Regulatory Alerts2010-11-10 | Circular 33/2010Added
Circular 33/2010 — Modifies the Repo Rules
The Bank of Mexico modifies the definition of Foreign Securities and the credit rating requirements for securities used in repo operations by institutions of credit, brokerage houses, investment companies, specialized retirement fund investment companies, and the Rural Financial Institution. The amendment expands the definition of Foreign Securities to include debt instruments with secondary markets issued by international financial organizations, central banks, and governments of Reference Countries other than Mexico, as well as foreign financial entities. It also establishes specific minimum credit rating thresholds from Standard & Poor’s, Moody’s, Fitch, and HR Ratings for short-term and long-term local and global securities when acting as reported parties with affiliated entities, qualified investors, or individuals, while exempting securities guaranteed by the Federal Mortgage Society for at least 65% of their outstanding balance. Additionally, the circular repeals section 9.2 and Annexes 1, 2, and 3 of the original rules, and these changes enter into force on November 12, 2010.
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