Regulatory Alerts2009-05-29 | Circular 14/2009Added
Circular 14/2009 — Modifies Circular 47/2008
This circular modifies Articles 1 and 4 of Circular 47/2008 to specify that the amount of US dollars sold in daily auctions is determined by the Commission de Cambios. It establishes a mechanism where subsequent auction amounts are calculated as the difference between the initially announced total and the quantity allocated in previous auctions on the same day. The modification applies to credit institutions participating in these daily dollar sales auctions conducted by the Bank of Mexico. The changes entered into force on June 9, 2009.
CIRCULAR 14/2009 Mexico City, June 5, 2009. TO CREDIT INSTITUTIONS: SUBJECT: AUCTIONS FOR THE SALE OF UNITED STATES DOLLARS.
The Bank of Mexico, based on Article 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; Article 7, fraction X, Article 8, Article 14, and Article 24 of the Bank of Mexico Law; Article 22 of the Law for Transparency and Ordering of Financial Services; Article 8, third and sixth paragraphs, Article 17, fraction I, and Article 19, fraction IX of the Internal Regulations of the Bank of Mexico, which provide for the attribution of the Central Bank, through the Directorate of Central Banking Provisions and the Operations Directorate respectively, to issue provisions; as well as Article Unique, fractions I and IV of the Agreement on the Affiliation of Administrative Units of the Bank of Mexico, in compliance with the agreement of the Exchange Commission made known on May 29, 2009, regarding the reduction of the amount of daily US dollar sale auctions at the minimum exchange rate, with the objective of promoting the sound development of the financial system, as well as orderly conditions in the foreign exchange market, has resolved to establish in the applicable provisions that the amount of said auctions will be disclosed in the respective call and will correspond to that previously agreed and announced for such effect by said Commission, for which numerals 1. and 4. second paragraph of the provisions contained in Circular 47/2008 dated October 8, 2008, are modified, to read as follows:
“1. CALL FOR AUCTIONS. The Bank of Mexico will call for up to three auctions for the sale of United States Dollars (dollars) every banking business day. The calls will be made known through the Bank of Mexico Account Holder Attention System (SIAC-BANXICO) and will contain the amount of dollars to be auctioned, the type of auction to be held, as well as the other characteristics of the auction in question.”
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“4. SUBMISSION OF BIDS. … In the event that a partial allocation of the amount of dollars being auctioned occurs in the first auction, the amount for the second auction will be equal to the difference between the amount announced in the first call and the amount allocated in the first auction. If a partial allocation of this amount occurs in the second auction, the amount to be auctioned for the third auction will be equal to the result of subtracting from the amount announced in the first call the amounts of dollars allocated in the first and second auctions. …”
TRANSITORY PROVISION UNIQUE. This Circular shall enter into force on June 9, 2009.
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