GENERAL PROVISIONS ON LIQUIDITY REQUIREMENTS FOR MULTIPLE BANKING INSTITUTIONS

Published in the Official Gazette of the Federation on August 23, 2021, modified by Resolution published in the same Gazette on March 1, 2022.

A seal with the National Coat of Arms appears at the margin, which reads: United Mexican States.- TREASURY.- Ministry of Finance and Public Credit.- Bank of Mexico.

The Bank of Mexico, based on the provisions of Articles 28, paragraphs sixth and seventh of the Political Constitution of the United Mexican States; 96 Bis 1 of the Credit Institutions Law; as well as 24, 26, 36, 36 Bis and 47, fraction I, of the Bank of Mexico Law; 1st, 4th, first paragraph; 10, first paragraph; 14 in relation to 25; 14 Bis, in relation to 17, and 14 Bis 1 in relation to 25 Bis 1, of the Internal Regulations of the Bank of Mexico and Second, fractions VIII and X, of the Agreement on the Assignment of Administrative Units of the Bank of Mexico, and the National Banking and Securities Commission, based on the provisions of Articles 96 Bis 1, 96 Bis 2, last paragraph and 98 Bis of the Credit Institutions Law; 4, fractions XXXVI and XXXVIII; 16, fraction I and 19 of the National Banking and Securities Commission Law, and

CONSIDERING

That in accordance with Article 78 of the General Law for Regulatory Improvement and with the purpose of reducing the compliance cost of these provisions, the National Banking and Securities Commission, through a resolution published in the Official Gazette of the Federation on November 15, 2018, modified the "General Provisions applicable to Brokerage Houses," to extend the deadline that brokerage houses have to observe what is provided in the Financial Information Standards issued by the Mexican Council for Financial Reporting Standards, A.C.;

That the Credit Institutions Law grants the joint authority to the National Banking and Securities Commission and the Bank of Mexico to issue general provisions establishing liquidity requirements that multiple banking institutions must comply with at all times, in accordance with the guidelines established for this purpose by the Liquidity Regulation Committee in terms of said Law;

That the Liquidity Regulation Committee, in sessions held on October 17, 2014 and June 14, 2018, issued the guidelines to implement the Liquidity Coverage Ratio and the Net Stable Funding Ratio, and determined that these requirements must be consistent with the standards issued by the Basel Committee on Banking Supervision regarding liquidity requirements insofar as the Mexican legal framework allows, with the objective of preserving the stability of the Mexican financial system;

That the aforementioned guidelines establish that the general provisions on liquidity requirements issued jointly by the Bank of Mexico and the National Banking and Securities Commission must:

I. Provide that multiple banking institutions maintain liquid assets freely available and of high credit quality, as defined in the applicable general provisions, to meet their obligations and liquidity needs for 30 days.

II. Establish, for the purposes of the preceding fraction I, a Liquidity Coverage Ratio in accordance with a calculation methodology that reflects the international standard. This ratio must be satisfied in national currency considering all foreign currencies.

III. Provide that multiple banking institutions maintain liabilities whose maturity and stability characteristics are related to the maturity and liquidity characteristics of their assets.

IV. Establish, for the purposes of the preceding fraction III, a Net Stable Funding Ratio consistent with the calculation methodology of the international standard. This ratio must consider operations in national currency and foreign currency.

V. Take into account, for the calculation of the Liquidity Coverage Ratio and the Net Stable Funding Ratio, all operations of the multiple banking institutions included in their respective balance sheets, as well as those off-balance sheet operations that due to their characteristics imply a liquidity risk for the institutions.

VI. Provide that for the calculation of the Liquidity Coverage Ratio and the Net Stable Funding Ratio, multiple banking institutions must consolidate their balance sheets with those of their subsidiaries that are financial entities, except for those that the Bank of Mexico and the National Banking and Securities Commission determine in the aforementioned provisions.

Likewise, measures must be established to prevent multiple banking institutions, through operations conducted with financial entities that are part of the financial group to which they belong or with those that have common controlling shareholders or partners, from reducing their liquidity requirements without an equivalent reduction in their risk.

Considering that multiple banking institutions could face liquidity risks arising from operations carried out by the entities or companies that make up the same financial group, consortium, or business group to which these institutions belong, it shall correspond to the board of directors of each entity to authorize financial support to said entities and companies, and it must be provided that said board must: i) identify said entities and companies, ii) estimate the potential impact that liquidity risk could have if materialized, and iii) define the policies and criteria of action to mitigate said risk. The foregoing, with the purpose of reflecting these policies in the calculation of the aforementioned ratios.

Likewise, provide that multiple banking institutions must comply with the requirements individually, as well as taking into account what is provided in this fraction.

VII. Establish that multiple banking institutions disclose: (i) their Liquidity Coverage Ratio and their Net Stable Funding Ratio; (ii) the list of financial entities and companies identified in accordance with the preceding fraction VI; (iii) the policies and criteria referred to in said preceding fraction VI; and (iv) the declaration that, with respect to those financial entities and companies that have not been included in the list referred to in the preceding item (ii), there is no explicit or implicit commitment, nor is it expected to grant financial support by the multiple banking institution. Furthermore, provide that the National Banking and Securities Commission must make known on its website the Liquidity Coverage Ratios and Net Stable Funding Ratios of all multiple banking institutions, as well as the additional information that the Bank of Mexico and the National Banking and Securities Commission determine in the general provisions.

VIII. Define the terms and conditions under which the Liquidity Coverage Ratios and Net Stable Funding Ratios of multiple banking institutions will be determined for legal purposes, which must contemplate, at a minimum: (i) the obligation of such institutions to perform the calculation of said ratios and communicate them to the Bank of Mexico along with the information supporting said calculations, in accordance with the forms that, for this purpose, the Bank of Mexico establishes with the opinion of the National Banking and Securities Commission; (ii) the verification of said calculations carried out by the Bank of Mexico, and (iii) the communication by the Bank of Mexico to the National Banking and Securities Commission of said calculations and all other information that said Central Institute has in its possession and that is related to such ratios.

IX. Consider a transitional period for the compliance with the Liquidity Coverage Ratio for recently created institutions, taking into account the amount of the institutions' active operations and the time they have been operating.

X. Establish a scheme that allows classifying multiple banking institutions based on their Liquidity Coverage Ratio and their Net Stable Funding Ratio, in order to determine possible non-compliance with minimum liquidity requirements, considering the magnitude, frequency, and duration of such non-compliance.

XI. Provide the corrective measures that the National Banking and Securities Commission may order multiple banking institutions, depending on their classification in terms of the preceding fraction. These measures will have the objective that the multiple banking institutions in question restore their liquidity.

That contributing to continue with the achievement, on the one hand, of the objective entrusted by Law to the National Banking and Securities Commission, consisting of seeking the stability and correct functioning of the Mexican financial system, as well as maintaining and fostering the healthy and balanced development of said system as a whole, in protection of the interests of the public and, on the other hand, of the purpose that the law confers on the Bank of Mexico, relative to promoting the healthy development of the financial system, as well as the good functioning of the payment systems, have resolved to issue the following:

