Circular 5/2008 — Modifies Circular 1/2006

"2008, Year of Physical Education and Sport"
CIRCULAR 5/2008
Mexico City, February 19, 2008.
SUBJECT: MODIFICATIONS TO CIRCULAR 1/2006.
MODIFICATIONS TO THE "RULES THAT ADMINISTRATORS OF RETIREMENT FUNDS; BROKERAGE FIRMS; EXCHANGE HOUSES; CREDIT INSTITUTIONS; INSURANCE COMPANIES; DISTRIBUTING COMPANIES OF INVESTMENT SOCIETY SHARES; LIMITED-OBJECT FINANCIAL COMPANIES, AND OPERATING COMPANIES OF INVESTMENT SOCIETIES, THAT PARTICIPATE IN THE INTERBANK ELECTRONIC PAYMENTS SYSTEM (SPEI), MUST COMPLY WITH".

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 2, 3, fraction I, 24 and 31 of the Bank of Mexico Law; 22 of the Law for Transparency and Ordering of Financial Services; and 8, third and fourth paragraphs, 10, 17, fraction I and 20, fraction IV, of the Internal Regulations of the Bank of Mexico published in the Official Gazette of the Federation on September 30, 1994, whose last modification was published in the aforementioned Official Gazette on April 26, 2007, and with the objective of promoting the proper functioning of payment systems, considering that:
a) For the development and greater use of the Interbank Electronic Payments System (SPEI), it is convenient to allow the participation in said system of other financial entities; b) With the participation of new financial entities in the SPEI, additional operating hours will be opened, so it is convenient to update the concepts and the amount of the consideration for the services provided in it; and c) It is necessary to make clarifications regarding contingency plans applicable to the settlement of operations with some of the financial entities participating in said system.

It has resolved to modify the title of the aforementioned Rules; the definition of Participant; paragraphs 3.1, first paragraph; 3.2, second paragraph; 4.3, first paragraph, and 6.4, second and fourth paragraphs; as well as to add the definitions of: i) CLS; ii) Popular Savings and Credit Entities; and iii) Multiple-Object Financial Societies; a third paragraph to item 6.7; and Annex 2, all of the "Rules that Administrators of Retirement Funds; Brokerage Firms; Exchange Houses; Credit Institutions; Insurance Companies; Distributing Companies of Investment Society Shares; Limited-Object Financial Companies, and Operating Companies of Investment Societies, that participate in the Interbank Electronic Payments System (SPEI)", provided for in Circular 1/2006 of May 19, 2006, as well as its modifications, to remain in the following terms:

"RULES THAT ADMINISTRATORS OF RETIREMENT FUNDS; BROKERAGE FIRMS; EXCHANGE HOUSES; POPULAR SAVINGS AND CREDIT ENTITIES; CREDIT INSTITUTIONS; INSURANCE COMPANIES; DISTRIBUTING COMPANIES OF INVESTMENT SOCIETY SHARES; LIMITED-OBJECT FINANCIAL COMPANIES; MULTIPLE-OBJECT FINANCIAL COMPANIES, AND OPERATING COMPANIES OF INVESTMENT SOCIETIES, THAT PARTICIPATE IN THE INTERBANK ELECTRONIC PAYMENTS SYSTEM (SPEI)"

"1. DEFINITIONS.
...
CLS: a CLS Bank International, an entity accepted to participate in the SPEI in order to send and receive Payment Orders.
...
Popular Savings and Credit Entities:
to the legal entities authorized to operate as such in terms of the Popular Savings and Credit Law.
...

Participant: the Bank of Mexico, as well as the Administrators of Retirement Funds; Brokerage Firms; Exchange Houses; Popular Savings and Credit Entities; Credit Institutions; Insurance Companies; Distributing Companies of Investment Society Shares; Limited-Object Financial Companies; Multiple-Object Financial Companies, and Operating Companies of Investment Societies, that have signed the contract referred to in item 2, which may send and receive Payment Orders in terms of what is provided in these Rules. ... Multiple-Object Financial Societies:
to the legal entities constituted as such in terms of the General Law of Organizations and Auxiliary Credit Activities."

3. SENDING AND PROCESSING OF PAYMENT ORDERS.
   "3.1 Participants may send Payment Orders and, where applicable, Transfers for any amount, as well as other Data Messages through the SPEI, complying with what is provided in these Rules, as well as with the schedules, protocols, formats, sending methods and procedures that the Bank of Mexico determines in the Manual. Likewise, Participants may send to CLS and receive from said entity, Payment Orders through the SPEI. ..." "3.2 ... Once the respective Participating Credit Institution has decided to accept or reject the client's request, it must inform the client of said situation through the mentioned means. From the moment a Participating Credit Institution informs the client of the acceptance of its request as indicated above, it will have ten minutes to send the respective Payment Order to the SPEI. ..."

