Regulatory Alerts2005-06-30 | Circular 4/2005Added
Circular 4/2005 — Modifies Circular 115/2002
Effective July 1, 2005, the sum of bid amounts submitted by each bidder for a government securities primary placement auction must not exceed 60% of the maximum amount offered for that auction. This 60% limit applies collectively to bids submitted by multiple banking institutions and brokerage houses that are part of the same financial group or controlled by the same shareholder. A shareholder is considered to control both types of intermediaries if they own 30% or more of the voting shares, control the general shareholder meetings, appoint the majority of board members, or otherwise exercise control over both entities.
CIRCULAR 4/2005 Mexico, D.F., June 30, 2005. TO THE BROKERAGE HOUSES: SUBJECT: MODIFICATIONS TO CIRCULAR 115/2002. The Bank of Mexico, pursuant to Articles 3, fraction I, 7, fraction I, 8, 24, and 26 of its Law, with the objective of continuing to ensure adequate conditions for auctions for the primary placement of government securities, has resolved, effective July 1, 2005, to modify section CB.5.4.2.1 of Circular 115/2002, to read as follows:
“CB.5.4.2.1 The sum of the amounts of the bids submitted by each bidder, for the auction defined in each call for bids, must not exceed sixty percent of the maximum amount offered for said auction.
The aforementioned limit shall be applicable to the set of bids submitted by multiple banking institutions and brokerage houses that are part of the same financial group or controlled by the same shareholder. For the purposes of the foregoing, it shall be understood that the same shareholder controls a multiple banking institution and a brokerage house when they are the owner of thirty percent or more of the shares representing the social capital of both intermediaries; have control of their general shareholder meetings; are in a position to appoint the majority of the members of their boards of directors; or by any other means control the multiple banking institution and brokerage house in question.”
More like this from BANXICO
We email you every new BANXICO publication the day it's published.