GENERAL PROVISIONS APPLICABLE TO COMPANIES ADMINISTERING SYSTEMS TO FACILITATE SECURITIES TRANSACTIONS

Published in the Official Gazette of the Federation on June 6, 2014.
Updated with modifications published in the same Gazette on October 20, 2014, and March 31, 2016.

The National Banking and Securities Commission, with prior agreement of its Board of Directors, based on the provisions of articles 254, fraction V, 257, first paragraph, and 259, last paragraph of the Securities Market Law, as well as articles 2, second paragraph; 4, fractions XXXVI and XXXVIII; 16, fractions I and XVI, and 19 of the Law of the National Banking and Securities Commission, and

CONSIDERING

That the "Provisions applicable to companies that administer mechanisms to facilitate securities transactions" published in the Official Gazette of the Federation on August 28, 1997, were issued by this National Banking and Securities Commission under the authority of the previous Securities Market Law; therefore, it is necessary to update the rules contained in the aforementioned provisions regulating such companies in order to adjust them to the legal framework provided in the currently in force Securities Market Law;

That in order to comply with commitments acquired in the international arena to incorporate provisions related to standardized derivative transactions regarding their negotiation, it is considered appropriate to strengthen the rules applicable to companies that administer systems to facilitate securities transactions, which will allow these companies, in addition to disseminating quotes in order to channel requests for credit institutions, brokerage houses, and other institutional investors, national or foreign, as well as financial entities from abroad of the same type as those indicated, to carry out transactions with securities and other financial assets, to also include in the performance of the activities referred to standardized derivative transactions, in accordance with the best international practices established in this matter;

That in this vein, obligations and requirements applicable to the aforementioned companies in the performance of their activities are incorporated, including the dissemination of quotes on derivative transactions, whether standardized or not, with standardized ones being classified as such in accordance with the provisions issued by the Bank of Mexico, in order to have a legal framework in accordance with best practices and which at the same time is consistent with the international commitments assumed;

That likewise, it is necessary to strengthen the rules regarding the operation of companies that administer systems to facilitate securities transactions in order to anticipate the activities of disseminating quotes and providing information regarding the negotiation of securities, derivative transactions, whether standardized or not, or other financial assets, in order to have an orderly market. In such virtue, it is indispensable to strengthen the provisions regarding the operation and functioning of the aforementioned companies, adding rules regarding their organization and operation, as well as the rules and procedures that their internal regulations must provide for;

And finally, it is convenient to incorporate the provisions that foreign companies performing functions similar to those of companies authorized by the National Banking and Securities Commission to administer systems to facilitate securities transactions must comply with, recognizing the operational mechanics of the aforementioned companies in the performance of international transactions, has resolved to issue the following:

GENERAL PROVISIONS APPLICABLE TO COMPANIES ADMINISTERING SYSTEMS TO FACILITATE SECURITIES TRANSACTIONS

INDEX

Chapter One
General Provisions

Chapter Two
On the Authorization of Companies

Chapter Three
On the Obligations of Companies

Chapter Four
On the Powers of the Commission

(2) ANNEX 1 Minimum guidelines to be considered by Companies in the preparation of their codes of conduct

Chapter One

General Provisions

FIRST. For the purposes of these provisions, it shall be understood that:

I. Commission, refers to the National Banking and Securities Commission;
II. Standardized derivative transactions, refers to those defined as such by the Bank of Mexico in accordance with applicable provisions;
III. Law, refers to the Securities Market Law, and
IV. Companies, refers to companies that administer systems to facilitate securities transactions authorized by the Commission in terms of article 253 of the Law.

Additionally, the terms underlying assets, clearinghouse, institutional investor, and clearing member shall have the meaning attributed to them in the "Rules to which participants in the market for listed derivative contracts shall be subject" published in the Official Gazette of the Federation on December 31, 1996, and their respective modifications.

Likewise, the words consortium, control, relevant executive, group of persons, business group, financial group, significant influence, and power of command shall have the meaning attributed to them in the Law.

SECOND. These provisions aim to regulate Companies, which perform the following activities:

I. Disseminate quotes in order to channel requests or orders to carry out transactions with securities, derivative transactions, whether standardized or not, and other financial assets, through the use of automated equipment or communication;
II. Provide information regarding the quotes of securities, derivative transactions, whether standardized or not, and other financial assets, regarding which they provide their services, and

III. Provide services through systems or communication equipment related to the dissemination of quotes to carry out transactions.

