Circular 10/2017 — Modification to Circular 4/2016

Monday, May 29, 2017 OFFICIAL GAZETTE (First Section) 85 BANCO DE MEXICO CIRCULAR 10/2017 addressed to credit institutions, regarding the modification to Circular 4/2016 (Rules of the Interbank Payment System in Dollars).

At the margin, a logo that says: Bank of Mexico.

CIRCULAR 10/2017
TO CREDIT INSTITUTIONS:
SUBJECT: MODIFICATION TO CIRCULAR 4/2016
(RULES OF THE INTERBANK PAYMENT SYSTEM IN DOLLARS)

The Bank of Mexico, considering the current conditions observed in the participants of the Interbank Payment System in Dollars (SPID), has decided to modify the Rules applicable to said Payment System in order to extend the operating hours of the SPID so that participating credit institutions can offer their clients better transfer services through this payment system, as well as to specify in greater detail certain circumstances or establish additional facilities for those already contemplated in the Rules themselves, and to expand the measures susceptible to be adopted in case that mandatory compliance plans are not carried out in accordance with what is provided in said Rules.

For the above reason, based on articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 2, sections I, IV and VIII, and 6, of the Payment Systems Law, 22 of the Law for Transparency and Regulation of Financial Services, 4, first paragraph, 8, paragraphs fourth and seventh, 10, first paragraph, 14 Bis, first paragraph in relation to 17, section I, 14 Bis 1, first paragraph in relation to 25 Bis 1, section IV, and 15, first paragraph, in relation to 20, section XI, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Legal Directorate, General Directorate of Financial System Affairs and General Directorate of Payment Systems and Corporate Services, respectively, as well as Second, sections I, VIII and X, of the Agreement on the Attachment of Administrative Units of the Bank of Mexico, it has resolved to modify Rules 3rd, 9th, first paragraph, 14th, section II, 23rd, section II, 27th, 42nd, section IV, subsection e), 50th, section V, section VI, second paragraph, 53rd, fifth paragraph, sections I and II, 58th, 62nd, sections I and III, and the sixth transitional article of Circular 4/2016 modified by Circular 11/2016 “Modifications to the SPID Rules (transitional regime and peso accounts)” published in the Official Gazette of the Federation on November 3, 2016, and to add a section III to the fifth paragraph of the 53rd of the “Rules of the Interbank Payment System in Dollars”, contained in Circular 4/2016, to remain in the following terms:

RULES OF THE INTERBANK PAYMENT SYSTEM IN DOLLARS

“3rd. Object of the SPID.- The SPID aims to provide Participants with a means to process, securely and efficiently, interbank electronic transfers between deposit accounts denominated in Dollars of legal entities incorporated and domiciled in the national territory that are clients of the Participants. In the same way, the SPID allows Participants who choose to offer their clients who are legal entities incorporated and domiciled in the national territory and who are holders of bank deposit accounts denominated in pesos, national currency, to make such transfers to the same type of accounts denominated in Dollars opened in other Participants, once the respective Participants have made the charges to the aforementioned peso, national currency accounts for the amounts equivalent to those in Dollars subject to the transfers, to acquire said amounts in Dollars through operations outside the SPID and at the exchange rate they determine for this purpose.”

“9th. Request for Sending.- The Participant who has agreed with its Sender Clients to process, as Issuing Participant, the Requests for Sending that they transmit to it, must carry out this procedure, charged to the respective deposit accounts of these latter denominated in Dollars. Likewise, that Participant who has chosen to offer the making of transfers through the SPID to those Sender Clients who are holders of deposit accounts denominated in pesos, national currency, opened in the Participant itself, must carry out the charge in said accounts of the amounts equivalent to those in Dollars corresponding to said Requests for Sending, in accordance with the exchange rate agreed with said holders, in order to acquire said amounts in Dollars through operations outside the SPID that it determines for this purpose. In any case, the referred Participant must allow said clients to transmit their Requests for Sending through the following channels:
I. to II. …”

“14th. Information on the status of the Request for Sending.- …
I. …
II. Regarding Requests for Sending whose validation referred to in the previous Rule has resulted in a rejection, it must inform the Sender Client of this fact in accordance with what is established for this purpose in the Manual, no later than 17:14:59 hours on the same day it received the referred Request for Sending.”

“23rd. Deadlines for the return of Transfer Orders Accepted by SPID.- …
I. …
II. When the circumstance of section I of the previous Rule occurs, which must occur no later than 17:14:59 hours on the same Banking Business Day on which it received the Notice of Liquidation of the Transfer Order Accepted by SPID subject to the return.”

