Circular 4/2014 — Clearing Houses for Card Payments

(First Section) OFFICIAL GAZETTE Tuesday, March 11, 2014 BANCO DE MEXICO CIRCULAR 4/2014, regarding the Rules applicable to clearing houses for card payments.
At the margin, a logo that says: Bank of Mexico.
CIRCULAR 4/2014
TO THE CLEARING HOUSES
FOR CARD PAYMENTS:
SUBJECT: RULES APPLICABLE TO CLEARING HOUSES
FOR CARD PAYMENTS

The card payment market offers various benefits to society, among which stand out the lower costs, both monetary and of another nature, for making payments, greater security compared to cash against theft or loss, greater access of the population to financial services, as well as the promotion of the formal economy. Clearing houses for card payments are key actors in the development of this market, by virtue of their role in the exchange of the information necessary for transactions to take place between the other participants involved.

In view of the above and with the objective of fostering more vigorous competition in the market for clearing houses for card payments and thereby achieving greater development of the card payment market, the Bank of Mexico has resolved to issue rules to, among other things:
I. Avoid barriers to entry and information problems that result in discriminatory policies against potential competitors, by requiring for the authorization of clearing houses for card payments that: i) they have clear and accessible rules and operational procedures and ii) define the terms under which the link between their processing systems and those of the clearing houses for card payments must be made;
II. Avoid price distortions by prohibiting uncompetitive charging practices such as forced bundling of products or discounts based on individual characteristics of customers; Facilitate innovation, eliminating barriers to development that hinder the incorporation of improvements in infrastructure and operation, and
III. Strengthen the security and risk management of the network through guidelines for the business continuity and security schemes of the participants.

For the above reason, based on articles 28, paragraphs sixth and seventh of the Political Constitution of the United Mexican States; 24 of the Bank of Mexico Law; 3, fractions II and XII, 19, 19 Bis, 21, 22, 47, 49, fraction VII and 49 Bis of the Law for the Transparency and Ordering of Financial Services; 4th, first paragraph, 8th, paragraphs fourth and seventh, 10, first paragraph, 14 Bis in relation to 17, fraction I and 15 in relation to 20, fraction XI of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Legal Directorate and the General Directorate of Payment Systems and Corporate Services, respectively, as well as Second of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, fractions VIII and X, has resolved to issue the "Rules for the organization, functioning and operation of clearing houses for card payments", in the following terms:

RULES FOR THE ORGANIZATION, FUNCTIONING AND OPERATION OF CLEARING HOUSES FOR CARD PAYMENTS

1a. Object and Definitions.- These Rules aim to establish the terms and conditions applicable to the functioning and operation of the clearing houses referred to in articles 3, fraction II, 19 and 19 Bis of the Law for the Transparency and Ordering of Financial Services that have as their purpose to process payment instructions with debit and credit cards, as well as the requirements that such clearing houses must comply with, and the procedure they must follow to request authorization from the Bank of Mexico to organize and operate with such character.

The following central entities or payment processing mechanisms are excluded from these Rules: i) those that perform completely within the same entity the functions of issuance, acquiring, processing and brand ownership, and ii) those that are operated mostly under the scheme of the previous subsection (i) and that incorporate other issuers or acquirers, whose operation is less than 5% of the billing of the total operations of all Card Payment Networks.

For the purposes of what is provided in these Rules, the following shall be understood, in singular or plural:

Acquirer: the participant in the Card Payment Network that, in accordance with the contract it has entered into with the Clearing House for Card Payments, provides acceptance services for Card Payments to Payment Receivers or Aggregators in the Card Payment Networks and, where applicable, provides the infrastructure of POS terminals connected to these latter networks. Likewise, it commits, in the terms agreed, among other things, i) to receive from Payment Receivers the Payment Authorization Requests for Card Payments; ii) to process and direct to the respective Issuers said requests through the Clearing House for Card Payments, iii) to receive the Payment Authorizations, Payment Rejections, returns and adjustments processed by the Issuer to deliver them to the Payment Receiver; and iv) to settle with the Payment Receiver the amount of the Card Payments that have the Payment Authorization granted by the corresponding Issuer.

