Circular 49/2008 — Modifies Circular 48/2008

2008, Year of Physical Education and Sport
CIRCULAR 49/2008
Mexico, D.F., October 16, 2008.
TO THE MULTIBANK INSTITUTIONS:
SUBJECT: LIQUIDITY FACILITIES

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 7th, fractions I, II and X; 8th, 14, 16, 24 and 36 of the Bank of Mexico Law; 22 of the Law for Transparency and Order of Financial Services; 8th, third and sixth paragraphs; 12 in relation to 19 fraction IX and 17 fraction I of the Internal Regulations of the Bank of Mexico, which provide for the attribution of the Central Bank, through the General Directorate of Central Bank Operations and the Directorate of Central Bank Regulations, respectively, to issue provisions; Sole paragraph of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, fractions I and IV, with the objective of continuing to implement measures to promote the sound development of the financial system and to foster the proper functioning of payment systems, as well as considering the existence of short-term instruments that do not have a rating in accordance with what is provided in the Securities Market Law, has resolved to modify numeral 1.2 under the heading "Securities Subject to Repo" of the "Rules applicable to the exercise of financing", contained in Circular 48/2008, to read as follows:

RULES APPLICABLE TO THE EXERCISE OF FINANCING

1.2 Repo Operations

"Securities Subject to Repo: i) Certificates of the Treasury of the Federation denominated in national currency (CETES) excluding those issued under credit restructuring programs in investment units (SPECIAL CETES); ii) Development Bonds of the Federal Government denominated in national currency (BONDES) or in investment units (UDIBONOS); iii) Segregated Coupons of the Development Bonds of the Federal Government denominated in national currency with a fixed interest rate or in investment units referred to in the "Rules for the Segregation and Reconstitution of Securities" issued by the Ministry of Finance and Public Credit; iv) Securities issued by the Institute for the Protection of Bank Savings with respect to which the Bank of Mexico acts as financial agent for the issuance, placement, purchase and sale, in the national market (BONOS DE PROTECCIÓN AL AHORRO (BPAS)); v) Monetary Regulation Bonds (BREMS); vi) Debt securities issued by the Federal Government denominated in foreign currency, which are deposited in the S.D. Indeval, Institution for the Deposit of Securities, S.A. de C.V., (INDEVAL); vii) Debt securities denominated in national currency issued by credit institutions other than the reporting one and deposited in INDEVAL, which have been registered in the National Securities Register provided for in the Securities Market Law by October 10, 2008 at the latest, and viii) Debt securities denominated in national currency, which are deposited in INDEVAL, with at least two minimum AA ratings or their equivalent granted by securities rating institutions authorized by the National Banking and Securities Commission and issued by any of the following persons:

a. Parastatal entities; b. Local governments;
c. Municipalities;
d. International organizations; e. Non-financial companies resident in Mexico that do not form part of the same business group or consortium as the reporting entity, in terms of what is provided in the Securities Market Law; f. Financial companies resident in Mexico other than the reporting one, which issue such instruments to securitize future payment obligations for mortgage credits, or g. Trusts constituted by financial companies resident in Mexico other than the reporting one, whose equity is constituted by a portfolio of mortgage credits.

The maturity of the securities must be subsequent to the term of the repo operations to be formalized. Likewise, the value of the securities subject to the repo determined in accordance with the provisions of the following paragraph, must be equal to or greater than the sum of the price plus the premium of the operation.

The Bank of Mexico will make known to the institutions intending to carry out repo operations, the market price valuation of the securities to be reported and the corresponding discount factors. Likewise, the Bank of Mexico will make known to the institutions, through the means it considers appropriate, the specific characteristics of the securities susceptible to being subject to repos, reserving the right not to accept any particular security."

TRANSITORY

SOLE. This Circular enters into force on October 16, 2008.