THIRD. The services referred to in the previous provision may be applied to securities registered in the National Securities Register, which can be negotiated outside of stock exchanges, derivative transactions, whether standardized or not, as well as other financial assets. These services will be provided to credit institutions, brokerage houses, foreign financial entities of the same type as those indicated, and other institutional investors, national or foreign.

Companies must ensure that securities transactions carried out through their systems by credit institutions, brokerage houses, and other institutional investors, national or foreign, always have as counterparty a credit institution or brokerage house. Likewise, such situation will be required for derivative transactions, whether standardized or not, or with other financial assets, concluded by institutional investors, national or foreign.

Regarding derivative transactions, whether standardized or not, as well as regarding other financial assets carried out through the systems of Companies, it will not be necessary to have a credit institution or brokerage house as counterparty when concluded by foreign financial entities of the same type as those indicated.

Additionally, information regarding the quotes of securities, derivative transactions, whether standardized or not, and other financial assets regarding which they provide services may be supplied to any person.

Chapter Two

On the Authorization of Companies

FOURTH. To organize and operate as a Company, authorization from the Commission, with prior agreement of its Board of Directors, is required. To this effect, interested parties must submit the corresponding application accompanied by the documentation referred to in the Fifth of these provisions. The aforementioned Commission will grant or deny the respective authorization at its discretion.

Only anonymous societies constituted in accordance with the provisions of the General Law of Commercial Societies and which comply with these provisions will enjoy authorization.

FIFTH. Persons wishing to constitute a Company must accompany their application with the following documentation:

I. Draft of corporate bylaws;
II. List of shareholders who will constitute the company and the capital each of them will contribute, as well as the list of directors, general manager, and executives with the immediate lower hierarchy to the latter who will be appointed.
Likewise, regarding shareholders, they must prove that they have integrity and satisfactory credit history;
III. General operating plan of the Company, which includes, at least, the following aspects:

a) The indication of the securities, derivative transactions, whether standardized or not, or any other financial asset regarding which it intends to provide its services;

b) The premises, facilities, and trading systems that will be used for the dissemination of quotes, as well as for the negotiation of transactions with securities, derivative transactions, whether standardized or not, and other financial assets;

c) The security measures they will implement, including those related to the integrity and confidentiality of information, as well as responsibilities regarding the use of systems by credit institutions, brokerage houses, other institutional investors, national or foreign, as well as foreign financial entities of the same type as those indicated and the Companies themselves;

d) Contingency prevention plans that allow continuity in the performance of operations. These plans must guarantee the integrity and security in the recording of the information generated;

e) In their case, the draft contracts that would govern the transactions between the Company and the clearinghouse or any foreign institution acting as a central counterparty recognized by the Bank of Mexico, which must include the form and terms in which it must provide it with information on derivative transactions, whether standardized or not, as well as between the Company and credit institutions, brokerage houses, other institutional investors, national or foreign, and foreign financial entities of the same type as those indicated to which it provides its services;

f) The manuals of policies and operating procedures and systems prepared in accordance with these provisions;

g) The means that will be used to disseminate quotes in order to channel requests or orders to carry out transactions with securities, derivative transactions, whether standardized or not, or other financial assets, and

h) The procedures for the assignment of orders and, in their case, the algorithm for their execution, as well as for the dissemination of market information.

IV. Regarding Companies whose capital participates in foreign legal entities that are authorized to perform similar or equivalent transactions to Companies, the regulatory authority to which the latter are subject must be indicated, and, in their case, the self-regulatory body to which they belong.

V. Draft internal regulations containing the rules and procedures that will determine the operation of the Company, incorporating at least:

a) The trading mechanics of securities, derivative transactions, whether standardized or not, and other financial assets, as well as the terms, conditions, and forms of negotiation of the transactions;

b) The policies and guidelines for the collection of tariffs, fees, or commissions for the services provided, and

c) The causes for which the provision of its services to credit institutions, brokerage houses, other institutional investors, national or foreign, as well as foreign financial entities of the same type as those indicated, may be suspended.