GENERAL PROVISIONS ON LIQUIDITY REQUIREMENTS FOR MULTIPLE BANKING INSTITUTIONS

INDEX

TITLE I

GENERAL PROVISIONS

CHAPTER I

DEFINITIONS

CHAPTER II

ACCOUNTING TREATMENT AND CALCULATION OF CURRENCY EQUIVALENCES

CHAPTER III

REPORTING AND PUBLICATION OF RATIOS

TITLE II

LIQUIDITY COVERAGE RATIO

CHAPTER I

CALCULATION AND DETERMINATION OF COMPUTABLE ELIGIBLE LIQUID ASSETS AND TOTAL CASH IN-FLOW AND OUT-FLOW

CHAPTER II

SCENARIOS AND CORRECTIVE MEASURES

TITLE III

NET STABLE FUNDING RATIO

CHAPTER I

CALCULATION AND DETERMINATION OF MATURITIES OF OPERATIONS

CHAPTER II

SCENARIOS AND CORRECTIVE MEASURES

TITLE IV

FINAL PROVISIONS

CHAPTER I

RATIO RESTORATION PLAN

CHAPTER II

NON-COMPLIANCE AND EXCEPTIONS

TRANSITORY

List of Annexes

ANNEX 1 Classification of Eligible Liquid Assets
ANNEX 2 Exit factors for liabilities or other operations
ANNEX 3 Cash inflow factors for operations
ANNEX 4 Methodology to determine outflows and inflows from operations with financial derivative instruments
ANNEX 5 Liquidity Coverage Ratio disclosure format
ANNEX 6 Determination of Available Net Stable Funding Amount
ANNEX 7 Required Net Stable Funding Amount for unrestricted assets and other operations
ANNEX 8 Factors of the Required Net Stable Funding Amount for Restricted Assets or granted as collateral
ANNEX 9 Methodology to determine assets and liabilities from Operations with Financial Derivative Instruments for purposes of the Net Stable Funding Ratio
ANNEX 10 Net Stable Funding Ratio disclosure format
ANNEX 11 Certificate signed by the secretariat of the board of directors regarding the denomination of the financial entities and companies of the financial group, consortium or business group that will receive financial support from the Institution
ANNEX 12 Guidelines that the methodology must meet to estimate the amount of money deposits for operational purposes to determine outflows
ANNEX 13 Guidelines that the methodology must meet to estimate inflows from deposit accounts that Institutions maintain in other financial entities
ANNEX 14 Requirements to prove the independence of the third-party independent experts referred to in Articles 11, fraction V and 12, fraction IV of these provisions, who review the methodology to determine the Amount of Deposits for Operational Purposes in the determination of cash inflows and outflows

TITLE I

GENERAL PROVISIONS

CHAPTER I

DEFINITIONS

Article 1.- For the purposes of these provisions, the following shall be understood, in singular or plural:

I. Eligible Liquid Assets: the assets indicated in Annex 1 of these provisions.

II. Computable Liquid Assets: the total amount corresponding to the value of Eligible Liquid Assets that, in accordance with these provisions, are included in the calculation of the Liquidity Coverage Ratio, with the limits and discount factors established in these provisions.

III. Ratios: the Liquidity Coverage Ratio and the Net Stable Funding Ratio, jointly or separately.

IV. Liquidity Coverage Ratio: the result of applying the calculation formula established in Article 9 of these provisions.

V. Net Stable Funding Ratio: the result of applying the calculation formula established in Article 16 of these provisions.

VI. Commission: the National Banking and Securities Commission.

VII. Accounting Criteria: the accounting criteria for credit institutions referred to in Chapter One of Title Three of the Provisions, contained in Annex 33 of said regulation.

VIII. Operational Purpose Deposit Accounts: demand deposit accounts and time deposit accounts with a term of less than 30 days opened by legal entities in the corresponding Institution or constituted in another financial entity by the Institution itself, and that meet the following characteristics:
a) They have been opened as a necessary condition for the provision of compensation, custody, or cash administration services that the Institution offers to said account holders; b) Their opening, according to the respective contracts, has been for the purpose of using them solely for the provision of compensation, custody, or cash administration services, as applicable; and c) The purpose of the deposits corresponding to said accounts is not to obtain profits from the interest payments they generate, so their interest rate must be lower than that of savings or investment products offered by the Institution itself.

IX. Business Days: the days on which Institutions are not obliged to close their doors or suspend operations, in terms of the general provisions issued for this purpose by the Commission.

X. Provisions: the General Provisions applicable to credit institutions issued by the Commission and published in the Official Gazette of the Federation on December 2, 2005, as well as their various modifications.

XI. Entities Subject to Consolidation: those financial entities that:
a) are subject to consolidation in accordance with the Accounting Criteria, except those that are subject to prudential standards issued by a Mexican financial authority other than the Commission, or b) are part of the same financial group, consortium, or business group to which the Institution belongs, are constituted in Mexico, and the board of directors determines that they must be consolidated, as part of the Policies and Criteria of action to mitigate the potential negative impact risks of liquidity that said entities could generate to the Institution.

In the case of those financial entities that are subsidiaries of the Institution and fall under the exception provided in item a) of this fraction, the board of directors of the respective Institution may determine, based on the Policies and Criteria, that said entities are subject to consolidation.

XII. Total Net Cash Outflow: the amount resulting from subtracting the total cash inflow of an Institution from the total cash outflow of that same Institution, determined in accordance with these provisions.

XIII. Institutions: multiple banking institutions.

XIV. IPAB: the Institute for the Protection of Bank Savings.

XV. Law: the Credit Institutions Law.

XVI. Credit Lines: contracts through which a sum of money is made available, both to natural and legal persons, for a certain period, for a pre-established limit.

XVII. Liquidity Lines: Credit Lines, granted by Institutions to back commercial paper issuances.

XVIII. Amount of Operational Purpose Deposits: the amount of resources deposited in Operational Purpose Deposit Accounts whose holders must maintain to develop compensation, custody, or cash administration operations during the following thirty days. The excess over said amount will not be considered as part of deposits with operational purposes.

XIX. Available Net Stable Funding Amount: the amount resulting from summing the liabilities and capital indicated in Annex 6 of these provisions after applying the factors corresponding to them depending on their classification in terms of said own annex.

XX. Required Net Stable Funding Amount: the amount resulting from summing: (i) the unrestricted assets and other operations indicated in Annex 7 of these provisions, and (ii) the restricted assets or granted as collateral indicated in Annex 8 of these provisions. In both cases, the sum will be made after applying the factors corresponding to them depending on their classification in terms of the referred annexes.

XXI. Interdependent Operations: the passive operations of Institutions carried out by these with development banking institutions, the public trusts for economic development referred to in Article 3 of the Law, as well as the development agencies referred to in the General Provisions applicable to development agencies and development entities issued by the Commission and the active operations of Institutions carried out by these with any counterparty, provided that in accordance with the terms and conditions established in the contracts documenting them, it is provided that the resources from the active operation can only be used to meet the corresponding passive operation and, in turn, the resources resulting from the passive operation can only be used to carry out the referred active operation. For these operations to be considered by Institutions as interdependent active and passive operations, these operations must meet the following requirements:
a) Clearly identify the active and passive operations individually; b) The maturities and principal amounts of the passive operations are equal to or greater than those corresponding to the active operations, and c) The counterparties of the active and passive operations must be distinct.

XXII. Contingency Funding Plan: that considered as such by the Provisions.

XXIII. Policies and Criteria: those guidelines approved by the board of directors of the Institution, through which:
a) the entities and companies that make up the same group, consortium, or business group to which the Institution belongs, whose operations constitute a liquidity risk for the Institution, are identified, b) the potential negative impact that the liquidity risk referred to in the preceding item could have if materialized is estimated, and c) the manner in which the operations of said entities or companies must be taken into account as part of the liquidity risk of the Institution, for the calculation of liquidity requirements, is defined. The foregoing, for purposes of the consolidation of financial entities and their inclusion in Entities Subject to Consolidation, or for the determination of an amount destined to face the liquidity risk represented by said entities or companies.

XXIV. Capital Rules: those established in the Provisions.

XXV. Banking Correspondence Services: payment services provided by an Institution (correspondent bank) that maintains deposits owned by a credit institution (issuing bank) for the purpose of settling foreign currency operations of the latter.

XXVI. UDIS: the accounting units, 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 by which obligations that may be denominated in investment units are established and reforms and additions are made to various provisions of the Fiscal Code of the Federation and the Income Tax Law" published in the Official Gazette of the Federation on April 1, 1995 and 20 Ter of the Fiscal Code of the Federation.

CHAPTER II

ACCOUNTING TREATMENT AND CALCULATION OF CURRENCY EQUIVALENCES

Article 2.- Institutions, for the purposes of calculating the Ratios provided for in these provisions, must adhere to the following:

I. Include all their operations for individual calculation, and include for consolidated calculation the operations of both the individual calculation and the operations carried out by the Entities Subject to Consolidation.

II. Include operations registered in their balance sheet, as well as those registered in the off-balance sheet accounts referred to in Annexes 2 and 3 of these provisions, for the Liquidity Coverage Ratio, and Annexes 7 and 8, of these provisions, for the Net Stable Funding Ratio.

