GENERAL PROVISIONS APPLICABLE TO SELF-REGULATORY ORGANIZATIONS RECOGNIZED BY THE NATIONAL BANKING AND SECURITIES COMMISSION

Published in the Official Gazette of the Federation on May 6, 2016

The National Banking and Securities Commission, based on the provisions of Article 230 of the Securities Market Law, Article 7 Bis 2 of the Credit Institutions Law, Article 35 of the Investment Funds Law, and Article 115 of the Savings and Popular Credit Law, as well as Articles 4 (paragraphs XXXVI and XXXVIII) and 16 (paragraph I) of the National Banking and Securities Commission Law,

CONSIDERING

That it is necessary for the norms applicable to self-regulatory organizations to include their scope of application to those associations or guilds referred to in the Credit Institutions Law and the Savings and Popular Credit Law that wish to obtain recognition as such from the National Banking and Securities Commission, since current norms are silent regarding such associations, and

That in consistency with the above, the rules governing the process to obtain recognition as a self-regulatory organization, the authorization for said organizations to issue certifications in terms of the corresponding laws, as well as their revocation, are established; therefore, in order to have a secondary framework consistent with the Credit Institutions Law, the Savings and Popular Credit Law, and the Securities Market Law, it has resolved to issue the following:

GENERAL PROVISIONS APPLICABLE TO SELF-REGULATORY ORGANIZATIONS RECOGNIZED BY THE NATIONAL BANKING AND SECURITIES COMMISSION

INDEX

Chapter I
On Recognition

Chapter II
On Self-Regulatory Organizations Authorized to Certify

Chapter III
On Revocation

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Chapter I

On Recognition

Article 1. For the purposes of these provisions, singular or plural shall be understood as follows:

I. Commission: The National Banking and Securities Commission.
II. LACP: The Savings and Popular Credit Law.
III. LFI: The Investment Funds Law.
IV. LIC: The Credit Institutions Law.
V. LMV: The Securities Market Law.

VI. Self-regulatory organizations: The associations or guilds referred to in Articles 228 (first and third paragraphs) of the Securities Market Law, Article 7 Bis of the Credit Institutions Law, and Article 113 of the Savings and Popular Credit Law, recognized by the Commission as such.

VII. Credit information reports: Special credit reports issued by credit information societies referred to in Article 36 Bis of the Law to Regulate Credit Information Societies, specifically:
a) That issued by a credit information society that includes information contained in the databases of other credit information societies, or b) Individual credit reports issued by all credit information societies.

Article 2. Associations or guilds wishing to obtain recognition from the Commission as a Self-regulatory organization must submit a written application to said Commission, accompanied by the following documentation:

I. Draft of the constitutive act or draft of the corporate statutes.
II. List of the members who comprise them, which must represent the majority or, in their case, the largest number of entities, societies, or service providers linked to the relevant market, in the sector or area where the self-regulation functions are intended to be developed.
III. Document describing the internal organization and functioning in matters of self-regulation, containing at least aspects related to:
a) Requirements and procedures for admission and exclusion of members. b) Rights and obligations of members. c) Specific self-regulation functions they intend to develop. d) Procedure for representation and participation of members in sessions of the board of directors and technical committees. e) Procedure to be followed to elaborate self-regulation norms, as well as to make them effective and sanction non-compliance. f) Procedures to prevent and resolve conflicts of interest that arise between members, as well as between them and the Self-regulatory organization itself. g) Other aspects indicated by the LIC, LMV, and LACP, as applicable.
IV. Procedure to verify the performance of its members, as well as any other persons subject to compliance with the self-regulation norms they issue.
V. List of probable councilors and executives of the Self-regulatory organization.
VI. In their case, request for authorization to certify natural persons who, in accordance with the LMV and LFI, must be certified, concerning associations or guilds seeking recognition as Self-regulatory organizations of securities market intermediaries or investment advisors. Such request must be accompanied by the information and documentation referred to in Article 5 of these provisions.

Self-regulatory organizations must notify the Commission of modifications made to the documentation indicated in paragraphs I to V of this article, within ten business days following the date on which they take place.

Article 3. Self-regulatory organizations are obligated to:

I. Verify that the activities of their members and the executives and employees thereof comply with the self-regulation norms they issue.
II. Ensure that their administration bodies, committees, and working groups linked to self-regulatory activity are integrated equitably and consistently with their objectives, by persons who possess capacity, professional and technical experience, to carry out their function efficiently and who, furthermore, conduct themselves with independence.
III. Inform the Commission of serious infractions committed by their members and the executives and employees thereof, against the self-regulation norms they issue.
IV. Inform the Commission of irregularities detected within their competence regarding the performance of their members and the executives and employees thereof, as well as any other persons subject to compliance with the self-regulation norms they issue, which may presumably be violations of the LIC, LMV, LFI, and LACP.
V. Provide the Commission, when so requested, with information and documentation related to the exercise of their self-regulatory functions.