(1) VI. Code of conduct to which directors, the compliance officer, the general manager, executives, and other personnel involved in the provision of their services will be subject, which includes policies for the resolution of conflicts of interest in the performance of their activities. This manual must provide for the rules contained in Annex 1 of these provisions, and

VII. Financial feasibility study including projected financial statements for the first twenty-four months of operation, in which it is shown that it has sufficient resources to maintain adequate operation for at least said period.
Likewise, a general description of the financial model used must be included, indicating the main assumptions, as well as the expected income from the collection of the corresponding counterpayments.

Companies must notify the Commission of any modification they make to the documentation indicated in this provision, within ten business days following the date on which the modification takes place, in order for the Commission itself to exercise the power contained in article 254, last paragraph of the Law.

SIXTH. Companies that provide their services regarding Standardized Derivative Transactions must prove to the Commission, prior to the start of their operations, that they have the necessary connections with any clearinghouse established in Mexico or any foreign institution acting as a central counterparty recognized by the Bank of Mexico.

SEVENTH. The Board of Directors of Companies must be composed of a minimum of five and a maximum of fifteen directors, of whom at least thirty-three percent must be independent. For each owner director, a respective substitute must be designated, understanding that substitute directors of independent directors must have the same character.
Likewise, the Board of Directors will have the support of a secretary, who will not be part of said Board.

Members of the Board of Directors who have a conflict of interest in any matter must abstain from participating and being present in the deliberation and voting of said matter, without this affecting the quorum required for the installation of said Board.

Shareholders who individually or collectively hold ten percent of the shares representing the social capital may designate in the general shareholders' meeting a director and an auditor, as well as revoke such appointments, without the percentages referred to in articles 144 and 171 of the General Law of Commercial Societies being applicable. Such appointments can only be revoked when, in turn, the appointment of all other directors or auditors is revoked, as the case may be, in which case they must not be appointed with such character during the twelve months immediately following the date of revocation.

Directors and the secretary must maintain absolute confidentiality regarding all those acts, facts, or events related to the Company, in which they serve as such, when the information is not public, as well as any deliberation that takes place in the board, unless by reason of their employment, position, or commission the person to whom they transmit or provide said information must know it. This without prejudice to the obligation that the Company will have to provide all the information requested by the Commission.

EIGHTH. The appointment of directors, the compliance officer, the general manager, and executives holding positions with the immediate lower hierarchy to the latter of Companies, must fall on persons who prove to have technical quality, integrity, and satisfactory credit history, extensive knowledge and experience in financial or administrative matters, as well as meet at least the following requirements:

I. Be a resident in national territory in terms of the provisions of the Federal Tax Code, except regarding directors;
II. Have provided at least five years of their services in high-level decision-making positions, whose performance requires knowledge and experience in financial and administrative matters;

III. Not be located in any of the following impediments:

a) Have a pending lawsuit with the Company in question; b) Have been convicted by an irrevocable sentence for a property crime, disqualified from exercising commerce or from holding a position, office, or commission in public service, or in the Mexican financial system; c) Have been declared bankrupt or in bankruptcy proceedings, without having been rehabilitated, and d) Perform or exercise functions of inspection, supervision, or regulation of the Company.

In any case, the persons mentioned in this provision must manifest in writing that they are not located in any of the situations referred to in the previous subsections, that they are up to date with their credit obligations of any kind, as well as that they know the rights and obligations they assume when accepting the corresponding position.

IV. Not have conflicts of interest or an interest opposed to that of the Company.

Regarding auditors, the appointment must fall on persons who prove to have technical quality, integrity, and satisfactory credit history, extensive knowledge and experience in financial or administrative matters, as well as comply with what is provided in fractions III and IV of this provision.

Companies must verify that persons appointed as directors, compliance officer, auditor, general manager, and executives with the immediate lower hierarchy to the latter, comply, prior to the start of their management and during the development of the same, with the requirements indicated in this provision.

Companies must inform the Commission of the appointments, resignations, and removals of directors, compliance officer, auditors, general manager, and executives with the immediate lower hierarchy to the latter, within ten business days following the occurrence of said event, expressly stating, in the case of appointments, that the persons comply with the applicable requirements.

Additionally, persons who hold an employment or hold any position, mandate, or commission or any other legal title that Companies have granted for the performance of their operations, who are in charge of operating the systems or communication equipment of these, must comply with what is provided in fraction I of this provision.