Aggregator: the participant in the Card Payment Network that, under the protection of a service provision contract entered into with an Acquirer, offers Payment Receivers the service of acceptance of Card Payments and, where applicable, provides the infrastructure of POS terminals connected to said networks.

Payment Authorization: the message sent by the Issuer in response to a Payment Authorization Request presented by the Acquirer confirming that it is appropriate to charge the account linked to the Card in question to complete the respective Card Payment.

Clearing House for Card Payments:
a person who acts as a central entity or is the operator of a centralized processing mechanism, through which the actions corresponding to exchange between Acquirers and Issuers, Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns, adjustments or other financial obligations related to Card Payments, including Clearing, are carried out.

Clearing: the process carried out by the Clearing House for Card Payments to determine at the close of a set period the debtor or creditor balance corresponding to each of its Participants or to other Clearing Houses for Card Payments to which it transmits and from which it receives Payment Authorizations, returns, adjustments and other financial obligations related to Card Payments and that in turn said balances result from the exchange of obligations between those Participants and the Clearing Houses for Card Payments derived from the above and that have the effect that these assume the character of reciprocal creditors and debtors.

Conditions for Interchange between Clearing Houses:
the set of operational procedures between Clearing House for Card Payments that includes Routing, Clearing, Settlement, operational security, communication protocols and the way in which they will carry out the link with other Clearing Houses for Card Payments to exchange Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns or adjustments of Card Payments.

Issuer: the entity that participates in the Card Payment Network that issues Cards and that, through the Clearing House for Card Payments, receives the Payment Authorization Requests directed to it by the Acquirer and generates the respective Payment Authorizations, Payment Rejections, returns and adjustments with the object of being sent to the Payment Receiver through the Clearing House for Card Payments and the corresponding Acquirer.

Settlement: the act by virtue of which the Acquirer and Issuer consider the obligation resulting from the Clearing to be fulfilled in accordance with what is established in the Conditions for Interchange between Clearing Houses.

Card Payment: the delivery of the respective resources to the Payment Receiver derived from the acceptance that it has made of a Card to cover a certain consideration for the sale of a good, provision of a service or for any other concept, through the corresponding charges in the account linked to said Card and the credit of the agreed amount in the account of the Payment Receivers.

Participant: the Issuer or Acquirer that intervenes in the Card Payment Network through the Clearing Houses for Card Payments.

Payment Receiver: the natural or legal person who, by reason of the celebration of a service provision contract with an Acquirer or Aggregator, accepts Card Payments by means of POS terminals or other devices connected to the Card Payment Network that the Acquirer or Aggregator makes available to it, and is the one who initiates the Payment Authorization Request through the Acquirer or Aggregator and receives the Payment Authorization response, Payment Rejection, returns or adjustments through the same Acquirer or Aggregator.

Payment Rejection: the instruction message sent by the Issuer in response to a Payment Authorization Request presented by the Acquirer, on behalf of the Payment Receiver, through the corresponding Clearing House for Card Payments, by which it confirms that it is not appropriate to charge the account linked to the Card in question, for which reason the payment initiated by the use of said Card through the Card Payment Network will not be completed.

Card Payment Network: the network of means of disposal referred to in article 3, fraction XIV, of the Law for the Transparency and Ordering of Financial Services, related to the use of Cards as a means of payment.

Routing: the transmission of Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns and adjustments of Card Payments that Clearing Houses for Card Payments carry out from Acquirers or Issuers by which the exchange between them is carried out.

Payment Authorization Request:
the message that the Acquirer directs to the Issuer through a Clearing House for Card Payments with the instruction to charge the account linked to the Card corresponding to the Card Payment in question so that said Issuer carries out the Payment Authorization that allows said Card Payment to be carried out in favor of the respective Payment Receiver.

Cards: Credit Cards and Debit Cards.

Credit Cards: the means of disposal issued under the protection of a current account credit opening contract, which the Issuer grants in the name of the accredited person so that this, by using said means, can dispose of the credit line granted, totally or partially, under the modality of cash withdrawal, where applicable, or payments in favor of third parties carried out by the Issuer on behalf of the accredited person through the Card Payment Network that, for these purposes, is operated by the Clearing House for Card Payments.

