Circular 7/2021 — Modifies Circular 2/2011

174 OFFICIAL GAZETTE Friday, October 22, 2021

CIRCULAR 7/2021 addressed to Credit Institutions, Brokerage Houses, Investment Funds, and Specialized Investment Societies for Retirement Funds, regarding the modifications to Circular 2/2011 (Rules for the Swap of Government Securities).

A logo appears at the margin, stating: Bank of Mexico.- “2021: Year of Independence”.

CIRCULAR 7/2021

TO CREDIT INSTITUTIONS, BROKERAGE HOUSES, INVESTMENT FUNDS, AND SPECIALIZED INVESTMENT SOCIETIES FOR RETIREMENT FUNDS:

SUBJECT: MODIFICATIONS TO CIRCULAR 2/2011 (RULES FOR THE SWAP OF GOVERNMENT SECURITIES)

The Bank of Mexico, with the purpose of continuing to promote the sound development of the financial system, foster the proper functioning of payment systems, and protect the interests of the public, has determined it convenient to adjust the Rules for the Swap of Government Securities, contained in Circular 2/2011, with the objective of including any debt instrument issued by the Federal Government, including those at adjustable rates, for the conduct of government security swap auctions, in order to promote flexibility in this type of operation and the development of the fixed income market in Mexico.

Therefore, based on articles 28, sixth and seventh paragraphs, of the Political Constitution of the United Mexican States, 3, fraction III, 7, fraction I, 8, 10, 12, 14, and 24 of the Bank of Mexico Law, 22 of the Law for Transparency and Ordering of Financial Services, 1, 4, first paragraph, 8, fourth and eighth paragraphs, 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 Central Bank Operations and the General Legal Directorate, respectively, as well as Second, fractions VI and X, of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, it has resolved to modify the definitions of “Bonds” to become “BONDES”, “CETEs”, “DALI”, “Net Long Position”, “SIAC-BANXICO” to become “PRIMARY SWAP”, “Auctions”, “UDIS” and “Government Securities”, sections 1, first, second, and fourth paragraphs, 2, first paragraph, 3, items a) and b), 4, 5.1, 5.2, first paragraph, 5.31, 5.32, 5.41, third paragraph, 5.42, second paragraph, 6, first and second paragraphs, 7, 8, 8.1, 8.2, 8.3, second paragraph, 8.4, first, second, fourth, and fifth paragraphs, 8.5, 9.1, 9.2, and 9.3, Appendices 1, 2, 3, 4, and 5, add the definition of “Banking Business Days”, item c) to section 3, a third paragraph to section 5.42, the fourth and fifth paragraphs to section 6, subsequently renumbering the aforementioned fourth, fifth, sixth, and seventh paragraphs of the same section, sections 9.4, 9.5, and 9.6, Appendix 1 BIS, and derogate the definition of “Udibonos”, from the “Rules for the Swap of Government Securities”, contained in Circular 2/2011, issued by the Bank of Mexico on February 9, 2011, to read as follows:

RULES FOR THE SWAP OF GOVERNMENT SECURITIES

For the purposes of these Rules, the following shall be understood, in singular or plural:

...

“BONDES: Bonds for Development issued by the Federal Government of the United Mexican States in the national market, denominated in national currency, both at fixed interest rates, also known as “BONOS M”, and at variable interest rates, also known as “BONDES D” or “BONDES F”, and denominated in UDIS at fixed interest rates, also known as “UDIBONOS”;

CETEs: Certificates of the Treasury of the Federation denominated in national currency issued by the Federal Government of the United Mexican States, excluding those issued under credit restructuring programs in UDIS (Special CETEs);

DALI: The System for the Deposit, Administration, and Settlement of Securities administered by INDEVAL;

Banking Business Days:
Days on which financial entities are not obliged to close their doors or suspend operations, in terms of the general provisions issued for such effect by the National Banking and Securities Commission;

Friday, October 22, 2021 OFFICIAL GAZETTE 175

...

