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The Commission for the Financial Market (CMF) instructed banks to adopt special measures to facilitate the second withdrawal of 10 percent of pension funds, after the enactment of the law this Friday.
The CMF asked to implement special communication measures to deliver a “clear, complete and timely information on the different existing alternatives to dispose of the funds that are credited to their accounts “.
To do this, he demanded that the banks reinforce and privilege remote service channels to reduce health and security risks, as well as instructed “the industry to strengthen measures for the prevention of fraud and monitoring of possible cybersecurity threats“.
“Banks must make every effort to meet user demands in this period, safeguarding health protocols to protect clients and their own collaborators, “the agency insisted.
Finally, the CMF emphasized that it will supervise “the 10% withdrawal operation in the areas of its competence, in close coordination with the Central Bank, the Superintendency of Pensions and the Ministry of Finance.”
🔵Now: The CMF issues instructions to the banks for the payment of 10%. Considers:
✔️ Clear information about the destination of the resources
✔️ Strengthen remote channels and digital payments
✔️ Strengthen fraud prevention
✔️Cybersecurity monitoring@Cooperative pic.twitter.com/1dgaioxpAl– Felipe Gallegos (@ FelipeGallegos7) December 4, 2020
The Superintendency of Pensions estimates that this second withdrawal will mobilize $ 19 billion, which is equivalent to about a quarter of the country’s budget in a year.
CENTRAL BANK MEASURES TO MITIGATE NEGATIVE IMPACTS
In turn, the Central Bank announced a package of measures to mitigate the eventual negative impacts of the second withdrawal, as it did in the first, even before that process, since “as of the end of July, it implemented a series of measures designed to contain potential increases in volatility in the markets, which could be generated as a result of relevant changes in the portfolios of pension funds “.
As this second extraction of pension savings “will involve a significant liquidation of assets by the administrators of these funds”, the issuer considers that “the orderly liquidation of said assets is essential to preserve the stability of financial markets and the efficiency of the price formation process“.
Therefore, he ordered the “reopening of the special program for Cash Purchase and Forward Sale (CC-VP) for the remainder of the first program, equivalent to an amount of up to the equivalent of US $ 8,500 million “; and also the”reopening of the special program for the purchase of Term Deposits for the remainder of the first program, equivalent to an amount of up to the equivalent of US $ 7,750 million “.
To these programs is added “the REPO window with banking companies, in force since November 2019, with terms between 7 and 180 days, which will be extended until May 2021.”
In addition, “the CC-VP and Term Deposit programs will be in effect from December 9 of this year to February 15 of next year. As of that date, CC-VP operations may only be renewed.”
🔵The Latest: The Central Bank enters the field and announces measures to avoid negative impacts on the market and in the formation of prices, with the payment of the 2nd withdrawal of pension savings. Here the detail 👇🏽 @Cooperative pic.twitter.com/oK6pzAL1EZ
– Felipe Gallegos (@ FelipeGallegos7) December 4, 2020
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