Debit Cards: the means of disposal issued under the protection of a demand deposit contract, which the Issuer grants to the depositor so that this, by using said means, can, in addition to carrying out other withdrawal operations, dispose of the deposited funds as payments in favor of third parties carried out by the Issuer on behalf of the depositor through the Card Payment Network that, for these purposes, is operated by the Clearing House for Card Payments.

Brand Owner: the participant in the Card Payment Network that is the owner of a brand susceptible to being used on Cards and that grants under a contract, licenses for its use to Issuers in the issuance of Cards, and to Acquirers in the provision of services related to them and that, where applicable, as part of the use licenses it grants, among other things, establishes conditions and technical, operational and guarantee specifications to the Issuers and Acquirers that use its brand, as well as to a company that is authorized to impose said conditions and specifications of use of the license granted by some brand owner abroad.

Point of Sale Terminals or POS:
to the means of access to the Card Payment Network, such as electronic devices, terminals, mobile phones and computer programs, operated by Payment Receivers to instruct the payment of goods or services charged to a Card.

2a. Authorization of Clearing Houses for Card Payments.- The Bank of Mexico may only grant its authorization for the organization and operation of the Clearing Houses for Card Payments referred to in these Rules to anonymous societies or limited liability societies, constituted in accordance with the General Law of Commercial Societies, that comply with the requirements indicated in this Rule.

The persons who intend to constitute and operate a Clearing House for Card Payments must present to the Bank of Mexico, through the Management of Authorizations, Consultations and Legal Control, their respective authorization requests to organize and operate as such.

The requests mentioned in the previous paragraph must attach the following documentation:
I. Instrument duly notarized before an authorized public notary by which sufficient powers are granted to the representatives of the respective promoters who present to the Bank of Mexico the corresponding request;
II. Draft bylaws of the society that is intended to be organized and operated as a Clearing House for Card Payments, which must expressly include, at least, the following:
a) The recognition, as part of its corporate purpose, of carrying out actions to exchange between Acquirers and Issuers, Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns and adjustments or any other financial obligations related to Card Payments through the Card Payment Network, as well as, where applicable, Clearing or Settlement; b) The address of its central administration in national territory; c) The establishment of a board of directors composed of a minimum of five and a maximum of fifteen members, who must meet the same requirements imposed by the Credit Institutions Law for the directors of multiple banking institutions and in accordance with applicable international agreements. In the case of limited liability societies, the aforementioned integration of its administration shall be as an exception to what is provided in article 74 of the General Law of Commercial Societies; d) The indication that, of the total number of directors, at least twenty-five percent must be independent and that, to be considered as such, they must meet the same requirements established in the Credit Institutions Law for said directors of multiple banking institutions, as well as the express condition that the agreements taken by the board must have the approval of at least one of said independent directors; e) The condition that any transfer of its shares by more than five percent of the paid ordinary social capital must have the authorization of its board of directors, in terms of what is provided in article 130 of the General Law of Commercial Societies for the case of anonymous societies, or in the case of limited liability societies with the consent of the partners representing the majority of the capital, in accordance with what is provided in article 65 of the aforementioned Law. Likewise, it must be established that the aforementioned transfer will be subject to the condition that the society obtains prior approval from the Bank of Mexico, and f) The express agreement that any modification to the bylaws of the society must have, for its validity, prior authorization from the Bank of Mexico;