Net Long Position: The sum of the own position in securities plus securities to be received by repo or securities lending minus securities to be delivered by repo or securities lending;

PRIMARY SWAP:
The Bank of Mexico Swap Auction System that allows the persons determined in these Rules to submit bids through the Bank of Mexico Account Holder Attention System (SIAC-BANXICO), in accordance with the contract entered into with the Bank of Mexico;

Auctions: The auctions for the swap of Government Securities provided for in these Rules;

Udibono: Derogated.

UDIS: The unit of account whose value in national currency is published by the Bank of Mexico in the Official Gazette of the Federation, in accordance with articles Third of the “Decree establishing the obligations that may be denominated in Investment Units and reforming and adding various provisions of the Federal Tax Code and the Income Tax Law”, published in the Official Gazette of the Federation on April 1, 1995, and 20 Ter of the Federal Tax Code, and

Government Securities:
BONDES or CETEs, jointly or separately.”

1. BIDDERS

“Only the following persons may submit bids in the relevant Auctions:
a) and b) ... c) Investment funds; d) ... e) Other financial entities expressly authorized for such effect by the Bank in terms of section 9.6 of these Rules.
The aforementioned persons must submit all their bids on their own account, except for: i) investment funds regulated by the Investment Funds Law, who will submit their bids through the investment fund management company that provides them with asset administration services, and ii) specialized investment societies for retirement funds regulated by the Savings for Retirement Systems Law, who will submit their bids through the retirement fund administrator that manages and operates them.

...

The Bank will not accept bids when, in its judgment, they fail to comply with applicable provisions or do not conform to sound uses or practices of the securities market.”

“2. CALLS FOR AUCTIONS

The Bank will make the calls for Auctions available to the entities referred to in the previous section 1 up to one Banking Business Day before the date of the respective Auction, through the Internet website identified by the domain name: www.banxico.org.mx, the PRIMARY SWAP system, or through any other electronic, computing, or telecommunications medium authorized for such effect by the Bank, unless it announces another date or time for a particular call.

...”

3. TYPES OF AUCTIONS

...

“a) At a single rate or price: Those in which the Government Securities will be allocated starting from the most convenient bid in terms of rate or price for the issuer, and all bids that result in allocation will be attended to at the same rate or price, as applicable, of the last bid that receives allocation, even if it was partially attended in its amount.

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b) At multiple rates or prices: Those in which the Government Securities will be allocated starting from the most convenient bid in terms of rate or price for the issuer, and all bids that result in allocation will be attended to at the requested rate or price, or c) At a fixed rate or price: Those in which the Government Securities will be allocated at the rate or price determined by the Bank, and all bids that result in allocation will be attended to at the said rate or price.”

4. PRICES AND RATES

“The Bank will make known to the bidders the rates of CETEs or the prices of BONDES that the Federal Government offers for their swap, through the aforementioned Internet website identified by the domain name: www.banxico.org.mx, or through any other electronic, computing, or telecommunications medium authorized for such effect by the Bank. The references to rates in these Rules correspond to discount rates, and the references to prices correspond to clean prices; that is, those that do not include accrued but unpaid interest, rounded to ten-thousandths.”

5. BIDS

5.1 Types of Bids

“For the Auctions referred to in items a) and b) of section 3 of these Rules, bids may only be competitive and must indicate the issuance key, the rate of the CETE or the price of the BONDE, and, as applicable, the amount that the bidder is willing to deliver or receive and the key of the Government Security that they wish to receive or deliver as a result of the swap, as the case may be. For the Auctions referred to in item c) of section 3 of these Rules, bids must indicate the issuance key, the amount that the bidder is willing to deliver or receive, and the key of the CETE or BONDE that they wish to deliver or receive as a result of the swap, as the case may be.

...

Regarding CETEs, the rate must be indicated in percentage terms, annual, rounded to hundredths and based on three hundred sixty-day years. In the case of BONDES, the unit price must be indicated, rounded to ten-thousandths, and must not include accrued but unpaid interest during the current interest period.”

5.2 Bid Limits

“The sum of the amounts of the bids presented by each bidder, for each call, must not exceed the maximum amount of Government Securities announced by the Bank in the call.”

...

