Agreement Establishing Temporary and Extraordinary Measures and Suspending Certain Deadlines for the Attention of Financial Entities and Persons Subject to Supervision by the National Banking and Securities Commission Due to the Coronavirus COVID-19

AGREEMENT ESTABLISHING TEMPORARY AND EXTRAORDINARY MEASURES AND SUSPENDING CERTAIN DEADLINES FOR THE ATTENTION OF FINANCIAL ENTITIES AND PERSONS SUBJECT TO SUPERVISION BY THE NATIONAL BANKING AND SECURITIES COMMISSION, DUE TO THE CORONAVIRUS NAMED COVID-19.

Published in the Official Gazette of the Federation on March 26, 2020.

The Governing Board of the National Banking and Securities Commission (the "Commission"), based on the provisions of Article 1, third paragraph; Article 4, fourth paragraph; and Article 73, fraction XVI, Bases 1st to 3rd of the Political Constitution of the United Mexican States, as well as Articles 2, 3, 4, 6, 6 Bis, 12, fraction XIV, 14, and 16 of the Law of the National Banking and Securities Commission and Articles 9, 10, and 11 of the Internal Regulations of the National Banking and Securities Commission;

CONSIDERING

That the World Health Organization declared on March 11, 2020, the coronavirus named COVID-19 as a global pandemic because it is highly contagious and puts at risk the health and even the life of the population, both cases guaranteed as Human Rights in our Political Constitution of the United Mexican States, particularly due to its long incubation period which, although infectious, is asymptomatic, and since it is not evident, it encourages infected individuals to continue their usual activities in coexistence with others, potentiating the geometric growth of the virus's impact;

That since the beginning of the outbreak of the coronavirus named COVID-19 in national territory, the Federal Government, in coordination with the governments of the federal entities, has implemented a series of actions aimed at controlling and combating the existence and transmission of the virus, among others the "National Day for Healthy Distance" from March 23 to April 19 of this year;

That the General Health Council, in its Extraordinary First Session held on March 19, 2020, recognized the pandemic caused by the coronavirus named COVID-19 in Mexico as a serious disease requiring priority attention, contemplating for this purpose the adoption of preventive measures, including those for closed and open spaces tending to mitigate the risk of community transmission of the virus, which implies consequently and for all effects that this is a case of force majeure;

That, by virtue of the foregoing, Financial Entities and persons subject to supervision by the Commission have adopted multiple mechanisms to ensure the continuity of essential financial services, but under the limitations and operational restrictions imposed by the contingency, given its nature, geographical location, human and material structures, as well as the services involved;

That the Government of Mexico City, a federal entity where the offices of the National Banking and Securities Commission are located, through public communications issued on March 16 and 22 of the current year, has significantly increased measures to prevent community contagion of the virus;

That on March 24 of this year, the Decree was published in the Official Gazette of the Federation by which the Constitutional President of the United Mexican States sanctioned in turn the Agreement published on the same date by the Ministry of Health, in which preventive measures are established that must be implemented to mitigate and control health risks implied by the disease caused by the coronavirus named COVID-19; all of this, under the powers of the Executive and especially, concerning the Extraordinary Action in matters of General Health dispensed in Art. 181 of the General Health Law, considering the health authority as executive and ordering obedience from all administrative authorities of the country. Within these preventive measures, the Agreement issued by the Ministry of Health orders in its Second Article, subsection c) "Temporarily suspend the activities of the public, social, and private sectors that involve the physical concentration, transit, or displacement of people starting from the entry into force of this Agreement and until April 19, 2020", instructing that the Departments and Entities of the Federal Public Administration identify the essential functions of each institution, in order to guarantee their continuity, as well as coordinate with said Ministry of Health regarding the measures being implemented for such effect;

That the Commission is the decentralized body of the Federal Public Administration empowered to issue, within the scope of its competence, provisions and other general rules of a prudential and administrative nature to which Financial Entities and persons subject to supervision by the Commission must adhere, and

That it is necessary to inform Financial Entities and persons subject to the supervision of the Commission of the determinations adopted by this decentralized body as a consequence of the health contingency resulting from the outbreak of the coronavirus named COVID-19, therefore it has resolved to issue the following:

AGREEMENT ESTABLISHING TEMPORARY AND EXTRAORDINARY MEASURES AND SUSPENDING CERTAIN DEADLINES FOR THE ATTENTION OF FINANCIAL ENTITIES AND PERSONS SUBJECT TO SUPERVISION BY THE NATIONAL BANKING AND SECURITIES COMMISSION, DUE TO THE CORONAVIRUS NAMED COVID-19

