Circular 25/2020 — Financing from the Bank of Mexico Guaranteed with Qualified Credit Assets of Banks for Channeling to Micro, Small and Medium Enterprises

Friday, June 19, 2020 OFFICIAL GAZETTE 1 BANK OF MEXICO CIRCULAR 25/2020 addressed to Multiple Banking and Development Banking Institutions, regarding the Rules applicable to financing from the Bank of Mexico guaranteed with qualified credit assets of the banking sector, for their channeling to micro, small, and medium-sized enterprises. At the margin, a logo stating: Bank of Mexico.- "2020, Year of Leona Vicario, Meritorious Mother of the Fatherland". CIRCULAR 25/2020 TO MULTIPLE BANKING AND DEVELOPMENT BANKING INSTITUTIONS: SUBJECT: RULES APPLICABLE TO FINANCING FROM THE BANK OF MEXICO GUARANTEED WITH QUALIFIED CREDIT ASSETS OF THE BANKING SECTOR, FOR THEIR CHANNELING TO MICRO, SMALL, AND MEDIUM-SIZED ENTERPRISES. The Bank of Mexico, considering the impacts that the COVID-19 pandemic has caused on the global economy and on the behavior of our country's financial markets, as well as on the foreign exchange and fixed-income markets that continue to show little depth, lower liquidity, and a deterioration of operating conditions, with the object of continuing to promote the sound development of the financial system and ensuring its stability, as well as to foster the proper functioning of payment systems and avoid disturbances in them, has considered it necessary to maintain the provision of national currency liquidity to credit institutions, in order to strengthen credit granting channels in the economy and thus improve the functioning of national markets and promote the orderly behavior of our country's debt and exchange markets. With this, this Central Institute will contribute to the existence of conditions that facilitate credit institutions to fulfill their priority function of providing financing to the economy, which is why it has resolved to offer credit institutions this facility with the objective that these, in turn, directly channel resources through the granting of credit directed to micro, small, and medium-sized enterprises, or indirectly, through other non-bank financial entities by celebrating credit operations that have guarantees on those other credits that such institutions have previously granted to Mexican legal entities, as well as public trusts, with high credit quality that issue debt securities. For the above, based on articles 25, second paragraph, and 28, sixth and seventh paragraphs, of the Political Constitution of the United Mexican States, 7, fractions I, II, and X, 8, 14, first paragraph, 15, 16, 24, and 36, of the Bank of Mexico Law, 54 and 96, Bis of the Credit Institutions Law, 22 of the Law for Transparency and Orderly Financial Services, 4, first paragraph, 8, fourth and eighth paragraphs, 10, 12, first paragraph, in relation to 19 Bis, fraction V, 14, first paragraph, in relation to 25, fraction VII, 14 Bis, first paragraph, in relation to 17, fraction I, and 14 Bis 1, in relation to 25 Bis 1, fraction IV, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Directorate of Central Banking Operations, the General Directorate of Financial Stability, the General Legal Directorate, and the General Directorate of Financial System Affairs, respectively, as well as Second, fractions I, IV, VI, and X, of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, has resolved to issue the following provisions:

RULES APPLICABLE TO FINANCING FROM THE BANK OF MEXICO GUARANTEED WITH QUALIFIED CREDIT ASSETS OF THE BANKING SECTOR, FOR THEIR CHANNELING TO MICRO, SMALL, AND MEDIUM-SIZED ENTERPRISES

1. Definitions. For the purposes of these Rules, the terms used herein, in singular or plural, shall have the meanings indicated below, without prejudice to the different treatment given to similar terms in other regulations: Eligible Assets: credit operations that the Institution in question has granted to legal entities incorporated in the country, which meet the characteristics provided for in section 3.8 of these Rules, for their assignment, by the same Institution, as guarantee for the obligations resulting from its liability for

2 OFFICIAL GAZETTE Friday, June 19, 2020 the financing that the Bank of Mexico grants it in accordance with these same Rules. Global Credit Quality Criterion: a) that applicable to the corporate debtor persons of the credit operations that constitute Eligible Assets, to securities whose source of payment depends on said corporate persons that receive a credit from the Institution, or to securities offered in repurchase agreements under these Rules, pursuant to which such persons or securities must have, at least, two ratings, on a global scale, issued by the Securities Rating Institutions Moody’s, S&P Global Ratings, Fitch Ratings, and HR Ratings equal to or higher than Ba1 / BB+ / BB+ / HR BB+ (G), respectively, or, in the case of short-term securities, to the respective ratings equal to or higher than P-2 / A-2 / F2 / HR2 (G), or to a rating equivalent to the aforementioned that any other Securities Rating Institution assigns. National Credit Quality Criterion: a) that applicable to the corporate debtor persons of the credit operations that constitute Eligible Assets, to securities whose source of payment depends on said corporate persons that receive a credit from the Institution, or to securities offered in repurchase agreements under these Rules, pursuant to which such persons or securities must have, at least, two ratings, on a national scale, issued by the Securities Rating Institutions Moody’s, S&P Global Ratings, Fitch Ratings, and HR Ratings equal to or higher than A2.mx / mxA / A(mex) / HR A, respectively, or, in the case of Short-Term Securities, to the respective ratings equal to or higher than MX-2 / mxA-2 / F2(mex) / HR2 or to a rating equivalent to the aforementioned that any other Securities Rating Institution assigns. Single Account: the national currency demand deposit bank account that the Bank of Mexico maintains for each of the Institutions in accordance with the provisions of the Operating Provisions. Banking Business Days: the days on which Institutions are not obligated to close their doors or suspend their operations, in terms of the general provisions issued for such effect by the National Banking and Securities Commission. Operating Provisions: the Provisions Applicable to Operations of Credit Institutions, Regulated Multiple-Object Financial Companies that Maintain Patrimonial Links with Credit Institutions, and the National Development Bank for Agriculture, Rural, Forestry, and Fisheries, issued by the Bank of Mexico through Circular 3/2012, published in the Official Gazette of the Federation on March 2, 2012, as they have been modified by subsequent resolutions. Eligible Currency: the Australian Commonwealth dollar, Canadian dollar, United States of America dollar, New Zealand dollar, Euro of the European Union, Pound Sterling of the United Kingdom of Great Britain and Northern Ireland, and Japanese Yen. Issuing Trust: the one referred to in section 4.3 of these Rules. Guarantee Trust: the one referred to in section 3.7 of these Rules. Indeval: S.D. Indeval, Institution for the Deposit of Securities, S.A. de C.V. Institutions: multiple banking or development banking institutions, as applicable. Securities Rating Institution: a) any of the anonymous societies authorized by the National Banking and Securities Commission to act in such capacity, in terms of what is provided by the Securities Market Law, as well as their foreign subsidiaries that grant credit ratings to corporate persons or to securities whose source of payment depends on said persons.