III. List and information of the persons who directly or indirectly intend to maintain any participation in the capital of the society object of the authorization request, which must contain the following:
a) The amount of social capital that each of them will subscribe and the origin of the resources it will use for such effect; b) The financial situation, in the case of natural persons, or the financial statements, in the case of legal persons, in both cases for the last three years, and c) That which allows verifying that they have honorability and satisfactory credit and business history;
IV. List of the persons proposed to occupy the positions of directors, general manager, auditor and main executives of the society;
V. Legal instrument accrediting the ownership or right of use of the computer systems and programs they use or intend to use for the operation of the Clearing House for Card Payments;
VI. General functioning plan that allows the Clearing House for Card Payments in question to adequately comply with the object imposed on it by the Law for the Transparency and Ordering of Financial Services, as well as the obligations, guidelines and requirements provided for in any applicable provision, and that describes in detail the following:
a) The characteristics, existing or planned, of its technological and telecommunications infrastructure, which must consider the available capacity to link to other Clearing Houses for Card Payments; b) The way in which they will link their processing systems with those of their Participants and with other Clearing Houses for Card Payments with which they interact or intend to interact in order to offer their Card Payment processing services; c) Description of the direct installation expenses that would be incurred to make a new link with a Clearing House for Card Payments in accordance with what is established in the previous subsection; d) Technical and security characteristics of said links, which must meet the minimum requirements established in the Conditions for Interchange between Clearing Houses; e) The financial viability study of the society; f) The bases for applying profits; g) The legal acts they have entered into with the telecommunications company or companies, as well as the tariffs and technical specifications of the service provided by said companies, and h) The other legal acts that, in the opinion of the Bank of Mexico, are relevant for the functioning of the Clearing House for Card Payments. Said functioning plan must be presented to the Bank of Mexico at least every two years and will be subject to the supervision procedures established in Rule 17a. of this document, and
VII. Certifications of compliance with operational and computer security standards, which are required of them in the Conditions for Interchange between Clearing Houses of the Card Payment Network in which it intends to operate, as well as the information of the certifying company;
VIII. Description of the processes they carry out or intend to carry out related to the exchange of Card Payment instructions, including, among others, the operating hours and the systems that their Participants will use;
IX. Description of the technological and operational capacity that allows them to provide the services, meeting the response times and availability established in the Conditions for Interchange between Clearing Houses;
X. Internal norms to which the Clearing House for Card Payments in question will be obliged, in order to adequately comply with the object imposed on it by the Law for the Transparency and Ordering of Financial Services, as well as the applicable provisions, which must include, at least, the following aspects:

Tuesday, March 11, 2014 OFFICIAL GAZETTE (First Section) a) The access requirements for potential Participants, under which they must allow the affiliation, on equal terms, of any entity that has accreditation to issue or accept Cards from any Card Payment Network; b) Contracts, as well as any other legal instrument they intend to enter into with their Participants, Brand Owners, and with other Clearing Houses for Card Payments, in which all the terms and conditions of the rights and obligations corresponding to the Clearing House for Card Payments and to each of the counterparties are stipulated. These legal instruments must contain, at least, the following:
(i) Tariff schemes and other charges that will be collected for the provision of their services, with a breakdown of the tariff for each of the services provided; (ii) Conventional penalties or measures that must be adopted in the event of non-compliance with internal rules, and (iii) Technical requirements to offer or contract said services; c) Procedures for the resolution of disputes between their Participants, as well as with other Clearing Houses for Card Payments for the operations carried out, without prejudice to what is provided in Rule 10th of these Rules; d) Security measures to preserve the integrity of information and avoid its unauthorized disclosure, with a description of the technical elements as well as the processes; e) Business continuity plans, which identify the means for controlling risks derived from Routing, Clearing, Settlement, or any other service offered to Acquirers or Issuers, which must comply with Rule 11th of these Rules, and f) Description of the guarantee schemes that their participants must maintain for each Card Payment Network to cover the Settlement of the results of Clearing among the Participants and with other Clearing Houses for Card Payments, only in the case where they intend to provide the Settlement service. The Bank of Mexico may require additional documentation, information, and certifications that it deems necessary to verify the aforementioned requirements and evaluate the convenience of granting the requested authorization.

3rd. Resolution.- Once the application referred to in Rule 2nd of these Rules includes the documentation and information referred to in said Rule, the Bank of Mexico will analyze whether, based on that documentation and information, it is appropriate to grant the authorization to the petitioner in question to act as a Clearing House for Card Payments and must inform its decision to the applicant within a period not exceeding ninety natural days. In the event that, after the period indicated in the previous paragraph, the Bank of Mexico does not communicate its decision to the applicant, it will be understood that said authorization request has been denied.

