Regulatory Alerts2021-08-09 | Circular 5/2021Added · Updated
Circular 5/2021 — Modifications to Circular 3/2017 (Rules for Foreign Exchange Hedging Auctions)
The Bank of Mexico amends the Rules for Foreign Exchange Hedging Auctions to mandate daily settlement of hedging positions, requiring credit institutions to receive or pay daily compensation based on exchange rate movements. The revision updates definitions, removes obsolete financial instrument acronyms, and introduces new calculation formulas for daily liquidation amounts using present value and net added value metrics. It also establishes procedures for bid submission, assignment criteria, and early termination of contracts if accounts lack sufficient funds.
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