Article 4. Self-regulatory organizations, in the elaboration of self-regulation norms governing the performance of their members and the executives and employees thereof, must contemplate adequate consultation procedures among the subjects of their regulation. They must also have efficient mechanisms for disseminating the self-regulatory norms they issue.

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Chapter II

On Self-Regulatory Organizations Authorized to Certify

Article 5. Self-regulatory organizations of securities market intermediaries and investment advisors intending to certify natural persons who, in accordance with the LMV and LFI, must be certified, must request authorization from the Commission to perform such certifications, adhering to the provisions of this Chapter for such effect. The authorization request must be accompanied by the following information and documentation:

I. Draft manual containing policies, guidelines, methodologies, and procedures to accredit the technical quality of persons intending to obtain certification, which includes, at least, the following:
a) Policies and guidelines for granting and renewing certifications, indicating the certifications they intend to grant in accordance with the LMV and LFI. Furthermore, the validity of the certifications they issue must be determined, which cannot exceed three years. b) Guidelines for preparing exams by type of certification; their respective syllabi, study guides, and bibliography, as well as the procedure to certify applicants who have twenty-five years of experience in the financial system, as provided in Article 7 of these provisions. Additionally, procedures for the review and updating of such guidelines and procedures, as well as the exams themselves, must be specified. c) Methodology for grading exams, which must indicate the minimum passing grade as well as, if applicable, the weights to be used for each topic comprising the exams. Similarly, procedures for the review and updating of said methodology must be indicated. d) Procedure to verify the information referred to in paragraphs I and II of Article 12 of this instrument. Reviews referred to in sub-items b) and c) above must be carried out at least once a year or earlier if there are relevant modifications to the LMV, LFI, or provisions emanating from them that persons obtaining the certification in question must know.

II. Procedures for resolving disputes and disagreements presented by certification applicants, in case of disagreement with the grade obtained.
III. List of persons who will comprise the certification committee, as well as documentation accrediting compliance with the requirements indicated in Article 8 of these provisions.
IV. Description of the infrastructure they will use, as well as the personnel they will have available to carry out the certification procedure.

Self-regulatory organizations authorized to certify must notify the Commission of any modification to the information or documentation referred to in this article within ten business days following the date on which they carry out the corresponding modifications.

Article 6. Self-regulatory organizations authorized to certify may evaluate the technical quality of persons who, in accordance with the LMV and LFI, must obtain such certification, through the application of exams, or, in the case of persons who have at least twenty-five years of experience in the financial system, through any other accreditation procedure determined by the Self-regulatory organizations, provided it is adequate to demonstrate the corresponding technical quality.

Likewise, self-regulatory organizations authorized to certify must verify the credit history and honorability of applicants intending to obtain the mentioned certification.

Article 7. Self-regulatory organizations authorized to certify, in the application of the exams they establish to carry out the certification referred to in this Chapter, are obligated to:

I. Make available to interested applicants intending to take certification exams, the policies and guidelines established for such effect, as well as a study guide containing the subjects object of the exams.
II. Have electronic systems that allow generating certification exams of technical quality that are different for each applicant and contain theoretical and practical questions, related to the various subjects integrating the study guide.
Such systems must have security mechanisms preventing unauthorized persons from accessing questionnaires, modifying exam answers, or altering records of obtained results, for which additional controls generating audit trails will be implemented.

In no case, self-regulatory organizations authorized to certify, nor their executives and other staff, may have property or business ties with educational institutions or of any other type, related to the delivery of courses directed at the preparation of persons who might eventually request the aforementioned certification. This does not apply to courses relative to the code of ethics and conduct that self-regulatory organizations authorized to certify deliver as a prior requirement to present the certification exam, nor to executives and other employees who personally engage in teaching activity at the educational institution in question.

The application of the certification exam cannot be conditioned on the applicant having to register and participate previously in preparation courses delivered by a particular educational institution, except regarding ethics and conduct courses related to the stock market sector.

Article 8. Self-regulatory organizations authorized to certify must have a certification committee integrated, at least, by three persons designated jointly by the members of the respective self-regulatory organization, who possess knowledge and experience in the various functions and activities performed by persons who, in accordance with the LMV and LFI, must obtain such certification, as well as by an independent member of recognized prestige in matters of academic quality evaluation and job performance. The number of members comprising the committee must always be odd.

