Fintech Law Series: Custody of Financial Instruments

Regulatory Framework

• Fintech Law 21.521: General framework regulating technology-based financial services

• General Rule No. 524 (NCG N°524): Regulation detailing the requirements for registration and authorization

Checklist: Are You a Custodian of Financial Instruments?

According to Fintech Law 21.521, your company may be considered a custodian if it engages in the following activities:

1. Asset Custody

Does your company hold…?

• Securities or contracts in its own name on behalf of third parties?

• Documents directly in the name of third parties?

• Virtual financial assets or cryptocurrencies?

• Assets used as collateral in financial operations?

Practical Example:

If you offer crypto asset custody services or manage portfolios of financial instruments on behalf of clients, you likely fall under this category.

2. Resource Management

Do you handle…?

• Funds from the sale of instruments

• Currencies generated by asset flows

• Funds for the acquisition of new instruments

• Resources to guarantee operations

3. Types of Instruments

Do you custody instruments such as…?

• Contracts that generate monetary income

• Debt-representing documents

• Digital or virtual assets

• Intangible goods intended for financial returns

Key Obligations

If you’ve identified your company as a Custodian of Financial Instruments, you must:

• Implement robust security systems

• Maintain asset segregation

• Establish control and audit processes

• Ensure traceability of operations

Important Note

The CMF has set February 2, 2025 as the final deadline to register in the Financial Service Providers Registry.

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