Friday, June 19, 2020 OFFICIAL GAZETTE 3 Manual: the operational manual to implement the operations provided for in these Rules, which the Bank of Mexico makes known to Institutions through the internet portal located at the address: <http://webdgobc>. MiPyME: micro, small, and medium-sized enterprise, understood as that with a number of employees not exceeding 250 and that, in case it has entered into one or more financings with the Institution in question that remain valid at the moment when such Institution obtains resources from the Bank of Mexico in accordance with these Rules, the sum of the principal amounts of said financings, on the date of their origination, is not greater, in total, to 50 million pesos for each of those enterprises. Related Parties: related persons referred to in article 73 of the Credit Institutions Law and, regarding Institutions that are development banks, those persons that have links with said Institutions in terms equivalent to those provided for in that article. SIAC-BANXICO: the Bank of Mexico Account Holder Attention System. Special Guarantee Securities: debt securities that meet the requirements to carry out operations with the Bank of Mexico in accordance with what is provided by Circular 10/2015, regarding the Rules Applicable to the Exercise of Financing Granted by the Bank of Mexico to Cover Additional Ordinary Liquidity Needs, published in the Official Gazette of the Federation on May 11, 2015, in terms of the modifications made after that date. Independent Professional Appraiser: a) legal entity whose activity is the provision of credit portfolio appraisal services, in which independent professionals work, who meet the independence criteria established in article 6 of the General Provisions Applicable to Entities and Issuers Supervised by the National Banking and Securities Commission that Contract External Audit Services for Basic Financial Statements, issued by said Commission, and who have proven experience as providers of such services to the Bank Savings Protection Institute or development banking institutions.

2. General terms and conditions. The corresponding Institution may obtain from the Bank of Mexico the financing subject of these Rules, in order to use the respective resources to grant financing to MiPyME, directly, or indirectly through other non-bank financial entities, through the following operations, in the terms and subject to the conditions set forth in these same Rules: I. Simple credit guaranteed with Eligible Assets entrusted in a guarantee trust. II. Issuance of stock certificates guaranteed with Eligible Assets entrusted in a guarantee trust. III. Issuance of fiduciary stock certificates guaranteed with Eligible Assets entrusted in a guarantee trust. IV. Repurchase agreements on the eligible securities referred to in these Rules. For the corresponding Institution to obtain from the Bank of Mexico the financing that is appropriate in accordance with these Rules, it must previously celebrate with the latter the contracts appropriate for such effects in accordance with what is provided in these same Rules, as well as constitute, to the satisfaction of the Bank of Mexico, the respective guarantees or, in its case, transfer the ownership of the securities subject to the repurchase agreements that correspond. 2.1 Conditions for the granting of financing.

4 OFFICIAL GAZETTE Friday, June 19, 2020 The Institution interested in obtaining the financing from the Bank of Mexico referred to in these Rules must present it, for this purpose, its application on the dates and within the hours indicated in the calls that the latter makes known to them for these effects. The calls will be made known through the Bank of Mexico's internet site located at the address << https://www.banxico.org.mx/ >> or, in its case, through the electronic, computing, or telecommunications medium that, for this effect, the Bank of Mexico itself authorizes and makes known to Institutions on said internet site. Such calls will specify the dates and hours in which Institutions may request the carrying out of the financing operations subject of these Rules, as well as the amount of resources available for this purpose. The Bank of Mexico will issue the aforementioned calls, at the latest, on the Banking Business Day prior to the start of each term that it establishes for the receipt of the respective applications, during the validity of these Rules or until the maximum amount that it has determined for this effect has been covered. Institutions must present, through the electronic, computing, or telecommunications medium indicated for this purpose in the respective calls, the aforementioned applications within the deadlines and hours indicated in said calls, in the format of the model attached to the respective call. In the aforementioned applications, Institutions must manifest their consent to be subject to the terms and conditions of these Rules, as well as indicate the operations, among those provided for in sections 4.1, 4.2, 4.3, and 4.4 of these Rules, that they offer to celebrate for this effect, as well as the Eligible Assets that they offer as the object of the guarantees for the respective financings, or, in its case, the securities subject to the repurchase agreements that they propose to celebrate with the Bank of Mexico by virtue of said applications, in order that, with the resources they obtain from the Bank of Mexico by said operations in accordance with these Rules, they grant credits to MiPyME. Regarding the Eligible Assets that each Institution indicates in its respective application, it must include in this a report issued by an Independent Professional Appraiser on the legal validity of the instruments under which the corresponding credit operations to said Eligible Assets have been celebrated, as well as the compliance with the characteristics and conditions established in section 3.8 of these Rules and the corresponding valuation they have carried out. Additionally, in case that Institutions intend to grant the referred credits through non-bank financial entities, they must specify their denominations, the types of entities to which they correspond, and the respective keys of the Registry of Financial Service Providers administered by the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF). The application presented through the medium indicated in the respective call, in accordance with what is provided in the previous paragraph, must have the advanced electronic signature of the legal representative of the Institution that has the authority to exercise acts of dominion, whose data are susceptible of verification through the corresponding valid digital certificate issued by the Tax Administration Service (SAT), except in those cases in which the respective calls establish a system for the presentation of the aforementioned applications through access keys, identification, and, in its case, operation keys, established for the use of said system. In these cases, the electronic signature or the aforementioned keys will substitute the autograph signature of the representative of the Institution in question, so that the documentary or technical records generated or presented as a result of the use of said electronic signature or keys will produce the same effects that the laws grant to documents signed by the parties and, consequently, will have equal probative value. As an exception to the above, in an extraordinary manner, in case that an Institution does not have representatives with valid digital certificates for electronic signatures, it may, on that occasion, present its application through a written document, prepared in terms of the same model attached to the respective call, delivered at the address of the Bank of Mexico indicated in the Manual, which contains the autograph signature of the legal representative of the Institution that has the authority to exercise acts of dominion. At the conclusion of the term indicated in the respective call for the receipt of the applications referred to in this section, the Bank of Mexico will analyze said applications and, once it concludes the review of said applications, as well as that of the Eligible Assets and, in its case, that of the securities subject to repurchase that Institutions have presented in said applications, it will inform them of the assignment of the resources subject of these Rules. Prior to said assignment, as part of the review of the Eligible Assets or securities that the Bank of Mexico carries out in accordance with the above, it may ask the Institutions in question to substitute those included in their applications with others of better quality or that remain subject to terms more adequate to the purposes of the Bank's own financing provided for in these Rules, which they maintain in their portfolio.