5.3 Submission of Bids

“5.31. Bidders must submit their bids through the PRIMARY SWAP system on the date and within the period indicated for such effect in the corresponding calls.
Bids must be submitted in the form, terms, and conditions set forth in the respective calls.
In the event that bids cannot be submitted through PRIMARY SWAP, bidders may submit them, exceptionally, through any other electronic, computing, or telecommunications medium authorized for such effect by the Bank of Mexico, in which case they must confirm them in writing addressed to the National Operations Management, presented in a closed envelope no later than 17:00:00 hours on the same Banking Business Day of the Auction, using the corresponding model contained in Appendices 1 to 3 and accompanying it with a cover letter, as applicable, for each of the Government Securities involved. The documents mentioned in the previous paragraph must be signed by the same representatives duly authorized by the bidder. Additionally, the letter must show the signature knowledge granted by the Bank of Mexico, so that said signatures must be registered at the Bank of Mexico itself.”

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“5.32. Each bidder may present one or more bids in relation to the same call. The bids presented in each request must refer exclusively to the same issuance.”

5.4 Effects of Bids

“5.41. ...
The access, identification, and, if applicable, operation keys established for the use of PRIMARY SWAP or any other electronic, computing, or telecommunications medium used for the purposes of these Rules, will substitute the autograph signature with an electronic one, so that documentary or technical records in which they appear will have full legal validity and produce the same effects that the laws grant to documents signed by the parties, and consequently, will have equal probative value.”

“5.42. ...
Furthermore, the Bank may reject bids regarding one or more issuances if, in its judgment, the participation of the same, due to their characteristics, could produce inconvenient effects for the sound development of the securities market in particular or the financial market in general. The Bank may limit the participation of one or more of the persons mentioned in the first paragraph of section 1 of these Rules, when the bids they present do not conform to sound market practices.”

“6. ALLOCATION

Bids will receive allocation in ascending or descending order, as applicable, of the respective rates or prices.
In Auctions at a single rate or price, the rate or price at which the Government Securities involved will be allocated will be that corresponding to the last bid that receives allocation even if it is partially attended in its amount.

...

In Auctions at a fixed rate or price, bids will be attended to at the rate or price determined by the Bank and up to the amount indicated in the bid itself.
In all cases, bids will be attended to and receive allocation without exceeding the maximum amount indicated in the call.

...”

7. RESULTS

“The Bank will make the general results of the Auctions available to bidders, through the aforementioned Internet website of the Bank of Mexico or through any other electronic, computing, or telecommunications medium authorized for such effect by the Bank of Mexico, no later than within sixty minutes after the deadline for the submission of bids. The information corresponding to the general results of an Auction will remain available to bidders through the mentioned medium, until the results of a new Auction are incorporated in the terms indicated above. The Bank will inform each bidder individually, through the PRIMARY SWAP system or through any other electronic, computing, or telecommunications medium authorized for such effect by the Bank of Mexico, no later than sixty minutes after the deadline for the submission of bids of the Auction in question, the quantity of Government Securities that, if applicable, have been allocated to them and the quantity of Government Securities that, if applicable, they will deliver.”

“8. SETTLEMENT OF AUCTIONS

8.1 The Bank, by virtue of what is provided in articles 2312 and 2331 of the Federal Civil Code, reserves the ownership of the Government Securities that it must deliver as a result of the swap, until the moment it receives from the bidder the Government Securities corresponding to it.”

“8.2 The settlement of the swap operations of Government Securities referred to in these Rules will be carried out through DALI in the terms established in the internal regulations of INDEVAL, on the date fixed in the corresponding call. On the day of settlement, the Bank will instruct INDEVAL to: a) make the corresponding charge in the securities account of the credit institution or brokerage house in question, for the total of Government Securities that it must deliver to the Federal Government, in terms of what is provided in the following paragraph, and b) credit the cited account with the total of Government Securities that it must receive. In the event that the total value of the Government Securities to be delivered or received by the bidder is greater or less than the total value of the Government Securities to be received or delivered in the swap, the difference in favor or to the charge of the bidders mentioned in items a) and b) of section 1, as applicable, must be paid on the day of settlement of the swap by credit or charge in the account that the Bank of Mexico maintains for them.”

