Circular 15/2009 — Modifies the Repo Rules

CIRCULAR 15/2009 Mexico, D.F., June 15, 2009. TO CREDIT INSTITUTIONS, BROKERAGE HOUSES, INVESTMENT COMPANIES, SPECIALIZED INVESTMENT COMPANIES FOR RETIREMENT FUNDS AND THE RURAL FINANCIAL INSTITUTION: SUBJECT: RESOLUTION MODIFYING THE REPO RULES

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 24 and 26 of the Bank of Mexico Law; 53 fraction II and 81 of the Credit Institutions Law; 176 of the Securities Market Law; 15 second paragraph of the Investment Companies Law; 48 fraction VI of the Retirement Savings Systems Law; 19 of the Organic Law of the Rural Financial Institution; 22 of the Law for the Transparency and Ordering of Financial Services, as well as Articles 8 third and sixth paragraphs, 10, 14 in relation to 25 relation II, 17 fraction I and 19 fraction IX which provide for the powers of the Bank of Mexico to issue provisions, through the General Direction of Analysis of the Financial System, the Direction of Central Banking Provisions, and the Direction of Operations, respectively, all of the Internal Regulations of the Bank of Mexico, as well as the Single Agreement on the Assignment of Administrative Units of the Bank of Mexico, fractions I, III and IV, in view of the need to make a clarification regarding the titles that can be the subject of repo when they have the guarantee of the Sociedad Hipotecaria Federal, S.N.C.; has resolved to modify subsection a) of the second paragraph of item 2.1, of the "Rules to which credit institutions; brokerage houses; investment companies, specialized investment companies for retirement funds and the Rural Financial Institution must adhere in their repo operations", to read as follows:

2. AUTHORIZED OPERATIONS AND COUNTERPARTIES

"2.1 Credit Institutions and Brokerage Houses may act as Repo Parties with any person.

When acting as Repo Parties with other entities of the same financial group to which they belong, Qualified Investors, and individuals, and the securities subject to repo are Titles or Foreign Securities, they must adhere to the following: a) The Titles must be rated in terms of Annexes 1, 2 and 3 of these Rules, as applicable, by at least two internationally recognized rating agencies, or have a payment guarantee or aval from the Sociedad Hipotecaria Federal, S.N.C., of at least 65% of their outstanding balance for principal and ordinary interest, and b) … …"

TRANSITORY SINGLE. This Resolution shall enter into force on June 16, 2009.