Circular 2/2018 — Modifications to Circular 16/2011

Friday, January 26, 2018 OFFICIAL GAZETTE (First Section) 63 BANK OF MEXICO CIRCULAR 2/2018 addressed to Credit Institutions and Brokerage Houses, regarding Modifications to Circular 16/2011.

A logo is placed at the margin, which reads: Bank of Mexico.

CIRCULAR 2/2018 TO CREDIT INSTITUTIONS AND BROKERAGE HOUSES: SUBJECT: MODIFICATIONS TO CIRCULAR 16/2011

The Bank of Mexico, in its capacity as the financial agent of the Federal Government, with the purpose of continuing to promote the sound development of the financial system—in light of the modifications that the Ministry of Finance and Public Credit, through official letter number 305.-156/2017 made known by this Central Bank through Circular 26/2017 published in the Official Gazette of the Federation on January 5, 2018, has resolved to carry out regarding the procedure to which credit institutions and brokerage houses acting as market makers for government securities referred to in official letter number 305.-027/2011 of said Ministry must adhere—considers it convenient to make adjustments to the regime applicable to syndicated auctions of government securities.

For the above reason, based on Articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 3, fraction III, 7, fraction I, and 10 of the Bank of Mexico Law, 22 of the Law for Transparency and Ordering of Financial Services, 8, paragraphs fourth and seventh, 10, first paragraph, 12, first paragraph, in relation to 19 Bis, fraction V, and 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 Central Bank Operations and the Directorate of Central Bank Regulations, respectively, as well as Second, fractions VI and X, of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, it has resolved to modify the definition of “Distributor” in section 1, the fourth paragraph of section 4, the second paragraph of section 9, and the “Appendix”, as well as to add the definition of “Market Makers of UDIBONOS” to section 1, of the “Rules for the Holding of Syndicated Auctions of Government Securities”, contained in Circular 16/2011, to remain in the following terms:

RULES FOR THE HOLDING OF SYNDICATED AUCTIONS OF GOVERNMENT SECURITIES

“1. Definitions … Distributor: the Market Maker and the Market Maker of UDIBONOS designated by the Ministry to act in such capacity. … Market Makers of UDIBONOS: credit institutions and brokerage houses authorized by the Ministry to act in such capacity.

64 (First Section) OFFICIAL GAZETTE Friday, January 26, 2018 …”

“4. Bids … … … When the Bank so determines, bids must be presented through requests prepared in accordance with the model attached as an Appendix and delivered to the National Operations Management of the Bank of Mexico, located at Avenida 5 de Mayo number 6, second floor, Centro Neighborhood, Cuauhtémoc Delegation, Postal Code 06000, Mexico City, in a sealed envelope accompanied by a cover letter. …”

“9. General Provisions … The documentation referred to in the previous paragraph must be delivered to the Operations Instrumentation Management of the Bank of Mexico, located at Avenida 5 de Mayo number 2, third floor, Centro Neighborhood, Cuauhtémoc Delegation, Postal Code 06000, Mexico City, at least one Business Day in advance of the date on which the aforementioned contract is intended to be signed.”

“APPENDIX BID MODEL FOR SYNDICATED AUCTIONS OF GOVERNMENT SECURITIES

Mexico City to ____ of _____ of ___. BANK OF MEXICO National Operations Management Avenida 5 de Mayo No. 6, second floor, Centro Neighborhood, Postal Code 06000, Mexico City …”

TRANSITORY SINGLE. This Circular shall enter into force on the next business day following its publication in the Official Gazette of the Federation.

Mexico City, January 22, 2018.- The General Director of Central Bank Operations, Jaime José Cortina Morfín.- Signature.- The Director of Central Bank Regulations, Mario Ladislao Tamez López Negrete.- Signature.

Friday, January 26, 2018 OFFICIAL GAZETTE (First Section) 65 For any inquiries regarding the content of this Circular, please contact the Authorizations, Consultations and Legal Control Management, at the phone numbers (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000 Ext. 3200.