4th. Conditions of the Authorization.- The authorization granted by the Bank of Mexico to a company to organize and operate as a Clearing House for Card Payments will be personal and non-transferable and will have indefinite validity.
The Bank of Mexico will publish in the Official Gazette of the Federation the authorizations referred to in these Rules, as well as their modifications and revocations.

5th. Modification to internal rules, bylaws, or contracts.- In the event that Clearing Houses for Card Payments intend to make any modification to their bylaws, internal rules, or contracts provided for in these latter that they have entered into with the respective Participants, with the Brand Owners, other Clearing Houses for Card Payments, or with any third party that provides them with services related to the execution of operations related to Routing, Clearing, or Settlement in terms of Rule 7th of these Rules, they must obtain prior and written authorization from the Bank of Mexico, through a request submitted to the Management of Authorizations, Inquiries, and Legal Control. Clearing Houses for Card Payments must at all times subject their internal rules to the regulation on the matter issued by the Bank of Mexico.

(First Section) OFFICIAL GAZETTE Tuesday, March 11, 2014 In the event that Clearing Houses for Card Payments contract with a third party for the provision of services related to the execution of operations related to Routing, Clearing, or Settlement, and this party makes changes to its procedures, bylaws, or internal rules that do not comply with the requirements imposed on any Clearing House for Card Payments that performs the aforementioned services on its own, the Bank of Mexico may sanction the Clearing House for Card Payments in question, limit or suspend its operations, or revoke the authorization of the Clearing House for Card Payments.

6th. Tests.- Prior to their entry into operation, Clearing Houses for Card Payments must demonstrate to the full satisfaction of the Bank of Mexico, the connection and message exchange tests in accordance with what is stated in the Conditions for Interchange between Clearing Houses.

7th. Authorized Operations.- Clearing Houses for Card Payments may agree with third parties for the provision of services related to their object as long as they comply with the requirements and conditions published by the Bank of Mexico through a general resolution.

8th. Conditions for Interchange between Clearing Houses.- Brand Owners, Clearing Houses for Card Payments, Issuers, and Acquirers may present to the Bank of Mexico a project of Conditions for Interchange between Clearing Houses. The Bank of Mexico will analyze the appropriateness of authorizing said conditions or requesting modifications to them. In case it considers that what was presented does not meet the characteristics for the proper functioning of the Card Payment Network, the Bank of Mexico will establish the Conditions for Interchange between Clearing Houses that the aforementioned subjects must observe regarding the corresponding Card Payment Network. With respect to subsequent modifications, the Bank of Mexico will establish a mechanism for the receipt and, if applicable, the authorization of proposals from Brand Owners, Clearing Houses for Card Payments, Issuers, and Acquirers. All Clearing Houses for Card Payments that participate in any Card Payment Network must operate in accordance with the Conditions for Interchange between Clearing Houses of said network, in which the operational procedures and communication protocols will be established for:
I. To perform the Routing of Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns, and adjustments of Card Payments, including:
a) The description of the processes and communication protocols, for the secure exchange of messages of Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns, and adjustments between Clearing Houses for Card Payments, and b) The operating hours;
II. To perform Clearing and Settlement, including:
a) The description of the processes and communication protocols for the secure exchange of messages, and b) The operating hours;
III. To carry out the administration and resolution of disputes;
IV. To carry out the administration of liquidity risks;
V. To establish the link with other Clearing Houses for Card Payments;
VI. To establish the processes and procedures for operational continuity;
VII. To carry out the administration of the quality of their services (response times and service availability), and
VIII. To carry out the administration of the record of Interchange Fees for Card Payments that must be applied for the purposes of clearing and settlement between Issuers and Acquirers. In said record, they must allow the processing of more than one identifier linked to the Aggregators so that these can apply, if required, the level of Interchange Fee corresponding to the Payment Recipient to whom they provide the payment acceptance service.

