* Government to send new funds law to Congress in Q1
* New law to govern 5 different types of fund (Updates with quote)
NEW YORK, July 15 (Reuters) - Chilean Finance Minister Felipe Larrain said on Thursday the government plans to send a new law to Congress that governs different types of financial funds to simplify the legal framework.
Chilean law recognizes five different fund types: investment funds, mutual funds, funds for the investment of foreign capital, funds for the investment of foreign venture capital and funds for home savings purposes, Larrain said in a speech to investors in New York.
"The project seeks the creation of a new legal framework, simplified and symmetric to be applicable to all types of funds," Larrain said.
Larrain said each type of fund was currently regulated by different laws. The project seeks to standardize the regulatory framework, which he says the finance ministry will work to present to Congress in the first quarter of 2011.
"Although these instruments are functionally similar and may face comparable problems, the legal frameworks applicable to each of them establishes several differences ... generating confusion among investors, unjustified discrimination among industries and allowing regulatory arbitrage," Larrain said. (Reporting by Daniel Bases; Editing by Gary Hill)