Circular 45/2008 — Modifies Circular 2019/95

"2008, Year of Physical Education and Sport"
CIRCULAR 45/2008
Mexico, D.F., September 23, 2008

TO MULTIPLE BANKING INSTITUTIONS:
SUBJECT: MODIFICATIONS TO CIRCULAR 2019/95

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; 8th third and sixth paragraphs, 10 first paragraph, 14 first paragraph in relation to 25 fraction II, and 17 fraction I, which grant the Bank of Mexico, through the General Directorate of Analysis of the Financial System and the Central Banking Provisions Directorate, respectively, the authority to participate in the issuance of provisions, all of them under the Internal Regulations of the Bank of Mexico; Unique of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, fractions III and IV, with the purpose of promoting the sound development of the financial system and resulting from reforms carried out on various financial laws and the Internal Regulations of the Bank of Mexico in which, among other things, powers of some financial authorities were reassigned, has resolved to modify the provisions M.11.13.4, third paragraph; M.11.14.4, first paragraph; M.11.3; M.11.33.1; M.11.34.; M.13.23; M.24., first paragraph; M.72.23., fifth paragraph; M.85.; M.92.3, first paragraph, as well as Annex 3, item SA.11.1 and repeal the provisions M.13.5, second paragraph and M.34., all of Circular 2019/95, to remain in the following terms.

M.1 PASSIVE OPERATIONS
M.11. CHARACTERISTICS OF DOMESTIC CURRENCY OPERATIONS M.11.13. WITHDRAWABLE DEPOSITS ON PRE-ESTABLISHED DAYS

“M.11.13.4 Withdrawals
...
The institutions may agree with their clients that if the circumstance provided for in the preceding paragraph occurs, the deposit may be withdrawn on the immediate preceding banking business day, in accordance with what is provided for in article 46 Bis 5, fraction III of the Law of Credit Institutions. In the contracts it may also be established that the withdrawal may be made at the choice of the depositer in any of the two mentioned options.

2
...
”

M.11.14. SAVINGS DEPOSITS

“M.11.14.4 Income tax
Regarding the payment of returns to resident individuals in the country, in accordance with what is provided in the Income Tax Law, the interest of accounts with an average monthly balance equal to or less than double the general daily minimum wage of the Federal District raised to the year and with an interest rate not greater than that fixed annually by the Congress of the Union will not incur this tax. ... ”

“M.11.3 BANK BONDS AND BANK SECURITIES
Institutions may issue bank bonds and securities as provided for in articles 63 of the Law of Credit Institutions and 61 of the Securities Market Law, respectively. The referred securities will be called bank securities.”

M.11.33. TERMS

“M.11.33.1 Early Payment
In accordance with what is provided for in articles 46 Bis 5 and 63 of the Law of Credit Institutions, the issuer may amortize early the bonds and bank securities that it issues, respectively, provided that, in the issuance deed, the informative prospectus or in any other propaganda or advertising directed to the public regarding the characteristics of the issuance in question and in the titles that are issued, the terms, dates and conditions of early payment are clearly described.”

“M.11.34. DOCUMENTATION
In the issuance deed, in the respective titles or in the informative prospectuses and brochures, the rights and obligations of the issuer and of the title holders must be specified, so that such documents must contain, in addition to what is provided for in articles 63 of the Law of Credit Institutions and 63 of the Securities Market Law according to the title in question, at least the following clauses: a) unilateral declaration of will to issue bank bonds; b) destination; c) denomination of the issuance; d) term and maturity of the issuance; e) place of payment of principal and interest; f) possible acquirers; g) deposit in administration; h) domicile of the issuer; i) competent courts, and j) the information referred to in provision M.11.86.”