“8.3 ...
For the purposes of the foregoing, all Government Securities that bidders who have received allocation are obliged to deliver must be deposited in the corresponding securities accounts, before the closing of operations of DALI.

...”

“8.4 In the event that a bidder does not have the total amount of Government Securities that they must deliver in the designated account as indicated in the previous section, the Bank may, without the need for a judicial declaration, rescind the swap for the missing amount, so that the corresponding credits and charges will not be made in the securities accounts in DALI. In the case referred to in the previous paragraph, bidders must cover to the Bank the equivalent to the maximum amount resulting between one percent of the nominal amount of the Government Securities that were not delivered on time to the Federal Government and 200,000 UDIS applying the value in national currency of said unit of account corresponding to the date on which the breach in question occurs.

...

The amounts referred to in the previous paragraphs will be charged in the national currency account that the Bank of Mexico maintains for the defaulting bidder or in the account that it maintains for the institution or brokerage house that authorized them in terms of the authorization model presented to the Bank according to the format included in Appendices 4 and 5, as applicable. Without prejudice to the foregoing, the Bank may disqualify the respective bidder from participating in the Auctions.”

“8.5 In the case of BONDES with fixed interest rates issued prior to the placement date, settlement must be carried out by adding to the unit price, the accrued but unpaid interest, from the date of their issuance or from the last interest payment, as applicable, up to the settlement date, according to the following formula:
Where:
In the case of BONDES with variable interest rates, settlement must be carried out by adding to the unit price, the accrued but unpaid interest, from the date of their issuance or last interest payment, as applicable, up to the settlement date, according to the following formula:
Where:

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Where:
For “BONDES D”:
For “BONDES F”:
In the event of a non-business day, for the calculation of the interest rate, the rate announced on the immediately preceding Banking Business Day will be used.
Where:

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9. GENERAL PROVISIONS

“9.1 For market information, the Bank will make known to the general public the characteristics of the Auctions, through the Internet website identified by the domain name: www.banxico.org.mx or through any other electronic, computing, or telecommunications medium authorized for such effect by the Bank.”

“9.2 The times mentioned in these Rules refer to the time zone of Mexico City.”

“9.3 In the event that, due to force majeure or unforeseen circumstances, the Bank’s Internet website or the PRIMARY SWAP system cannot be used to announce the calls, conduct the Auctions, or inform the results thereof, the Bank will timely communicate the applicable procedure to announce such calls or the results of the corresponding Auctions.”

“9.4 Credit institutions and brokerage houses must authorize the Bank to instruct INDEVAL to charge or credit, as applicable, in the title deposit account in administration that INDEVAL maintains for them, for the amount of Government Securities corresponding. Likewise, they must authorize the Bank to charge or credit the cash settlement in the national currency account that the Bank maintains for them. For this purpose, credit institutions and brokerage houses must grant an authorization in favor of the Bank, prepared in terms of the format included in Appendix 4, a copy of which must be delivered to INDEVAL. The persons referred to in items b), c), and d) of the first paragraph of section 1 of these Rules must deliver and receive the corresponding Government Securities through a credit institution or brokerage house, which must grant a model of authorization to the Bank, prepared in terms of the model contained in Appendix 5. The authorization and the model of authorization that must be delivered to the Bank must be signed by whoever has the authority to perform acts of domain on behalf of and in the name of the credit institution or brokerage house, and must be accompanied by a certified copy and a simple copy of the public instrument in which the powers are stated, as well as a simple copy of the official identification of the attorney(s). The documentation that must be sent to the Bank in accordance with the provisions of this article must be delivered to the Operations Management Department of the Bank of Mexico at least three Banking Business Days in advance of the date on which they intend to begin participating in the Auctions.”

“9.5 The Bank may modify the dates, times, and deadlines mentioned in these Rules in the event that circumstances occur that prevent strict observance of the procedure and other acts related to the Auction in question. In such an event, the Bank will inform of the modifications through”

Friday, October 22, 2021 OFFICIAL GAZETTE 181 of its referred internet electronic page or through any other electronic, computing, or telecommunications medium authorized for this purpose by the Bank.”

