Circular 9/2012 — Modifies Circular 4/2012

Friday, June 15, 2012 OFFICIAL GAZETTE (First Section) BANK OF MEXICO CIRCULAR 9/2012 addressed to credit institutions, brokerage houses, investment companies, limited-purpose financial companies, and the Rural Financial Company, regarding modifications to Circular 4/2012.

A logo appears at the margin, stating: Bank of Mexico.

CIRCULAR 9/2012 TO CREDIT INSTITUTIONS, BROKERAGE HOUSES, INVESTMENT COMPANIES, LIMITED-PURPOSE FINANCIAL COMPANIES AND THE RURAL FINANCIAL COMPANY: SUBJECT: MODIFICATIONS TO CIRCULAR 4/2012

The Bank of Mexico, with the objective of continuing to promote the sound development of the financial system, considers it convenient to make modifications to Circular 4/2012, which contains the "Rules for the Conduct of Derivative Operations," with the purpose of making clarifications and including new underlyings on which credit institutions, brokerage houses, and the Rural Financial Company may enter into derivative operations.

Therefore, based on Article 28 of the Political Constitution of the United Mexican States, sixth and seventh paragraphs; Articles 24, 26, 27, and 36 of the Bank of Mexico Law; Article 46, fraction XXV, and Article 103, penultimate paragraph of the Credit Institutions Law; Article 176 of the Securities Market Law; Article 15, second paragraph of the Investment Companies Law; Article 22 of the Law for Transparency and Orderly Regulation of Financial Services; Article 9 of the Organic Law of Nacional Financiera; Article 6 of the Organic Law of Federal Mortgage Society; Article 9 of the Organic Law of the National Bank of Savings and Financial Services; Article 9 of the Organic Law of the National Bank of Foreign Trade; Article 10 of the Organic Law of the National Bank of Public Works and Services; Article 8 of the Organic Law of the National Bank of the Army, Air Force, and Navy; Article 7, fraction X, and Article 19 of the Organic Law of the Rural Financial Company; Article 4, first paragraph, Articles 8, fourth and seventh paragraphs, Article 10, first paragraph, Article 12, first paragraph in relation to Article 19, fraction VII, Article 14 Bis, first paragraph in relation to Article 17, fraction I, and Article 14 Bis 1, first paragraph in relation to Articles 25 Bis 1, fraction IV, and 25 Bis 2, fraction II of the Internal Regulations of the Bank of Mexico, which grant the authority to issue provisions through the General Directorate of Central Banking Operations, the General Legal Directorate, and the General Directorate of Financial System Affairs, respectively; as well as Article 2 of the Agreement on the Affiliation of the Administrative Units of the Bank of Mexico, fractions III, VII, and XI, it has resolved to modify paragraphs 2.1 and 7.2, as well as paragraph 28 of the Annex regarding the requirements that entities must meet to conduct derivative operations, all of Circular 4/2012, to read as follows:

RULES FOR THE CONDUCT OF DERIVATIVE OPERATIONS

"2. UNDERLYINGS 2.1 Entities may only conduct Derivative Operations on the following Underlyings: a) Stocks, a group or basket of stocks, or stock-referenced securities, that trade on a stock exchange;

(First Section) OFFICIAL GAZETTE Friday, June 15, 2012 b) Price indices on stocks that trade on a stock exchange; c) National currency, foreign currencies, and UDIS; d) Price indices related to inflation; e) Nominal, real, or excess interest rates, rates related to any debt security, and indices based on such rates; f) Loans and credits; g) Gold and silver; h) Corn, wheat, soy, sugar, rice, sorghum, cotton, oats, coffee, orange juice, cocoa, barley, milk, canola, soybean oil, and soybean meal; i) Pork meat, swine, and cattle; j) Natural gas, heating fuel, diesel, gasoline, and crude oil; k) Aluminum, copper, nickel, platinum, lead, and zinc, and l) Forward Operations, Option Operations, and Swap Contracts, on the Underlyings referred to in the preceding subsections."

7. SETTLEMENT METHODS "7.2 Entities that conduct Derivative Operations on the Underlyings indicated in subsections h), i), j), and k) of paragraph 2.1 for their own account are prohibited from settling them in kind."

ANNEX REQUIREMENTS FOR ENTITIES THAT INTEND TO CONDUCT DERIVATIVE OPERATIONS

III. INTERNAL CONTROL REQUIREMENTS. III.5 Accounting "28.- The settlement of operations must be performed by support staff under duly authorized instructions, with verified amounts and with the confirmation of counterparties."

TRANSITIONAL PROVISION SINGLE. The modifications to Circular 4/2012 provided for in this Circular shall enter into force on June 20, 2012.

Mexico, D.F., June 13, 2012.- BANK OF MEXICO: The General Director of Central Banking Operations, Francisco Javier Duclaud González de Castilla.- Signature.- The General Legal Director, Héctor Reynaldo Tinoco Jaramillo.- Signature.- The General Director of Financial System Affairs, José Gerardo Quijano León.- Signature.

Friday, June 15, 2012 OFFICIAL GAZETTE (First Section) For any inquiries regarding the content of this Circular, please contact the Department of Authorizations, Inquiries, and Legal Control, located at Avenida 5 de Mayo number 2, Colonia Centro, Mexico, Federal District, C.P. 06059, or by telephone at 5237.2308, 5237.2317, or 5237.2000 Ext. 3200.