III. Consider and integrate into the calculation of the Liquidity Coverage Ratio and the Net Stable Funding Ratio the Policies and Criteria, to include, if applicable, the corresponding financial entities within the Entities Subject to Consolidation; as well as the entities or companies that make up the same financial group, consortium, or business group for the determination of an amount destined to face the liquidity risks of the Institution.

For the purposes of the foregoing, Institutions must adhere to what is established in Annexes 2, 3, 6, 7 and 8 of these provisions.

Institutions may not reform the Policies and Criteria in the year following their approval, unless there are relevant changes that modify the scope of consolidation or the amount to address liquidity risks referred to in subsection c), fraction XXIII of article 1 of these provisions. In such cases, they must inform the Commission and the Bank of Mexico, including the reasons for wishing to modify the aforementioned Policies and Criteria, at least 5 Business Days before the institution's board of directors resolves to approve the modification.

The notification referred to in the preceding paragraph must be accompanied by the draft modifications to the Policies and Criteria that the board of directors intends to approve.

IV. Unless otherwise specified in these provisions, consider the value of their operations according to the Accounting Criteria. Regarding the Liquidity Coverage Ratio, Institutions must value held-to-maturity securities at their market value.

V. Include the inflows to be received or outflows to be delivered corresponding to operations with financial derivative instruments, calculated in accordance with the methodology described in Annex 4 of these provisions, for the calculation of the Liquidity Coverage Ratio.

VI. Apply the methodology described in Annex 9 of these provisions for the determination of assets and liabilities from operations with financial derivative instruments, for the calculation of the Net Stable Funding Ratio.

The Commission and the Bank of Mexico will jointly resolve regarding entry or exit factors applicable in case operations not covered by these provisions arise.

Article 3.- For the purposes of calculating the Liquidity Coverage Ratio, in addition to what is provided in the previous article, Institutions must adhere to the following:

I. Offset for each foreign exchange operation agreed upon on a value date, the active and passive parts of the same operation. In case a master agreement has been concluded for such operations under which all operations concluded with the same counterparty may be extinguished by offset in a single settlement, the operations in which a winning position is held must be offset against those in which a losing position is held. Once the result of such offsets is obtained, Institutions must include the resulting amount as an inflow if such amount corresponds to a winning position, or as an outflow if it corresponds to a losing position.

II. Offset for each securities purchase and sale operation agreed upon on a value date, the active and passive parts of the same operation and include the resulting amount as an inflow if the active part is greater, or as an outflow if the passive part is greater. For the purposes of the offset referred to in this fraction, Institutions must first apply the discount factor to Eligible Liquid Assets in accordance with article 10, fraction I, of these provisions, except for the securities referred to in Annex 1, fraction I, subsection E, to which a discount factor of 100 percent will be applied, as well as to securities other than Eligible Liquid Assets. Without prejudice to the foregoing, regarding those securities to which a discount factor of 100 percent is applied, the capital or interest of such securities that the Institution has the right to receive in the next thirty days may be included as an inflow.

Additionally, for the purposes of calculating the Liquidity Coverage Ratio, under no circumstances may Institutions simultaneously consider an asset as part of Computable Liquid Assets and, at the same time, as an operation that generates a cash inflow in accordance with what is established in these provisions.

Article 4.- For the purposes of calculating the Coefficients that Institutions must carry out in accordance with these provisions, the respective amounts that they must apply must be denominated in national currency, in accordance with the following:

I. The calculation of the national currency equivalent of amounts denominated in United States dollars, corresponding to Eligible Liquid Assets and the operations to be used to determine the Total Net Cash Outflow, as well as to the Available Stable Funding Amount and the operations to be used to determine the Required Stable Funding Amount, will be carried out taking into account the applicable exchange rate in accordance with what is provided in the Accounting Criteria.

II. The calculation of the national currency equivalent of amounts denominated in UDIs or any other unit of measure, corresponding to Eligible Liquid Assets, the Available Stable Funding Amount, and the operations necessary to determine the Total Net Cash Outflow or the Required Stable Funding Amount, will be carried out taking into account the valuation treatment established in the Accounting Criteria of the Provisions.

CHAPTER III
REPORTING AND PUBLICATION OF COEFFICIENTS

Article 5.- Institutions must report to the Bank of Mexico the result of the calculation of the Coefficients, both individually and in consolidated terms, which they carry out in accordance with these provisions, on the following dates and deadlines:

I. The Liquidity Coverage Ratio corresponding to each day must be reported during the ten Business Days following said day.

II. The Net Stable Funding Ratio corresponding to the last Business Day of each month must be reported during the first sixteen Business Days of the immediate following month.

III. Without prejudice to what is provided in fractions I and II above, the Commission or the Bank of Mexico may require a particular Institution to report its Liquidity Coverage Ratio, its Net Stable Funding Ratio, or both, on specific dates, provided that, in the judgment of the authority making such request, the Institution may be assuming risks notably higher than those shown by the figures of the last reported calculation, when there are indications that its liquidity situation may have deteriorated, or when such authorities consider it necessary due to the information they receive in the exercise of their functions.

IV. In the event that, in accordance with the Law and as a result of the exercise of its inspection and surveillance functions, the Commission requires a particular Institution to make adjustments to the accounting records that result in modifications to the Liquidity Coverage Ratio, the Net Stable Funding Ratio, or both, which said Institution had reported, the latter must report the new calculation of said Coefficients on the date specified for this purpose by the Commission.

V. In the event that any Institution becomes aware or foresees that the Liquidity Coverage Ratio or the Net Stable Funding Ratio corresponding to it, would place it in a scenario different from scenario I provided in these provisions regarding the Coefficient in question, said Institution must report to the Bank of Mexico and the Commission the calculation of the corresponding Coefficient, on the Business Day following that in which any of these situations occur. In this case, the referred Institution must accompany its report with an explanation of the causes that gave or could give rise to such situation, as well as the measures it will apply to restore its Liquidity Coverage Ratio or Net Stable Funding Ratio, as the case may be, to a level that allows it to be classified in the respective scenario I. This report, including the explanation, causes, and measures mentioned above, must also be delivered to the board of directors of the Institution, no later than the Business Day following that in which the report to the Bank of Mexico and the Commission is made. What is provided in this fraction will be applicable regardless of the measures that the Institution in question must carry out in accordance with the scenario in which it is located in terms of these provisions.

For the purposes of the reports referred to in this article, Institutions must present to the Bank of Mexico the result of the calculation of the Coefficients, as well as the necessary information for their verification, in the form determined by the Bank of Mexico itself, through the Financial System Information Directorate, and through computer systems or by any other means, including electronic ones specified by the Bank of Mexico itself, for which it may elaborate forms and operational aids.

Institutions must have all documentary evidence that attests to the information considered for the calculation of the Coefficients, when this is required by the Bank of Mexico or the Commission.

Article 6.- The Bank of Mexico will verify the calculations of the Coefficients reported by Institutions in terms of article 5 of these provisions, within five Business Days following the receipt of the corresponding information, and must communicate the result of said verification to the Commission through the electronic means that such authorities jointly determine.

Without prejudice to the foregoing, the Commission may request the Bank of Mexico, at any time, to verify the calculation of the Liquidity Coverage Ratio or the Net Stable Funding Ratio of an Institution, based on the information that the Commission itself has determined in the exercise of its inspection and surveillance powers.

Article 7.- The calculation of the Coefficients reported by Institutions, and verified by the Bank of Mexico in accordance with what is stated in these provisions, will be the valid calculation for all legal effects.

Article 8.- Institutions must disseminate to the general public quarterly, through their Internet page, information relating to both the Liquidity Coverage Ratio and the Net Stable Funding Ratio, in both cases, that related to the quarter being reported, in accordance with the formats included in Annexes 5 and 10, respectively.