Friday, June 19, 2020 OFFICIAL GAZETTE 5 For the purposes of the aforementioned assignments, the Bank of Mexico will attend to the applications that Institutions present in accordance with what is provided in the previous paragraphs and, from the respective amounts they have requested, it will assign those that are appropriate in accordance with what is indicated in this section. The assignment of the respective amounts will be made once those indicated in the previously presented applications that have remained pending assignment have been taken into account, in accordance with the order of the date of their presentation. In case that the total amount indicated in all applications exceeds the amount available determined by the Bank of Mexico, it will carry out the assignment pro rata, that is, proportionally to the amounts requested by each Institution and, in its case, it will take into account those applications that contemplate credit operations for the granting of the requested financing and other characteristics that are more adequate to the objectives of said financing. The respective assignment will indicate the Eligible Assets that may be granted as guarantee or that may be subject to repurchase, in accordance with these Rules, as well as the value that corresponds to them for this purpose, subject to the discount factors that the Bank of Mexico indicates in said assignment, which will be made known to Institutions through the electronic, computing, or telecommunications medium indicated for this effect by the Bank of Mexico in the respective call. Once the Bank of Mexico has notified the aforementioned assignment, the Institution in question must celebrate, at the latest within ten Banking Business Days following that of said assignment, the contracts corresponding to the financing operation subject of said assignment, in accordance with the models provided by the Bank of Mexico, as well as constitute the guarantees on the Eligible Assets that correspond with the fiduciary institution indicated by the Bank of Mexico or, in its case, transfer the securities subject to repurchase to the Bank of Mexico's account at Indeval or to the custodian account abroad, in accordance with what is provided for this purpose in these Rules and the Manual. The exercise of the financing subject of these Rules may be carried out, as the Institution in question deems appropriate with the Bank of Mexico, through any of the operations indicated in the previous section or combination of these, subject to what is provided in sections 4.1, 4.2, 4.3, and 4.4 of these Rules, as the case may be. In all these cases, the disposition of the resources corresponding to the financings celebrated based on the assignment that corresponds in accordance with the above will be subject to the prior formalization and execution of the applicable contracts, including the assignment in the Guarantee Trust of the Eligible Assets or, in its case, the transfer of ownership of the securities subject to repurchase. Only those Institutions that meet the requirements established for this purpose in accordance with these same Rules may obtain from the Bank of Mexico the resources referred to in these Rules. Regarding development banking institutions, only those authorized to do so in accordance with the applicable regulations may celebrate the referred financings. Institutions that have obtained resources from the Bank of Mexico derived from the operations celebrated in accordance with these Rules may present new applications on the dates and hours that it makes known in the subsequent calls, even in case that the operations they have celebrated remain valid on the dates when the new operations are celebrated. The Bank of Mexico may not accept new financing applications from Institutions that have not exercised the resources for the granting of credits to MiPyME in accordance with what is provided in these Rules. 3. Common characteristics of financing operations. In addition to the particular characteristics corresponding to each of the financing operations that Institutions celebrate with the Bank of Mexico in accordance with these Rules, as indicated below, they must be subject to the following characteristics: 3.1 Term for the celebration of the financing operation. On the Banking Business Day following that on which the Bank of Mexico has verified with the fiduciary institution of the Guarantee Trust the perfection of the guarantees in accordance with what is provided in these Rules or on the Banking Business Day following that on which the Bank of Mexico has notified the respective assignment, subject to the transfer of ownership of the securities subject to the repurchase agreement in question. 3.2 Terms of financing operations. The terms of the financing operations that Institutions celebrate with the Bank of Mexico in accordance with these Rules will be between 18 or 24 months, without exceeding 730 natural days,

6 DIARIO OFICIAL Viernes 19 de junio de 2020 counted from the Banking Business Day immediately following that on which the guarantees are perfected. Exceptionally, subject to authorization from the Bank of Mexico, this term may be extended when the characteristics of the credits that the Institution will grant with resources derived from the respective financing operation so justify. 3.3 Amount of the principal and applicable interest rate. The amount of the principal of the financing operation or, where applicable, the price of the repo agreement entered into by the Institution in question shall be that indicated by the Bank of Mexico in the respective allocation, up to an amount that, added to the agreed interest or premium, shall not exceed the sum of the values of the Eligible Assets or titles, adjusted as indicated in section 3.7 or 4.4 of these Rules, as applicable, which will be subject to the guarantee of the obligations borne by the Institution by virtue of the financing operation or repo agreement in question. Likewise, the respective financing operations will generate interest on the principal amount or, where applicable, will be subject to premiums borne by the Institutions entering into them, corresponding to a rate equivalent to the average of the one-day interbank interest rate that the Board of Governors of the Bank of Mexico has determined as the target rate for monetary policy purposes, expressed annually and in percent with rounding to two decimal places, made known on the Bank's website, during each day of the validity of said operations. With respect to the financing operations provided for in sections 4.1, 4.2, and 4.3 below, for the purpose of calculating interest, the referred interest rate shall be divided by 360 and the resulting figure multiplied by the number of natural days actually elapsed; and, in turn, the previous result shall be multiplied by the principal amount of the operation in question. With respect to the repo provided for in section 4.4 below, the interest rate shall be used in determining the respective premium as indicated in said section. Financings that the Bank of Mexico grants to Institutions accredited through the operations referred to in these Rules must be denominated in national currency. 3.4 Disposition of the financing operation amount and crediting of respective resources. The Institution may dispose of the amount of the financing operation in question on the Banking Business Day following that on which the corresponding guarantees have been perfected, through the transfer of the Eligible Assets to the corresponding Guarantee Trust, or, where applicable, the ownership of the titles subject to repo has been transferred to the Bank of Mexico, subject to the Institution having signed the corresponding contracts for said operation and having received notification from the Bank of Mexico regarding the respective allocation. Once the allocation of the Eligible Assets to the Guarantee Trust has been carried out, subject to confirmation by the fiduciary institution, or once the transfer of ownership of the titles subject to repo has been carried out, the Bank of Mexico, during the hours established in the Manual, will make the credit of the amount equivalent to the principal amount of the financing or the price of the repo in question, in the Single Account held by the Institution, for the operations provided for in sections 4.1, 4.2, and 4.4 of these Rules or in that corresponding to the fiduciary institution in the Issuer Trust intervening in the operation contemplated in section 4.3. The value of the Eligible Assets delivered by the accredited Institution to the Guarantee Trust, adjusted by the discount factors determined by the Bank of Mexico in the allocation notified to the Institution, must fully cover both the principal and the estimated interest as provided for in section 3.7 below and any other agreed expenses, in accordance with these Rules. As an exception to the above, the accredited Institution may grant as collateral Special Guarantee Values that are not rejected by the Bank of Mexico as provided for in section 3.7 below, at their market price value adjusted according to the discount factors that the Bank of Mexico makes known through the internet portal located at the address << http://webdgobc >>, only up to the amount equivalent to the difference between the sum of the principal of the corresponding financing operation, plus the estimated interest and agreed expenses mentioned above, and the sum of the value of the Eligible Assets adjusted according to the referred discount factors. With respect to the repo operations entered into in accordance with section 4.4 below, the value of the titles subject to such operations delivered by the Institution reporting to the Bank of Mexico, adjusted by the corresponding discount factors as indicated in said section, must fully cover both the price of the repo and the estimated premium as provided for in section 4.4 below and any other agreed expenses, in accordance with these Rules.