FIRST.- During the period from March 23 to April 19, 2020 inclusive, deadlines regarding hearings, procedures, and processes that are ongoing, being carried out, or should be carried out before the Commission are suspended, also considering obligations that must be communicated or discharged before the Secretariat of Finance and Public Credit, through this Commission, in matters of prevention of operations with resources of illicit origin and financing of terrorism. Likewise, deadlines referring to various requests for authorization of new entities or new registrations are suspended. With respect to the renewals of registration of currency exchange centers and money transmitters, as well as renewals of certifications and opinions, the deadlines to carry out the corresponding actions are extended for the same time that the suspension referred to in this Agreement lasts. The authorizations granted to the persons referred to in Article 193 of the Securities Market Law and 35 of the Investment Funds Law that expire during the period referred to in the first paragraph of this FIRST Article will be extended for the same period that the suspension referred to in this Agreement lasts. Consequently, on the next business day following the end of the period indicated in the first paragraph of this FIRST Article, the computation of the deadlines provided for in the applicable regulations will resume. The suspension of the deadlines contemplated in this FIRST Article will also apply to the deadlines established for the Commission to take knowledge or resolve what is appropriate regarding the procedures or processes referred to herein.

SECOND.- With respect to the obligations incumbent on Financial Entities and persons subject to supervision by the Commission, consisting in the sending of information or reports that physically must be sent to said Commission in the period indicated in the first paragraph of the FIRST Article, the same must be signed by duly authorized personnel and sent via the electronic means that the Commission publishes through its website on the worldwide network known as Internet, understanding that the documentation that physically should have been sent during that period may be delivered to the Commission within the following 15 business days counted from the business day following the period indicated in the aforementioned FIRST Article. This unless the Commission expressly indicates otherwise through a different notification issued for that effect. The Commission may authorize in each case to Financial Entities and persons subject to supervision by the Commission, the presentation of simplified reports to be presented during the period that the contingency lasts, in terms of what is stated in the previous paragraph. Specifically, with respect to Financial Entities and persons subject to the supervision of the Commission in matters of prevention of operations with resources of illicit origin and financing of terrorism, they may opt to hold during the month of May of the current year the sessions of the Communication and Control Committee corresponding to the months of March and April.

THIRD.- The President of the Commission will identify critical processes that will not be suspended and that are indispensable, in order to procure the stability and correct functioning of Financial Entities and persons subject to supervision by the Commission, in relation to the operational subsistence of the Mexican financial system and in protection of the interests of the public.

FOURTH.- The President of the Commission may modify or temporarily invalidate those legal provisions issued for Financial Entities and persons subject to supervision by the Commission, that are necessary to provide the administrative facilities required, without prejudice to the participation that, in their case, corresponds to the other financial authorities.
The administrative facilities may be implemented, considering the nature of the Financial Entity or the supervised person in question, geographical location, human and material structures available, their operational restrictions, as well as the services involved; and may include, among other actions, the adoption of remote work or work-from-home schemes using equipment and technological tools that are not usually used by the Financial Entity or supervised person, the modification of customer service hours, establishment of limitations regarding the number of clients and users who can enter branches, total, partial, or alternating closure of branches, and suspension of the provision of certain services. Likewise, the President of the Commission may determine authorizations that may be granted expeditiously or conditionally, as well as the flexibility of the corresponding requirements, in order to address operational or market needs, the adoption of measures to mitigate risks derived from the current situation or those acts intended to maintain the stability of the financial system and the securities market.

FIFTH.- This Agreement and the acts deriving from it do not constitute a temporary or definitive limitation of the attributes and powers that the laws confer upon the Commission, nor will they generate greater rights or benefits for Financial Entities and persons subject to supervision by the Commission than those expressly and by virtue of the contingency defined by the Commission, this authority being able to request the information it requires at any moment and instruct what is appropriate in the exercise of its powers. TRANSITORY PROVISIONS

FIRST.- Publish in the Official Gazette of the Federation.

SECOND.- This Agreement shall take effect from March 23, 2020 until April 19 of the same year inclusive, and may be extended to the extent that the public health contingency continues. The President of the Commission may determine cases in which the effects of the suspension are retroactive or establish additional deadlines, in terms of the provisions issued under the auspices of this Agreement.

THIRD.- The President of the Commission must inform the Governing Board of said decentralized body of the administrative facilities that have been granted to Financial Entities and persons subject to the supervision of the Commission, as well as of the acts that he has performed in compliance therewith. This for due knowledge and subsequent follow-up.