Institutions must also disseminate, in terms of this article, the Policies and Criteria, as well as a list with the denomination of each of the financial entities that, in compliance with the aforementioned Policies and Criteria, the board of directors has determined to include as part of the Entities Subject to Consolidation, as well as a list of those entities or companies that, not being part of the Entities Subject to Consolidation, are susceptible to receiving financial support. Additionally, Institutions must publish the declaration that, with respect to those financial entities and companies that have not been included in the aforementioned lists, there is no explicit or implicit commitment to grant financial support, nor is financial support expected to be granted by the Institution. For such purposes, the referred Institutions must include in said publication the text of the format contained in Annex 11 of these provisions.

The information referred to in this article must be disseminated in accordance with articles 180 and 181 of the Provisions as a note to the financial statements, and correspond to the quarters ending in March, June, September, and December, remaining on that electronic page for at least five subsequent quarters to the date of its publication for the case of information published quarterly, and for three years following its date for information published annually.

Without prejudice to the foregoing, the Commission will publish on its website within the month immediately following the date on which Institutions must carry out the dissemination referred to in the preceding paragraph, the simple average of the calculations of the Coefficients reported by each Institution the immediate previous quarter, adhering to the following formats:

Average Quarter X of year 20XX
Average daily individual LCR of the quarter
Average daily consolidated LCR of the quarter
Average Quarter X of year 20XX
Average individual NSFR of the quarter
Average consolidated NSFR of the quarter

TITLE II
LIQUIDITY COVERAGE RATIO
CHAPTER I
CALCULATION AND DETERMINATION OF COMPUTABLE LIQUID ASSETS AND TOTAL CASH OUTFLOW AND INFLOW

Article 9.- Institutions must calculate at the close of operations each day their Liquidity Coverage Ratio in the terms provided by these provisions, as well as report to the Bank of Mexico, in accordance with article 5, fraction I of these provisions, the calculation of said Coefficient. Regarding non-business days, for the purposes of the calculation referred to in this paragraph, the Liquidity Coverage Ratio corresponding to the immediate previous Business Day will be considered.

The Liquidity Coverage Ratio will be the result of applying the following formula and must be expressed as a percentage rounded to the nearest hundredth of a percentage point.

Liquidity Coverage Ratio = Computable Liquid Assets / Total Net Cash Outflow

Article 10.- Institutions, to determine Computable Liquid Assets, must observe the following:

I. They will classify the Eligible Liquid Assets subject to these provisions into the corresponding categories according to the table of this fraction, valued at their corresponding market values.

Classification of assets according to Annex 1

Category	A	B	Discount Factor	C	D
Level I Group	A1	B1	0%	C1	D1
Level IIA Group	A2	B2	15%	C2	D2
Level IIB Group corresponding to securities from securitizations of housing mortgage credits	A3	B3	25%	C3	D3
Level IIB Group other than securities from securitizations of housing mortgage credits	A4	B4	50%	C4	D4

Where:

i. The column “A” corresponds to the amount of Eligible Liquid Assets indicated in Annex 1, available to the Institution on the date of calculation of the Liquidity Coverage Ratio, including those received in repo operations, securities lending, or as collateral in operations with financial derivative instruments, provided that the Institution itself can dispose of them without any restriction. Eligible Liquid Assets must be easily convertible into cash with little or no loss of value and be under the control of the area in charge of managing the Institution's liquidity.

Regarding securities referred to in Annex 1, fraction I, subsection E, they may be considered as Eligible Liquid Assets, according to the currency in which they are denominated, up to the amount of the Total Net Cash Outflow of the Entities Subject to Consolidation, which are established in the corresponding country, in that currency.

Likewise, in case the characteristics of an Eligible Liquid Asset are modified in such a way that said asset no longer qualifies as an Eligible Liquid Asset or passes to a lower category within the classification of Eligible Liquid Assets, it may continue to count in its original classification during the thirty days following the modification of said characteristics.

ii. The column “B” corresponds to the amount of Eligible Liquid Assets that the Institution has available on the calculation date, plus those on which it has a contractual right to receive in the next thirty days, minus those on which there is a contractual obligation to deliver in the next thirty days, derived from the repo and securities lending operations contracts concluded for this purpose.

For this, they must consider that all repo and securities lending operations with a maturity in the next thirty days, involving Eligible Liquid Assets in both the active and passive parts of the operation, are settled.

iii. The column “C” corresponds to the amount resulting from subtracting from the amount of column “A” the amount resulting from multiplying the amount of column “A” by the percentage corresponding to the column “Discount Factor”.

iv. The column “D” corresponds to the amount resulting from subtracting from the amount of column “B” the amount resulting from multiplying the amount of column “B” by the percentage corresponding to the column “Discount Factor”.

II. The Computable Liquid Assets for the calculation of the Liquidity Coverage Ratio will be those resulting from applying the following formula:

Computable Liquid Assets = C1 + C2 + C3 + C4 – Adjustment A – Adjustment B

Where:

Adjustment A = Max (D3 + D4 – 15/85*(D1 + D2), D3 + D4 – 15/60*D1, 0)

Adjustment B = Max ((D2 + D3 + D4 – Adjustment A) – 2/3*D1, 0)

Institutions, when determining the amount of Computable Liquid Assets in consolidated terms, may not include Computable Liquid Assets in possession of an Entity Subject to Consolidation established in a foreign country for an amount greater than the Total Net Cash Outflow of said Entity Subject to Consolidation.

Article 11.- Institutions, to determine the total cash outflow, must observe the following:

I. The total cash outflow will be the result of summing all passive operations with a maturity equal to or less than thirty days multiplied by their corresponding exit factor, in accordance with what is established in Annex 2 of these provisions. Such operations must comprise those that, due to the contracts the Institution has concluded, could generate a cash outflow in the thirty days following the date of calculation of the Liquidity Coverage Ratio.

II. To determine the term of the operations referred to in fraction I of this article, Institutions must take as the maturity date the nearest date on which such operations can be contractually demanded, for which they must consider whether the respective contract allows the counterparty to advance the demandability of such operations.

III. Regarding the Institution's own issuances whose remaining term is greater than thirty days, which had been acquired and reported by a brokerage house with which there are equity links, the remaining term of the operation in which they were reported by the brokerage house will be assigned to them.

IV. Regarding deposits from legal entities in Deposit Accounts for Operational Purposes, the Institution may classify a part of them as Amount of Deposits for Operational Purposes, and assign the exit factor corresponding to it according to the aforementioned Annex 2. The excess over the referred Amount of Deposit Accounts for Operational Purposes must be classified as appropriate according to the cited annex.

Deposit accounts received by Institutions for the provision of banking correspondent services may not be classified as Deposit Accounts for Operational Purposes.

V. To determine the Amount of Deposits for Operational Purposes, Institutions must have a methodology documented in their policies and comprehensive risk management procedures; which must take into account the stability of balances in Deposit Accounts for Operational Purposes, as well as the usage patterns of the resources that integrate them. The methodology must also include an evaluation of how clients are managing the resources of said Deposit Accounts for Operational Purposes and evaluate the possibility that the Amount of Deposits for Operational Purposes could decrease considerably in episodes of stress. In case of not having such methodology, Institutions may not classify the deposits referred to in fraction IV of this article, neither totally nor partially, as part of the Amount of Deposits for Operational Purposes.

The effectiveness of the aforementioned methodology must have an independent technical compliance evaluation biennially, either internal or by an independent expert third party that meets the requirements indicated in Annex 14 of these provisions, who must validate that such methodology complies with the guidelines described in Annex 12 of these provisions and adequately reflects the stability of the deposits recognized in the calculation of the Liquidity Coverage Ratio as Amount of Deposits for Operational Purposes.

Without prejudice to the foregoing, when a modification is made to the methodology referred to in the preceding paragraph within the first year of the biennial technical compliance evaluation period, a new technical evaluation must be carried out during the following calendar year in which said modification was made. In the event that the aforementioned methodology modification is carried out during the second year of the aforementioned biennial period, it must be considered within the technical compliance evaluation that must be submitted to the Commission at the end of the biennial period.

The report of the results of the technical evaluation must be sent by the Institution to the Commission within 20 business days following the date of its issuance. In the event that the methodology review has been carried out internally, the Institution in question must present, together with the results report, evidence of the designation by the Board of the person acting as the internal evaluator, as well as a declaration signed by the aforementioned person acting as the internal evaluator, stating that during their evaluation and as of the date of issuance of the aforementioned report, they and, where applicable, the personnel who carried out the evaluation, met the requirements listed below:

Demonstrate at least 5 years of experience in risk management areas and 2 years in internal control or audit processes, both matters focused on banking operations.
Have a hierarchical level not lower than the three levels below the General Director.

