Circular 31/2010 — Amends Circular 4/2006

Wednesday, October 6, 2010 OFFICIAL GAZETTE (Second Section) 4

CIRCULAR 31/2010 Resolution that modifies the "Rules to which multiple banking institutions, brokerage houses, investment companies, and limited-purpose financial societies must adhere in carrying out derivative operations" contained in Circular 4/2006.

A logo appears at the margin, stating: Bank of Mexico.

CIRCULAR 31/2010

TO MULTIPLE BANKING INSTITUTIONS, BROKERAGE HOUSES, INVESTMENT COMPANIES, AND LIMITED-PURPOSE FINANCIAL SOCIETIES

SUBJECT: RESOLUTION MODIFYING CIRCULAR 4/2006

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 24 and 26 of the Bank of Mexico Law; 46, fraction XXV of the Credit Institutions Law; 176 of the Securities Market Law; as well as Article 8, third and sixth paragraphs, 10, first paragraph in relation to 25, fraction II; 17, fraction I and 19, fraction IX, which provide for the Bank of Mexico's authority to issue provisions through the General Directorate of Financial System Analysis, the Directorate of Central Banking Provisions, and the Directorate of Operations, all of them under the Internal Regulations of the Bank of Mexico, Single Agreement on the Assignment of Administrative Units of the Bank of Mexico, fractions I, III and IV, with the purpose of promoting the sound development of the financial system, by establishing that the settlement of Mexican Federal Government Development Bonds with fixed national currency interest rates issued in Mexico (BONOS) may be carried out within a term of up to eight business days, without the respective operation being considered a derivative operation, in order to facilitate the negotiation of these securities with foreign investors; has resolved to modify section 3.1.4 of Circular 4/2006, which contains the "Rules to which multiple banking institutions, brokerage houses, investment companies, and limited-purpose financial societies must adhere in carrying out derivative operations," published in the Official Gazette of the Federation on December 26, 2006, as well as its modifications, to read as follows:

"3.1.4. Entities may carry out Future Operations, without the provisions of these Rules applying to them, when:

a) The Settlement Date does not exceed four Business Days after the date of agreement; b) Their counterparty is the issuer of the debt security subject to the operation and it is a primary placement, or c) They carry out operations whose Underlyings are Mexican Federal Government Development Bonds with fixed national currency interest rates issued in Mexico (BONOS) and their Settlement is carried out within a term not exceeding eight Business Days counted from their date of agreement.

Multiple Banking Institutions when concluding Future Operations as provided for in the preceding subsections with Underlyings that are gold, silver, Foreign Exchange, or securities must observe what is provided in Circular 2019/95 issued by this Central Institute. Brokerage Houses when concluding the aforementioned operations with Underlyings that are gold, silver, or Foreign Exchange must adhere to the provisions provided in Circular 115/2002 issued by this Central Bank and when they are securities to the provisions issued by the CNBV.

TRANSITORY SINGLE. This Resolution shall enter into force the day following its publication in the Official Gazette of the Federation.

Mexico, D.F., October 4, 2010.- BANK OF MEXICO: The General Director of Financial System Analysis, José Gerardo Quijano León.- Signature.- The Director of Central Banking Provisions, Fernando Luis Corvera Caraza.- Signature.- The Director of Operations, Francisco Javier Duclaud González de Castilla.- Signature.

Wednesday, October 6, 2010 OFFICIAL GAZETTE (Second Section) 5 For any inquiries regarding the content of this Circular, please contact the General Directorate of Authorizations, Consultations, and Legal Control, located at Avenida 5 de Mayo number 2, sixth floor, Colonia Centro, Mexico, Federal District, C.P. 06059, or at the phones 5237.2308, 5237.2317 or 5237.2000 Ext. 3200.