Viernes 19 de junio de 2020 DIARIO OFICIAL 7 3.5 Payment of financing. The principal and interest amounts of the financing operations provided for in sections 4.1, 4.2, and 4.3 of these Rules, as well as the price and premium of the repos indicated in section 4.4 below, borne by the Institution in question, shall be payable upon maturity of the respective operations. Once the financings provided for in these Rules have been fully settled, the obligations of the parties shall be extinguished. 3.6 Early payment. The Institution that enters into any of the financing operations in accordance with these Rules may, prior to the agreed maturity date for said operation, pay in full or in part the amounts owed by it by virtue of the operation. With respect to the financing operations entered into through the issuance of securities certificates in accordance with sections 4.2 and 4.3 of these Rules, as applicable, the early payment must be in an amount equivalent to the nominal value of the number of securities certificates eligible for cancellation. In the event that the accredited or reporting Institution intends to make an early payment as above, it must inform the Bank of Mexico and, where applicable, the Issuer Trust of the fiduciary securities certificates, through a communication prepared for such purposes in accordance with the format established for this effect in the contract of the financing operation in question, with the advance notice and during the hours indicated for this purpose in the Manual. In said communication, the Institution, where applicable, must grant its authorization to charge the corresponding amount in the respective Single Account of the Institution. 3.7 Guarantee Trust. No later than the date on which the Institution may dispose of the principal amount corresponding to any of the financing operations contemplated in fractions I to III of the previous section 2, which it enters into under these Rules, it must transfer the Eligible Assets indicated in the allocation referred to in previous section 2.1 to a guarantee trust (the Guarantee Trust). Said Guarantee Trust must be constituted at the Institution indicated by the Bank of Mexico, which must be different from the accredited Institution and, where applicable, from that acting as fiduciary of the Issuer Trust, which, where applicable, intervenes in the financing operation referred to in section 4.3 below. The Guarantee Trust will have as beneficiaries first the Bank of Mexico, as creditor of the financing operation entered into by the Institution in question, and second, the accredited Institution. With respect to those financing operations entered into through guaranteed fiduciary securities certificates provided for in fraction III of previous section 2, the Guarantee Trust will have as beneficiaries first, the Issuer Trust and, second, the accredited Institution. The assigned Institution must allocate to the Guarantee Trust, by virtue of the trust contract in question, Eligible Assets whose adjusted valuation by discount factors must be equal to or greater at all times than the principal amount that said Institution receives by virtue of the respective financing operation plus the estimated interest for said financing operation and any other agreed expenses. For these purposes, the value of the Eligible Assets will be determined according to the corresponding discount factors that the Bank of Mexico determines based on the credit risk of the Eligible Assets and the prospects thereof. For the case provided for in the previous paragraph, the estimated interest will be calculated as follows: On the day of execution of the financing in question, the estimated interest will be those resulting from applying the procedure established in section 3.3 of these Rules, taking into account the average of the one-day interbank interest rate that the Board of Governors of the Bank of Mexico has determined as the target rate for monetary policy purposes, expressed annually and in percent with rounding to two decimal places, which is made known on the Bank's electronic website, from the date of execution until the valuation date, assuming, for the purposes of this calculation, that said rate will remain constant during the remaining term of the financing operation. Additionally, in the event that, from the day of execution of the financing until the agreed expiration date for the respective financing operation, the referred target interest rate is modified by decision of the

8 DIARIO OFICIAL Viernes 19 de junio de 2020 Board of Governors of the Bank of Mexico, the value of said rate will be taken as applicable for each of the days from that on which it has been made known until the agreed maturity date of the term of the financing operation. Without prejudice to the above, the interest that the accredited Institution must pay will be those resulting from the calculation performed, upon maturity of the term of the financing operation, in accordance with section 3.3 of these Rules and the respective contract. In the credit contract or the issuance act of the securities certificates issued, depending on the financing operation in question, it must be established that, in the event that the value of the Eligible Assets in collateral resulting from applying the respective discount factors is not sufficient to cover the sum of the principal amount of the financing operation, the estimated interest according to the previous paragraph, and any other agreed expenses, the Institution must allocate additional Eligible Assets to the Guarantee Trust or substitute those already entrusted, or allocate Special Guarantee Values for an amount equivalent to the referred difference. With respect to the referred Special Guarantee Values, the Institution in question must contribute them at their market price value, adjusted according to the corresponding discount factors that the Bank of Mexico makes known to Institutions, through the internet portal located at the address << http://webdgobc >>, whose remaining maturity term is, at least, 93 days. During the validity of the financing operation, in the event that the maturity of the Special Guarantee Values entrusted in the Guarantee Trust in accordance with the previous paragraph, as well as sections 3.4 and 3.9 of these Rules, occurs on a date prior to the maturity of said financing operation, the accredited Institution must substitute such values from said Guarantee Trust, at least three Banking Business Days prior to the maturity of said Special Guarantee Values, with other Special Guarantee Values, with the prior acceptance of the Bank of Mexico, whose remaining maturity term is, at least, 93 days. The Bank of Mexico, in view of the date of issuance and placement of the titles offered as Special Guarantee Values, as well as the depth and conditions prevailing in the market where such titles are traded, may not accept such titles for allocation to the Guarantee Trust, as well as those that do not have an updated valuation at market prices, that have not been placed among several investors, or that have not been placed through a public offering. For the case of titles denominated in Eligible Currencies, the Bank of Mexico may not accept those with which it is not able to carry out the corresponding operations within the term to perfect the respective repo. Additionally, the Bank of Mexico will not accept, in any case, among the titles offered by the Institutions, those that are issued by Related Parties of these. In the event that the Institution does not allocate additional Eligible Assets or Special Guarantee Values in the Guarantee Trust to cover the difference indicated in the sixth paragraph of this section, the Bank of Mexico or, where applicable, the fiduciary of the Issuer Trust of the respective fiduciary securities certificates must exercise all actions corresponding for the recovery of the credit granted to the accredited Institution. The amounts that, where applicable, the fiduciary recovers must be delivered to the Bank of Mexico, as holder of the referred fiduciary securities certificates. The fiduciary institution of the Guarantee Trust or, where applicable, an independent entity of the Assigned Institution and the Bank of Mexico that said fiduciary institution designates, with the approval of the Bank of Mexico, to act as master administrator, must perform, at least, the following functions: (i) Verify that the entrusted Eligible Assets comply with the characteristics indicated in the following section 3.8; (ii) Verify the truthfulness and sufficiency of the periodic reports regarding the Eligible Assets that the accredited Institution delivers to the fiduciary institution and the Bank of Mexico; (iii) Notify the accredited Institution when any Eligible Asset or Special Guarantee Value does not comply with the requirements established in section 3.8 and this section, in order to proceed to replace it with another in accordance with said sections; (iv) Follow up on the administration and collection functions performed by the accredited Institution regarding the entrusted Eligible Assets, and (v) Act as substitute administrator in case it is necessary to remove the accredited Institution as administrator of the Eligible Assets. The accredited Institution must pay the fees of the fiduciary institution of the Guarantee Trust in terms of the respective contract.