The person designated as responsible, the internal area to which they belong, as well as the personnel under their charge who participate in the evaluation of the methodologies, must have organizational and resource independence with respect to the areas responsible for the development of the methodology referred to in the first paragraph of this subsection, as well as those responsible for its use, and must not receive any remuneration associated with the specific performance of either of these last two areas. Furthermore, they must have access to all information related to their evaluation function.

When, in the opinion of the Commission, the aforementioned methodology does not consider the guidelines described in Annex 12 or does not reflect the amount that is effectively stable in accordance with the historical behavior of the account, it may order modifications to said methodology, more frequent reviews by independent third parties or by the internal evaluator, or order the designation of persons acting as internal evaluators or the hiring of a different independent external third party than those designated by the Institution to carry out such reviews, or that the amount included as Amount of Operational Purpose Deposits for the purpose of calculating the Liquidity Coverage Ratio be reduced, in accordance with these provisions, establishing deadlines for such actions.

VI. In the event that, in accordance with what is provided for in Annex 2 of these provisions, a single operation corresponds to more than one outflow factor, the Institution must use the highest outflow factor.

Article 12.- Institutions, to determine the total cash inflow, must observe the following:

I. They will consider all valid operations in accordance with the Accounting Criteria that do not present overdue payments of principal or interest, which, derived from the contracts entered into for that effect, will generate a cash inflow within the thirty days following the date of calculation of the Liquidity Coverage Ratio, multiplied by their corresponding inflow factor, in accordance with what is established in Annex 3 of these provisions.

II. To determine the term of the operations referred to in subsection I of this article, Institutions must take as the maturity date the last date on which they could contractually demand payment.

III. They will recognize as part of the Amount of Operational Purpose Deposits those deposits in Operational Purpose Deposit Accounts that they maintain in other financial entities, as well as those deposits that, despite being in accounts that do not meet all the requirements to be considered as Operational Purpose Deposit Accounts, the Institutions consider necessary to carry out their operations. To these deposits, the methodology referred to in subsection IV of this article will apply to determine the amount that must be included as Amount of Operational Purpose Deposits.

IV. To determine the inflow associated with the Amount of Operational Purpose Deposits, Institutions must use a methodology documented in their comprehensive risk management policies and procedures, in which they consider the pertinent adjustments to evaluate the amount that Institutions must maintain in Operational Purpose Deposit Accounts or in the accounts referred to in the previous subsection III during the following thirty days. The methodology must take into account, among other things, the stability of balances in Operational Purpose Deposit Accounts and the accounts referred to in subsection III above, as well as the usage patterns of the resources that integrate them, including an evaluation of how Institutions are managing the resources of these accounts and the possibility of withdrawing said resources without compromising their operations under normal conditions. In the event of not having such methodology, Institutions must classify all their deposits in Operational Purpose Deposit Accounts as part of the Amount of Operational Purpose Deposits.

The effectiveness of the aforementioned methodology must have an independent technical compliance evaluation biennially, either internal or by an independent expert third party who meets the requirements indicated in Annex 14 of these provisions, who must validate that such methodology complies with the guidelines described in Annex 13 of these provisions and adequately reflects the excess of the operational amount of deposits in Operational Purpose Deposit Accounts that is recognized in the calculation of the liquidity coverage ratio as an inflow.

Demonstrate at least 5 years of experience in risk management areas and 2 years in internal control or audit processes, both matters focused on banking operations.
Have a hierarchical level not lower than the three levels below the General Director.

When, in the opinion of the Commission, the aforementioned methodology does not consider the guidelines described in Annex 13 or does not reflect the amount that effectively exceeds the stable amount in accordance with the historical behavior of the account, it may order modifications to said methodology, more frequent reviews by independent third parties or by the internal evaluator, or order the designation of persons acting as internal evaluators or the hiring of a different independent external third party than those designated by the Institution to carry out such reviews, or that the amount included as Amount of Operational Purpose Deposits for the purpose of calculating the Liquidity Coverage Ratio be increased, in accordance with these provisions, establishing deadlines for such actions.

V. The total cash inflow will be the amount resulting from the lesser of: i) the sum of all cash inflows calculated in accordance with the previous subsection I, and ii) 75 percent of the total cash outflow calculated in accordance with Article 11 of these provisions.

CHAPTER II
SCENARIOS AND CORRECTIVE MEASURES

Article 13.- Institutions that have been in operation for more than sixty months, as well as those institutions that although they have been in operation for less than sixty months, but according to the figures published by the Commission at the end of each month and considering the value of the UDI published by the Bank of Mexico on the corresponding date, have maintained an individual or consolidated credit portfolio equal to or greater than 30 billion UDIs, based on the Liquidity Coverage Ratio reports in terms of Article 5, subsection I, of these provisions, must be located in one of the liquidity scenarios indicated in this article, taking into account the one resulting from the lesser between the individually calculated one and that calculated in consolidated terms.

I. Scenario I when the Liquidity Coverage Ratio corresponding to each day of the immediate previous calendar month is at least 100 percent.

II. In scenarios II, III, and IV when the Liquidity Coverage Ratio corresponding to any of the days of the immediate previous calendar month has been less than 100 percent, according to the following table:

Minimum LCR Level Observed on Any Day of the Calendar Month	Accumulated Deviations in the Month of LCR Below 100
Less than or equal to 25	Greater than 25 and less than or equal to 150	Greater than 150
Scenario II	Scenario III	Scenario IV
Scenario III	Scenario IV	Scenario IV
Scenario IV

Where:

$LCR_{min}$ is the lowest Liquidity Coverage Ratio level observed at the close of any of the days of the immediate previous calendar month.
Accumulated LCR deviations below 100 in the month, is the amount resulting from applying the following formula:

$$ Deviation = \sum_{t=1}^{T} \max(0, 100 - LCR_t) $$

Where $LCR_t$ denotes the calculation of the Liquidity Coverage Ratio at the close of day $t$ of the immediate previous calendar month, and $T$ denotes the last day of said month.

III. In scenario III when, according to what is established in subsection II of this article, they correspond to be located in scenario II, and additionally, they have updated during the last six months scenario II or higher on three or more occasions.

IV. In scenario V when, according to subsection II of this article, they correspond to be located in scenarios III or IV, and additionally, they have updated during the last six months: scenario III on three or more occasions, any combination of scenarios III, IV, or V on three or more occasions in aggregate, or scenarios IV or V on two or more occasions.

In the event that, based on the Liquidity Coverage Ratio report in terms of subsections III, IV, and V, of Article 5, Institutions anticipate that at the end of the month they will be classified in scenario II or higher according to what is established in subsections II, III, and IV of this article, they must be immediately classified in the scenario that corresponds to them according to the aforementioned subsections unless the scenario corresponding to the close of the previous month is higher.

Without prejudice to what is provided in this article, the Commission, at any time, based on the Liquidity Coverage Ratio reported by the Institution, which has been verified and communicated to the Commission by the Bank of Mexico in terms of Article 6 of these provisions, may order that Institutions be located in the scenario that corresponds to them.

Article 14.- Institutions that have been in operation for sixty months or less and that, according to the figures published by the Commission at the end of each month and considering the value of the UDI published by the Bank of Mexico on the corresponding date, have maintained an individual or consolidated credit portfolio less than 30 billion UDIs, must observe the following:

I. From the first day until the last day of the twelfth month following the date on which they began operations, the liquidity scenarios indicated in this article will not apply to them, without prejudice to the fulfillment of other obligations that apply in terms of these provisions.

