Circular 59/2008 — Modifies Circular 2019/95

"2008, Year of Physical Education and Sport"
CIRCULAR 59/2008
Mexico, D.F., December 1, 2008.
TO THE MULTIPLE BANKING INSTITUTIONS:
SUBJECT: U.S. DOLLAR DEPOSITS

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 3, fraction I, 7, fractions II, VII and X, 8, 14, 16, 24 and 26 of the Bank of Mexico Law; 22 of the Law for Transparency and Order of Financial Services; 8, 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 Bank of Mexico, through the General Directorate of Central Banking Operations and the Directorate of Central Banking Regulations, respectively, to issue provisions; Unique of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, fractions I and IV, with the objective of promoting the sound development of the financial system by expanding the range of guarantees accepted in credit operations it carries out with banking, allowing deposits in dollars received from these institutions in open market operations to be granted as collateral in the credits granted through overdrafts in the Single Accounts it maintains for credit institutions and in the procedure for determining the Interbank Equilibrium Interest Rate (TIIE), has resolved to modify sections M.71.12.41, 1.21.3 subsection f) of Annex 1 and 5.3 subsection f) of Annex 5, as well as to add to Annex 1 Appendix 3; Annex 4 and to Annex 5 an Appendix, all of Circular 2019/95, to remain in the following terms:

M.7 OPERATIONAL RULES
M.71. DEPOSITS AND LIQUIDITY REPurchase OPERATIONS M.71.1 NATIONAL CURRENCY CASH DEPOSITS AT THE BANK OF MEXICO M.71.12. CASH DEPOSITS

"M.71.12.41. Institutions may incur overdrafts up to the amount of: i) monetary regulation deposits; ii) time deposits derived from the procedure for determining the TIIE provided for in Annex 1 of this Circular, iii) time deposits derived from the operations referred to in Annex 7 of this Circular and iv) U.S. dollar deposits referred to in section M.71.2; which have been granted as collateral to the Bank of Mexico for this purpose in accordance with what is established in section M.71.12.43.

Regarding guarantees constituted with the U.S. dollar deposits referred to in item iv) above, institutions must request that for such purposes they be segregated into the special guarantee account maintained for them by the Bank of Mexico, through SIAC-BANXICO, or any other electronic, computing or telecommunications medium authorized for this purpose by the Bank of Mexico or, in requests prepared in accordance with Annex 4 duly signed by the institution's representatives, which must show the signature knowledge granted by the Cash Account Operations Office of the Bank of Mexico, so that said signatures must be registered in said Office. The value of the guarantee will be determined by applying the exchange rate published by the Bank of Mexico in the Official Gazette of the Federation on the date of its constitution minus the discount factor that will be made known through the Bank of Mexico site on the Financial Network, at the address: http:\webdgobc."

Annex 1
NATIONAL CURRENCY INTERBANK EQUILIBRIUM INTEREST RATE (TIIE)
1.21. Financing that the Bank of Mexico will grant to participating institutions
"1.21.3 Credits will have the following characteristics:
f) Guarantee: i) monetary regulation deposits that the accredited party maintains at the Bank of Mexico; ii) deposits constituted in accordance with the procedure described in section 1.22. of this Annex, iii) deposits made in accordance with what is provided in Annex 7 of Circular 2019/95, and iv) U.S. dollar deposits that the accredited party maintains at the Bank of Mexico in terms of what is provided in section M.71.2 of Circular 2019/95. The aforementioned deposits must be previously designated for this purpose by the accredited institution. The amount of the deposits must cover both the principal and the interest that the credit will accrue and its maturity date must be equal to or greater than the term of the credit they guarantee.

Regarding guarantees constituted with the U.S. dollar deposits referred to in item iv) above, institutions must request that for such purposes they be segregated into the special guarantee account maintained for them by the Bank of Mexico, through SIAC-BANXICO, or any other electronic, computing or telecommunications medium authorized for this purpose by the Bank of Mexico or, in requests prepared in accordance with Appendix 3 of this Annex duly signed by the institution's representatives, which must show the signature knowledge granted by the Cash Account Operations Office of the Bank of Mexico, so that said signatures must be registered in said Office. The value of the guarantee will be determined by applying the exchange rate published by the Bank of Mexico in the Official Gazette of the Federation on the date of its constitution minus the discount factor that will be made known through the Bank of Mexico site on the Financial Network, at the address: http:\webdgobc. . . ."