Tuesday, March 11, 2014 OFFICIAL GAZETTE (First Section) 9th. Link between processing systems.- Clearing Houses for Card Payments:
I. Will have the obligation to link their operational processing systems, to respond to Payment Authorization Requests, Payment Authorizations, Payment Rejections, returns, and adjustments that they exchange with other Clearing Houses for Card Payments that process Card Payments of the same Card Payment Network, at the request of their respective Issuers or Acquirers. Clearing Houses for Card Payments cannot charge other Clearing House counterparties consideration for said link and for the transmission of information between them or any other concept, except for direct installation costs;
II. Must allow the free exchange of information of said payments without blocking, delaying, or hindering communication with other Clearing Houses for Card Payments of said network, and
III. May establish the link with other Clearing Houses for Card Payments that process Card Payments of the same Card Payment Network, through an agreement with a third Clearing House for Card Payments that also processes Card Payments of the cited Network.

10th. Restricted Activities.- Clearing Houses for Card Payments will not discriminate in any way between their subsidiaries or shareholders, on the one hand, and the users of those systems and other contractual partners, on the other.
Likewise, Clearing Houses for Card Payments will not in any way subordinate the provision of any service to the acceptance by the Participant of contracting any other service they offer. In particular, Clearing Houses for Card Payments are obliged to:
I. Refrain from performing tied sales, that is, to condition the provision to their Participants of the services of Routing, Clearing, and Settlement related to Card Payments, as well as the Clearing and Settlement of these to the acquisition of other services or products. In any case, Clearing Houses must offer their services in a disaggregated manner and must charge individual tariffs for each of said services;
II. Refrain from requiring their Participants to exclusively use a specific Card brand of all those processed by said chamber, or to process or condition their clients to process Card Payments, only, through the Clearing House for Card Payments in question;
III. Refrain from giving differentiated treatment in the provision of the same type of service, unless in the judgment of the Bank of Mexico, it is duly justified and is not discriminatory;
IV. Refrain from imposing any other restriction or condition that limits the free contracting of any of their Routing, Clearing, and Settlement services;
V. In case of knowing about any discriminatory measure or obligation of exclusivity in the use or acceptance of certain Cards that are being carried out by Brand Owners, Acquirers, Issuers, or other Clearing Houses for Card Payments, to which they provide services, they must Inform the Bank of Mexico, and
VI. Refrain from charging other Clearing Houses for Card Payments for the link and transmission of information except in the cases provided for in Rule 14th of these Rules, in which case, said charges must have been previously authorized by the Bank of Mexico in terms of Rule 15th.

11th. Business continuity.- Each Clearing House for Card Payments must have two processing sites, one main and one backup, which must have the capacity to respond to requests and connect to new Clearing Houses for Card Payments. Both processing sites must be linked to the corresponding systems of the other Clearing Houses for Card Payments with which they, in turn, must be linked, under the conditions established in Rule 9th of these Rules. These links (main and backup) must have the following characteristics:
I. Be dedicated;
II. Be contracted with at least two different telecommunications providers;

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III. Be subject to the requirements indicated in the Conditions for Interchange between Clearing Houses that the Bank of Mexico authorizes or, if applicable, establishes, regarding the capacity to transport the flow of information estimated to be exchanged between the Clearing Houses for Card Payments that it connects, taking into account the growth in the flow of information;
IV. Maintain their correct functioning, and
V. Be protected by logical security systems through equipment, including: redundant unauthorized access blocking devices (“Firewalls”), malicious intrusion prevention systems (“Intrusion Prevention System-IPS”), among others.

12th. Obstruction of link.- Any Clearing House for Card Payments must notify the Bank of Mexico when, in its opinion, it estimates that another is infringing what is provided in Rules 9th and 10th of these Rules. The Bank of Mexico may require Clearing Houses for Card Payments the information it considers necessary to determine if what is established in said Rule has been infringed.
I. If the Bank of Mexico verifies and determines that a Clearing House for Card Payments is obstructing the links referred to in Rule 9th, it will apply the sanction established in Article 49 of the Law for Transparency and Ordering of Financial Services.
II. In case of recurrence in the obstruction of links, by a Clearing House for Card Payments, this Central Institute will determine if it is appropriate to impose a limitation or partial suspension of its operations or, if applicable, the revocation of the authorization that has been granted to said Clearing House for Card Payments.

