Chile Pension Regulator Cracks Down on Swaps Ahead of Deadline

Chile’s pension regulator is further restricting the use of derivatives by pension funds ahead of a deadline for a new risk-based rules system later this year.

The regulator sent the funds — known as AFPs — a notice Friday indicating they can only trade to reduce the risk previously taken on by receiving interest rate swap positions, rather than increasing their exposure, according to people familiar with the matter. The memo came before they have to adjust to the new guidelines over the next six months.