The Banking, Insurance & Private Pension Fund Managers’ Authority passed  Resolution 3274-2017 on 21st August 2017, approving regulations to manage conduct within the financial market system and making changes to the accounting manual used by companies in the financial system, as well as the regulations applying to credit and debit cards.

The Regulations to Manage Conduct within the Financial Market System make it mandatory for companies offering financial products and services to have due regard for consumer rights, and for approved market conduct policies and procedures. This is discussed by the Head of the Authority, Socorro Heysen Zegarra, in our interview with her published in this issue of Progreso.

The regulations cover the marketing mechanisms that companies must use in order to prevent consumers being misled about their financial products and services, as well as the type of information they must supply in order for the consumer to have a full understanding of the product, its advantages, risks and conditions that apply, so that they can take informed purchasing decisions. Specifically, the regulations require companies to have:

• Policies that embed ethical market conduct into companies’ organisation, culture and corporate governance structures.
• Generic procedures for designing, validating, selling and monitoring products and services that are consistent with market conduct principles.
• Manual to manage market conduct, containing the targets, mechanisms and procedures to be used to meet the targets and responsibilities in the areas involved in implementing user procedures, the job description of the market conduct officer, as well as the channels of communication and coordination between them.
• Corporate codes of good practice in dealing with users that include market conduct principles.
• Annual training programme for front-line staff.

The Regulations provide for the creation of a conduct officer, to be appointed by the Board of Directors, who should be trained in matters concerning consumer protection and market conduct, and also understands their company’s products and services, someone who has experience in control, monitoring and process management.

This position’s responsibilities are to include: (i) proposing company strategies and measures for managing appropriate market conduct; ii) assessing and verifying that policies and procedures are applied to guarantee appropriate market conduct in the company, and that these are reflected in how the entire organisation behaves; iii) participating in validating the design of the sales strategy; iv) verifying the after-sales procedures of products and services provided.

In order to improve the quality of information given to users, the regulations make it mandatory for credit card issuers to publish information comparing them, their features and tariffs, so that consumers access the cards that best match their interests and their profiles.

The regulations apply to banks, financial institutions, microfinance entities, firms providing financial leasing and factoring, real estate developers, providers of sureties and trust services, the central bank (Banco de la Nación) and Banco Agropecuario. These institutions are all required, in no more than sixty (60) days after the publication of the Resolution, to submit to the Authority their plans for the changes they will push through in their entities to comply with the provisions in the regulations.

Finally, the Resolution approves the modification to article 11 of the Credit and Debit Card regulation, which makes it obligatory for firms to send credit card title owners an online or paper monthly statement (when required to do so by the customer) no less than five (5) working days before the payment due date.