Circular 18/2007 — Commission Registration

CIRCULAR 18/2007 regarding the general provisions referred to in Article 6 of the Law for Transparency and Regulation of Financial Services regarding Commission Registration.

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

CIRCULAR 18/2007

TO CREDIT INSTITUTIONS,
LIMITED OBJECT FINANCIAL COMPANIES AND
MULTIPLE OBJECT FINANCIAL COMPANIES REGULATED:

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; 4, 6 and 22 of the Law for Transparency and Regulation of Financial Services, 48 of the Credit Institutions Law, as well as Article 8, third and fourth paragraphs, 10, 14 in relation to Article 25, fraction II; 17, fraction I and 20, fraction IV, which grant the General Direction of Financial System Analysis, the Direction of Central Banking Provisions, and the Direction of Operational and Payment Systems, respectively, the authority to participate in the issuance of provisions, all of them from the Internal Regulations of the Bank of Mexico, published in the Official Gazette of the Federation on September 30, 1994, whose last modification was published in said Gazette on April 26, 2007, as well as in the Single Article, fraction I of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, published in the Official Gazette of the Federation on October 15, 1998, whose last modification was published in said Gazette on April 26, 2007, with the objective of promoting the healthy development of the financial system, as well as protecting the interests of the public, and considering that:

a) On June 15, 2007, the "Decree by which the Law for Transparency and Regulation of Financial Services published in the Official Gazette of the Federation on January 26, 2004 is repealed, the Law for Transparency and Regulation of Financial Services is enacted, and various provisions of the Credit Institutions Law, the Law for Protection and Defense of Users of Financial Services, and the Law of the National Banking and Securities Commission are reformed, added, and repealed" was published in the Official Gazette of the Federation;

b) These reforms had, among other purposes, to oblige the aforementioned Financial Entities to register with the Bank of Mexico the Commissions they charge for Payment Services and the Credits they offer to the public, as well as to increase the transparency and dissemination of said Commissions through institutional media;

c) The disclosure of Commissions fosters competition among institutions and thereby contributes to the healthy development of the financial system;

d) Offering the public comparative information regarding the Commissions charged by various Financial Entities provides additional elements of judgment to favor decision-making in accordance with their needs and expectations;

Therefore, it has resolved to issue the following:

GENERAL PROVISIONS REFERRED TO IN ARTICLE 6 OF THE LAW FOR TRANSPARENCY AND REGULATION OF FINANCIAL SERVICES REGARDING COMMISSION REGISTRATION.

1. DEFINITIONS

For brevity, singular or plural, the following shall be understood as:

Client: the person who receives any credit, loan, or financing from any of the Financial Entities or uses Payment Services issued by them.

Credit: the credits, loans, or financings that Financial Entities grant to the general public, whether they offer them directly or through a third party, when they document them through standard form contracts in accordance with the Law and their amount is less than the equivalent of 900,000 UDIS or if they are Guaranteed Housing Credits for any amount.

Guaranteed Housing Credits:
The guaranteed credit related to housing, referred to in the Law for Transparency and Promotion of Competition in Guaranteed Credit.

Commission: any charge, distinct from interest, regardless of its denomination or modality, that a Financial Entity charges directly or indirectly to a Client for operations related to Credits and Payment Services.

Business Day: the days of the week, except Saturdays, Sundays, and those on which credit institutions are obliged to close their offices and branches, in terms of the calendar published annually by the National Banking and Securities Commission in the Official Gazette of the Federation.

Financial Entity: the: (i) credit institutions; (ii) limited object financial companies, and (iii) multiple object financial companies regulated.

Law: the Law for Transparency and Regulation of Financial Services.

Payment and Disposal Means:
cash, debit cards or access cards to automated teller machines associated with demand deposit bank accounts; credit cards issued under a credit opening contract; checks, and fund transfer orders, including the service known as direct debit.

Payment Services: operations related to the use of Payment and Disposal Means.

UDIS: the investment units referred to in the "Decree by which obligations that may be denominated in Investment Units are established and various provisions of the Federal Tax Code and the Income Tax Law are reformed and added", published in the Official Gazette of the Federation on April 1, 1995.

2. REGISTRATION OF COMMISSIONS WITH THE BANK OF MEXICO

The registration of Commissions that the Bank of Mexico will keep in terms of the Law will be integrated with the following: i) the Commissions that Financial Entities have sent to the Bank of Mexico before the entry into force of these Provisions; ii) the Commissions that Financial Entities register in accordance with the procedure established in this section, and iii) the modification made to the Commissions mentioned in the previous subsections i) and ii).

For the purposes of the provisions in subsections ii) and iii) of the previous paragraph, Financial Entities must present the corresponding information to the Financial System Information Direction of the Bank of Mexico, in the terms determined by it. The sending of said information will be considered as a registration request.

Any modification to the information subject to the Commission registration must be presented to said Direction with the following advance notice:
a) When it concerns new Commissions or an increase in the amount of those already registered, at least 30 calendar days in advance of the date on which the respective Commission or its modification is intended to enter into force, and b) When it concerns the reduction of the amount or cancellation of existing Commissions, at least 2 calendar days in advance of their entry into force.

The Bank of Mexico will consider the respective information received for registration when, within a period of two Business Days counted from its presentation, it does not manifest to the Financial Entity that there are errors or omissions in such information. After said period has elapsed, the received information will become part of the Commission registration and from that moment, the periods referred to in subsections a) and b) above will begin to run.

3. PROCEDURE FOR FORMULATING OBSERVATIONS ON THE APPLICATION OF NEW COMMISSIONS OR THE INCREASE IN THE AMOUNT OF EXISTING ONES

When the Bank of Mexico intends to publish observations regarding new Commissions or those that imply an increase in their amount, it will make known to the Financial Entity in question, in writing or through electronic means, the corresponding reasons, with the purpose that said Financial Entity manifests, if applicable, what it considers appropriate for its rights.

The Bank of Mexico, having analyzed the arguments that the Financial Entity presents, if applicable, will publish the observations it has determined to formulate in terms of what is provided in section 4 of these Provisions.

When the Financial Entity, before the corresponding entry into force, manifests to the aforementioned Financial System Information Direction through the means indicated by it, its decision to cancel a new Commission or the modification to the amount of an already registered one, the Bank of Mexico will cancel its registration. In this last case, the registration of the Commission whose amount was intended to be modified will remain in force.

4. DISSEMINATION OF COMMISSIONS AND OBSERVATIONS

The Bank of Mexico will publish through its electronic page on the worldwide network (Internet) identified with the domain name: www.banxico.org.mx, the registered Commissions, as well as the observations that it may formulate on them, if applicable.

TRANSITORY PROVISIONS

FIRST.- These Provisions will enter into force on December 13, 2007.

SECOND.- From the entry into force of these Provisions, section BD.23.2 of Circular 1/2006, addressed to development banking institutions, is repealed.

Respectfully,

Mexico, D.F., December 10, 2007.- BANK OF MEXICO: The General Director of Financial System Analysis, José Gerardo Quijano León.- Signature.- The Director of Central Banking Provisions,

Fernando Luis Corvera Caraza.- Signature.- The Manager of Payment Systems, Francisco Javier de Jesús Solís Robleda.- Signature.

For any queries regarding the content of these Provisions, please go to the Direction of Authorizations, Consultations and Legal Control, located at 5 de Mayo Avenue number 2, sixth floor, Col. Centro, Mexico, Federal District, C.P. 06059, or to the phones 5237.2308, 5237.3200 or 5237.2317