II. From the first day of the thirteenth month until the last day of the twenty-fourth month following the date on which they began operations, they will be located in:

a) Scenario I, when the Liquidity Coverage Ratio corresponding to each day of the immediate previous calendar month is at least 60 percent, and scenarios II, III, and IV according to the following table:

Minimum LCR Level Observed on Any Day of the Calendar Month	Accumulated Deviations in the Month of LCR Below 60
Less than or equal to 25	Greater than 25 and less than or equal to 150	Greater than 150
Scenario II	Scenario III	Scenario IV

Where:

$LCR_{min}$ is the lowest Liquidity Coverage Ratio level observed at the close of any of the days of the immediate previous calendar month.
Accumulated LCR deviations below 60 in the month, is the amount resulting from applying the following formula:

$$ Deviation = \sum_{t=1}^{T} \max(0, 60 - LCR_t) $$

Where $LCR_t$ denotes the calculation of the Liquidity Coverage Ratio at the close of day $t$ of the immediate previous calendar month, and $T$ denotes the last day of said month.

b) In scenario III when, according to what is established in the previous subsection of this article, they correspond to be located in scenario II, and additionally, they have updated during the last six months scenario II or higher on three or more occasions.

c) In scenario V, when, according to subsections 1 and 2 of this article, they correspond to be located in scenarios III or IV according to the previous table, and, additionally, they have updated, during the last six months: scenario III on three or more occasions, any combination of scenarios III, IV, or V on three or more occasions in aggregate, or scenarios IV or V on two or more occasions, in terms of the aforementioned table.

d) Institutions, based on the Liquidity Coverage Ratio report in terms of subsections II, III, and IV of Article 5, will be located in scenario II when the reported calculation is less than 60 and greater than or equal to 50, and in scenario IV when said calculation is less than 50.

III. From the first day of the twenty-fifth month until the last day of the thirty-sixth month following the date on which they began operations, they will be located in:

a) Scenario I, when the Liquidity Coverage Ratio corresponding to each day of the immediate previous calendar month is at least 70 percent, and scenarios II, III, and IV according to the following table:

Minimum LCR Level Observed on Any Day of the Calendar Month	Accumulated Deviations in the Month of LCR Below 70
Less than or equal to 25	Greater than 25 and less than or equal to 150	Greater than 150
Scenario II	Scenario III	Scenario IV
Scenario III	Scenario IV	Scenario IV

Where:

$LCR_{min}$ is the lowest Liquidity Coverage Ratio level observed at the close of any of the days of the immediate previous calendar month.
Accumulated LCR deviations below 70 in the month, is the amount resulting from applying the following formula:

$$ Deviation = \sum_{t=1}^{T} \max(0, 70 - LCR_t) $$

Where $LCR_t$ denotes the calculation of the Liquidity Coverage Ratio at the close of day $t$ of the immediate previous calendar month, and $T$ denotes the last day of said month.

d) Institutions, based on the Liquidity Coverage Ratio report in terms of subsections II, III, and IV, of Article 5, will be located in scenario II when the reported calculation is greater than or equal to 60 and less than 70, in scenario III when the reported calculation is less than 60 and greater than or equal to 50, and in scenario IV when said calculation is less than 50.

IV. From the first day of the thirty-seventh month until the last day of the forty-eighth month following the date on which they began operations, they will be located in:

a) Scenario I, when the Liquidity Coverage Ratio corresponding to each day of the immediate previous calendar month is at least 80 percent, and scenarios II, III, and IV according to the following table:

Minimum LCR Level Observed on Any Day of the Calendar Month	Accumulated Deviations in the Month of LCR Below 80
Less than or equal to 25	Greater than 25 and less than or equal to 150	Greater than 150
Scenario II	Scenario III	Scenario IV
Scenario II	Scenario III	Scenario IV
Scenario III	Scenario IV	Scenario IV

Where:

$LCR_{min}$ is the lowest Liquidity Coverage Ratio level observed at the close of any of the days of the immediate previous calendar month.
Accumulated LCR deviations below 80 in the month, is the amount resulting from applying the following formula:

$$ Deviation = \sum_{t=1}^{T} \max(0, 80 - LCR_t) $$

Where $LCR_t$ denotes the calculation of the Liquidity Coverage Ratio at the close of day $t$ of the immediate previous calendar month, and $T$ denotes the last day of said month.

c) Institutions, based on the Liquidity Coverage Ratio report in terms of subsections II, III, and IV, of Article 5, will be located in scenario II when the reported calculation is greater than or equal to 65 and less than 80, in scenario III when the reported calculation is less than 65 and greater than or equal to 50, and in scenario IV when said calculation is less than 50.

V. From the first day of the forty-ninth month until the last day of the sixtieth month following the date on which they began operations, they will be located in:

a) Scenario I, when the Liquidity Coverage Ratio corresponding to each day of the immediate previous calendar month is at least 90 percent, and scenarios II, III, and IV according to the following table:

Minimum LCR Level Observed on Any Day of the Calendar Month	Accumulated Deviations in the Month of LCR Below 90
Less than or equal to 25	Greater than 25 and less than or equal to 150	Greater than 150
Scenario II	Scenario III	Scenario IV
Scenario II	Scenario III	Scenario IV
Scenario III	Scenario IV	Scenario IV

Where:

$LCR_{min}$ is the lowest Liquidity Coverage Ratio level observed at the close of any of the days of the immediate previous calendar month.
Accumulated LCR deviations below 90 in the month, is the amount resulting from applying the following formula:

$$ Deviation = \sum_{t=1}^{T} \max(0, 90 - LCR_t) $$

Where $LCR_t$ denotes the calculation of the Liquidity Coverage Ratio at the close of day $t$ of the immediate previous calendar month, and $T$ denotes the last day of said month.

c) In scenario V, when, according to subsections 1 and 2 of this article, they correspond to be located in scenarios III or IV according to the previous table, and, additionally, they have updated, during the last six months, scenario III on three or more occasions, any combination of scenarios III, IV, or V on three or more occasions in aggregate,

more occasions in aggregate, or scenarios IV or V on two or more occasions, in terms of the aforementioned table.

d) Institutions, based on the Liquidity Coverage Ratio report in terms of fractions II and III of Article 5, shall be located in scenario II when the reported calculation is greater than or equal to 75 and less than 90, in scenario III when the reported calculation is less than 75 and greater than or equal to 60, and in scenario IV when such calculation is less than 60.

Article 15.- The Commission, with the opinion of the Bank of Mexico, considering the scenario in which Institutions are located or expected to be located, in terms of the preceding Articles 13 and 14, may order Institutions to apply the following measures:

I. In scenario III:
a) Present to its board of directors, as well as to the Commission and the Bank of Mexico, a detailed report of its liquidity situation. b) Refrain from carrying out operations whose execution would cause its Liquidity Coverage Ratio to deteriorate, until such time as it is located in scenario I. c) Present to the Commission and the Bank of Mexico a report on the use of the Contingency Financing Plan.

II. In scenario IV, in addition to the measures applicable to Institutions located in scenario III:
a) Suspend the payment of dividends, as well as any mechanism or act that implies a transfer of patrimonial benefits, until it is located in scenario I. b) Limit or suspend, partially or totally, those operations that the Commission, with the prior opinion of the Bank of Mexico, considers necessary for the Institution to be located in scenario I, among the following operations:

i. Investment in securities and debt instruments other than those classified in Group Level I according to Annex 1 of these provisions;
ii. Loans to related counterparties or with relevant links;
iii. Loans to financial entities other than Institutions;
iv. Loans to Institutions;
v. Loans or loan renewals, whose amount is not financed in its entirety through passive operations carried out after it has been determined that the Institution is located in scenario IV, with a term equal to or greater than the term of the aforementioned loans. The foregoing shall not apply, regarding the restriction on the term, when the term of the aforementioned passive operations is greater than one hundred eighty days.
c) Present to the Commission for approval, with the prior favorable opinion of the Bank of Mexico, a liquidity restoration plan within a term no greater than five Business Days counted from the day the Institution has been located in the aforementioned scenario. Such plan must be prepared in terms of Article 22 of these provisions.

III. In scenario V, in addition to the measures applicable to Institutions located in scenario IV, the suspension of the payment of dividends, as well as any mechanism or act that implies a transfer of patrimonial benefits, until full compliance with the Liquidity Restoration Plan referred to in subsection c) of the preceding fraction and the Institution is located in scenario I for at least 3 consecutive months.