Additionally, concerning self-regulatory organizations that, among other figures, certify stock operators or proxies of securities market intermediaries, the certification committee must have a representative of each corporation that has obtained a concession from the Ministry of Finance and Public Credit to organize and operate as a stock exchange.

Referred self-regulatory organizations must ensure that the certification committee has a representative of each association or guild comprising financial entities or societies requiring the services of certified natural persons in terms of the LMV and LFI.

In no case, members of the certification committee may have property or business ties with educational institutions or of any other type, related to the delivery of courses directed at the preparation of persons who might eventually request certification of technical quality. This does not apply to persons who personally engage in teaching activity at the educational institution delivering the referenced courses.

Article 9. The certification committee will have, among others, the following functions and responsibilities:

I. Approve the manual referred to in Article 5, paragraph I of these provisions.
II. Approve procedures for resolving disputes and disagreements presented by certification applicants.

Article 10. Self-regulatory organizations authorized to certify, in order to verify the credit history of applicants referred to in this instrument, must obtain from the interested person a Credit Information Report with an issuance date not greater than three months prior to the date of the request, containing antecedents of at least five years prior to the date when the mentioned certification is intended to be obtained.

In all cases, self-regulatory organizations authorized to certify must establish policies allowing them to evaluate the credit history of applicants, based on the Credit Information Report. Such policies will take into account, at least, the following:

I. Criteria for valuing the content of Credit Information Reports, allowing qualification of the candidate's credit profile, in the event that they have overdue debts or other types of negative credit antecedents.
II. Additional information required from persons located in the cases provided for in the preceding paragraph.
III. Procedure to keep updated the information contained in the registry referred to in Article 12 of these provisions, without in any case such update exceeding three years.

Article 11. To verify honorability, self-regulatory organizations authorized to certify must consider that certification applicants:

I. Have not been convicted by an irrevocable sentence for intentional crime imposing a penalty of more than one year of imprisonment. Concerning patrimonial crimes committed intentionally, regardless of the penalty.
II. Are not, at the time of the request, administratively or criminally disqualified or suspended from exercising commerce or holding a position, employment, or commission in public service or in the Mexican financial system.
III. Have not been subject to investigation or administrative inquiry procedures for serious infractions or penal offenses, for violations of national or foreign financial laws, which have resulted in any type of resolution or administrative or penal agreement concluding with forgiveness or settlement explicitly implying acceptance of guilt or responsibility, or final condemning sentence.

For the purposes of what is provided in this article, self-regulatory organizations authorized to certify may take into consideration the declaration referred to in Article 12, paragraph V, sub-item b) of these provisions.

Article 12. Self-regulatory organizations authorized to certify in terms of these provisions must maintain in a centralized manner and separate from the certification committee, a registry containing regarding each person requesting and obtaining the certification referred to in this instrument, the following information and documentation:

I. General data of the applicant, including identity according to birth certificate or valid official identification, which may be the passport, voter credential issued by the National Electoral Institute, or professional license; domicile; federal taxpayer registry; unique population registry key, and nationality or migratory status. The indicated information must be supported by corresponding documentation in accordance with what is provided for such effects in the manual referred to in Article 5, paragraph I of these provisions.
II. In their case, titles, certificates, diplomas, or any other type of document, in which recognition of technical or professional studies is recorded, issued by educational institutions.
III. Certification certificate and renewal of certification granted by the respective self-regulatory organization, specifying the respective specialty and date of issuance.
Concerning stock operators, additionally, certificate issued by the stock exchange in which they will operate, accrediting compliance with requirements established in its internal regulations.
IV. Credit Information Report and antecedents referred to in these provisions.

V. Declaration signed by the applicant in which it expressly states:
a) Their consent for the information held in the registry to be disclosed by the corresponding self-regulatory organization in accordance with what is established in these provisions. b) Whether they fall or do not fall under any of the following situations:
i. Any of paragraphs I to III of Article 11 of these provisions.
ii. Having been declared in civil or commercial bankruptcy without being rehabilitated.
iii. Being subject to criminal process.
iv. Having pending litigation against the entity or society where they intend to provide services and, if applicable, proxy them, or against societies forming part of the financial group to which the corresponding entity or society belongs.
v. Having conflicts of interest with the entity or society where they intend to provide their services or, if applicable, proxy them, or with societies forming part of the financial group to which the respective entity belongs.