“27th. SPID Operating Hours.- The operating hours of the SPID will start at 08:00:00 hours and end at 17:14:59 hours of each Banking Business Day. Participants must allow their Sender Clients to present Requests for Sending during the hours between 8:00:00 and 16:59:59 hours. On its part, the period from 17:00:00 to 17:14:59 hours will be exclusive for Participants to receive, and if applicable, credit, Transfer Orders Accepted by SPID and send Transfer Orders corresponding to the return type.”

“42nd. Requirements for admission as a Participant.- …
I. to III. …
IV. ...
a) to d) … e) Have a model for the evaluation of Additional Risks, which is obliged to apply to all its clients who are holders of deposit accounts of money in Dollars and that, therefore, are susceptible to become Beneficiary Clients of Transfer Orders that the Credit Institution in question receives from its admission to the SPID, as well as its Sender Clients with whom it agrees to process Requests for Sending. Said Additional Risk model must comply with the characteristics established in Annex 2 of these Rules and must be approved by the Risk Committee based on the proposal that, for this purpose, the Communication and Control Committee that the Participant must establish in accordance with applicable provisions makes, which must be informed by said Risk Committee to the Board of Directors or Board of Directors of the Credit Institution, as applicable. Likewise, the Credit Institution must send to the Bank of Mexico, through the Business Continuity and Operations Management of Payment Systems, no later than 30 Banking Business Days after the one in which the referred Additional Risk model has been informed to the Board of Directors or Board of Directors in question, a document describing it and including at least the aspects indicated in Annex 2.”

“50th. Permanent compliance with the requirements for admission as a Participant.- … …
I. to IV …
V. Refrain from issuing Transfer Orders or accepting those Transfer Orders Accepted that the SPID issues, referred to the Sender Client or Beneficiary Client, as the case may be, whose data have coincided with those of the lists referred to in the previous section IV, without the Participant itself having carried out the review and, if applicable, obtained the additional necessary information to verify if said client does not correspond to the person included in such lists. Without prejudice to the foregoing, to the extent that, as a result of the processing of Accepted Transfer Orders, alerts are generated in the automated systems available to the Participant in question in order to detect unusualness in the respective transfers or inconsistencies of these with the information that is known to said Participant regarding the Sender Client and Beneficiary Client, as the case may be, the Participant must give attention to said alerts with greater priority and speed than established in its ordinary processes, in proportion to the Additional Risk that could result from said transfers.
VI. …
In its case, the Communication and Control Committee must submit to the approval of its Risk Committee the modifications made to the Additional Risk assessment model of its clients referred to in section IV, subsection e), of the 42nd of these Rules and inform this fact to the Board of Directors or Board of Directors of the Participant as applicable, as well as to the Bank of Mexico, through the Business Continuity and Operations Management of Payment Systems, within fifteen Banking Business Days after the date of that approval by the Risk Committee, the result of the application of said modified model to the respective clients. … …”

“53rd. Mandatory compliance plan.- …
…
…
…
…
I. Restrict the making of withdrawals and credits to the deposit accounts of money in Dollars that the Participant carries to its clients, through electronic interbank fund transfers through the SPID;

88 (First Section) OFFICIAL GAZETTE Monday, May 29, 2017
II. Restrict the opening of checking deposit accounts in Dollars with or without checkbook, payable in the Mexican Republic that the Participant offers to legal entities that have their domicile in national territory in terms of the Provisions, or
III. Restrict the sending of fund transfers in Dollars through the SPID from accounts denominated in pesos, national currency, with respect to which the referred Participant has agreed with the respective account holders to provide the service of sending electronic fund transfers denominated in Dollars through the SPID in accordance with these Rules.
…”

“58th. Service availability.- Each Participant must provide the fund transfer service through the SPID, at least at the availability level defined in Chapter 5 of the Manual, to the following clients: (i) those who are legal entities incorporated and domiciled in the national territory that are holders of deposit accounts of money denominated in Dollars opened in the Participant itself, as well as (ii) those who are legal entities incorporated and domiciled in the national territory that are holders of bank deposit accounts of money denominated in pesos, national currency, with respect to which the Participant has agreed to provide the transfer service through the SPID.”

