The Ministry of Finance, through the Financial Regulation Unit (URF), once again took a step forward to deepen the integration of the traditional financial sector and the fintech industry (financial technology companies), allowing credit institutions, financial services companies, and capitalization companies, the acquisition of shares or quotas in Fintech companies.
The issuance of this decree (2443 of 2018) had been anticipating for some time. The decree resolves the need of the financial sector to provide greater integration tools to financial institutions for the purpose of evolving with fintech developments. Of course, this integration path will be added to the previous measures of collaboration that the financial sector had taken to adopt fintech.
With this new decree, the aforementioned financial entities are given free access to invest in fintech companies. However, this investment must meet certain requirements, which in turn will behave as limitations to avoid unrestricted use of this new investment permit.
In the first place, financial entities may invest in fintech companies whose sole corporate purpose is the development and/or application of innovations and technology related to the development of the corporate purpose of the financial institution.
These fintech companies, with their exclusive corporate purpose, will take the name of innovation and financial technology companies and will not be able to provide financial services. It is worth mentioning that the decree allows the acquisition of any percentage in the innovation and financial technology companies.
Second, the innovation and financial technology companies may not have any type of participation in other companies or associations of any kind. That is, this type of company may not participate in the capital, in any way, or another type of company. This limitation includes the investment in financial entities that own shares in their capital (already limited by the rules of overlap) or in the subordinates of these financial entities.
The perception of the idea behind these limitations, is that financial institutions do not use this decree as a carte blanche for investment in any type of company, either directly in companies that do not have as an exclusive social purpose the development of fintech or indirectly to through investment in innovation and financial technology companies with investments in other types of companies, without any link with fintech.
In the near future they will begin to see the results of these integrations. The opportunity is given so that the actors of the financial sector that had not deepened their fintech strategy do so through the acquisition of innovation and financial technology companies. For the time being, this decree can be seen as a new step for the consolidation of the country as a fintech development center and for the stimulation of the financial industry in the country.