NINTH. In no case may the following persons be appointed or serve as independent directors of Companies:

I. Relevant executives or employees of the Company or of the legal entities that make up the business group or consortium to which it belongs, as well as the auditors of the latter. The aforementioned limitation will be applicable to those natural persons who have occupied such positions during the twelve months immediately prior to the date of appointment;
II. Natural persons who, in terms of the provisions of the Law, have significant influence or power of command in the Company or in any of the legal entities that make up the business group or consortium to which said Company belongs;
III. Shareholders who are part of the group of persons that maintains control of the Company;
IV. Clients, service providers, suppliers, debtors, creditors, partners, directors, or employees of a company that is an important client, service provider, supplier, debtor, or creditor.

It is considered for the purposes stated in the preceding paragraph that a client, service provider, or supplier is important when the sales of the Society represent more than ten percent of the total sales of the client, service provider, or supplier, during the twelve months prior to the date of appointment. Likewise, a debtor or creditor is considered important when the credit amount is greater than fifteen percent of the assets of the Society itself or its counterparty;

V. Those related by consanguinity, affinity, or civil law up to the fourth degree, as well as spouses, concubines, and concubines, of any of the natural persons referred to in items I to IV of this provision, and

VI. Natural persons who participate in the share capital of financial entities or hold positions, jobs, or commissions in these entities, except for independent board members of any of the aforementioned financial entities.

Independent board members who cease to have such characteristic during their term must notify the board of directors no later than at the next session of said body.

The Commission, prior to the right of hearing of the Society and the board member in question, and with the agreement of its Board of Directors, may object to the qualification of independence of the members of the board of administration, when there are elements demonstrating the lack of independence in accordance with what is provided in items I to V of this provision, in which case they will lose said character.

The Commission will have a period of thirty business days counted from the notification made for this purpose by the Society, in terms of the applicable provisions, to object, if applicable, to the independence of the respective board member; upon expiration of said period without the Commission issuing its opinion, it will be understood that there is no objection. The foregoing, without prejudice to the fact that the Commission may object to such independence, when subsequently it is detected that during the term of a board member they fall into any of the circumstances referred to in this item.

TENTH.- The board of administration of the Societies shall be responsible for:

(3) I. Issuing the internal regulations of the Society.

(3) II. Establishing the committees it deems necessary for the best performance of the Society's functions.

(4) III. Approving quarterly the reports presented to it by the regulatory controller of the Society.

ELEVENTH.- The Societies shall have a regulatory controller, responsible for monitoring that the operations carried out derived from the provision of the Society's services, as well as the activities of the Society itself, comply with the applicable regulations.

The regulatory controller must be a person external to the administration of the Society, who meets the requirements and conditions established in the previous Eighth provision, and whose appointment, suspension, or dismissal shall correspond to the board of administration. The regulatory controller must be summoned to the board of administration sessions with voice but without vote.

The obligations of the regulatory controller are:

I. Monitor compliance with these provisions and others applicable;

II. Analyze the reports of the auditor(s) and the opinions of external auditors, presenting its written opinion to the board, and

(3) III. Report to the Commission quarterly on the compliance with its obligations, within five business days following the end of the months of March, June, September, and December of each year, as well as immediately regarding any irregularities it becomes aware of in the exercise of its functions.

(3) The regulatory controller shall present to the board of administration quarterly, for its approval, reports regarding the compliance with its obligations and shall be responsible for the non-compliance with any of its obligations, potentially being sanctioned in accordance with what is provided in the internal regulations of the Society.

TWELFTH.- The report that the regulatory controller presents to the board of administration of the Society, in terms of the Eleventh of these provisions, regarding the level of compliance of the regulatory framework applicable to the operations carried out derived from the provision of services of the Society, as well as to the Society itself, including adherence to its code of conduct, shall be prepared semi-annually. The report shall contain, at a minimum, a description of:

I. The compliance with its policies and procedures;

II. Information on all its pending investigations and examinations during the period;

III. Any relevant changes in policies and procedures since the date of the previous report;

IV. Any recommendation to generate relevant changes to policies and procedures as a result of an annual review, the rationale of such recommendation, and whether such policies and procedures were or will be modified by the Society to incorporate said recommendation, and

V. Any relevant non-compliance problem identified since the last report.

The report referred to in this provision shall be delivered to the Commission no later than within five business days following its presentation to the Society's board.