Viernes 19 de junio de 2020 DIARIO OFICIAL 9 3.8 Eligible Assets in Collateral. The credit granted by the Bank of Mexico or Issuer Trust to the accredited Institution, as applicable to the financing operation entered into by the Institution among those indicated in fractions I to III of previous section 2, will be guaranteed with Eligible Assets that meet, at least, the following characteristics: a) They must consist of credits granted by the accredited Institution to legal entities resident in Mexico, as well as public trusts, whether financial, distinct from the Institutions themselves, and non-financial, that are not Related Parties of the accredited Institution. With respect to credits granted to multiple banking institutions, these must have been entered into before April 21, 2020; b) The legal entities referred to in the previous subsection must comply with the National Credit Quality Criterion according to the respective current ratings granted to them, or have issued debt securities that comply with the National or Global Credit Quality Criterion, depending on the title in question. In the case of the referred titles, these must be in circulation on the date the Institution has presented the request in accordance with previous section 2.1; c) The referred credits must remain valid, without any default, since their origination, in the payments due on the respective amortization dates, on the date of their allocation to the Guarantee Trust, and during the entire validity of the corresponding financing operation; d) The accredited Institution must have the status of creditor or grantor of the respective credits and will be the sole and legitimate holder of the rights related to said credits; e) The rights related to said credits must be free of any encumbrance or limitation of ownership or any other options or rights of preference of any nature; f) The debtor persons of said credits must not be subject to a commercial bankruptcy or similar procedure; g) The rights related to the credits must be freely pledgeable, assignable, or transferable without any restriction and without requiring the consent or authorization of the respective debtor or third parties; h) The respective credits must be denominated in national or foreign currency, and i) The allocation of the credits in the Guarantee Trust must not imply obligations to disburse amounts borne by the Trust. Each of the Eligible Assets subject to collateral must have, from the time it is contributed to the Guarantee Trust, a maturity term for its outstanding balance of, at least, two Banking Business Days after the conclusion of the term of the financing operation in question. In any case, the Bank of Mexico may not accept credits referred to above as Eligible Assets, in view of the credit quality and future prospects of that quality, as well as the common risks represented by the Eligible Assets, in addition to the opinions issued by the Independent Professional Appraiser in the report delivered to the Bank of Mexico in accordance with previous section 2.1, as well as those that, due to their structural complexity, do not allow determining their quality and risks within a review period of less than ten Banking Business Days. In these cases, the accredited Institution must contribute other Eligible Assets in collateral in substitution of those that the Bank of Mexico has determined do not meet these criteria. 3.9 Replacement Assets. In the event that any of the Eligible Assets allocated to the Guarantee Trust (i) do not comply with any of the characteristics indicated in previous section 3.8, (ii) have been paid early, in full or in part, while remaining in the patrimony of the Guarantee Trust, or (iii) suffer a reduction in their calculated value as a result of applying a discount factor corresponding to a change in their credit situation, while continuing to comply with the characteristics indicated in previous section 3.8, the Accredited Institution, no later than the Banking Business Day following that on which it receives the respective notification from the fiduciary institution, must contribute to the Guarantee Trust, in substitution of said Eligible Assets, other Eligible Assets that meet the indicated characteristics or Special Guarantee Values, for an amount equivalent to the amount that, added to that of the other entrusted Eligible Assets, allows covering the sum of the principal plus the estimated interest and other agreed expenses, in accordance with previous section 3.7. Additionally, the accredited Institution, with the prior consent of the Bank of Mexico and the fiduciary institution, may contribute to the Guarantee Trust, in substitution of the previously entrusted Eligible Assets, other Eligible Assets with the characteristics indicated in previous section 3.8. 3.10 Administration of the Assets.

10 OFFICIAL GAZETTE Friday, June 19, 2020

The accredited Institution may continue to carry out the administration and collection of the Eligible Assets affected as collateral, as well as, where applicable, receive the fruits and other payments of the Special Guarantee Securities, as long as it complies with the obligations incumbent upon it corresponding to the financing operation in question. Nevertheless, the Institution must provide the trustee with the information that it requests to follow up on the Eligible Assets.

4. Particular characteristics of financing operations.

In addition to the characteristics indicated in the previous section 3, the financing operations subject to these Rules must have the following particular characteristics:

4.1 Simple credit guaranteed with Eligible Assets entrusted in a Guarantee Trust.

For the Institution in question to obtain the financing subject to these Rules through the guaranteed credit indicated in subsection I of the previous section 2, it must previously enter into a simple credit contract with guarantee with the Bank of Mexico, which will have, at least, the following characteristics:

Accreditor: The Bank of Mexico. Accredited: The Institution that meets the requirements to obtain financing from the Bank of Mexico in accordance with these Rules. Collateral: The obligations of the Institution under the simple credit contract will be guaranteed through the Guarantee Trust constituted in accordance with the previous section 3.7, to which the Institution will contribute the Eligible Assets and, where applicable, Special Guarantee Securities. In the event of default, the Guarantee Trust, at the choice of the Bank of Mexico, until such time as the Eligible Assets and Special Guarantee Securities are alienated, could serve as an alternative source of payment for the respective credit, under which the flows generated by said Eligible Assets, when deposited in the trust, may be used to make the payment of the credit owed by the Institution.

4.2 Guaranteed securities with Eligible Assets entrusted in a Guarantee Trust.

For the Institution in question to obtain the financing subject to these Rules through the issuance of securities indicated in subsection II of the previous section 2, it must formalize the documents related to such issuance, which will have, at least, the following characteristics:

Holder of the securities: The Bank of Mexico. Issuer of the securities: The Institution that meets the requirements to obtain financing from the Bank of Mexico in accordance with these Rules. Characteristics of the securities: The securities will not be registered in the National Securities Registry nor listed on a stock exchange, and must be deposited in Indeval. The disposition of the resources subject to this financing operation will be represented by certificates, with specific characteristics for such disposition, regarding term, amount, interest, and other characteristics indicated in the previous section 3. Collateral: The obligations of the Institution under the securities will be guaranteed through the Guarantee Trust constituted in accordance with the previous section 3.7, to which the Institution will contribute the Eligible Assets and, where applicable, Special Guarantee Securities. In the event of default, the Guarantee Trust, at the choice of the Bank of Mexico, until such time as the Eligible Assets and Special Guarantee Securities are alienated, could serve as an alternative source of payment for the securities, under which the flows generated by said Eligible Assets and Special Guarantee Securities, when deposited in the Guarantee Trust, may be used to make the payment of the securities in the name and on behalf of the Institution.

4.3 Guaranteed fiduciary securities.

For the Institution in question to obtain the financing subject to these Rules through the issuance of guaranteed fiduciary securities indicated in subsection III of the previous section 2, it must formalize the documents related to such issuance, which will have, at least, the following characteristics:

Holder of the securities: The Bank of Mexico.

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Issuer of the guaranteed fiduciary securities: Accredited Institutions will issue, through a trust (Issuing Trust), the guaranteed fiduciary securities provided for in Article 63 of the Securities Market Law.

The Issuing Trust indicated in the previous paragraph must be constituted in another credit institution. In the event that the multiple banking institution is part of a financial group with more than one credit institution, the Issuing Trust must be constituted in a credit institution different from these.

