Regulatory Alerts2006-12-26 | Circular 4/2006Added
Circular 4/2006 — Derivatives Operations
The Bank of Mexico establishes rules for multiple banking institutions, brokerage houses, investment companies, and limited-purpose financial companies regarding derivatives operations. The regulation simplifies authorization procedures by granting general indefinite authorizations to intermediaries, removes the requirement for auditor and consultant reports, and allows multiple banking institutions to conduct credit derivatives. It defines permissible underlyings, authorized counterparties, documentation standards, and specific prohibitions, such as banning brokerage houses, investment companies, and Sofoles from engaging in credit derivatives.
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