Third Chapter
On the Obligations of the Societies

THIRTEENTH.- The Societies that have received the authorization referred to in the Fourth of these provisions, shall have the following obligations:

(3) I. Provide access to automated electronic or voice trading systems, which allow credit institutions, brokerage houses, and other institutional investors, national or foreign, as well as financial entities from abroad of the same type as those indicated, to operate on equal conditions, as well as to obtain information on positions, transactions, and market facts in general. In case voice is used, the recording and disclosure of positions and operations in the systems shall be done immediately; regarding positions in operations through auctions, the Societies may abstain from disclosing them provided that their internal regulations so determine.

Additionally, in all cases, they must establish processes for real-time monitoring of operations and those that allow for the records known as "audit trails".

For the purposes of what is provided in this item, they must have at least systems for:

a) The trading of securities, derivatives operations whether standardized or not, or other financial assets, as applicable, which must show information on the types of orders, positions, and quotes that are traded in their systems, the manner in which they will be managed, and their disclosure to credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated;

(3) b) The disclosure of information to credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated. These systems must allow:

(3)
(i) That at the start of each session they disseminate the reference price or value of the previous business day of each security, derivative operation whether standardized or not, or other financial assets, as well as, if applicable, the amount traded;

(3)
(ii) The real-time disclosure of information on operations and positions during the day, identifying the type of security, derivative operation whether standardized or not, or other financial asset, term, market price or interest rate, and

(3)
(iii) That it contains a description in strict chronological order of all events that take place in said system.

II. Establish premises, facilities, and automated mechanisms that facilitate the negotiation of operations with securities, derivative operations whether standardized or not, or other financial assets, by credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated, as well as promote the negotiation of said operations;

III. Ensure that their activities adhere to stock market usages and sound market practices and comply with applicable provisions;

(3) IV. Have a system that allows capturing in an orderly and complete manner the information of each transaction, in which the credit institution, brokerage house, or subject established by Law operating in the Societies, date and time of negotiation, price, value or interest rate, and amount of the operation, class and type of security, derivative operation whether standardized or not, or other financial asset, as well as, if applicable, the underlying assets and volumes traded can be identified. Said system must allow precise follow-up and knowledge of the complete information of each operation, as well as have audit trails that allow reconstructing chronologically and verifying all transactions;

V. Send to the Commission monthly within the first ten business days of the conclusion of the corresponding month their financial statements, as well as the result of an external audit performed, at least once a year, the latter must be delivered within ten business days following the date of celebration of the ordinary general assembly of shareholders that resolves on the results of the fiscal year, which must be held within four months following the close of said year;

VI. Send daily the confirmations of the securities, derivative operations whether standardized or not, or other financial assets, celebrated in their electronic trading systems, to credit institutions, brokerage houses, other institutional investors, national or foreign, as well as to financial entities from abroad of the same type as those indicated that operate in said systems;

(4) VII. In case the Societies provide the service of sending information to any clearing house on the detail of the Standardized Derivative Operations celebrated in their electronic trading systems, said information must be sent as soon as technologically possible, and

VIII. Suspend the provision of services to credit institutions, brokerage houses, and other institutional investors, national or foreign, as well as to financial entities from abroad of the same type as those indicated, once the clearing house informs them that said subjects have reached the exposure limits to risk or when there are payment defaults of the requirements formulated by the clearing house itself.

(4) THIRTEENTH BIS.- The Societies that have received the authorization referred to in the Fourth of these provisions, must have policies and guidelines to which they will be subject in the execution of block operations.

(4) In said policies and guidelines, it must be foreseen that the Societies may abstain from disclosing positions related to block operations, provided that within a period not exceeding three business days after the execution of said operations, they disclose in their trading systems each of the operations carried out.

(4) Until block operations are disclosed in their trading systems, they will have the character of insider information.

FOURTEENTH.- The Societies must provide the services they offer in the contract they celebrate with credit institutions, brokerage houses, other institutional investors, national or foreign, as well as with financial entities from abroad of the same type as those indicated. Said contract must contain, in addition to the stipulations corresponding by their nature, the following:

I. The means that will be used to achieve the identification of persons authorized by credit institutions, brokerage houses, other institutional investors, national or foreign, and by financial entities from abroad of the same type as those indicated for the operation of automated or communication equipment, as well as the responsibilities related to their use;

II. That positions or order requests transmitted through automated or communication equipment installed will be considered firm;

III. That the identification means used to operate the automated or communication equipment implemented in substitution of the autograph signature, will produce between credit institutions, brokerage houses, and other institutional investors, national or foreign, as well as financial entities from abroad of the same type as those indicated, the same effects that laws grant to private documents, having equal probative value;

IV. That the Society under no circumstances will assume the character of counterparty of any of the credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated in the operations channeled through their trading systems, for which reason it will not incur any responsibility in case of non-compliance with such operations, and

(3) V. That credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated, will adhere to the internal regulations of the Society.

