LAW OF THE NATIONAL BANKING AND SECURITIES COMMISSION

Published in the Official Gazette of the Federation on April 28, 1995.
Updated with reforms published in the same Gazette on January 23, 1998; January 18, 1999; June 1, 2001; January 23, 2004; June 20, 2005; June 15, 2007; June 25 and August 13, 2009; April 9, 2012; January 10, 2014 and March 9, 2018; as well as May 11, 2022.

LAW OF THE NATIONAL BANKING AND SECURITIES COMMISSION

INDEX

TITLE ONE
Of the Nature, Object and Powers

CHAPTER I
Of the Nature and Object

CHAPTER II
Of the Powers

TITLE TWO
Of the Organization

CHAPTER I
Of the Organizational Basis

CHAPTER II
Of the Board of Directors

CHAPTER III
Of the Presidency

TITLE THREE
Of the General Provisions

UNIQUE CHAPTER
Transitory Articles

Exposition of Motives
References

At the margin a seal with the National Coat of Arms, which says: United Mexican States.- Presidency of the Republic.

ERNESTO ZEDILLO PONCE DE LEON, Constitutional President of the United Mexican States, to its inhabitants, be it known:

That the Honorable Congress of the Union has seen fit to address to me the following:

D E C R E E:

“The Congress of the United Mexican States, decrees:

LAW OF THE NATIONAL BANKING AND SECURITIES COMMISSION

TITLE ONE

Of the Nature, Object and Powers

CHAPTER I

Of the Nature and Object

Article 1.- The National Banking and Securities Commission is created as a decentralized body of the Ministry of Finance and Public Credit, with technical autonomy and executive powers in accordance with the terms of this Law.

(11) Article 2.- The Commission shall have as its object to supervise and regulate, within the scope of its competence, the entities that make up the Mexican financial system as specified in this Law, in order to ensure their stability and proper functioning, as well as to maintain and foster the sound and balanced development of said system as a whole, in protection of the public's interests.

It shall also be its object to supervise and regulate natural persons and other legal entities when they carry out activities provided for in the laws relating to the aforementioned financial system.

Article 3.- For the purposes of this Law, the following shall be understood:

I. Commission, the National Banking and Securities Commission;

II. Board of Directors or Board, the Board of Directors of the Commission;

III. President, the President of the Commission, and

(11) IV. Entities or financial entities that are part of the Mexican Financial System:

(17) a) Controlling and sub-controlling societies of financial groups, credit institutions, brokerage houses, stock exchanges, investment funds, investment fund operating societies, investment fund share distribution societies, general warehouses, credit unions, exchange houses, regulated multiple-object financial societies, popular financial societies, securities depository institutions, central counterparties, securities rating agencies, financial technology institutions, credit information societies, community financial societies, subject to the supervision of the Commission and rural financial integration bodies, as well as other institutions and public trusts that carry out financial activities and regarding which the Commission exercises supervisory powers, all of them constituted in accordance with commercial and financial laws.

(11) b) Savings and loan cooperative societies, subject to the supervision of the Commission, referred to in the Law for the Regulation of the Activities of Savings and Loan Cooperative Societies, that are part of the social sector.

(11) V. Federations: the federations referred to in the Popular Savings and Credit Law.

(12) VI. Protection Fund: the protection fund referred to in the Law for the Regulation of the Activities of Savings and Loan Cooperative Societies, as well as that referred to in the Popular Savings and Credit Law.

(15) VII. Currency Centers: those referred to in Article 81-A of the General Law of Auxiliary Credit Organizations and Activities.

(15) VIII. Money Transmitters: those referred to in Article 81-A Bis of the General Law of Auxiliary Credit Organizations and Activities.

CHAPTER II

Of the Powers

Article 4.- It corresponds to the Commission:

(11) I. To carry out the supervision of financial entities; of the protection fund referred to in the Law for the Regulation of the Activities of Savings and Loan Cooperative Societies; of the Federations and of the protection fund referred to in the Popular Savings and Credit Law, as well as of natural persons and other legal entities when they carry out activities provided for in the Laws relating to the financial system.