“9.6 The Bank may authorize other financial entities other than those indicated in items a) to d) of numeral 1 of these Rules to submit bids in the Auctions in accordance with these same Rules. For these purposes, interested entities wishing to participate as bidders must submit their application to the Bank, through the Central Banking Authorizations and Inquiries Management of the Bank of Mexico. The Bank may, at any time, limit or revoke, as appropriate, the authorization granted in accordance with this numeral.”

“APPENDIX 1
MODEL APPLICATION TO PARTICIPATE IN THE AUCTION FOR THE SWAP OF FIXED INTEREST RATE FEDERAL GOVERNMENT DEVELOPMENT BONDS (BONOS M)

BANK OF MEXICO
NATIONAL OPERATIONS MANAGEMENT
5 de Mayo Avenue, No. 6
Col. Centro, C.P. 06000, Mexico City

Present.

APPLICATION ON OWN ACCOUNT

Mexico City, on ____ of ____________ of __.

Bidder Name: _____________________________
Bidder Key at the Bank of Mexico: _____________________________ Bond Issue Key for which bids are submitted: __________________ (MAAMMDD)

BIDS:
Price: Total Amount: Issue to receive or deliver in the swap:
_________ ., ______ thousand pesos ____________________ _________ ., ______ thousand pesos ____________________ _________ ._________, ______ thousand pesos ____________________

PRICES must be expressed up to FIVE decimal places.
PRICES are exclusive of accrued interest.
The cited bids are mandatory and irrevocable; they will produce the broadest effects allowed by law and imply our acceptance of each and every one of the current “Rules for the Swap of Government Securities,” as well as the terms and conditions of the call for bids dated ____ of _____________ of __.

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Sincerely, 1
(Bidder Name)
(Name, position, and signature of authorized officials)

NOTE: Unused spaces must be cancelled.

1 This document must show the signature knowledge granted by the Bank of Mexico, so these signatures must be registered at the Bank of Mexico itself.”

“APPENDIX 1 BIS
MODEL APPLICATION TO PARTICIPATE IN THE AUCTION FOR THE SWAP OF ADJUSTABLE INTEREST RATE FEDERAL GOVERNMENT DEVELOPMENT BONDS (BONDES D AND BONDES F)

BANK OF MEXICO
NATIONAL OPERATIONS MANAGEMENT
5 de Mayo Avenue, No. 6
Col. Centro, C.P. 06000, Mexico City

Present.

APPLICATION ON OWN ACCOUNT

Mexico City, on ____ of ____________ of __.

Bidder Name: _____________________________
Bidder Key at the Bank of Mexico: _____________________________ BONDE Issue Key for which bids are submitted: ______________________ (LDAAMMDD)/(LFAAMMDD)

BIDS:
Price: Total Amount: Issue to receive or deliver in the swap:
_________ ., ______ thousand pesos ____________________ _________ ., ______ thousand pesos ____________________ _________ ._________, ______ thousand pesos ____________________

PRICES must be expressed up to FIVE decimal places.
PRICES are exclusive of accrued interest.
The cited bids are mandatory and irrevocable; they will produce the broadest effects allowed by law and imply our acceptance of each and every one of the current “Rules for the Swap of Government Securities,” as well as the terms and conditions of the call for bids dated ____ of _____________ of __.

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Sincerely, 1
(Bidder Name)
(Name, position, and signature of authorized officials)

NOTE: Unused spaces must be cancelled.

1 This document must show the signature knowledge granted by the Bank of Mexico, so these signatures must be registered at the Bank of Mexico itself.”

“APPENDIX 2
MODEL APPLICATION TO PARTICIPATE IN THE AUCTION FOR THE SWAP OF FEDERAL GOVERNMENT DEVELOPMENT BONDS DENOMINATED IN INVESTMENT UNITS (UDIBONOS)

BANK OF MEXICO
NATIONAL OPERATIONS MANAGEMENT
5 de Mayo Avenue, No. 6
Col. Centro, C.P. 06000, Mexico City

Present.