13th. Information.- Clearing Houses for Card Payments must provide the Bank of Mexico, in the terms and deadlines indicated by it, the information and documentation related to:
I. The reports on Card Payment operations that said Clearing Houses carry out;
II. The contingency events that have been recorded in the Routing, Clearing, and Settlement services, both in the operations of their own Participants and in those of other Clearing Houses for Card Payments, as well as the corrective actions that were taken, and
III. Any other aspect different from those indicated in the previous subsections that the Bank of Mexico deems necessary to evaluate the adequate organization, functioning, and operation of the Clearing House for Card Payments in question, as well as the efficiency and competitive conditions of the market.
Additionally, Clearing Houses for Card Payments must provide Brand Owners with information about their transactions that allows them to manage the risks of the operations guaranteed by said holders. To this effect, the delivery of information must be carried out in accordance with the terms and conditions agreed upon by each Clearing House for Card Payments and the Brand Owner.

14th. Charges.- Clearing Houses for Card Payments may provide linking services, through their infrastructure, to other Clearing Houses for Card Payments that are not linked with other Clearing Houses for Card Payments, and may charge them for this intermediary service the amounts they agree upon for this purpose.

15th. Authorization of charges.- Clearing Houses for Card Payments may charge their Participants and other Clearing Houses for Card Payments to which they provide the services of Routing, Clearing, and Settlement, only those charges that have the prior authorization of the Bank of Mexico and, in any case, said Clearing Houses for Card Payments must refrain from granting discounts for consuming two or more services provided by the chamber itself or for shareholding. Likewise, with respect to differentiated charges by volume, the difference between the highest and lowest transaction tariff must not exceed 5%.

16th. Information protection.- Clearing Houses for Card Payments must obligate themselves to keep in the utmost confidentiality appropriate under law all the information and documentation related to the operations and services they offer and, by virtue thereof, must refrain from giving information about Card Payments they send to any person, except to the Participants involved in said operations, as well as to the Bank of Mexico and to the other authorities that have legal powers to require and obtain said information in accordance with the procedure that the applicable provisions establish for this purpose. Without prejudice to the foregoing, the Clearing House for Card Payments, subject to applicable provisions, may share among its Participants, in a consolidated manner, information that is not nominative or is individualized to any person, for the purpose of improving services to Participants.

17th. Supervision.- For the supervision of compliance with what is provided in these Rules, the Bank of Mexico may adopt, among others, the following measures:
I. Require the Clearing House for Card Payments all the information it indicates for the purpose of supervising compliance with the provisions applicable to it, in which case said Clearing Houses for Card Payments are obliged to provide that information in the deadlines and terms indicated by the Bank of Mexico;
II. Carry out inspections in the offices, facilities, equipment, and information and communication technology systems of Clearing Houses for Card Payments, which must allow their access;
III. Carry out inspections or require information to verify the operating plan of the respective Clearing House for Card Payments, and
IV. Issue recommendations regarding the functioning of Clearing Houses for Card Payments.
The Bank of Mexico, in the exercise of its supervisory powers, may at any time require Clearing Houses for Card Payments to update or modernize the technologies they use for the development of their object.

18th. Sanctions.- The Bank of Mexico will sanction, with a fine imposed in terms of what is provided in the Law for Transparency and Ordering of Financial Services, the Clearing House for Card Payments, when they infringe any of the provisions provided in these Rules and in the Conditions for Interchange between Clearing Houses.
Taking into account the circumstances of the concrete case, the Bank of Mexico, in addition to the imposition of the corresponding fine, if applicable, may limit or partially suspend the operations of Clearing Houses for Card Payments, for infringing these Rules or the Conditions for Interchange between Clearing Houses in a repeated or serious manner.

19th. Limitation or suspension of operations.- The Bank of Mexico will notify the Clearing House for Card Payments to which a limitation or partial suspension of its Routing, Clearing, or Settlement operations will be imposed, in accordance with Rule 18th, at least 20 business days in advance, from the date from which it will cease to provide the services that the Bank of Mexico has partially limited or suspended. Said Clearing House for Card Payments must inform its Participant clients and the rest of the Clearing Houses for Card Payments, no later than the next business day after receiving said notification or any other related to the non-compliance with these Rules. Likewise, the Bank of Mexico will make public the limitations or suspensions of operations that it executes.