With respect to savings and loan cooperative societies, the Commission shall only be responsible for the supervision of those with operation levels I to IV referred to in the Law for the Regulation of the Activities of Savings and Loan Cooperative Societies;

II. To issue prudential regulation within the scope of its competence to which the entities shall be subject;

III. To issue registration rules for operations applicable to the entities;

IV. To establish rules for the estimation of assets and, where applicable, of the obligations and responsibilities of the entities, in the terms specified by the laws;

V. To issue rules regarding the information that the entities must provide to it periodically;

VI. To issue general provisions establishing the characteristics and requirements that the auditors of the entities must meet, as well as their opinions;

VII. To establish the criteria referred to in Article 2 of the Securities Market Law, as well as those of general application in the financial sector regarding acts and operations that are considered contrary to commercial, banking and stock market usages or sound practices of financial markets, and to issue the necessary measures so that the entities adjust their activities and operations to the laws applicable to them, to the general provisions derived from them, and to the aforementioned usages and sound practices;

VIII. To act as a consultative body of the Federal Government in financial matters;

IX. To ensure, through the procedures established in the laws regulating the financial system, that the entities carry out operations and services duly and effectively, in the terms and conditions agreed upon, with users of financial services;

(14) X. To certify independent external auditors and other professionals, in order that they provide their services to the entities and persons subject to the supervision of the Commission for the verification of compliance with financial laws and the provisions emanating from them in matters of prevention, detection and reporting of acts, omissions or operations that could fall under the circumstances of Articles 139, 148 Bis or 400 Bis of the Federal Penal Code, by the entities and persons obliged to said regime, as well as compliance officers, in terms of the general provisions issued by the Commission for such purposes. Such certification, in terms of the aforementioned provisions, must be renewed every five years;

(15) X Bis. To certify auditors and other professionals, in order that they cooperate with the Commission when it hires them, for the verification of compliance with financial laws and the provisions emanating from them in matters of prevention, detection and reporting of acts, omissions or operations that could fall under the circumstances of Articles 139, 148 Bis or 400 Bis of the Federal Penal Code, in terms of the general provisions issued by the Commission for such purposes. Such certification, in terms of the aforementioned provisions, must be renewed every five years;

(14) XI. To authorize the constitution and operation of those entities specified by the laws and, where applicable, agree on the revocation of said authorizations, as well as to determine the minimum capital and capitalization requirements to which the entities must be subject as specified by the laws;

(3) XII. To authorize natural persons who carry out operations with the public, regarding advice, promotion, purchase and sale of securities, as agents of intermediaries in the securities market, in the terms specified by the laws applicable to the latter;

(3) XIII. To determine or recommend that proceedings be taken for the reprimand, suspension or removal and, where applicable, disqualification of directors, executives, trustees, fiduciary delegates, attorneys-in-fact, officials, independent external auditors and other persons who may bind the entities, in accordance with what is established in the laws governing them;

XIV. To order the suspension of operations of the entities in accordance with the provisions of this Law;

XV. To intervene administratively or managerially in the entities, in order to suspend, normalize or resolve operations that endanger their solvency, stability or liquidity, or those that violate the laws regulating them or the general provisions derived from them, in the terms established by said laws;

XVI. To investigate acts of natural persons as well as legal entities that, although not being entities of the financial sector, suggest the carrying out of operations violating the laws governing said entities, being able to order inspection visits to the presumed responsible parties for this purpose;

XVII. To order the suspension of operations, as well as to intervene administratively or managerially, as provided for in the laws, in the negotiation, company or establishments of natural persons or legal entities that, without the corresponding authorization, carry out activities that require it in terms of the provisions regulating the entities of the financial sector, or to proceed to the closure of their offices;

(3) XVIII. To investigate acts or facts that contravene what is provided for in the Securities Market Law, for which it may conduct visits regarding such acts or facts, as well as summon, request information or request the appearance of alleged offenders and other persons who may contribute to the proper development of the investigation;

(3) XIX. To impose administrative sanctions for infractions to the laws regulating the activities, entities and persons subject to its supervision, as well as to the provisions emanating from them and, where applicable, to cooperate with the public ministry regarding the crimes provided for in the laws relating to the financial system;

(15) XIX Bis. To carry out, at the request of the Ministry of Finance and Public Credit and the Federal Public Ministry, as a collaborator of said departments, investigation activities in financial entities and other persons subject to its supervision, for the purposes of detecting resources and obtaining information for the effects of what is provided for in the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, as well as for the prosecution of conduct that could favor, provide help, aid or cooperation of any kind, for the commission of the crime provided for in Articles 139 and 148 Bis of the Federal Penal Code or that could fall under the circumstances of Article 400 Bis of the same Code.

The investigative powers referred to in this section shall be exercised in accordance with the terms of Article 5 of this Law. The Commission shall submit a report on the results of its investigations to the Ministry of Finance and Public Credit and the Federal Public Ministry for the purposes that may apply.