"4.3 Payment Orders and Transfer requests will be considered accepted once the SPEI sends to the sending and receiving Participants, or to CLS, as applicable, the respective Settlement Notices.
..."

6. OPERATION OF EQUIPMENT AND COMPUTER PROGRAMS.
   "6.4 ...
   To register Operators, the Participant must send the corresponding instruction to the National Operations Processing Management of the Bank of Mexico, prepared in accordance with the format provided in item 2.2 of these Rules, signed by attorney(s) with powers to exercise acts of dominion and expressly to designate those who may act as Operators in the payment systems administered by the Bank of Mexico. The aforementioned instruction, duly signed, will take effect on the third banking business day following that in which it is received by the aforementioned Management. The Participant may also register Operators through an instruction sent via the SPEI in accordance with what is established in the Manual. In this case, the instruction will take effect from the moment it is received in the SPEI, for which the Operator sending the instruction must have the operation level that, in accordance with the aforementioned Manual, allows him to make the corresponding designation, accrediting his powers beforehand before the Sub-Management of National Operations Instrumentation of the Bank of Mexico, by presenting the documentation indicated in item 2.1, with at least five banking business days in advance of the date on which he intends to process the digital certificate with the aforementioned operation level. ... To deregister an Operator, the Participant must send the corresponding instruction to the National Operations Processing Management, using the format provided in item 2.2 of these Rules, signed by person(s) who have signature(s) registered with the Cash Account Operations Office of the Bank of Mexico, in this case, the duly signed instruction will take effect on the third banking business day following that in which it is received by the aforementioned Management. The Participant may also deregister Operators through an instruction sent via the SPEI by any Operator, in accordance with what is established in the Manual, in this case the instruction will take effect from the moment it is received in the SPEI.

..."
"6.7 ...
Notwithstanding what is indicated in the first paragraph of this item, if for any circumstance a Participant cannot send to CLS or receive from it Payment Orders through the SPEI, said Participant must comply with the procedure described in the Contingency Manual for Operations with CLS Bank International."

"ANNEX 2
TARIFFS IN THE SPEI
Annual fee for the service related to the SPEI Concept Amount Fee for 2008 $0.00 Tariffs for the calculation of the monthly SPEI fee Concept Amount For Payment Order sent: 1 a) in the schedule between the SPEI opening time established in the MANUAL and 08:30 hours $0.10 b) in the schedule between 08:30 hours and the SPEI closing time established in the MANUAL $0.50 For Payment Order sent to CLS Bank International €1.00 2 For Transfer request sent $0.50 For return received:
a) in the schedule between the SPEI opening time established in the MANUAL and 08:30 hours $0.10 b) in the schedule between 08:30 and the SPEI closing time established in the MANUAL $0.50

1 All types of payment are considered, except returns accepted by the system.
2 For the determination of the amount in national currency, the following will be used: a) the equivalence of the Euro with the United States of America (USA) dollar published in the Official Gazette of the Federation in the month immediately preceding the month of the payment date, and b) the exchange rate that the Bank of Mexico publishes in the Official Gazette of the Federation on the banking business day immediately preceding that on which the payment is made.

For verified electronic signature 3 $0.20
Amount of information retransmitted at the request of the Participant $0.01/Byte"

TRANSITORY CLAUSES
FIRST.- This Circular will enter into force on February 25, 2008.
SECOND.- From the entry into force of this Circular, the SPEI tariffs in effect until that date will be repealed. This is understood to mean that, with regard to Participants other than Credit Institutions and Brokerage Firms, the tariffs related to the annual fee for the service of the Financial System Network will remain in effect. The tariffs mentioned in Annex 2 must be incorporated into the contracts referred to in item 2 of these Rules, for which Participants must sign the respective instruments no later than May 30, 2008.

3 Payment Instructions, Transfers between the Credit Institution's accounts, cancellation of Payment Orders, cancellation of Transfers, change of reserved balance, as well as any other message signed and sent through the SPEI itself are considered.
The signature of Payment Instructions with returns will be charged to:

• The Participant who returns the Order, if:
  o The Payment Instruction contains Payment Orders with payment types different from the return. o The Payment Instruction is rejected by the SPEI.
• The Participant who receives the return, if the Payment Instruction only contains returns and they are accepted by the SPEI.