20th. Revocation.- The Bank of Mexico may revoke the authorization granted to a Clearing House for Card Payments when it:
I. Obstructs the link with other Clearing Houses for Card Payments that process Card Payments of the same Card Payment Network;
II. Does not start its operations within a period of twelve months counted from the date on which the authorization was granted;
III. Ceases to carry out the activity that was authorized to it for a period greater than six months without justified cause;
IV. Has presented to the Bank of Mexico, as part of the authorization application referred to in these Rules or in response to the information requirements that it makes in accordance with these Rules, false documents or declarations or by any other irregular means;
V. Ceases to meet the requirements considered for the granting of the authorization;
VI. Enters into a dissolution and Settlement process;
VII. Is declared in commercial bankruptcy by a judicial authority, or
VIII. Commits serious infractions or is a repeat offender.

(First Section) OFFICIAL GAZETTE Tuesday, March 11, 2014

21st. Recidivism or serious infractions.- For the purposes of the limitation, suspension, or revocation provided for in these Rules, a Card Payment Clearing House shall be considered a repeat offender if, having committed an infraction that has been sanctioned, it commits another of the same type or nature within the two years immediately following the date on which the corresponding resolution became final.

Likewise, for the purposes of these Rules, serious infractions shall be considered to be the Card Payment Clearing Houses' violation of what is provided in Rule 2nd, when they do not have the counselors referred to in fraction II, subsections c) and d), or when a transfer of shares representing their share capital is carried out in violation of what is provided in subsection e) of that same fraction; Rule 5th, first paragraph, when they modify their bylaws or internal regulations without having the authorization of the Bank of Mexico; Rule 10th, fraction I, when they carry out tied sales; Rule 12th, when they obstruct the link; Rule 15th, when they charge for the basic services of Routing, Clearing, and Settlement that do not have the authorization of the Bank of Mexico, and Rule 16th, when they fail to comply with their obligation to keep confidentiality or disclose information or documentation contrary to what is provided by said Rule.

TRANSITIONAL PROVISIONS

FIRST. These Rules shall enter into force on the third next banking business day following their publication in the Official Gazette of the Federation.

SECOND. Persons who, on the date of entry into force of these Rules, operate as Card Payment Clearing Houses shall have a period of ninety natural days counted from the aforementioned date to submit the authorization applications referred to in Rule 2nd of these Rules, in which they must attach, in addition to the documentation referred to in said rule, the following information:

a) The notarized articles of incorporation of the relevant company, registered in the Public Registry of Commerce and, where applicable, any modifications thereto, as well as their bylaws; b) A description of their share capital structure, indicating the identity of all persons who own, directly or indirectly, any participation therein, as well as a description of their corporate structure with indication of the persons who act as the main executives of the company; c) The document accrediting the address of their central administration, and d) The public instrument or certified copy before a public notary of the general or special power of attorney of the representative of the company, with the registration data in the Public Registry of Commerce, as well as a certificate signed by the secretary of the board of directors authenticating that the powers of legal representative have not been revoked, modified, or limited as of the date of submission of the application.

The persons referred to in this transitional rule may continue to operate under such status and under the applicable terms and conditions until the Bank of Mexico grants or denies the corresponding authorization.

THIRD. In the event that the Bank of Mexico does not receive the proposal referred to in Rule 8th of these Rules regarding the Payment Networks in operation upon the entry into force of these Rules, within the 90 days following such entry into force, or receives one that does not comply with what is provided in these Rules, the Bank of Mexico shall publish the Conditions for Interchange between Clearing Houses that will be applicable to said Payment Networks.

Mexico, D.F., March 10, 2014.- BANK OF MEXICO: The Director General of Payment Systems and Corporate Services, Lorenza Martínez Trigueros.- Initials.- The General Legal Director, Luis Urrutia Corral.- Initials.

For any inquiries regarding the content of this Circular, please contact the Department of Authorizations, Queries, and Legal Control, at the phone numbers (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000, extension 3200.