Fund association wants to broaden gamut of assets global investors can buy

Wednesday, October 19, 2011

Chilean fund manager association ACAFI has asked the government to help local central securities depository DCV become a part of global custody networks, to broaden the gamut of Chilean assets that can be purchased by global investors, ACAFI president Fernando Tisné told BNamericas.

"To do that we need, the DCV has to begin operating with Euroclear and the (US' Depository Trust Company) DTC so foreign investors can use their custodian banks to invest in Chilean assets such as corporate bonds, stocks and investment fund quotas," he said at the sidelines of a seminar.

Currently, Chilean sovereign bonds are the only assets in custody at Euroclear.

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Such reforms would further strengthen Chile's path toward becoming a regional financial hub, Tisné said.

The first step in that direction, according to the executive, was a bill that the finance ministry sent to congress in late September to end the 35% capital gains tax currently applied to overseas investors who put money in funds where 80% of assets are allocated outside of Chile.

ACAFI expects the bill to help create a new US$10bn industry by 2021, practically the same as the current size of Chile's open-ended fund industry.