Regarding the supply of information referred to in the third paragraph of the Third provision to a price provider, the Societies are obligated to provide it in an identical manner and with the same opportunity, cost, and delivery method, to any other price provider that requests it.

(4) In case the information that the Societies disclose to price providers contains errors or omissions, said Societies must notify them of this fact immediately upon identification. To this effect, they must identify the error or omission, its date of occurrence, as well as describe the respective corrections. The Societies must keep a record of notifications in accordance with the foregoing.

FIFTEENTH.- Information relating to securities, derivative operations whether standardized or not, or other financial assets, will be protected by confidentiality provisions in the same terms that the Credit Institutions Law and the Law establish for financial secrecy. This provision must be contained in the contracts and other documentation that regulate the provision of services between the Societies and the credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated.

What is provided in this provision does not affect in any way the obligation that the Societies have to provide the Commission, any kind of information and documentation that in the exercise of its supervisory functions it requests from them regarding information on securities, derivative operations whether standardized or not, or other financial assets, and the services they provide, or to attend requests from foreign financial authorities.

The Societies must guarantee that their employees, officials, and board members comply at all times with what is provided by this provision.

The information that the Societies provide to credit institutions, brokerage houses, other institutional investors, national or foreign, and financial entities from abroad of the same type as those indicated, as well as to the general public in terms of these provisions, may only be revealed in an aggregated form.

In the contracts that the Societies sign with credit institutions, brokerage houses, and other institutional investors, national or foreign, as well as with financial entities from abroad of the same type as those indicated, their authorization must be obtained so that information coming from Derivative Operations whether standardized or not that are celebrated through their trading systems and that are cleared and settled in clearing houses, can be provided to this or any institution from abroad that acts as a recognized central counterparty by the Bank of Mexico.

Fourth Chapter
On the Powers of the Commission

SIXTEENTH.- The Commission in the exercise of its supervisory powers, may order the Societies the temporary suspension of the services that they offer to certain credit institutions, brokerage houses, or other institutional investors, national or foreign, as well as financial entities from abroad of the same type as those indicated, when the operations of the latter do not comply with applicable provisions, sound practices, or if disordered conditions arise in the market.

SEVENTEENTH.- The Societies must keep records on the operations carried out through their systems identifying, number, volume, price, value or interest rate, and type of operation, securities, derivative operations whether standardized or not, or other financial assets, specifying the series to which they belong. This information must be kept available to the Commission, from the date of celebration of the operations, as well as be preserved for a period of five years thereafter.

The Societies are obligated to provide the Commission, the data, reports, records, minute books, auxiliary books, documents, correspondence, and in general, the information that the same deems necessary in the form and terms that it indicates, as well as to allow it access to their offices, premises, and other facilities.

EIGHTEENTH.- The Commission may grant recognition to foreign societies that carry out similar or equivalent operations to the Societies, for the purposes that credit institutions, brokerage houses, and other national institutional investors can celebrate through them Standardized Derivative Operations, taking into account the following:

I. That they are subject to the supervision and monitoring of the foreign financial authority and comply with the legal and administrative provisions applicable in their country of origin.

II. That the legal regime applicable to the foreign society has norms that establish the obligation to reveal in a periodic, sufficient, and timely manner information relating to its financial, economic, accounting, legal, and administrative situation, and always allowing the disclosure to the authorities of said information in an accessible, expeditious, and continuous manner. Additionally, include provisions to protect the interests of persons operating in said societies.

The foregoing, provided that the Commission has agreements signed with foreign financial authorities with supervisory functions similar to those of the Commission itself, in which the principle of reciprocity is contemplated.

(4) NINETEENTH.- The Commission will determine the amount of those operations with securities, Financial Derivative Operations whether standardized or not, or other financial assets that by reason of their amount must be considered by the Societies as block operations, as well as the maximum deviation of the existing positions or of the reference buy and sell prices that said operations may have. What is provided in this provision must be notified to the Societies, as well as made known to the public through the Internet on the site http://www.cnbv.gob.mx.

