Regulatory Alerts2023-03-13 | Circular 2/2023Added · Updated
Circular 2/2023 — Modifications to Circular 4/2012 (Initial and Variation Margins)
The Bank of Mexico amends the 'Rules for the Conduct of Derivative Operations' by modifying definitions in section 1.1, updating reporting and counterparty requirements in sections 3.1.3, 4, and 5.1, and adding comprehensive provisions in section 6 regarding initial and variation margin requirements for non-centrally cleared over-the-counter derivative transactions. The amendments require regulated entities, including credit institutions, brokerage houses, investment funds, and multiple-object financial societies, to establish bilateral margin exchanges, define eligible collateral, and implement legal and operational frameworks for margining, with specific exemptions for certain government and multilateral entities.
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