Credit owed by the Institution: The Issuing Trust, with the resources obtained as a result of the placement of the referred guaranteed fiduciary securities, will grant a simple credit to the Institution, at a rate equivalent to that paid by said titles, which will be guaranteed by the Guarantee Trust. Such credit will represent a direct, unconditional, and unsubordinated debt owed by the accredited Institution.

Additionally, the Institution to which the Issuing Trust has granted the referred credit must be obligated to cover the amounts of the debts covered by the fiduciary securities issued by the Issuing Trust that are not covered by the equity of the respective trust, as well as the guarantees granted through the Guarantee Trust.

Issuing Trust: The Issuing Trust will be irrevocable and its main purpose will be to issue the guaranteed fiduciary securities, as well as to grant the credit to the corresponding Institution as contemplated above in this section, and may carry out other acts that are necessary to fulfill these purposes.

The Issuing Trust will comply with the payment obligations of the guaranteed fiduciary securities with resources coming from the amounts it receives from the accredited Institution. The beneficiaries will be, first, the Bank of Mexico as holder of the fiduciary securities, and second, the accredited Institution.

The accredited Institution, at all times, as agreed with the Bank of Mexico in the respective contract, will maintain in the Issuing Trust an amount of liquid resources sufficient to cover the amount corresponding to estimated interest and principal payments, as well as other expenses associated with the administration of the Issuing Trust and the Guarantee Trust, which it must perform, at least, within the agreed advance period before the due payment date.

In addition to the above, the trustee Institution of the respective Issuing Trust must comply, at least, with the following obligations provided for in the trust contract:

a) Receive from the Guarantee Trust reports that allow verifying, during the term of the trust, that the Eligible Assets affected as collateral are sufficient to properly guarantee the obligations secured through the trust;

b) Receive from the Guarantee Trust reports that allow verifying that the proper collection of the Eligible Assets affected as collateral is carried out;

c) Receive from the Guarantee Trust reports that allow verifying the status of the Eligible Assets affected as collateral and require the accredited Institution to comply with the necessary obligations to maintain Eligible Assets that meet the characteristics established for this purpose in these Rules;

d) Prepare periodic reports regarding the quality of the Eligible Assets affected as collateral as established in the contract;

e) Receive from the Guarantee Trust reports that allow verifying that the credits forming part of the Eligible Assets affected as collateral comply, at all times, with the National or Global Credit Quality Criteria and require the accredited Institution to comply with these obligations and, where applicable, substitute credits that do not meet the requirements to be considered Eligible Assets;

f) Inform the accredited Institution of the occurrence of events or third-party acts that prevent or hinder the achievement of the purposes of the trust, and

g) Render accounts for its fiduciary management.

Characteristics of the guaranteed fiduciary securities: The securities will not be registered in the National Securities Registry nor listed on a stock exchange, and must be deposited in Indeval. The disposition of the resources subject to this financing operation will be represented by said certificates, with specific characteristics for such disposition, regarding term, amount, interest, and other characteristics indicated in the previous section 3.

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Collateral: The obligations of the Issuing Trust under the guaranteed fiduciary securities will be guaranteed through the Guarantee Trust constituted in accordance with the previous section 3.7, to which the Institution will contribute the Eligible Assets and, where applicable, Special Guarantee Securities. In the event of default, the Guarantee Trust, at the choice of the Bank of Mexico, until such time as the Eligible Assets and Special Guarantee Securities are alienated, could serve as an alternative source of payment for the guaranteed fiduciary securities, under which the flows generated by said Eligible Assets and Special Guarantee Securities, when deposited in the Issuing Trust, may be used to make the payment of the securities in the name and on behalf of the Institution.

4.4 Repo operations.

For the Institution in question to enter into repos with the Bank of Mexico in accordance with these Rules, it must previously sign the respective contract with it, which will have, at least, the following characteristics:

Repo Provider: The Bank of Mexico. Repo Taker: The Institution that meets the requirements to obtain financing from the Bank of Mexico in accordance with these Rules. Repo Term: It will be the one provided for in the previous section 3.2. Titles subject to the repo: The repos referred to in these Rules may only be entered into on any of the debt securities denominated in national currency, Eligible Currencies, or UDIS, deposited in Indeval or in the corresponding custodian accounts abroad, that meet the National Credit Quality Criteria, for those titles denominated in national currency or UDIS, and the Global Credit Quality Criteria, for those titles denominated in Eligible Currencies, and have been issued by:

a) Any of the legal entities or public trusts that meet the same characteristics indicated in subsection a) of the previous section 3.8; or

b) Trust institutions of trusts through which the persons indicated in subsection a) above issue said debt titles in the form of fiduciary securities that represent the right of their holders to receive the payment of capital and, where applicable, interest or yields, provided that said trusts have been constituted in accordance with the Securities Market Law and meet the following characteristics:

i) The holders of the respective securities must be placed in the first place of priority for the payment of the respective securities and no holder will be subordinated to the payment of other holders.

ii) The trusts must be irrevocable.

iii) The trust does not include credit derivative products in its structure or, in any other way, contemplate the use of said products for the payment of the respective fiduciary securities.

iv) The instruments of their issuance include an express clause by which the persons responsible for whom the collective credit object of said titles was constituted are also obligated to cover the amounts of the debts covered by said titles that are not paid by the respective trust and other parties that, where applicable, have assumed said obligation.

Additionally, the titles subject to the repo must not include structured bank titles provided for in Title Two, Chapter I, Sections I, Subsection G, and III, Subsection E, of the Operations Provisions, as well as other titles implemented with similar characteristics.

Likewise, the titles subject to the repo must be issued through private placement in the Mexican market.

The Institution that presents the titles for the realization of the repo provided for in this section must verify that they meet the characteristics previously established for each of them, without prejudice to the review that the Bank of Mexico must carry out.

The maturity of the titles subject to the repo must be subsequent to that corresponding to the term of the repo. Exceptionally, in the event that the Institution in question does not have titles with maturities subsequent to the terms it has agreed to enter into with the Bank of Mexico in accordance with the above, it must successively enter into repos with other titles provided for in this section, at the latest, two Banking Business Days prior to the maturity of the titles with shorter terms that it has available for such operations, until completing the terms agreed with the Bank of Mexico, provided that the remaining term to maturity of the titles subject to the new repo is at least 93 days. The rate and other general terms of the repos entered into successively in accordance with the above must have the same characteristics as those corresponding to the first repo entered into by virtue of the assignment that has been given. Likewise, in all cases, the total value of the titles subject to the repo, determined in accordance with the provisions of the following paragraph, must be equal to or greater than the sum of the Repo Price plus the estimated premium of the operation and any other agreed expenses. In the event that the corresponding Institution does not contribute titles that meet the above characteristics to enter into subsequent repos, the agreement to enter into the other additional repos to reach the originally agreed term will be considered terminated.

The Bank of Mexico will make known to the Institutions the valuation of the titles to be repoed and the corresponding discount factors on the internet page << http://webdgobc >>.