The investigative activities and the presentation of the report shall not imply any transgression of the financial secrets contemplated in the laws relating to the Mexican financial system;

XX. To hear and resolve on the revocation appeal filed against the sanctions applied, as well as to forgive total or partial fines imposed;

XXI. To intervene in the liquidation procedures of the entities in accordance with the law;

XXII. To determine the days on which the entities must close their doors and suspend their operations;

(14) XXIII. To prepare and publish statistics relating to the entities and financial markets, indicators of solvency, stability and liquidity, as well as to carry out and disseminate studies and estimates of market scenarios that allow for the comparability of information.

Likewise, the Commission may publish representative samples of databases relating to operations and services of the entities or of segments of the markets of the financial system, provided that the corresponding information does not contain reserved or confidential information;

XXIV. To enter into agreements with national and international bodies with supervisory and regulatory functions similar to those of the Commission, as well as to participate in consultation forums and financial supervisory and regulatory bodies at the national and international levels;

(15) XXIV Bis. To enter into information exchange agreements that are not reserved or confidential in terms of the applicable legal provisions, with public or private research or teaching institutions, for academic and dissemination purposes of the Mexican financial system;

XXV. To provide the assistance requested by supervisory and regulatory institutions of other countries, for which, in the exercise of its inspection and surveillance powers, it may obtain from any person the information and documentation that is the subject of the request;

XXVI. To intervene in the issuance, draws and cancellation of titles or securities of the entities, in accordance with the law, ensuring that their circulation does not exceed legal limits;

(16) XXVII. Repealed;

XXVIII. To keep the National Registry of Securities and Intermediaries and certify inscriptions recorded therein;

XXIX. To authorize, suspend or cancel the inscription of securities and stock market specialists in the National Registry of Securities and Intermediaries, as well as to suspend said inscription with respect to brokerage houses;

XXX. To supervise issuers of securities registered in the National Registry of Securities and Intermediaries, regarding the obligations imposed on them by the Securities Market Law;

XXXI. To issue general provisions regarding the form and terms in which issuing societies that possess insider information shall be obliged to make it known to the public;

XXXII. To issue rules establishing the minimum disclosure requirements to the public that securities rating agencies must satisfy regarding the credit quality of the issuances they have rated and on other aspects aimed at improving the services they provide to users;

XXXIII. To issue rules to which brokerage houses must be subject when carrying out operations with their shareholders, directors, executives and employees;

XXXIV. To authorize and monitor clearing systems, centralized information systems, securities rating and other mechanisms aimed at facilitating operations or perfecting the securities market;

XXXV. To order the suspension of securities quotations, when disordered conditions exist in their market or operations are carried out that are not in accordance with sound usages or practices;

(8) XXXVI. To issue the necessary provisions for the exercise of the powers granted to it by this Law and other laws and for the effective compliance with them and with the provisions issued based on them;

(14) XXXVII. To keep the registry of currency centers and money transmitters and, where applicable, modify or cancel the inscriptions or annotations contained in said registry, in the terms established by said laws, as well as to issue the bases relating to their organization and functioning and to the obtaining of the corresponding inscriptions, and

(9) XXXVIII.- The other powers attributed to it by this Law, by the Regulatory Law of Section XIII Bis of Section B, of Article 123 of the Political Constitution of the United Mexican States and by other laws.

(14) Article 5.- The supervision carried out by the Commission shall be subject to the regulation issued for this purpose by the Federal Executive and shall comprise the exercise of the powers of inspection, surveillance, prevention and correction conferred on the Commission by this Law, as well as other applicable laws and provisions.

(14) The supervision of financial entities shall have as its object to evaluate the risks to which they are subject, their control systems and the quality of their administration, in order to ensure that they maintain adequate liquidity, are solvent and stable and, in general, comply with the provisions governing them and the usages and sound practices of financial markets. Likewise, through supervision, the risks of financial entities grouped or having patrimonial links shall be evaluated in a consolidated manner, as well as the proper functioning of the financial system in general.

(14) Inspection shall be carried out through visits, verification of operations and audit of records and systems, in the facilities or automated equipment of financial entities, to verify the state in which the latter are found.

(14) Surveillance shall be carried out through the analysis of economic and financial information, in order to measure possible effects on financial entities and on the financial system as a whole.

(14) Likewise, surveillance shall comprise the analysis of information on the establishment of preventive controls to verify compliance with financial laws and the provisions emanating from them in matters of prevention, detection and reporting of acts, omissions or operations that could fall under the circumstances of Articles 139, 148 Bis or 400 Bis of the Federal Penal Code, with the same purpose of measuring possible effects on financial entities and on the financial system as a whole, as well as to, among other things, program the exercise of inspection powers.

