Circular 15/2014 — Modifications to Circular 3/2012 Regarding ATM Agreements

(First Section) OFFICIAL GAZETTE Friday, October 3, 2014

CIRCULAR 15/2014, addressed to Credit Institutions and the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, regarding Modifications to Circular 3/2012, concerning agreements on automated teller machines.

At the margin, a logo stating: Bank of Mexico.

CIRCULAR 15/2014

TO CREDIT INSTITUTIONS AND TO THE NATIONAL FINANCIAL INSTITUTION FOR AGRICULTURAL, RURAL, FORESTRY AND FISHERIES DEVELOPMENT:

SUBJECT: MODIFICATIONS TO CIRCULAR 3/2012, WITH RESPECT TO AGREEMENTS ON AUTOMATED TELLER MACHINES.

The Bank of Mexico, with the purpose of continuing the promotion of the sound development of the financial system and to foster the proper functioning of payment systems, considering the importance of maintaining competitive conditions and avoiding discriminatory practices in the use of credit institutions' automated teller machine infrastructures, through schemes that allow generating adequate incentives to promote greater efficiency and growth in said infrastructures, has resolved to establish the requirements that agreements must contain whereby credit institutions allow the use of their respective automated teller machine infrastructures by account holders of other institutions so that they are exempt from paying commissions for such use or can pay lower commissions than those established for account holders of all other institutions.

Therefore, based on Articles 28, sixth and seventh paragraphs, of the Political Constitution of the United Mexican States, 24 and 26 of the Bank of Mexico Law, 17 and 22 of the Law for Transparency and Regulation of Financial Services, 19 of the Organic Law of the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, 4, first paragraph, 8, fourth and seventh paragraphs, 10, first paragraph, 15, first paragraph, in relation with 20, fraction XI, 14 Bis 1, first paragraph, in relation with 25 Bis 1, fraction IV, and 25 Bis 2, fraction II, 14 Bis, first paragraph, in relation with 17, fraction I, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Directorate of Payment Systems and Corporate Services, the General Directorate of Financial System Affairs, and the General Legal Directorate, respectively, as well as Article Two of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, fractions I, VIII and X, has resolved to modify the title of the "Applicable Provisions to the Operations of Credit Institutions and the Rural Financial Institution", the index, the definition of "Development Banking Institutions" in Article 2, as well as Articles 84 and 85, including their titles, of the "Applicable Provisions to the Operations of Credit Institutions and the Rural Financial Institution" contained in Circular 3/2012, to read as follows:

"APPLICABLE PROVISIONS TO THE OPERATIONS OF CREDIT INSTITUTIONS AND OF THE NATIONAL FINANCIAL INSTITUTION FOR AGRICULTURAL, RURAL, FORESTRY AND FISHERIES DEVELOPMENT"

INDEX ... SECOND TITLE OPERATIONS WITH THE PUBLIC CHAPTER III SERVICES Section III Other services ...

Friday, October 3, 2014 OFFICIAL GAZETTE (First Section)

"Article 84.- Request for authorization to conclude agreements on automated teller machines" "Article 85.- Resolution of the request for authorization to conclude agreements on automated teller machines" ...

Definitions "Article 2.- For brevity, in singular or plural, in these Provisions it shall be understood as: ... Development Banking Institutions: the National Foreign Trade Bank, S.N.C., Development Banking Institution; the National Bank of the Army, Air Force and Navy, S.N.C., Development Banking Institution; the National Savings Bank and Financial Services, S.N.C., Development Banking Institution; Nacional Financiera, S.N.C., Development Banking Institution; the Federal Mortgage Society, S.N.C., Development Banking Institution, and the National Bank of Public Works and Services, S.N.C., Development Banking Institution. For the purposes of these Provisions, it shall be understood that the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development is part of this definition."

"Requests for authorization to conclude agreements on automated teller machines Article 84.- Institutions that intend to offer their clients the possibility of performing acts related to the operations and services they have contracted with said Institutions, through automated teller machines that are part of the infrastructures belonging to other Institutions, with the aim that said clients are exempt from paying commissions or pay commissions lower than those applicable to clients of other Institutions, must conclude an agreement with the Institutions to which such infrastructures belong.

Institutions that intend to conclude the agreement referred to in the previous paragraph must request prior authorization from the Bank of Mexico. For these purposes, they must attach to their request the draft agreement which must comply with the principles set forth in Article 17, penultimate paragraph, of the Law for Transparency and Regulation of Financial Services, as well as contain, at least, the following information:

I. Name of the Institutions that will sign the agreement; II. Description of the process that Institutions will follow to allow clients of said Institutions to perform acts through the automated teller machines subject to the agreement, which includes the intervention, if any, of third parties in said process; III. Tariffs that, if applicable, the Institution to which the infrastructure belongs will charge to the Institutions that are part of the agreement for allowing the use of its infrastructure;

(First Section) OFFICIAL GAZETTE Friday, October 3, 2014

IV. Commissions that, if applicable, the Institution to which the infrastructure belongs intends to charge to clients of the Institution participating in the agreement; V. Clauses stipulating the requirements and procedures that allow other Institutions to adhere to the agreement, and VI. Clauses stipulating the causes by which Institutions may terminate the agreement.

The Bank of Mexico may require additional documentation and information it deems necessary to evaluate the appropriateness of granting the requested authorization."

"Resolution of the request for authorization to conclude agreements on automated teller machines Article 85.- Once the request referred to in Article 84 of these Provisions meets the documentation and information referred to in said Article, the Bank of Mexico will analyze whether, based on that documentation and information, it is appropriate to grant the corresponding authorization and must inform its decision to the petitioning Institutions within a period not exceeding thirty Banking Business Days.

In the event that, after the period indicated in the previous paragraph has elapsed, the Bank of Mexico does not communicate its decision to the petitioning Institutions, it shall be understood that said request for authorization has been denied.

If the Bank of Mexico grants the respective authorization, the Institutions participating in the agreement may exempt from charging commissions or charge commissions for the use of their automated teller machines for amounts lower than those they charge to clients of other Institutions with which they have not concluded an agreement.

In any case, the Institutions referred to in the previous paragraph must request prior authorization from the Bank of Mexico if they intend to modify the terms or conditions of the agreement."

TRANSITORY PROVISIONS

FIRST. This Circular shall enter into force on the banking business day following its publication in the Official Gazette of the Federation.

SECOND.- Institutions that, prior to the entry into force of this Circular, have obtained authorization from the Bank of Mexico to provide services through automated teller machine networks operated by the third party contemplated in said authorization, may continue to operate, provided that they observe the principles contemplated in Article 17 of the Law for Transparency and Regulation of Financial Services.

Mexico, D.F., September 29, 2014.- The General Director of Payment Systems and Corporate Services, Lorenza Martínez Trigueros.- Signature.- The General Legal Director, Luis Urrutia Corral.- Signature.- The General Director of Financial System Affairs, Jesús Alan Elizondo Flores.- Signature.

Friday, October 3, 2014 OFFICIAL GAZETTE (First Section)

For any inquiries regarding the content of this Circular, please contact the Authorization, Inquiries and Legal Control Department, at phones (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000, extension 3200.