In all cases, the Bank of Mexico, taking into account the date of issuance and placement of the titles, as well as the depth and conditions prevailing in the market in which said titles are negotiated, may not accept titles in repo operations, as well as those that do not have an updated valuation at market prices. For the case of titles denominated in Eligible Currencies, the Bank of Mexico may not accept those with which it is not able to carry out the corresponding operations within the term to perfect the respective repo. Additionally, the Bank of Mexico will not accept, in all cases, among the titles offered by the Institutions, those that are issued by Related Parties of these.

Repo Price: The amount in national currency equivalent to the value of the titles subject to the repo made known by the Bank of Mexico at the time of perfection of the operation, adjusted by the discount factors that the Bank itself determines and makes known through the internet portal it maintains at the address: << http://webdgobc >>.

Premium: The one resulting from the following formula:

Where: Interest Rate: The one indicated in the previous section 3.3. Amount: To the amount agreed for the corresponding repo, equivalent to the Repo Price. Days: To the number of natural days that elapse between the one in which the repo is perfected and the Banking Business Day on which it is settled.

The payment of the Premium will be made at the conclusion of the operation, through a charge that the Bank of Mexico makes in the Single Account that it holds for the repo taker Institution.

Valuation of the titles subject to the repo: The repo taker Institution must deliver to the Bank of Mexico, by virtue of the repo in question, titles whose valuation adjusted by the discount factors must be equal to or greater, at all times, to the repo price plus the estimated premium for the repo operation and any other agreed expenses. For these purposes, the value of the titles will be determined in accordance with the prices and the corresponding discount factors that the Bank of Mexico makes known to the Institutions, through the internet portal located at the address: << http://webdgobc >>.

For the case provided for in the previous paragraph, the estimated premium will be calculated as follows:

On the day of perfection of the repo in question, the estimated premium will be the one resulting from applying the formula indicated above, for which the average of the one-day interbank interest rate that the Board of Governors of the Bank of Mexico has determined as the target rate for monetary policy purposes, expressed annually and in percent with rounding to two decimals, which is made known on the Bank's own internet page, from the date of perfection until the valuation date, assuming, for the purposes of this calculation, that said rate will remain constant during the remaining term of the repo. Additionally, in the event that, from the day of perfection of the repo until the agreed date of expiration of the repo term, said target interest rate is modified by decision of the Board of Governors of the Bank of Mexico, the value of said rate will be taken as applicable for each of the days from the one in which it was made known until the agreed date of expiration of the repo term. Without prejudice to the above, the Premium that the repo taker Institution must pay to the Bank of Mexico will be the one resulting from the calculation made, at the expiration of the repo term, in accordance with the indications in the heading "Premium" of this section.

The value of the titles subject to the repo will be determined daily, until such time as the repo is settled, in accordance with the valuation carried out by the Bank of Mexico and, as a result of such determination, the following will be done:

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a) If the value of the securities, after applying the corresponding discount factor, is less than the sum of the repo price, the estimated premium, and any other agreed expenses, the Bank of Mexico will notify the Institution concerned of such situation through the website << https://webdgobc/ >>, which must send a communication in the terms established for this purpose in the Manual, indicating the securities, among those specified previously in this section as securities susceptible to being subject to repo, that it will grant to the Bank of Mexico to cover the amount of the corresponding difference. The Institution must carry out, on the same Banking Business Day that the Bank of Mexico notifies that the shortage is applicable, the transfer of said securities to the securities deposit account that the Bank of Mexico maintains at Indeval. In the case of those securities denominated in Eligible Currencies, Institutions must carry out the referred transfer to the foreign custody accounts that the Bank of Mexico will make known, for these purposes, within the hours that Institutions may consult in the Manual and, in this case, Institutions must communicate to the Bank of Mexico, on the Banking Business Day immediately preceding that on which they are going to make said transfer, their intention to carry it out.

b) If the value of the securities, after applying the corresponding discount factor, is greater than the sum of the Repo Price, the Estimated Premium, and any other agreed expenses, the Institution may request the Bank of Mexico for the return of the excess securities, to those granted as securities subject to the repo, through a communication sent to the Bank of Mexico in the terms of the Manual.

In the event that the Institution does not carry out the transfer of the securities as referred to in the preceding subsection a), on the following Banking Business Day the repo will be considered terminated in advance, in which case the Institution must make a payment for the uncovered amount derived from the corresponding difference between the sum of the Repo Price, the Estimated Premium, and any other agreed expenses, and the value of the securities, after applying the corresponding discount factor. Notwithstanding the foregoing, without prejudice to the corresponding conventional penalty for the uncovered amount, the Institution and the Bank of Mexico may enter into a new repo with the remaining securities that the Institution had previously delivered to it for a term equal to the remaining term of the original operation.

Acreditation of resources: Once the Institution concerned has signed the contract and submitted the request to celebrate the corresponding repo in accordance with section 2.1 above, said Institution must transfer the securities subject to the repo, as indicated in this section, to the securities deposit account that Indeval holds for the Bank of Mexico, or in foreign custody accounts, in terms of what is established in the Manual.

Once the delivery of said securities has been carried out through the transfer referred to in the previous paragraph, the Bank of Mexico, during the hours established in the Manual, will make the credit of the amount equivalent to the Repo Price in question in the Single Account held by the reported Institution. The value of the securities delivered by the reported Institution to the Bank of Mexico, adjusted by the discount factors, must fully cover both the Repo Price and the Estimated Premium and any other agreed expenses, in accordance with what is established in these Rules.

Payment of the repo. The reported Institution may, prior to the expiration date agreed for the repo it has celebrated in accordance with these Rules, pay in full or in part the amounts owed by it by virtue of said repo. In these cases, the reported Institution must inform the Bank of Mexico of this, through a communication prepared for such purposes in accordance with the format established in the respective repo contract and during the hours indicated in the Manual.

Once all the repos provided for in these Rules have been settled in full, the obligations of the parties shall be extinguished.

5. General Provisions.

5.1 Destination of resources.

Institutions must allocate the resources obtained through the financing operation to the direct granting, or in its case, indirect granting in the terms indicated for this purpose in this section, only of new credits or expansion of existing credits to MSMEs, with special attention to smaller-sized enterprises. Likewise, Institutions may carry out restructurings or refinancings of those same credits previously granted, through which the respective debtors may have access to additional resources derived from those obtained by the Institutions in accordance with the operations provided for in these Rules, in which case Institutions must compute, for the purposes of these Rules, only the additional amounts derived from the operations subject to these same Rules.

Development banking Institutions that obtain resources derived from the financing operations they celebrate in accordance with these Rules will channel them to the granting of new credits or expansion of credits to MSMEs through other financial intermediaries specified in the respective requests they submit in accordance with section 2.1 above, in accordance with the related programs that said Institutions have established.

Institutions will grant the credits contemplated in the previous paragraph and carry out the referred restructurings and refinancings, under their own account and risk, by virtue of which they will determine the terms and conditions applicable to them, without prejudice to those indicated in these Rules. Additionally, said credits, restructurings, and refinancings may be associated with the support and guarantee programs of development banking Institutions, in which case the Institutions granting them must subject them to the terms and conditions established in accordance with said programs.

