Circular 7/2018 — Modifies Circular 5/2012

Friday, July 13, 2018 OFFICIAL GAZETTE 1 BANK OF MEXICO CIRCULAR 7/2018 addressed to Credit Institutions, Brokerage Houses, Investment Funds, Specialized Investment Societies for Retirement Funds and National Financial Institution, regarding the Modifications to Circular 5/2012 on the increase in the maximum amount of bids to be presented in Cetes auctions.

At the margin a logo, which says: Bank of Mexico.

CIRCULAR 7/2018 TO CREDIT INSTITUTIONS, BROKERAGE HOUSES, INVESTMENT FUNDS, SPECIALIZED INVESTMENT SOCIETIES FOR RETIREMENT FUNDS AND NATIONAL FINANCIAL INSTITUTION:

SUBJECT: MODIFICATIONS TO CIRCULAR 5/2012 REGARDING THE INCREASE IN THE MAXIMUM AMOUNT OF BIDS TO BE PRESENTED IN CETES AUCTIONS.

The Bank of Mexico, in its capacity as financial agent of the Federal Government of the United Mexican States and of the Institute for the Protection of Bank Savings, with the purpose of continuing to promote the development of the domestic debt market through the placement of issuances with greater liquidity and depth and to make the price formation process of the Treasury Certificates of the Federation (Cetes) more efficient in primary auctions, thereby promoting the sound development of the financial system, has resolved to increase the maximum allocation amount of the bids received in primary Cetes auctions.

Therefore, based on Articles 28, paragraphs sixth and seventh, of the Political Constitution of the United Mexican States, 3, fraction III, 7, fraction I, 8, 10 and 14, of the Bank of Mexico Law, 9 of the National Financiera Organic Law, 6 of the Federal Mortgage Society Organic Law, 9 of the National Savings Bank and Financial Services Organic Law, 9 of the National Foreign Trade Bank Organic Law, 10 of the National Bank of Works and Public Services Organic Law, 8 of the National Bank of the Army, Air Force and Navy Organic Law, 19 of the Organic Law of the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, 2 of the Federal Revenue Law for the Fiscal Year 2018, 22 of the Law for Transparency and Ordering of Financial Services, 4, first paragraph, 8, paragraphs fourth and seventh, 10, first paragraph, 12, first paragraph, in relation to 19 Bis, fractions II and 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 Operations and Payment Systems 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 fractions III of the first paragraph and I of the second paragraph, both of article 2 and the current second paragraph of article 7, as well as to add a second paragraph to article 7, shifting the current second and third paragraphs of said article, of the “Rules of the auctions for the placement of government securities and IPAB securities”, contained in Circular 5/2012, to remain in the following terms:

RULES OF THE AUCTIONS FOR THE PLACEMENT OF GOVERNMENT SECURITIES AND IPAB SECURITIES

Bidders

Article 2.- …

I. and II. …

“III. Investment funds; IV. and V. … ...

I. Investment funds, who will present their bids through the fund operating society that provides them with asset management services, and II. …”

Limits

Article 7.- …

“As an exception to the foregoing, the sum of the amounts of the bids presented by each bidder with respect to a call referred to Cetes, shall not exceed eighty percent of the maximum amount offered in said call. The limits mentioned in the two preceding paragraphs shall be applicable to the set of bids presented by multiple banking institutions and brokerage houses that are part of the same financial group or controlled by the same shareholder. For these purposes, it shall be understood that the same shareholder controls a multiple banking institution and a brokerage house when it is the owner of thirty percent or more of the shares representing the social capital of both intermediaries, has control of their general shareholders’ meetings, is in a position to appoint the majority of the members of their boards of directors or by any other means controls the multiple banking institution and the brokerage house in question. The provisions of this paragraph shall not be applicable to IPAB Securities auctions. …”

TRANSITORY

UNIQUE. This Circular shall enter into force on the day of its publication in the Official Gazette of the Federation.

Mexico City, July 11, 2018.- The General Director of Operations and Payment Systems, Jaime José Cortina Morfín.- Initials.- The General Legal Director, Luis Urrutia Corral.- Initials.

Friday, July 13, 2018 OFFICIAL GAZETTE 3 For any inquiries regarding the content of this Circular, please contact the Department of Authorizations, Consultations and Legal Control, at the phones (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000 Ext. 3200.