Circular 6/2009 — US Dollar Sales Auctions Without Minimum Price

CIRCULAR 6/2009 Mexico, D.F., March 5, 2009. TO CREDIT INSTITUTIONS: SUBJECT: US DOLLAR SALES AUCTIONS WITHOUT MINIMUM PRICE

The Bank of Mexico, based on Articles 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; 7th fraction X, 8th, 14th and 24th of the Bank of Mexico Law; 22nd of the Law for Transparency and Regulation of Financial Services; 8th paragraphs third and sixth, 17th fraction I and 19th fraction IX of the Internal Regulations of the Bank of Mexico, which provide for the attribution of the Central Bank, through the Directorate of Central Bank Dispositions and the Directorate of Operations, respectively, to issue provisions, as well as the Sole fraction I and IV of the Agreement on the Adscription of the Administrative Units of the Bank of Mexico, in compliance with what is established by the Exchange Commission in the sense of establishing a mechanism to guarantee that a significant part of the projected accumulation of international reserves is sold in the foreign exchange market, in order to foster orderly conditions in said market, and with the object of promoting the healthy development of the financial system, has resolved to temporarily carry out daily auctions for the sale of United States dollars (US dollars), under the following terms:

1. CALL FOR AUCTIONS The Bank of Mexico will auction United States dollars (dollars) every banking business day. The calls will be made known at 8:30:00 hours through the Bank of Mexico Account Holder Attention System (SIAC-BANXICO) and will contain the amount of dollars to be auctioned, the type of auction to be held, the schedules for the celebration of the auction and for the presentation of bids, as well as the other characteristics of the auction in question.

2. TYPES OF AUCTIONS The auctions may be: a) Traditional, meaning that institutions will present their bids without having information about the other bids presented. Institutions will receive information about other participants until the results of the auction are made public, or b) Interactive, meaning that institutions will present their bids knowing at all times the marginal allocation price of the auction. Both types of auctions will be carried out based on a multiple-price allocation, meaning that the offered amount of dollars will be allocated starting from the best bid for the Bank of Mexico, and the bids that result in allocation will be attended to at the requested price.

3. PRESENTATION OF BIDS Interested institutions may present their bids through the Dollar Auctions Module of SIAC-BANXICO or through any other electronic, computing, or telecommunications medium authorized for this purpose by the Bank of Mexico, during the period established in the respective call. Each bidder may present one or more bids for each auction, provided that the amount of each bid does not exceed the amount offered in the call. The bidder must indicate the amount and the price in national currency at which they are willing to acquire the dollars subject to the auction, expressed in four decimal places. This amount must be for one million dollars or its multiples. The access, identification, and, where applicable, operation keys established for the use of electronic, computing, or telecommunications media will substitute the autograph signature with an electronic one; therefore, the documentary or technical records where they appear will produce the same effects that the laws grant to documents signed by the parties and, consequently, will have equal probative value. The Bank of Mexico reserves the right to reject bids that do not comply with the provisions of this Circular, are incomplete, or are in any way incorrect. Likewise, the Bank of Mexico reserves the right to reject any bid or to declare the auction totally or partially void, if in its judgment such bids, due to their characteristics, could produce inconvenient effects in the foreign exchange market, in the healthy development of the financial market in general, or if it considers that they are not consistent with the conditions prevailing in the foreign exchange market. The Bank of Mexico will not receive bids for the time it determines, from credit institutions that, in the judgment of the Bank itself, do not comply with any applicable provisions or do not adjust to sound uses or practices of the foreign exchange market.

4. EFFECTS OF BIDS Bids presented to the Bank of Mexico will produce the broadest effects corresponding in law and will imply the bidder's acceptance of all and each of these provisions. Every bid will be binding for the bidder who presents it and will be irrevocable. By the mere fact of presenting bids, institutions irrevocably authorize the Bank of Mexico to, in the event that such bids receive allocation, charge their Single National Currency Account up to the amount corresponding to the respective price at the opening of the second immediate next banking business day following the date of the corresponding allocation. The allocated dollars will be deposited in the account that the institution has previously indicated to the Bank of Mexico's Foreign Exchange and Metals Operations Processing Office, on the second immediate next banking business day following the date of the allocation. For the exclusive purposes of this section, banking business days will be understood as days that are banking business days both in the United Mexican States and in the United States of America.

5. ALLOCATION In each of the auctions, the allocation will be carried out according to the descending order of the prices corresponding to the bids in question, without exceeding the auctioned amount. In the event that the value of the total bids exceeds this amount, only bids with an accumulated value equal to this will be accepted. If there are several tied bids at the point where the auctioned amount is reached, causing such amount to be exceeded, the allocation will be made pro-rata to the amount requested in the tied bids when it concerns traditional auctions and according to the order in which the bids were received when the corresponding auction is interactive. Likewise, in the event that during the period between the presentation of bids and the moment when the results of the auctions are made known, system failures occur, the auction will be declared void and the Bank of Mexico will call for a new auction on the same day by the same medium or by another that it makes known to the institutions. In the event that in an auction not all of the offered dollars have been allocated, the Bank of Mexico will call for a new auction to place said remaining amount. The schedules and type of auction will be made known by the Bank of Mexico in the respective call. In the event that at the end of the day there is an amount pending allocation, said amount will be offered in the next auction carried out by the Bank of Mexico.

6. RESULTS OF THE AUCTIONS The results of the auctions will be available through the Module indicated in the first paragraph of section 3, within five minutes after the deadline for the presentation of bids in each auction has expired.

7. GENERAL PROVISIONS In the event that due to fortuitous event or force majeure auctions cannot be carried out through SIAC-BANXICO or the respective calls or the results of the auctions cannot be made known in accordance with this Circular, the Bank of Mexico will make known to the institutions the applicable procedure for carrying out said auctions or for making known such calls or the corresponding results, as the case may be.