The principal amount of the credits to MSMEs, as well as the additional amount granted as part of the restructured or refinanced credit with resources derived from the operations subject to these Rules, must not exceed 50 million pesos per MSME. With respect to those restructurings or refinancings of credits that Institutions have granted to MSMEs prior to obtaining the resources subject to these Rules, said Institutions may only make available to the respective debtor persons, as part of those restructurings or refinancings, resources derived from the operations carried out in accordance with these Rules, provided that they agree to establish the same or better terms and conditions of term and rate as those stipulated in the contracts of the operations subject to the restructuring or financing in question.

In the event that Institutions allocate the respective resources for the granting or expansion of the referred credits, indirectly, through other financial entities, as specified in the requests referred to in section 2.1, to which the corresponding Institutions, in turn, grant financing for these purposes exclusively, said Institutions must agree with those financial entities the terms and conditions applicable to the credits that the latter grant with the respective resources, as well as ensure obtaining from those entities the necessary information to present the report described in section 5.4 of these Rules.

Institutions will have a term of twenty Banking Business Days subsequent to that on which they have received the resources derived from the operations they have celebrated in accordance with these Rules, so that, at the latest by the conclusion of such term, they allocate said resources to the previously referred credits. In the event that the respective Institution has allocated part of the resources derived from the financing operations celebrated in accordance with these Rules for the granting or expansion of any of the credits provided for in these same Rules and, prior to the expiration of the operation in question, receives payment of part or the entirety of the corresponding credit, it must allocate the resources from that payment to the granting of a new credit or expansion of another existing one in the terms described above, within a term of twenty Banking Business Days subsequent to that on which it has received said payment.

In the event that Institutions that obtain resources by virtue of the operations celebrated in accordance with these Rules do not allocate them to the granting or expansion of credits in the terms established in these same Rules, they will be obliged to reimburse the Bank of Mexico the respective resources in the cases indicated in the following section 5.3. With respect to financial operations celebrated through the issuance of securities certificates in accordance with sections 4.2 and 4.3 above, the Bank of Mexico will return those certificates that cover the respective amount.

5.2 Celebration of contracts.

To celebrate the financing subject to these Rules, interested Institutions must present to the Operations Instrumentation Management of the Bank of Mexico a certified copy of the deed in which the powers granted to their legal representatives to exercise acts of dominion are recorded, as well as the official identifications of said representatives who sign said contracts and the other documents indicated therein.

5.3 Additional Conditions.

In the event that any Institution celebrates a financing operation in accordance with these Rules and does not allocate, during the term of that operation, the entirety of the resources derived from it to the granting of the previously described credits, the Institution must restore to the Bank of Mexico the amount that it has not allocated to the granting of the referred credits, in which case the operation will be considered terminated in advance and the parties may simultaneously enter into a new operation, in the same terms, with the same expiration date as the previous one and with the same Eligible Assets and, in its case, Special Guarantee Values that cover, at least, the principal amount equivalent to the amount of resources that the Institution has effectively allocated to the previously referred credits, plus the estimated interests in accordance with the above for the remaining term and, in its case, other agreed expenses. With respect to financial operations celebrated through the issuance of securities certificates in accordance with sections 4.2 and 4.3 above, the Bank of Mexico will return those certificates that cover the respective amount.

In the case referred to in the previous paragraph, the Bank of Mexico, within ten Banking Business Days immediately following that on which the Institution presents the report on the credits it has granted in the weeks comprised in the term of twenty Banking Business Days that corresponds in accordance with said paragraph or omits to report the referred credits, will send a notification to the Institution concerned indicating the amount that the Institution must reimburse in accordance with the above, in order for it to manifest what is appropriate for its rights, within three Banking Business Days immediately following that on which it receives the mentioned notification. Once the referred term of three Banking Business Days concludes and the Institution has not disproven what was stated by the Bank of Mexico in the mentioned notification, the latter will carry out, on the Banking Business Day following that on which said term concludes, a charge in the Single Account of the referred Institution for the amount that it has become obliged to restore and, in the event that the financing operation has been instrumented through the issuance of guaranteed fiduciary securities certificates in accordance with section 4.3 above, it will carry out the corresponding simultaneous payment to the Issuing Trust against the cancellation of the corresponding securities certificates.

The Bank of Mexico may reject new requests from an Institution to celebrate financing operations in accordance with these Rules when said Institution does not comply with the conditions provided for in these same Rules, with what is stipulated in the contract of the respective financing operation, as well as the other conditions established by the Bank of Mexico itself for those other operations celebrated by it in accordance with the Rules and applicable stipulations.

As an exception to what is provided by article 116 of the Operations Provisions, Institutions that celebrate the financing operations subject to these Rules may not incur overdrafts in their respective Single Accounts not covered by guarantees for the payment of said operations. By virtue of the foregoing, in the event that the Bank of Mexico cannot carry out the respective charge at the expiration of the financing operation in question, the payment obligation of the respective financing will be considered breached up to the amount not covered by the Institution concerned.

5.4 Information to the Bank of Mexico.

Institutions must inform the Bank of Mexico of the destination they have given to the resources that the latter has credited to them in accordance with what is provided for in these Rules. For these purposes, each Institution must present to the Bank of Mexico reports with a weekly periodicity and with the detail that the latter indicates in the form that, for these purposes, it establishes through the Direction of Information of the Financial System. In said reports, Institutions must describe the way in which they have given attention to smaller-sized enterprises.

Institutions will carry out the acts provided for in these Rules, without prejudice to the faculty of the Bank of Mexico to require them, through the competent administrative units, the information that it requires for the adequate fulfillment of its functions.

The referred information must be sent in the form and terms that the mentioned administrative units make known to them for this purpose.

5.5 Responsibility of Institutions in the granting of credits to MSMEs.

Credits to MSMEs with resources obtained from the Bank of Mexico as a result of the operations provided for in these Rules, will be granted by the respective Institutions as a result of decisions that only correspond to them to take, as part of the origination and evaluation process they carry out, by which the Bank of Mexico will be excluded from all responsibility for said decisions taken by the Institutions. Likewise, for the formalization of the referred credits, Institutions must comply with the applicable regulations, including that referred to in article 115 of the Credit Institutions Law, corresponding to the prevention of operations with resources of illicit origin.

TRANSITORY PROVISIONS

FIRST. These Rules will enter into force on the day of their publication in the Official Gazette of the Federation and their validity will expire on September 30, 2020.

SECOND. The financing operations celebrated between the Institutions and the Bank of Mexico in accordance with these Rules will remain in force until the date of their settlement, subject to these provisions and the applicable contracts.

Mexico City, June 10, 2020.- BANK OF MEXICO: The General Director of Central Banking Operations, Gerardo Israel García López.- Signature.- The General Director of Financial Stability, Fabrizio López Gallo Dey.- Signature.- The General Legal Director, Luis Urrutia Corral.- Signature.- The General Director of Financial System Affairs, José Luis Negrín Muñoz.- Signature.

For any consultation regarding the content of this Circular, the Bank of Mexico is at your disposal through the Direction of Authorizations and Sanctions of Central Banking at telephone (55) 5237-2000 extension 3200.