(14) In all cases, as a result of the exercise of surveillance powers, the Commission shall notify the entities of the deficiencies detected regarding the information they have submitted or the recommendations deemed appropriate and, where applicable, impose the corresponding sanctions.

(14) Prevention and correction shall be carried out through the establishment of programs, mandatory for financial entities, aimed at eliminating irregularities. Likewise, such programs shall be established when entities present financial imbalances that could affect their liquidity, solvency or stability, and may in all cases be implemented by agreement with the entities themselves. Non-compliance with the programs may give rise to the exercise of the power contained in Section XV of Article 4 of this Law, without prejudice to the sanctions contemplated in Article 108 of the Credit Institutions Law.

(14) The supervision carried out by the Commission with respect to natural persons and other legal entities, when they carry out activities provided for in the laws relating to the financial system, shall have the purpose that such persons duly observe said laws, as well as the provisions emanating from them.

(14) The Commission shall be empowered to request from the entities, currency centers, money transmitters and any other person subject to its supervision, all kinds of information and documents regarding the operations carried out by the persons or societies subject to the supervision of the Commission itself, as well as their shareholders and related persons, in the latter case, in relation to the activities of the supervised entities and persons. The foregoing, provided that such request is duly founded and motivated, as well as that it is directly related to acts subject to supervision by the Commission. Said entities, currency centers, money transmitters and any other person subject to such supervision, must provide the information referred to in this paragraph, without this implying a transgression of the confidentiality duties established in the laws relating to the financial system.

(15) Article 5 Bis.- The National Insurance and Surety Commission, the Retirement Savings System Commission and for the Protection and Defense of Users of Financial Services, as well as the Bank of Mexico and the Institute for the Protection of Bank Savings, at the request of the Commission and, in order to ensure coordination in the practice of ordinary visits carried out in the exercise of supervisory powers, must communicate with each other, no later than November 15 of each year, those financial entities to which they intend to carry out such visits the following year and, within the thirty days following the aforementioned date, they must agree on the visits that can be carried out jointly with some of the other authorities.

(15) What is provided for in the previous paragraph shall be applicable without prejudice to the visits that the aforementioned authorities may carry out on an extraordinary basis or at any time, in accordance with the provisions applicable to them.

(15) Article 5 Bis 1.- When any of the financial authorities indicated in Article 5 Bis above, in the exercise of its supervisory powers, detects any possible non-compliance with provisions issued by another financial authority, it shall make this known to said authority.

(15) Article 5 Bis 2.- To safeguard the exercise of the right of access to public government information, the Commission, in accordance with the guidelines approved by its Board of Directors, must make known to the general public, through its Internet portal, the sanctions it imposes for infractions to the laws regulating the entities and persons subject to its supervision, or to the provisions emanating from them, for which it must indicate:

(15) I. The name, trade name or corporate name of the offender;

(15) II. The legal provision infringed, the type of sanction imposed, amount or term, as applicable, the infringing conduct, and

(15) III. The status of the resolution, indicating whether it is final or if it is subject to challenge and in the latter case if any means of defense has been filed and its type, when there is knowledge of such circumstance having been duly notified by the competent authority.

(15) In all cases, if the imposed sanction is set aside by any competent authority, such circumstance must also be published.

(15) The information mentioned above shall not be considered reserved or confidential.

Article 6.- For the purposes of Section II of Article 4, the Commission, in accordance with what is established by the laws relating to the financial system, will issue prudential rules aimed at preserving the liquidity, solvency and stability of financial entities.

(15) Article 6 Bis.- The Commission, in the exercise of the powers referred to in fractions II, III, IV, and XI of Article 4 of this Law, may issue corrective measures, consisting of ordering corrections or modifications to the following:

(15) I. The prudential policies and guidelines adopted by the entities, as well as the adequate segregation of functions between business units and other instances of the entities' organizational structure;

(15) II. The accounting records and financial statements of the entities, and

(15) III. The calculation of capitalization, liquidity, and other financial ratios or levels.

(15)For the foregoing, the Commission must previously hear the affected entity, and resolve within a period not exceeding three business days. Likewise, it shall be empowered to instruct the entities to publish the corrections and modifications it has ordered under this provision.

Article 7.- The Commission, in the exercise of the power referred to in fraction XIV of Article 4, may order the temporary suspension of all or some of the operations of financial entities when they seriously or repeatedly infringe the legislation applicable to them, as well as the provisions derived from it. This power shall not include the suspension of operations that, in accordance with the laws, correspond to be ordered by the Bank of Mexico.

