched a Normative Recommendations filing one year ago in order to suggest improvements to the country’s stock exchanges in order to promote competition. The court rebuked the Commercial Exchange’s move by recommending that different stock exchanges be forcibly interconnected through binding, automatic mechanisms. The recommendation represents a setback for the Santiago Stock exchange, the country’s largest.

After the TDLC’s resolution, the Santiago Stock Exchange indicated that “ the tribunal’s proposed modifications to the rules will not be beneficial to the Chilean capital exchange market”. The organization elaborated, considering “the Executive’s recommendation to propose a legal change promoting obligatory interconnections between the exchanges will not be an incentive to greater competition, but rather promote greater concentration, as it goes against the current model for stock exchanges around the world.”

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