In the event that Institutions present at the same time a Liquidity Coverage Ratio and a Net Stable Funding Ratio that place them in scenarios for which they must apply some of the measures contained in Article 15 and in this Article, the measures established by the Institutions must be consistent with each other.

The term to respond to the opinion requests referred to in this Article may not exceed five Business Days, counted from the date the Bank of Mexico receives the opinion request from the Commission, or from the date the Commission has responded to the information requirements that the Central Bank has made in the aforementioned term. In the event that the Bank of Mexico (i) has not made any information request to the Commission, or (ii) has not issued the corresponding response within the established term, the opinion of the Bank of Mexico shall be understood to be positive.

TITLE III
NET STABLE FUNDING RATIO
CHAPTER I
CALCULATION AND DETERMINATION OF OPERATIONS TERMS

Article 16.- Institutions shall calculate the Net Stable Funding Ratio in the terms provided by these provisions, as well as report to the Bank of Mexico the calculation of said Ratio corresponding to the last Business Day of each month, in accordance with Article 5 of these provisions.

The Net Stable Funding Ratio shall be the result of applying the following formula and must be expressed as a percentage rounded to the nearest hundredth of a percentage point.

Net Stable Funding Ratio = Amount of Available Stable Funding / Amount of Required Stable Funding

Article 17.- Institutions, for the purposes of calculating the Net Stable Funding Ratio, shall take into account the following:

I. The credit portfolio shall be considered net of preventive reserves, and
II. Value-dated operations are considered as if they had already been settled, that is, assets to be received for value-dated operations will have the treatment as if they were already in the Institution's holding, and assets to be delivered as if they had already been delivered.

Article 18.- The term of each of the operations that Institutions must use to carry out the calculations referred to in this Title III shall consist of the remaining term of the validity of the operation in question, calculated as that which must elapse from the date of the calculation of the Net Stable Funding Ratio corresponding in terms of these provisions to the maturity date of said operation. Regarding the monthly reports that Institutions present in accordance with Article 5, fraction II, of these provisions, the date to calculate the term referred to in this paragraph shall be that of the last Business Day of the month corresponding to that of the calculation of the Net Stable Funding Ratio that results applicable.

For the purposes of calculating the term of the operations referred to in the preceding paragraph, Institutions shall observe the following:

I. For the determination of the remaining term of the Institution's assets, it must be assumed that the respective counterparties of the Institution in question will exercise the option that has been agreed upon regarding the corresponding operations to extend their maturity term. For the determination of the remaining term of the Institution's liabilities, it must be assumed that the respective creditors will exercise the option of early amortization on the first possible date that has been agreed upon regarding the corresponding operations.
II. Regarding credits for which partial capital amortizations have been agreed, partial principal amortizations must be considered in the term in which such partial capital amortizations must be carried out. In this case, for the purposes of compensating for the reserves constituted by such credits, such reserves must be applied starting from the longer term to the shorter term of each partial capital amortization.
III. Regarding current account credits whose disposal is through credit cards issued under the contracts that document such credits, for the determination of the term for the payment of the exercised credit amount, it must be assumed that the borrower will only pay the minimum amount required in each of the terms.
IV. Regarding issuances of the Institution itself whose remaining term is greater than six months, which had been acquired and reported by a brokerage house with which there are patrimonial links, the remaining term of the operation in which they were reported by the brokerage house shall be assigned.

The Commission and the Bank of Mexico will resolve jointly regarding factors applicable in the event that operations not covered by these provisions are presented.

CHAPTER II
SCENARIOS AND CORRECTIVE MEASURES

Article 19.- Institutions, based on the respective Net Stable Funding Ratio reports they present to the Bank of Mexico in terms of Article 5, fraction II, of these provisions, shall be located in one of the liquidity scenarios indicated in this Article, taking into account the lower result between that calculated individually and that calculated in consolidated terms:

I. In scenario I, that Institution whose Net Stable Funding Ratio corresponding to the most recent calendar month reported is at least 100 percent.
II. In scenarios II, III, and IV, that Institution whose Net Stable Funding Ratio corresponding to the most recent calendar month reported is less than 100 percent, according to the following table:

Net Stable Funding Ratio (NSFR) Level	Number of monthly NSFR reports below 100%, including the most recent report, during the last 12 months:
1 to 4 reports	5 to 11 reports
Less than 100 and greater than or equal to 90, i.e.: 90 < NSFR < 100	Scenario II

Without prejudice to what is provided in this Article, the Commission, at any time, based on the Net Stable Funding Ratio reported and verified by the Bank of Mexico in terms of Article 6 of these provisions, may order that Institutions be located in the scenario that corresponds to them.

Article 20.- When in a twelve-month period Institutions are located three or more times, consecutively or non-consecutively, in a scenario other than scenario I, they must present to their board of directors, as well as to the Commission and the Bank of Mexico, within a term no greater than 1 Business Day after the date the aforementioned condition is met, a detailed report of their liquidity situation, which must be accompanied by an explanation of the causes that resulted in the measures adopted at the time for being located in a scenario other than scenario I not being effective in preventing the variability of their Net Stable Funding Ratio, as well as the risk management measures they will implement to reduce such variability, indicating those responsible for implementing and following up on such measures.

Article 21.- The Commission, with the opinion of the Bank of Mexico, considering the scenario in which Institutions are located or expected to be located, in terms of the preceding Article 19, may order Institutions to apply the following measures:

I. Regarding Institutions located in scenario II:
a) Present to its board of directors, as well as to the Commission and the Bank of Mexico, a detailed report of its liquidity situation, as well as the causes that led to the decrease of its Net Stable Funding Ratio below 100%. b) Refrain from carrying out operations whose execution would cause its Net Stable Funding Ratio to deteriorate, until such time as it is located in scenario I. c) Present to the Commission, for approval with the prior favorable opinion of the Bank of Mexico, a plan to restore the Net Stable Funding Ratio within a term no greater than five Business Days counted from the day the Institution has been located in the aforementioned scenario. Such plan must be prepared in terms of Article 22 of these provisions.

II. Regarding Institutions located in scenario III, in addition to the measures indicated in the preceding fraction I, suspend the payment of dividends, as well as any mechanism or act that implies a transfer of patrimonial benefits, until it is located in scenario I.

III. Regarding Institutions located in scenario IV, in addition to the measures indicated in the preceding fraction II, limit or suspend, partially or totally, those operations that the Commission, with the prior opinion of the Bank of Mexico, considers necessary for the Institution in question to be located in scenario I, among the following operations:

TITLE IV
FINAL PROVISIONS
CHAPTER I
RATIO RESTORATION PLAN

Article 22.- The ratio restoration plans referred to in Article 15, fraction II, subsection c), and Article 21, fraction I, subsection c), as applicable, of these provisions, shall have the objective that the Institution implements modifications to its liquidity management in such a way that it is capable of consistently maintaining a Liquidity Coverage Ratio, a Net Stable Funding Ratio, or both, that place it in the corresponding scenario I, and must be approved by the board of directors of the Institution in question.

In the event that the Commission orders modifications to the restoration plan in question, it must be presented again for ratification to the board of directors of the Institution in question, accrediting it before the Commission for its approval in terms of the articles referred to in the preceding paragraph.

The restoration plan must comprise, at least, the following elements:

I. In the event that the plan refers to the Liquidity Coverage Ratio, identify the sources of resources to increase its Countable Liquid Assets, or reduce the Total Net Cash Outflow.
II. In the event that the plan refers to the Net Stable Funding Ratio, identify the sources of resources to increase the Amount of Available Stable Funding, or reduce the Amount of Required Stable Funding.
III. Indicate the term in which it is intended for the Institution to be located in the corresponding scenario I in accordance with these provisions.
IV. A calendar with the terms in which the Institution would reach each of the objectives, specifying the dates or stages in which it intends to carry out each of the necessary actions to restore its liquidity situation, as well as the responsible areas to carry out the liquidity restoration actions.
V. A detailed list of the information that the Institution must send to the Commission, and the frequency with which it will do so, in order for said Commission to be able to follow up on the compliance with the restoration plan.
VI. Identify the areas responsible for following up on the plan and informing the responsible areas within the Institution and the Commission about deviations in said plan.
VII. Identify the reasons why the Ratio in question was affected, as well as perform an analysis of the quantitative evaluation of the impact of the actions referred to in fraction IV of this Article, on both Ratios in the short and medium term, as well as on the regulatory limits established in the Law and the provisions emanating from it, and identify the factors that could affect the implementation or effectiveness of the aforementioned actions.

