Circular 9/2018 — Modifies Circular 34/2010 (Foreign Currency Charges with Credit Cards)

Wednesday, July 18, 2018 OFFICIAL GAZETTE (First Section) 103 BANK OF MEXICO CIRCULAR 9/2018 addressed to Multiple Banking Institutions and Multiple-Object Financial Societies Regulated that maintain equity links with Credit Institutions, regarding Modifications to Circular 34/2010 (Foreign Currency Charges with Credit Cards).

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

CIRCULAR 9/2018 TO MULTIPLE BANKING INSTITUTIONS AND MULTIPLE-OBJECT FINANCIAL SOCIETIES REGULATED THAT MAINTAIN EQUITY LINKS WITH CREDIT INSTITUTIONS: SUBJECT: MODIFICATIONS TO CIRCULAR 34/2010 (FOREIGN CURRENCY CHARGES WITH CREDIT CARDS).

The Bank of Mexico, with the purpose of continuing to promote the sound development of the financial system and protect the interests of the public, has determined to uniform the practice followed in the market, in such a way that it gives certainty to credit card users who carry out operations with them in foreign currency. To this end, it is convenient to establish for the entities that issue credit cards a regime that regulates the foreign exchange operations that such entities carry out to settle those payments and cash withdrawals in foreign currency that are executed with said cards.

For the above, based on articles 28, sixth and seventh paragraphs, of the Political Constitution of the United Mexican States, 24, 26, 32 and 35, of the Bank of Mexico Law, 22 of the Law for Transparency and Ordering of Financial Services, 4, first paragraph, 8, fourth and seventh paragraphs, 10, first paragraph, 14 Bis, first paragraph, in relation to 17, fraction I, 14 Bis 1, first paragraph, in relation to 25 Bis 1, fraction IV, of the Internal Regulations of the Bank of Mexico, which grant it the attribution to issue provisions through the General Legal Directorate and General Directorate of Affairs of the Financial System, respectively, as well as Second, fractions I and X, of the Agreement of Adscription of the Administrative Units of the Bank of Mexico, has resolved to modify numeral 2.10, as well as add numeral 2.10 Bis, to the “Credit Card Rules”, contained in Circular 34/2010, to remain in the terms set forth below:

CREDIT CARD RULES

“2.10 Charges for payments or cash withdrawals made in foreign currency with the Credit Card must be recorded in the Account, invariably, in national currency.”

“2.10 Bis The charge that the Issuer makes in accordance with what is provided in the previous numeral 2.10 must be equivalent to the amount resulting from the foreign exchange operation corresponding to convert to national currency the amount of the respective payment or cash withdrawal made with the Credit Card. In this case, to carry out the mentioned foreign exchange operation, regarding amounts denominated in United States dollars, the amount in pesos that the Issuer may charge to the Account may not exceed the product of the multiplication of the following factors: a) the amount of the payment or withdrawal in said foreign currency, and b) the result of multiplying by 1.005 the applicable exchange rate.

For the purposes of the case indicated in the previous paragraph, the applicable exchange rate will be the one determined by the Bank of Mexico, in accordance with Title Three, Chapter V, of the provisions issued by the Bank of Mexico through Circular 3/2012, which it makes known on the same day it determines it, through

104 (First Section) OFFICIAL GAZETTE Wednesday, July 18, 2018 its website, as the “FIX exchange rate” which, in turn, is published in the Official Gazette of the Federations on the next Business Day, and which corresponds to the last available on said website at the moment the Issuer: i) has authorized the respective payment or withdrawal, or ii) must carry out the settlement of the amounts corresponding to said charge in accordance with the agreements celebrated for this purpose with the Acquirer, the clearing house or the recipient of the respective payment, as the case may be, regarding operations in which the Cardholder authorizes, preliminarily, an initial charge and subsequently, a final charge for the same operation that implies the update of the previously authorized preliminary amount.

In the event that the payment or cash withdrawal with Credit Card is made in any foreign currency other than the United States dollar, the charge that the Issuer makes in national currency in the Account may not exceed the amount resulting from the following calculation: in the first place, the equivalent of the amount of the payment or withdrawal in the respective currency to United States dollars will be calculated in accordance with the last exchange rate available at the moment that corresponds in accordance with what is provided in letters i) or ii) of the previous paragraph, which has been made known by any price provider authorized to organize and operate with such character by the National Banking and Securities Commission in accordance with what is provided for this purpose by the Securities Market Law, as it has remained published on the respective website of said provider and, in the second place, the amount equivalent to pesos of said amount in United States dollars will be calculated, in accordance with what is indicated in the previous paragraph.

In the event that the price provider contracted by the Issuer in question does not make known on its website open to the public the applicable exchange rate for the foreign currency in which a payment is made or an amount of cash is withdrawn with a Credit Card, such Issuer may use the market exchange rate made known by any company that is not located in the cases of related person, in terms of article 73, fractions I, V and VII, of the Credit Institutions Law, with respect to the credit institution or multiple-object financial society regulated that maintains equity links with credit institutions that correspond. In this case, the Issuer must keep a record of the source from which it obtained the exchange rate referred to in this paragraph.

Issuers may request from the Bank of Mexico, through the Directorate of Authorizations, Consultations and Legal Control, through computer systems or by any other means, including the electronic ones determined for this purpose by the Bank of Mexico itself, their authorization to carry out the foreign exchange operation referred to in this numeral by applying: a) the corresponding exchange rate at a time different from those provided for in letters i) and ii) of the second paragraph of this same numeral, or b) an exchange rate of the foreign currency in question, other than the United States dollar, which is not made known by any price provider provided for in this numeral.

The Issuer that presents the request referred to in the previous paragraph must attach to it sufficient evidence on the operational reasons that justify said request, as well as the elements that support its convenience for users. Likewise, the Issuer that obtains the indicated authorization must make known to its cardholders, in accordance with the procedure referred to in said authorization, the application of the corresponding exchange rate, as well as carry out the modifications to the contracts under which the cards in question are issued. For these purposes, the Issuer must include in its authorization request its proposal for the procedure referred to above.”

TRANSITORY SINGLE. This Circular will enter into force one hundred eighty banking business days after the date of its publication in the Official Gazette of the Federation.

Mexico City, July 12, 2018.- The General Legal Director, Luis Urrutia Corral.- Signature.- The General Director of Affairs of the Financial System, Jesús Alán Elizondo Flores.- Signature.

Wednesday, July 18, 2018 OFFICIAL GAZETTE (First Section) 105 For any consultation regarding the content of this Circular, please contact the Directorate of Authorizations, Consultations and Legal Control, at the phones (55) 5237-2308, (55) 5237-2317 or (55) 5237-2000 Ext. 3200.