CMF modifies rules on Integrated Annual Report

Recently, the Financial Market Commission (CMF) published General Rule No. 519 (Norma de Caracter General), which updates the requirements for the Integrated Annual Report, modifying General Rules No. 30 and No. 461, among others, and raising the standards of transparency and responsibility in corporate governance, sustainability and inclusion. The most relevant aspects are highlighted below:

1. Corporate Governance

• Codes of Good Governance: Companies should disclose their adoption of codes of good governance, such as the OECD principles, or justify their non-adoption.
• Diversity on the Board of Directors: In order to assist shareholders in the search for and election of candidates to the Board of Directors, the Company should indicate whether it has implemented policies to ensure diversity in the composition of the list of candidates. If such policies are in place, specify whether it has been established that members of the same sex shall not exceed 60% of the directors. If there is no policy or if a different percentage of diversity is applied, this decision must be justified.

2. Diversity and Employment Inclusion  

• Protocols and training: Companies must report the percentage of employees trained in prevention of harassment and violence at work.
• Reporting of complaints: Companies must also report the number of complaints of harassment and violence at work, differentiated by type and gender of the complainant.

3. Sustainability and Independent Verification

• SASB Standard: Entities must report sustainability metrics following the SASB (Sustainability Accounting Standards Board) standard, in accordance with international best practices.
• Optional Verification: Companies are encouraged to submit their sustainability reports for independent verification. If they do so, they must specify the information verified and the standard used.

4. IFRS S1 and S2 Sustainability Standards

Although NCG 461 had already promoted advances in IFRS reporting, the new NCG 519 establishes that, starting in 2026 (with reporting from 2027), companies must report in accordance with IFRS S1, which defines the general requirements for financial information to disclose sustainability related information, and IFRS S2 to disclose climate-related information, both issued by the International Sustainability Standards Board (ISSB), with the option of a transition regime.

5. Flexibility in implementation

• Extension of the deadline: The obligation to report for the first time an integrated annual report is postponed by one year for issuers of securities that have not yet done so, in accordance with the requirements of NCG No. 461.
• Exclusion for small entities: Entities with consolidated assets of less than UF 1 million will be exempted from preparing an Integrated Annual Report in accordance with the requirements of NCG No. 461, and may opt for a simplified format that includes only a description of their corporate governance and risk management.

Effective date Most of the amendments introduced by AS No. 519 are effective as of October 28, 2024 and shall be applied to annual reports for the years 2025 onwards. However, some provisions will be effective as of December 31, 2026, and will apply to 2027 annual reports. Companies may choose to adopt these standards on a voluntary basis prior to their entry into force, in which case, they must expressly state so in their annual report.

For more information and access to the full document, please visit www.cmfchile.cl.

CONTACT

Fernando Bravo
Socio
fbravo@prieto.cl

Tomás Ochagavía
Asociado
tochagavia@prieto.cl

Amalia Bambach
Asociada
abambach@prieto.cl

Pilar Pinochet
Asociada
ppinochet@prieto.cl

The information contained in this alert has been prepared for informational purposes only and does not constitute legal advice*.