TRANSITIONAL PROVISIONS

FIRST.- These Provisions will enter into force 90 days following their publication in the Official Gazette of the Federation, except for what is provided in the following Transitional Article.

SECOND.- The societies that administer systems to facilitate securities transactions that on the date of publication of these Provisions are authorized to operate as such in terms of the Securities Market Law, must present to the National Banking and Securities Commission 30 days before the entry into force of this instrument, an implementation plan to comply with it. In any case, the aforementioned societies will be exempt from presenting the financial feasibility study referred to in item VII of the Fifth of these Provisions.

THIRD.- Upon the entry into force of these Provisions, the "Provisions applicable to companies that administer mechanisms to facilitate securities transactions", published in the Official Gazette of the Federation on August 28, 1997, and reformed by resolutions published in the said Official Gazette of the Federation on January 21, 1998, and April 11, 2000, are hereby repealed.

TRANSITIONAL PROVISIONS

(Resolution that modifies the General Provisions Applicable to Societies Administering Systems to Facilitate Securities Transactions, published in the Official Gazette of the Federation on October 20, 2014)

FIRST.- This Resolution will enter into force the day following its publication in the Official Gazette of the Federation.

SECOND.- The societies that administer systems to facilitate securities transactions that on the entry into force of this Resolution are authorized to be constituted with such character, will have ninety days counted from the entry into force of this Resolution to adjust their code of conduct in terms of what is provided in this same instrument.

TRANSITIONAL PROVISIONS
(Resolution modifying the General Provisions Applicable to Securities Settlement System Administrators, published in the Official Gazette of the Federation on March 31, 2016)

FIRST.- This Resolution shall enter into force the day following its publication in the Official Gazette of the Federation.

SECOND.- Securities settlement system administrators shall have a period of five business days from the entry into force of this instrument to send to the National Banking and Securities Commission the policies and guidelines referred to in the Tenth Bis Provision added to the "General Provisions Applicable to Securities Settlement System Administrators" by this instrument, as well as to adjust their systems to said provision.

THIRD.- Securities settlement system administrators shall have a period of six months to adapt the contracts they have entered into with credit institutions, brokerage houses, other institutional investors, national or foreign, and foreign financial entities of the same type as those indicated, in accordance with what is provided in this Resolution.

FOURTH.- The National Banking and Securities Commission shall notify securities settlement system administrators, within three business days following the entry into force of this Resolution, of the amount of transactions that must be considered as block transactions for the purposes of the "General Provisions Applicable to Securities Settlement System Administrators."

CONSIDERING
(Resolution of October 20, 2014)

That on January 10, 2014, the "Decree Reforming, Adding and Repealing Various Provisions in Financial Matters and Issuing the Law to Regulate Financial Conglomerates" was published in the Official Gazette of the Federation, which reformed, among other legal instruments, the Securities Market Law to empower the National Banking and Securities Commission to establish, through general provisions, the norms that must contain the codes of conduct of securities settlement system administrators, aimed at governing the conduct of said administrators, as well as their directors, regulatory auditors, general managers, and other executives and personnel involved in the provision of their services, and

That in this regard, codes of conduct must include policies for the resolution of potential conflicts of interest in the performance of the activities of securities settlement system administrators, in order to have transparent, efficient service provision consistent with best market practices, has resolved to issue the following:

CONSIDERING
(Resolution of March 31, 2016)

That it is necessary to provide for norms regarding block transactions negotiated through securities settlement system administrators in order to establish special treatment for such transactions that allows deferring the disclosure of corresponding information, promotes adequate price formation, market transparency, and operational efficiency, given the particular characteristics of this type of transaction, and

That additionally it is necessary to make clarifications to the rules applicable to securities settlement system administrators, including clarifying the period within which their regulatory auditor must submit reports to the National Banking and Securities Commission; determining the obligation for said administrators to have systems that generate audit trails for better supervision by the Commission itself, as well as indicating the manner in which such administrators must inform price providers when disclosed information contains errors or omissions, has resolved to issue the following:

REFERENCES
1) Reformed by Resolution, published in the Official Gazette of the Federation on October 20, 2014.
2) Added by Resolution, published in the Official Gazette of the Federation on October 20, 2014.
3) Reformed by Resolution published in the Official Gazette of the Federation on March 31, 2016.
4) Added by Resolution published in the Official Gazette of the Federation on March 31, 2016.