“62nd. Payment of compensation for delay.- …
I. In case the Issuing Participant fails to comply with any of the deadlines indicated in the 16th or 25th of these Rules, and said non-compliance persists, at least, to the SPID operating day that is subsequent to that in which the applicable deadline has expired, said Participant must pay the amount resulting in accordance with what is provided in the 63rd of these Rules. The Issuing Participant referred to in this section must credit, no later than the close of the SPID operating day immediately following that in which the non-compliance in question has concluded, said amount in the same deposit account denominated in Dollars of the Sender Client who has transmitted the Request for Sending in question. In case the Transfer Order relative to the circumstance that corresponds in accordance with this section has been processed with respect to resources derived from a deposit account of money denominated in pesos, national currency of the Sender Client in question in accordance with what is provided in the 9th of these Rules, the Issuing Participant must credit in said account the amount of said Transfer Order by an equivalent amount in pesos, national currency, using for this purpose the same exchange rate that it has agreed with said client in terms of section II of the 7th of these Rules;
II. …
III. In case the Receiving Participant has failed to comply with the deadline provided in the 23rd of these Rules and said non-compliance persists, at least, to the SPID operating day that is subsequent to that in which the applicable deadline has expired, said Participant must pay to the Issuing Participant of the Transfer Order subject to the return, the amount resulting in accordance with what is provided in the 63rd of these Rules. In this case, the Receiving Participant must send a Transfer Order corresponding to the extemporaneous return type to the Issuing Participant, for an amount equal to the sum of the original amount plus the amount resulting in accordance with what is provided in the 63rd of these Rules. The Issuing Participant is obliged to credit the amount of the said Transfer Order of the extemporaneous return type to the Sender Client who has instructed the Transfer Order subject to the return, in the same deposit account of the Sender Client who has transmitted the Request for Sending in question. In case the Transfer Order corresponding to the circumstance that corresponds in accordance with this section has been made with resources derived from a deposit account of money denominated in pesos, national currency, of the Sender Client in

Lunes 29 de mayo de 2017 DIARIO OFICIAL (Primera Sección) 89 question in accordance with what is provided in the 9th of these Rules, the Issuing Participant must credit in said account the amount of said Transfer Order equivalent to pesos, national currency, as applicable, using for this purpose the same exchange rate that it has agreed with said client in terms of section II of the 7th of these Rules.”

“TRANSITIONAL
FIRST TO FIFTH. …
SIXTH. …
…
I. …
a) Beneficiary Clients indicated in the Transfer Orders with respect to whom the Participants who constitute themselves as the respective Receiving Participants do not have the information referred to in section I of the 18th of these Rules.
As an exception to what is provided in section I of the 22nd of these Rules, the Participant who is in the circumstance described in the previous paragraph must credit, in terms of the 19th of these Rules, the Transfer Order Accepted by the SPID that it receives in favor of its Beneficiary Client with respect to whom said Receiving Participant does not have the information referred to in the same paragraph, provided that said Transfer Order Accepted by the SPID is the first that the Participant has received in favor of said Beneficiary Client. In this case, the Receiving Participant must, while the Beneficiary Client's account remains open, gather the information referred to in this subsection during the first fifteen Banking Business Days after the one in which the respective credit must be made in accordance with these Rules. In case the Participant receives other Transfer Orders Accepted by SPID in favor of the same Beneficiary Client, in addition to the one referred to in the previous paragraph, the Receiving Participant must execute the return of said Transfer Orders Accepted by SPID in terms of section I of the 22nd of these Rules. In the event that the referred Receiving Participant does not gather the information in the period indicated in this subsection, it must refrain from making or receiving fund transfers to the respective account by any other means, from the conclusion of said period; b) to c) …
II. …
SEVENTH TO THIRTEENTH. …”

TRANSITIONAL
FIRST. This Circular will enter into force on the Banking Business Day following its publication in the Official Gazette of the Federation, except for what is provided in the following transitional article.
SECOND. The modifications to the schedules provided for in the 14th, section II, 23rd, section II, and 27th of these Rules will enter into force on August 1, 2017.

Mexico City, May 24, 2017.- The General Legal Director, Luis Urrutia Corral.- Signature.- The General Director of Financial System Affairs, Jesús Alan Elizondo Flores.- Signature.- The General Director of Payment Systems and Corporate Services, Lorenza Martínez Trigueros.- Signature.

90 (First Section) OFFICIAL GAZETTE Monday, May 29, 2017 For any inquiries regarding the content of this Circular, please contact the Authorizations, Consultations and Legal Control Management, at the phones (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000 Ext. 3200.