"Appendix 3
"INSTITUTION REQUEST MODEL TO THE BANK OF MEXICO (INSTUTION LETTERHEAD) Mexico D.F., ______________________.
General Directorate of Central Banking Operations Bank of Mexico Present,

Through this channel, I allow myself to request from the Bank of Mexico on behalf of (full name of the multiple banking institution, including, if applicable, the financial group to which it belongs), that from this date it carry out the actions that prove necessary to segregate into the special guarantee account that it maintains for this Institution the amount of $______ (______ U.S. dollars) in order to guarantee the credits in which it incurs in terms of what is provided in Annex 1 of Circular 2019/95.

Sincerely,
Name and signature of the General Director of the Institution c.c.p.: Operational Processing Directorate National Operations Processing Management International Operations Accounting Sub-management

This communication may be directed to the email accounts and fax numbers indicated below:
Email Account Fax Number gcasas@banxico.org.mx 5227-8712 ljimenez@banxico.org.mx 5227-8709 ncastro@banxico.org.mx 5227-8787"

"Annex 4
INSTITUTION REQUEST MODEL TO THE BANK OF MEXICO (INSTUTION LETTERHEAD) Mexico D.F., ______________________.
General Directorate of Central Banking Operations Bank of Mexico Present,

Through this channel, I allow myself to request from the Bank of Mexico on behalf of (full name of the multiple banking institution, including, if applicable, the financial group to which it belongs), that from this date it carry out the actions that prove necessary to segregate into the special guarantee account that it maintains for this Institution the amount of $______ (______ U.S. dollars) in order to guarantee the credits in which it incurs in terms of what is provided in section M.71.12.41. of Circular 2019/95.

Sincerely,
Name and signature of the General Director of the Institution c.c.p.: Operational Processing Directorate National Operations Processing Management International Operations Accounting Sub-management

This communication may be directed to the email accounts and fax numbers indicated below:
Email Account Fax Number gcasas@banxico.org.mx 5227-8712 ljimenez@banxico.org.mx 5227-8709 ncastro@banxico.org.mx 5227-8787"

Annex 5
LIQUIDITY AUCTIONS CARRIED OUT BY THE BANK OF MEXICO
5. FORMALIZATION OF ASSIGNMENTS.
"5.3 Credits will have the following characteristics:
. . . f) Guarantee: i) monetary regulation deposits, that the accredited party maintains at the Bank of Mexico; ii) deposits constituted in accordance with the procedure described in section 1.22. of Annex 1 of Circular 2019/95, iii) deposits made in terms of what is provided in Annex 7 of Circular 2019/95 and iv) U.S. dollar deposits that the accredited party maintains at the Bank of Mexico in terms of what is provided in section M.71.2 of Circular 2019/95. The aforementioned deposits must be previously designated for this purpose by the accredited institution. In any case, the amount of the deposits must cover both the principal and the interest that the credit will accrue and its maturity date must be equal to or greater than the term of the credit they guarantee.

Regarding guarantees constituted with the U.S. dollar deposits referred to in item iv) above, institutions must request that for such purposes they be segregated into the special guarantee account maintained for them by the Bank of Mexico, through SIAC-BANXICO, or any other electronic, computing or telecommunications medium authorized for this purpose by the Bank of Mexico or, in requests prepared in accordance with the Appendix of this Annex duly signed by the institution's representatives, which must show the signature knowledge granted by the Cash Account Operations Office of the Bank of Mexico, so that said signatures must be registered in said Office. The value of the guarantee will be determined by applying the exchange rate published by the Bank of Mexico in the Official Gazette of the Federation on the date of its constitution minus the discount factor that will be made known through the Bank of Mexico site on the Financial Network, at the address: http:\webdgobc. . . ."

"Appendix
INSTITUTION REQUEST MODEL TO THE BANK OF MEXICO (INSTUTION LETTERHEAD) Mexico D.F., ______________________.
General Directorate of Central Banking Operations Bank of Mexico Present,

Through this channel, I allow myself to request from the Bank of Mexico on behalf of (full name of the multiple banking institution, including, if applicable, the financial group to which it belongs), that from this date it carry out the actions that prove necessary to segregate into the special guarantee account that it maintains for this Institution the amount of $______ (______ U.S. dollars) in order to guarantee the credits in which it incurs in terms of what is provided in Annex 5 of Circular 2019/95.

Sincerely,
Name and signature of the General Director of the Institution c.c.p.: Operational Processing Directorate National Operations Processing Management International Operations Accounting Sub-management

This communication may be directed to the email accounts and fax numbers indicated below:
Email Account Fax Number gcasas@banxico.org.mx 5227-8712 ljimenez@banxico.org.mx 5227-8709 ncastro@banxico.org.mx 5227-8787"

TRANSITORY
UNIQUE This Circular will enter into force on December 1, 2008.