Regulatory Alerts2002-07-29 | Circular 3/2002Added
Circular 3/2002 — Modifies Circular 1/2002
The Bank of Mexico modifies the rules for the placement of government securities, specifically amending sections 4.33, 5.32, and 6 of Circular 1/2002. The changes require bids to be submitted by 13:00 hours on the second banking business day prior to the auction date, allow the Federal Government to declare an auction void with no assignments, and mandate that individual results be communicated via SIAC-BANXICO within one hour of the deadline while general results are published on the Bank's website within thirty minutes. These modifications apply to investment companies and become effective on August 6, 2002.
CIRCULAR 3/2002 Mexico City, D.F., July 29, 2002 TO INVESTMENT COMPANIES: SUBJECT: RULES FOR THE PLACEMENT OF GOVERNMENT SECURITIES.
The Bank of Mexico, based on the provisions of Articles 3, fraction III, 7, fraction I, 8, and 10 of its Law, as well as on Official Letter 305.-164/2002 from the Ministry of Finance and Public Credit dated July 23, 2002, and with the objective of: a) Making the collection of resources more efficient through the placement of government securities via auctions conducted by this Central Institute in its capacity as the financial agent of the Federal Government, and b) Providing greater certainty to participants in the aforementioned auctions.
Has resolved, effective August 6 of the current year, to modify sections 4.33, first paragraph, 5.32, and 6, first and second paragraphs, all of the “Rules for the Placement of Government Securities” made known to those companies through Circular 1/2002 dated January 21, 2002, to read as follows:
4.3 SUBMISSION OF BIDS
“4.33. Bids must be submitted on the second banking business day immediately preceding the placement date of the SECURITIES to be auctioned, no later than 13:00 hours. The Bank of Mexico may announce another date or time for a particular auction. …”
5.3 COMMON PROVISIONS FOR ALL AUCTIONS
“5.32. The Federal Government may declare any auction entirely void, in which case no bid will receive an allocation of SECURITIES.”
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“6. RESULTS
The Bank of Mexico will inform each bidder individually, through SIAC-BANXICO, no later than one hour after the deadline for the submission of bids for the relevant auction, of the quantity of SECURITIES, if any, allocated to them and the total prices they must pay for said SECURITIES.
Likewise, it will make available to all bidders through its electronic page on the worldwide network (Internet) identified by the domain name: www.banxico.org.mx or through any other authorized electronic, computing, or telecommunications medium for this purpose by the Bank of Mexico itself, no later than thirty minutes after the deadline for the submission of bids, the general results of such auction. The information corresponding to the general results of an auction will remain available to bidders through the aforementioned medium until the results of a new auction are incorporated under the terms indicated above.”
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