APPLICATION ON OWN ACCOUNT

Mexico City, on ____ of ____________ of __.

Bidder Name: _____________________________
Bidder Key at the Bank of Mexico: _____________________________ Udibono Issue Key for which bids are submitted: ______________________ (SAAMMDD)

BIDS:
Price: Total Amount: Issue to receive or deliver in the swap:
_________ ., ______ thousand UDIS ____________________ _________ ., ______ thousand UDIS ____________________ _________ ._________, ______ thousand UDIS ____________________

PRICES must be expressed up to FIVE decimal places.
PRICES are exclusive of accrued interest.
The cited bids are mandatory and irrevocable; they will produce the broadest effects allowed by law and imply our acceptance of each and every one of the current “Rules for the Swap of Government Securities,” as well as the terms and conditions of the call for bids dated __ of _____________ of __.

184 OFFICIAL GAZETTE Friday, October 22, 2021

Sincerely, 1
(Bidder Name)
(Name, position, and signature of authorized officials)

NOTE: Unused spaces must be cancelled.

1 This document must show the signature knowledge granted by the Bank of Mexico, so these signatures must be registered at the Bank of Mexico itself.”

“APPENDIX 3
MODEL APPLICATION TO PARTICIPATE IN THE AUCTION FOR THE SWAP OF TREASURY CERTIFICATES OF THE FEDERATION (CETES)

BANK OF MEXICO
NATIONAL OPERATIONS MANAGEMENT
5 de Mayo Avenue, No. 6
Col. Centro, C.P. 06000, Mexico City

Present.

APPLICATION ON OWN ACCOUNT

Mexico City, on ____ of ____________ of __.

Bidder Name: _____________________________
Bidder Key at the Bank of Mexico: _____________________________ CETE Issue Key for which bids are submitted: ______________________ (BIAAMMDD) Term in days of the CETE issue for which bids are submitted: __________ days.

BIDS:
Discount Rate: Total Amount: Issue to receive or deliver in the swap:
_________ ., ______ thousand pesos ____________________ _________ ., ______ thousand pesos ____________________ _________ ._________, ______ thousand pesos ____________________

RATES must be expressed in annual percentage terms with TWO decimal places.
The cited bids are mandatory and irrevocable; they will produce the broadest effects allowed by law and imply our acceptance of each and every one of the current “Rules for the Swap of Government Securities,” as well as the terms and conditions of the call for bids dated __ of _____________ of __.

Friday, October 22, 2021 OFFICIAL GAZETTE 185

Sincerely, 1
(Bidder Name)
(Name, position, and signature of authorized officials)

NOTE: Unused spaces must be cancelled.

1 This document must show the signature knowledge granted by the Bank of Mexico, so these signatures must be registered at the Bank of Mexico itself.”

“APPENDIX 4
MODEL AUTHORIZATION IN FAVOR OF THE BANK OF MEXICO TO EFFECT CHARGES AND CREDITS IN THE ACCOUNTS OF CREDIT INSTITUTIONS OR BROKERAGE FIRMS THAT SUBMIT BIDS

(LETTERHEAD OF THE CREDIT INSTITUTION OR BROKERAGE FIRM)

Mexico City, on __ of ______ of ___.

BANK OF MEXICO
OPERATIONS MANAGEMENT DEPARTMENT
5 de Mayo Avenue No. 6,
Col. Centro, C.P. 06000, Mexico City,

Present.

(DENOMINATION OF THE CREDIT INSTITUTION OR BROKERAGE FIRM) hereby authorizes and instructs irrevocably the Bank of Mexico to effect the necessary charges and credits in the securities account that the S.D. INDEVAL Institution for the Deposit of Securities, S.A. de C.V., holds for us, derived from the settlement of swap operations of BONDES or CETES carried out by this company under the “Rules for the Swap of Government Securities.” For such purposes, that Central Bank will send the corresponding instructions to said securities deposit institution so that the respective records are made.