M.13. ADMISSION REGIMES FOR LIABILITIES AND INVESTMENT FOR FOREIGN CURRENCY OPERATIONS M.13.2 LIABILITY ADMISSION LIMIT

“M.13.23. Assets will be classified into two groups, and in each group the amount of assets to be counted will be calculated by multiplying the asset amount by the following weights:

ASSET TYPE WEIGHT
Liquid Assets, Money Market Assets and Foreign Currency to be Received.
1.0
Current credits with rating A, B or C, obtained in accordance with the Rules for the Rating of Credit Portfolios of Multiple Banking Institutions issued by the corresponding authority, as well as other assets and rights, with a Counting Term of up to one year, other than those previously mentioned. 0.5

“M.13.5 EXCEPTIONS TO THE ADMISSION REGIMES FOR LIABILITIES AND INVESTMENT FOR FOREIGN CURRENCY OPERATIONS ...
Repealed.”

M.2 ACTIVE OPERATIONS

“M.24. EARLY PAYMENT OF COMMERCIAL DOCUMENTARY CREDITS AT TERM OR COMMERCIAL LETTERS OF CREDIT AT TERM

4
Institutions may pay early obligations owed by them arising from irrevocable term commercial documentary credits and, if applicable, from term acceptances drawn in relation to such letters of credit, in accordance with what is established in article 46 Bis 5, fraction III of the Law of Credit Institutions. This is always provided that the documents presented by the beneficiaries comply with the terms and conditions provided for in the letters of credit themselves. ... ”

M.3 SERVICES

“M.34. Repealed”

M.7 OPERATIONAL RULES
M.72. COMPENSATION AND TRANSFER OF FUNDS
M.72.2 NATIONAL CURRENCY COMPENSATION

“M.72.23. ...
For the purposes of what is provided for in the preceding paragraph, the net capital will be that which is determined in terms of the rules applicable to credit institutions for capitalization requirements issued by the competent authority, relative to the month that corresponds as established in Annex 20. ... ”

M.8 OTHER PROVISIONS

“M.85. BANK OF MEXICO INTERBANK ELECTRONIC PAYMENT SYSTEM (SPEI) Institutions that act as participants in the SPEI must observe what is provided for in the "Rules to which Administrators of Retirement Funds; Brokerage Houses; Exchange Houses; Savings and Popular Credit Entities; Credit Institutions; Insurance Institutions; Investment Company Share Distributor Societies; Limited Purpose Financial Societies; Multiple Purpose Financial Societies, and Investment Company Operator Societies, that participate in the Interbank Electronic Payments System (SPEI)" must be subject, as well as any modifications that may be made to them. For this reason, the references to Circular 2019/95 that are made in the contracts that the institutions have entered or will enter with the Bank of Mexico to participate in said System, must be understood as referring, insofar as appropriate, to such Rules.”

M.9 TRANSITIONAL PROVISIONS
M.92. PASSIVE OPERATIONS

“M.92.3 PASSIVE OPERATIONS DENOMINATED IN NATIONAL CURRENCY CONTRACTED BEFORE APRIL 4, 1995 With the purpose that institutions can redocument in investment units the passive operations denominated in national currency contracted before April 4, 1995, they may pay early in whole or in part obligations owed by them derived from the passive operations indicated in M.11., provided that they agree with their clients to celebrate a new passive operation denominated in investment units with the proceeds of such payment, for a term equal to or greater than that remaining to mature for the operation that is paid early. This, in accordance with what is established in article 46 Bis 5, fraction III of the Law of Credit Institutions, will be without prejudice to what is provided for in the second paragraph of M.11.7. ... ”

ANNEX 3
PROVISIONS FOR BRANCHES AND AGENCIES ESTABLISHED ABROAD SA. BRANCHES AND AGENCIES SA.1 GENERAL PROVISIONS

“SA.11. For brevity, in this Annex the words:
SA.11.1 "Branch", in singular or plural, to designate the branches and/or agencies established abroad by Mexican banks, under authorizations issued by the National Banking and Securities Commission, in the terms of article 87 of the Law of Credit Institutions. ... ”

T R A N S I T O R Y
UNIQUE. This Circular will enter into force on September 26, 2008.