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2017-09-19 | Circular 18/2017

Added 2026-08-23

Circular 18/2017 — Exemptions for Force Majeure Cases Occurring on September 19, 2017

The Bank of Mexico exempts credit institutions and payment system participants from sanctions, penalties, and administrative procedures for overdrafts, settlement failures, or unpaid repo operations that occurred on September 19, 2017, due to the earthquake in central Mexico. Overdrafts in the Single Account are not subject to corresponding actions, and settlement obligations are exempt from administrative sanctioning procedures. Unsettled repo operations are automatically renewed at the interest rate determined by the Bank of Mexico for ordinary non-renewed repos. This resolution entered into force on the date of its publication, September 22, 2017.

Mexico

Banco de Mexico

Friday, September 22, 2017 OFFICIAL GAZETTE (First Section) 107 BANCO DE MEXICO CIRCULAR 18/2017 addressed to credit institutions, the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, and participants in payment systems administered by the Bank of Mexico, for exemptions in cases of force majeure occurring on September 19, 2017.

A logo appears at the margin, stating: Banco de México.

CIRCULAR 18/2017 TO CREDIT INSTITUTIONS, THE NATIONAL FINANCIAL INSTITUTION FOR AGRICULTURAL, RURAL, FORESTRY AND FISHERIES DEVELOPMENT AND PARTICIPANTS IN PAYMENT SYSTEMS ADMINISTERED BY THE BANK OF MEXICO:

SUBJECT: EXEMPTIONS FOR FORCE MAJEURE CASES OCCURRING ON SEPTEMBER 19 OF 2017.

The Bank of Mexico, with the purpose of continuing to promote the proper functioning of payment systems and the sound development of the financial system, and in order to provide legal certainty to credit institutions and to the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development (Institutions), as well as to participants in the payment systems administered by the Bank of Mexico (Participants) regarding force majeure cases resulting from the earthquake registered in the federal entities of the central zone of the country on the 19th day of the current month, with respect to their operations with the Bank of Mexico and their participation in the payment systems administered by said Bank, has resolved the following:

In the event that Institutions incurred overdrafts in their Single Account on September 19, 2017, in terms of the "Provisions applicable to the operations of credit institutions and of the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development" (the Provisions), issued by means of Circular 3/2012, they will not be subject to the actions corresponding to said scenario by the Bank of Mexico, in accordance with the Provisions and other contractual clauses established for this purpose.
In the event that Participants, at the close of operations corresponding to September 19, 2017, had failed to fulfill their settlement obligations before the payment systems administered by the Bank of Mexico, they will not be subject to the administrative procedures for imposing sanctions or penalties resulting from such failures in accordance with the provisions and other contractual clauses established for this purpose.
In the event that Institutions, in their capacity as reporters in repo operations they enter into with the Bank of Mexico, in accordance with what is established in Chapter III, of Title Three, of the Provisions, have not settled at the close of the operation on September 19, 2017, the respective repos entered into on that date by delivering the corresponding price and premium, these will be considered automatically renewed in accordance with what is provided in the Provisions and the premium that they are obligated to pay will correspond to that determined by the Bank of Mexico for ordinary non-renewed repos for the same term.

The foregoing established in this resolution is based on Articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 24 of the Bank of Mexico Law, 22 of the Law for Transparency and Order of Financial Services, 4, first paragraph, 8, paragraphs fourth and seventh, 10, first paragraph, 17, fraction I, 19 Bis, fraction V and 20, fraction XI, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the Directorate of Central Bank Provisions, the Directorate of National Operations and the Directorate of Payment Systems, respectively, as well as Second, fractions VI, VIII and X, of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico.

TRANSITORY SINGLE.- This Circular will enter into force on the day of its publication.

Mexico City, September 20, 2017.- The Director of Central Bank Provisions, Mario Ladislao Tamez López Negrete.- Rubric.- The Director of National Operations, Juan Rafael García Padilla.- Rubric.- The Director of Payment Systems, Manuel Miguel Ángel Díaz Díaz.- Rubric.

108 (First Section) OFFICIAL GAZETTE Friday, September 22, 2017 For any inquiries regarding the content of this Circular, please contact the Authorization, Consultations and Legal Control Management, at the phones (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000 Ext. 3200. 2308, (55) 5237-2317 or (55) 5237-2000 Ext. 3200.