VI. Letter signed by the regulatory controller of the respective entity or society or equivalent, informing the data of the public instrument in which the special power granted to the interested party to act as stock operator or proxy of securities market intermediaries or investment advisor is recorded, as applicable.
VII. In case requiring Commission authorization, copy of the notification by which the Commission informs the self-regulatory organization of the granting of authorization to the applicant to act with the character they hold, and when appropriate, the notification by which said Commission informs the self-regulatory organization that revokes the mentioned authorization, stating in said case the causes that motivated such determination.

In any case, the Commission will make known to the public through its website on the World Wide Web named Internet the names of persons authorized to act as stock operators or proxies of securities market intermediaries.

The registry referred to in this article may be consulted by interested parties who demonstrate having a legal interest, as well as by members of the respective self-regulatory organization, in accordance with these provisions and with the procedures this establishes for such effects.

In all cases, the information and documentation contained in the registry referred to in this article may be preserved through microfilming, recording on optical disks, or any other electronic means. The information and documentation contained in the registry must be at the disposal of the Commission at all times.

Self-regulatory organizations authorized to certify must establish policies and guidelines to keep updated the information relative to the honorability of the person in question contained in the registry, without in any case such update exceeding three years.

Article 13. Self-regulatory organizations authorized to certify must have the necessary security measures to monitor that the information contained in the registry referred to in the previous article is used only by persons authorized by them.

by assigning the corresponding access keys and in accordance with the consultation mechanisms established for this purpose.

Likewise, they shall be obligated to implement the necessary controls to prevent the performance of acts that modify or alter the contained information, and to establish plans or procedures that support such information and generate audit trails.

Article 14.- The Self-Regulatory Organizations authorized to certify shall make known to the public, through their Internet website, the name of the natural persons who hold the certification referred to in the Securities Market Law (LMV) and the Investment Funds Law (LFI), adding to such information the name of the entity or company where they provide their services, if applicable, as well as information regarding the power granted to the person in question.

The Self-Regulatory Organizations shall be obligated to update the information referred to in the preceding paragraph within a period not exceeding 3 business days counted from the occurrence of any change in such information, or from the time the corresponding self-regulatory organization becomes aware of the change.

Article 15.- The Self-Regulatory Organizations authorized to certify shall submit to the Commission the authorization requests of natural persons wishing to act as stock operators or agents of securities market intermediaries, in accordance with the provisions of the "General Provisions applicable to stock operators and agents of securities market intermediaries for the celebration of operations with the public."

Chapter III
On Revocation

Article 16.- The Commission, prior to agreement by its Board of Directors, may determine that the recognition granted to the Self-Regulatory Organizations be revoked, after hearing the interested party, when it falls under any of the following circumstances:

I. They cease to represent the majority or, in their case, the largest number of entities, companies, or service providers linked to the sector in question.

II. They repeatedly fail to comply with the legal and administrative provisions applicable to them.

Article 17.- The Commission may revoke the authorization to certify granted to Self-Regulatory Organizations for securities market intermediaries and investment advisors, after hearing the organization, in any of the following circumstances:

I. There are conflicts of interest in the performance of the certification function, by members of the certification committee or any advisor, executive, or employee participating in the certification procedure.

II. They repeatedly fail to comply with the obligation to submit to the Commission the authorization requests of natural persons wishing to act as stock operators or agents of securities market intermediaries, in accordance with the applicable provisions.

III. They repeatedly fail to comply with the provisions of Chapter II of these Provisions.

IV. They do not carry out certification procedures within six months following the granting of the authorization to certify.

V. They do not have the necessary infrastructure and personnel to carry out the certification procedure.

TRANSITORY PROVISIONS

FIRST.- These Provisions shall enter into force the day following their publication in the Official Gazette of the Federation.

SECOND.- Upon the entry into force of these Provisions, the "General Provisions applicable to self-regulatory organizations of the securities market recognized by the Banking and Securities Commission" (Comisión Nacional Bancaria y de Valores), published in the Official Gazette of the Federation on June 27, 2002, and amended by resolution published in said gazette on June 16, 2006, are hereby repealed.

THIRD.- Self-regulatory organizations recognized as such by the Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) in accordance with the provisions of the Securities Market Law or the Investment Funds Law, shall be deemed authorized to continue operating with such status, subject to the provisions of these Provisions.

Self-regulatory organizations authorized to carry out any of the certifications referred to in the Securities Market Law or the Investment Funds Law shall have a period of six months counted from the entry into force of these Provisions to submit to the Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) the manual referred to in Article 5, fraction I of this instrument.