Retail investors and crowdfunding platforms in chile. Risks, opportunities, and regulatory challenges

This paper evaluates the effectiveness of Chile’s recent regulatory framework for crowdfunding platforms and the protection afforded to retail investors. It questions the extent to which the new regulations protect non-professional investors from crowdfunding risks and how to leverage innovation without compromising the system’s security and development. To this end, it adopts a descriptive-analytical and comparative metho-dology; it reviews the evolution of fintech, examines crowdfunding in Chile and Latin America, analyzes Law 21.521 and General Rule No. 502 of the Commission for the Financial Market (CMF)-with an emphasis on retail investor protection-and contrasts the Chilean regime with European and Latin American frameworks. The study is organized into five chapters that culminate in proposals for regulatory improvements. Among the conclusions, it highlights that, although the fintech phenomenon has expanded access to capital for SMEs, Latin American regulation remains fragmented; Chilean legislation improves transparency but offers insufficient informational protection to address insolvency, default, or illiquidity. It is considered necessary to introduce prudential safeguards, business continuity plans, exposure limits, exit mechanisms, and suitability tests. It is also noted that the incorporation of artificial intelligence can improve risk assessment, although it requires greater transparency and governance, and that the originality lies in identifying gaps and proposing adjustments inspired by European standards, thus highlighting the vulnerability of retail investors.