In the event that the Institution does not comply with the presented restoration plan and, therefore, does not meet the necessary liquidity requirements, the Commission, with the prior opinion of the Bank of Mexico, may require as a precautionary measure the suspension of operations referred to in Articles 96 Bis 1, third paragraph, and 128 of the Law.

The foregoing will be applicable regardless of the sanctions that may apply.

CHAPTER II
NON-COMPLIANCE AND EXCEPTIONS

Article 23.- Non-compliance with liquidity requirements shall be understood as when Institutions are located in scenarios III, IV, or V in terms of Title II of these provisions, in the case of the Liquidity Coverage Ratio, and when Institutions are located in scenarios III or IV in terms of Title III of these provisions, regarding the Net Stable Funding Ratio.

Article 24.- The Bank of Mexico and the Commission may establish general exceptions to these provisions for a determined time and totally or partially, in the terms of the determination that, as applicable, the Liquidity Regulation Committee referred to in Article 96 Bis 1 of the Law adopts.

Consultations on the application of these provisions will be resolved by the Commission or the Bank of Mexico. The authority receiving the consultation must obtain the prior favorable opinion of the other, in order to resolve what is appropriate.

TRANSITORY PROVISIONS

FIRST.- These provisions shall enter into force on March 1, 2022, except for what is provided in the following transitory provisions.

SECOND.- On the date of entry into force of these provisions, the General Provisions on Liquidity Requirements for Multiple Banking Institutions jointly issued by the Bank of Mexico and the National Banking and Securities Commission, published in the Official Gazette of the Federation on December 31, 2014, and modified through Resolutions published in said Gazette on December 31, 2015, and December 28, 2016, shall be repealed.

THIRD.- Fraction VIII of Article 1 of these provisions shall enter into force on July 1, 2024.

From the date of entry into force of these provisions referred to in Transitory Provision First, and until the date indicated in the preceding paragraph, the exit factors referred to in Annex 2 of these provisions shall be applied, for the purposes of these provisions, for the determination of the exit flow regarding deposit accounts that meet the characteristics indicated in fraction VIII of Article 1 of these provisions, notwithstanding that, as an exception to what is provided in subsection b) of said fraction, the respective contracts do not state that the use of such accounts is solely for the provision of compensation, custody, or cash administration services referred to in said fraction. The foregoing, provided that the contracts referred to in the exception contained in this paragraph were entered into prior to the date indicated in Transitory Provision First for the entry into force of these provisions.

FOURTH.- Institutions that, prior to the date of entry into force of these provisions referred to in Transitory Provision First, have received authorization to operate as such without having started operations, as well as those Institutions that on the aforementioned date of entry into force have less than twelve months of having started operations, Article 8 of these provisions shall be applicable to them from the thirteenth month following the start of operations.

(2) FIFTH.- Notwithstanding what is established in Annex 1, fraction II, numeral 1, first paragraph, and numeral 2, first paragraph, of these provisions, for those titles listed in the aforementioned fraction II that have been issued prior to April 1, 2020, variations in their market price occurring from March 1, 2020, until March 31 of the same year, shall not be taken into account.

(2) SIXTH.- Notwithstanding what is provided in Annex 4, fraction III of these provisions, from March 1, 2022, until April 30, 2022, to determine the contingent exit flow for operations with financial derivative instruments (Look Back Approach), which is calculated as the maximum absolute value of the sum of the amounts referred to in subsections a) and b) of the aforementioned fraction III of Annex 4, calculating said subsections for each horizon of thirty consecutive days during the last 24 months, Institutions may exclude the month of March 2020 for the calculation of such amounts.

TRANSITORY PROVISIONS
(Resolution published in the Official Gazette of the Federation on March 1, 2022)

SINGLE.- This Resolution shall enter into force on March 1, 2022.

CONSIDERING

(Resolution published on March 1, 2022)

That the Liquidity Banking Regulation Committee, in sessions held on October 17, 2014, and June 14, 2018, issued guidelines to implement the Liquidity Coverage Ratio and the Net Stable Funding Ratio, and determined that such requirements must be consistent with the standards issued by the Basel Committee on Banking Supervision regarding liquidity requirements, insofar as the Mexican legal framework permits, and with the objective of preserving the stability of the Mexican financial system;

That on April 14, 2020, the Exceptions to the “General Provisions Regarding Liquidity Requirements for Multiple Banking Institutions” (Exceptions) were jointly issued by the Bank of Mexico and the National Banking and Securities Commission, the latter published in the Official Gazette of the Federation on December 31, 2014, and modified through Resolutions published in said Gazette on December 31, 2015, and December 28, 2016 (Prior Liquidity Provisions), and that said Exceptions were extended on August 26, 2020, and February 26, 2021;

That the Exceptions contemplated that, notwithstanding what is provided in Annex 4, section III of the Prior Liquidity Provisions, to determine the contingent outflow for operations with financial derivative instruments (Look Back Approach), which is calculated as the maximum absolute value of the sum of the amounts indicated in subsections a) and b) of said section III of Annex 4, calculating said subsections for each horizon of thirty consecutive days during the last 24 months, multiple banking institutions may exclude, starting from February 28, 2020, the month of March 2020 from the calculation of said amounts;

That the Exceptions also contemplated that, independent of what is established in Annex 1, fraction II, section 1, first paragraph, and 2, first paragraph of the Prior Liquidity Provisions, starting from September 1, 2021, variations in the market price of the securities listed in said fraction II will not be taken into account, when these have occurred from March 1, 2020, until March 31 of that same year;

That on August 23, 2021, the “General Provisions Regarding Liquidity Requirements for Multiple Banking Institutions” (Liquidity Provisions) were published in the Official Gazette of the Federation;

That, pursuant to the First Transitory Article of the Liquidity Provisions, these will enter into force on March 1, 2022, except for what is provided in the respective transitory articles, and that, pursuant to the Second Transitory Article of the Liquidity Provisions, as of the date of their entry into force, the Prior Liquidity Provisions will be repealed;

That it is necessary to provide that, to determine the contingent outflow for operations with financial derivative instruments (Look Back Approach), multiple banking institutions may also exclude, under the Liquidity Provisions, once these enter into force, the month of March 2020 from the calculation of said amounts;

That it must also be provided that, to determine the instruments that may count as Level II Group Liquid Assets, multiple banking institutions may also exclude, under the Liquidity Provisions, once these enter into force, the variations in the market price of the securities listed in Annex 1, fraction II of the Liquidity Provisions, when these have occurred from March 1, 2020, until March 31 of that same year, and

That it is necessary to homogenize the terminology of the Liquidity Provisions with that used in the “General Provisions applicable to credit institutions” issued by the

National Banking and Securities Commission, which were modified through a Resolution published in the Official Gazette of the Federation on March 13, 2020, with the purpose of updating the accounting criteria applicable to credit institutions to make them consistent with International Financial Reporting Standard 9 “Financial Instruments” (IFRS 9, in English), therefore it has resolved to issue the following:

REFERENCES

Amended by Resolution published in the Official Gazette of the Federation on March 1, 2022.
Added by Resolution published in the Official Gazette of the Federation on March 1, 2022.

General Provisions on Liquidity Requirements for Multiple Banking Institutions

GENERAL PROVISIONS ON LIQUIDITY REQUIREMENTS FOR MULTIPLE BANKING INSTITUTIONS

GENERAL PROVISIONS ON LIQUIDITY REQUIREMENTS FOR MULTIPLE BANKING INSTITUTIONS

INDEX

TITLE I

CHAPTER I

CHAPTER II

CHAPTER III

TITLE II

CHAPTER I

CHAPTER II

TITLE III

CHAPTER I

CHAPTER II

TITLE IV

CHAPTER I

CHAPTER II

TITLE I

CHAPTER I

CHAPTER II

Lineage: In force