Circular 6/2020 — Modifications to Circular 7/2011

Wednesday, April 1, 2020 OFFICIAL GAZETTE 1 BANK OF MEXICO CIRCULAR 6/2020 addressed to Credit Institutions and Brokerage Houses, regarding Modifications to Circular 7/2011.

At the margin a logo, which says: Bank of Mexico.- "2020, Year of Leona Vicario, Meritorious Mother of the Fatherland".

CIRCULAR 6/2020 TO CREDIT INSTITUTIONS AND BROKERAGE HOUSES: SUBJECT: MODIFICATIONS TO CIRCULAR 7/2011

The Bank of Mexico, in its capacity as financial agent of the Federal Government, with the purpose of continuing to promote the sound development of the financial system - in response to the modifications that the Ministry of Finance and Public Credit, through official letter number 305.-200/2020 made known by this Central Bank through Circular 5/2020 published in the Official Gazette of the Federation on April 1, 2020, has resolved to carry out on the procedure to which credit institutions and brokerage houses acting as market makers regarding government securities referred to in official letter number 305.-027/2011 of said Ministry- considers it convenient to make adjustments to the procedure so that market makers and UDIBONOS market makers exercise the right to purchase BONOS, CETES and UDIBONOS, as applicable, and conclude loan operations on such values with the Bank of Mexico in its capacity as financial agent of the federal government.

For the above, based on articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 3, fraction III, 7, fraction I, and 10 of the Bank of Mexico Law, 22 of the Law for Transparency and Ordering of Financial Services, 8, paragraphs fourth and eighth, 10, first paragraph, 12, first paragraph, in relation to 19 Bis, fraction V, and 14 Bis, first paragraph, in relation to 17, fraction I, of the Internal Regulations of the Bank of Mexico, which grant it the authority to issue provisions through the General Directorate of Central Bank Operations and the General Legal Directorate, respectively, as well as Second, fractions VI and X, of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, has resolved to modify numerals 2.1, 2.2 and 2.4 of the “Procedure for Market Makers and UDIBONOS Market Makers to Exercise the Right to Purchase BONOS, CETES and UDIBONOS, as Applicable, and Conclude Loan Operations on Such Values with the Bank of Mexico in its Capacity as Financial Agent of the Federal Government”, contained in Circular 7/2011, to remain in the following terms:

2 OFFICIAL GAZETTE Wednesday, April 1, 2020 PROCEDURE FOR MARKET MAKERS AND UDIBONOS MARKET MAKERS TO EXERCISE THE RIGHT TO PURCHASE BONOS, CETES AND UDIBONOS, AS APPLICABLE, AND CONCLUDE LOAN OPERATIONS ON SUCH VALUES WITH THE BANK OF MEXICO IN ITS CAPACITY AS FINANCIAL AGENT OF THE FEDERAL GOVERNMENT

“2. RIGHT OF MARKET MAKERS AND UDIBONOS MARKET MAKERS TO PURCHASE BONOS, CETES AND UDIBONOS, AS APPLICABLE, FROM THE BANK OF MEXICO IN ITS CAPACITY AS FINANCIAL AGENT OF THE FEDERAL GOVERNMENT

2.1 Market Makers will have the right to purchase BONOS and CETES and UDIBONOS Market Makers will have the right to purchase UDIBONOS, at a rate or price equal to the rate or price of assignment, as applicable, resulting from the Auction of each of said government securities in all weeks in which they are held. The foregoing, except in the week in which any syndicated auction for the placement of BONOS or UDIBONOS is held, in which case, Market Makers and UDIBONOS Market Makers may not exercise the option to purchase BONOS or UDIBONOS, as applicable, during the week in which the aforementioned syndicated auction is held, regardless of the maturity term of the instrument to which reference is made therein.

2.2 Requests to exercise the aforementioned purchase right must be submitted to the National Operations Management of the Bank of Mexico, between 8:45:00 and 9:00:00 hours on the second Business Day following the publication of the Auction results.

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2.4 In the event that for any circumstance the electronic, computing or telecommunications means referred to in numeral 2.3 cannot be used, requests may be submitted, exceptionally, through any of the means authorized by the Bank of Mexico according to the aforementioned, within the time established for the conclusion of the corresponding purchase, in accordance with what is provided in numeral 2.2, and must be confirmed in writing no later than 17:00:00 hours on the second Business Day using the models attached as Annexes, accompanied by a cover letter at the aforementioned National Operations Management, located at 5 de Mayo Avenue number 6, second floor, Centro Neighborhood, Mexico City. Both documents must be duly signed by the same authorized representatives of Market Makers and UDIBONOS Market Makers, and the letter must show the knowledge of signatures granted by the Bank of Mexico, so that the signatures must be registered in the Central Institute itself.

2.5 to 2.11 ...”

Wednesday, April 1, 2020 OFFICIAL GAZETTE 3 TRANSITORY SINGLE. This Circular shall enter into force on April 1, 2020. Mexico City, March 25, 2020.- The General Director of Central Bank Operations, Gerardo Israel García López.- Rubric.- The General Legal Director, Luis Urrutia Corral.- Rubric. For any inquiries regarding the content of this Circular, please contact the Central Bank Authorizations and Sanctions Directorate, at telephone numbers 55 5237-2308, 55 5237-2317 or 55 5237-2000 Ext. 3200.