Chile Pension Proposal Seeks to Limit Swaps That Boosted Returns

Chilean regulators are considering rules based on risk and liquidity to rein in the use of derivatives by pension funds known as AFPs, tightening their scrutiny after foreign interest rate positions helped push returns to an eight-year high in 2025 but led to concerns about potential financial strain.

The country’s pensions regulator sent the funds a draft of new restrictions on Tuesday, giving them seven days to send any feedback, said people familiar with the matter who asked not to be identified as they aren’t authorized to speak on the record. Two new limits are proposed: one on the potential exposure of their positions and another on the liquidity the funds have available to pay any potential margin calls.