Additionally, it is authorized and instructed irrevocably to the Bank of Mexico to, in its capacity as Financial Agent of the Federal Government, effect charges and credits in the national currency account that the Bank of Mexico itself holds for us, up to the amounts of cash differences resulting in favor or against this company derived from the swap operations mentioned in the previous paragraph, as well as for any other amount that this company must cover by virtue of what is provided in the aforementioned Rules.

Finally, we make known to you that the authorizations and instructions referred to in this document may only be modified or revoked through written communication addressed to that Central Bank and presented with, at least, one banking business day in advance of the date on which the respective modification or revocation is intended to take effect. It is understood that the modification or revocation will not be applicable with respect to charges and credits resulting from bids submitted by this company prior to such communication taking effect.

Sincerely,

(DENOMINATION OF THE CREDIT INSTITUTION OR BROKERAGE FIRM) (Name, position, and signature of person(s) with powers to exercise acts of dominion)

C.c.p. : S.D. INDEVAL Institution for the Deposit of Securities, S.A. de C.V.
For your information.”

“APPENDIX 5
MODEL AUTHORIZATION IN FAVOR OF THE BANK OF MEXICO TO EFFECT CHARGES AND CREDITS IN THE ACCOUNTS OF A CREDIT INSTITUTION OR BROKERAGE FIRM ON BEHALF OF ANOTHER BIDDER

(LETTERHEAD OF THE CREDIT INSTITUTION OR BROKERAGE FIRM)

Mexico City, on __ of ______ of ___.

BANK OF MEXICO
OPERATIONS MANAGEMENT DEPARTMENT
5 de Mayo Avenue No. 6,
Col. Centro, C.P. 06000, Mexico City,

Present.

(DENOMINATION OF THE CREDIT INSTITUTION OR BROKERAGE FIRM) hereby authorizes and instructs irrevocably the Bank of Mexico to effect the necessary charges and credits in the securities account that the S.D. INDEVAL Institution for the Deposit of Securities, S.A. de C.V., holds for us, derived from the settlement of swap operations of BONDES or CETES carried out by (DENOMINATION OF THE BIDDER) under the “Rules for the Swap of Government Securities,” which must be delivered and received by (DENOMINATION OF THE BIDDER). For such purposes, that Central Bank will send the corresponding instructions to said securities deposit institution so that the respective records are made.

Additionally, it is authorized and instructed irrevocably to that Central Bank to, in its capacity as Financial Agent of the Federal Government, effect charges and credits in the national currency account that the Bank of Mexico itself holds for us, up to the amounts of cash differences resulting in favor or against (DENOMINATION OF THE BIDDER) derived from the swap operations mentioned in the previous paragraph, as well as for any other amount that (DENOMINATION OF THE BIDDER) must cover by virtue of any non-compliance with what is provided in the aforementioned Rules.

Finally, we make known to you that the authorizations and instructions referred to in this document may only be modified or revoked through written communication addressed to that Central Bank and presented with, at least, one banking business day in advance of the date on which the respective modification or revocation is intended to take effect. It is understood that the modification or revocation will not be applicable with respect to charges and credits resulting from bids submitted by (DENOMINATION OF THE BIDDER) prior to such communication taking effect.

Sincerely,

(DENOMINATION OF THE CREDIT INSTITUTION OR BROKERAGE FIRM) (Name, position, and signature of person(s) with powers to exercise acts of dominion)

C.c.p. : S.D. INDEVAL Institution for the Deposit of Securities, S.A. de C.V.
For your information.

C.c.p. : (DENOMINATION OF THE BIDDER).

Friday, October 22, 2021 OFFICIAL GAZETTE 187
For your information.”

TRANSITORY
SINGLE.- This Circular shall enter into force the day following its publication in the Official Gazette of the Federation.

Mexico City, October 18, 2021.- BANK OF MEXICO: Director General of Central Banking Operations, Gerardo Israel García López.- Signature.- General Legal Director, Luis Urrutia Corral.- Signature.

For any inquiries regarding the content of this Circular, the Bank of Mexico is at your disposal through the Central Banking Authorizations and Sanctions Directorate at telephone (55) 5237-2000 extension 3200.