Article 8.- The Commission, in order to carry out inspection visits under the terms of fraction XVI of Article 4, as well as to effectively comply with closure resolutions, administrative intervention, or managerial intervention that it issues in the exercise of its powers, may request the assistance of the public force.

(14) Article 9.- The Commission, within the scope of its competence, shall be empowered to provide foreign financial authorities with all kinds of information necessary to address the requests made to it, such as documents, records, registers, declarations, and other evidence that the Commission has in its possession having obtained it in the exercise of its powers, acting in coordination with other entities, persons, or authorities, or directly from other authorities. The Commission may provide information of a reserved or confidential nature in accordance with the applicable legal provisions.

(14) For the purposes of the foregoing, the Commission must have signed an information exchange agreement with the foreign financial authorities in question, which must contemplate the principle of reciprocity.

(14) In any case, the Commission may refrain from providing the information it holds as reserved or confidential in accordance with the applicable legal provisions, when the intended use of such information is different from that for which it was requested, is contrary to public order, national security, or the terms agreed upon in the respective information exchange agreement.

(14) The Commission must establish coordination mechanisms with the Secretariat of Finance and Public Credit, the Institute for the Protection of Bank Savings, the Bank of Mexico, and the National Commission for the Protection and Defense of Users of Financial Services for the purposes of delivering the information referred to in this article to foreign financial authorities, in accordance with the applicable legal provisions.

(14) The delivery of information carried out under the terms of this present article shall not imply any transgression of the obligations of reserve, confidentiality, secrecy, or analogous ones that must be observed in accordance with the applicable legal provisions.

(15) Article 9 Bis.- The Commission, at the request of the authorities cited in the preceding Article 9 and, based on the principle of reciprocity, may carry out inspection visits to issuers that have securities registered in the National Securities Registry regarding their obligations as an issuer or to the subsidiaries of the entities. At its discretion, the visits may be conducted through its channel or, in cooperation with the foreign financial authority in question, it may allow the latter to conduct them.

(15) The request referred to in the preceding paragraph must be made in writing, at least thirty calendar days in advance, and must be accompanied by the following:

(15) I. Description of the object of the visit.

(15) II. Applicable legal provisions regarding the object of the request.

(15) The Commission must request that the foreign financial authorities carry out visits under the terms of this article provide a report on the results obtained.

(15) Article 9 Bis 1.- The entities, through their General Manager or equivalent and with the opinion of the audit committee or whoever exercises the oversight functions of the entity itself, may submit to the authorization of the Commission a self-correction program when the entity in question, in the course of its activities, or the audit committee or equivalent body as a result of the functions conferred upon it, detects irregularities or non-compliance with what is provided in this Law or the laws governing the entities and other applicable provisions.

(15) The following may not be the subject of a self-correction program under the terms of this present article:

(15) I. The irregularities or non-compliance that are detected by the Commission in the exercise of its inspection and oversight powers, before the presentation by the entity of the respective self-correction program.

(15) It shall be understood that the irregularity was previously detected by the Commission, in the case of oversight powers, when the entity has been notified of the irregularity; in the case of inspection powers, when it has been detected during the course of the inspection visit, or corrected subsequently after a request has been made during the visit;

(15) II. When the contravention of the norm in question corresponds to any of the crimes contemplated in the laws, or

(15) III. When it concerns any of the infractions considered as serious in terms of the laws governing the entities.

(15) Article 9 Bis 2.- The self-correction programs referred to in Article 9 Bis 1 of this Law shall be subject to the general provisions issued by the Commission. Additionally, they must be signed by the president of the entity's audit committee or whoever exercises the oversight functions, and be presented to the board of directors or equivalent body in the session immediately following the authorization request presented to the Commission. Likewise, it must contain the irregularities or non-compliance committed, indicating the provisions that have been considered contravened; the circumstances that originated the irregularity or non-compliance committed, as well as indicating the actions adopted or intended to be adopted by the entity to correct the irregularity or non-compliance that motivated the program.

(15) In the event that the entity requires a period to remedy the irregularity or non-compliance committed, the self-correction program must include a detailed schedule of activities to be carried out for that purpose.

(15) If the Commission does not order the entity to make modifications or corrections to the self-correction program within twenty business days following its presentation, the program shall be deemed authorized in all its terms.

(15) When the Commission orders the entity to make modifications or corrections with the purpose that the program complies with what is established in this present article and other applicable provisions, the entity shall have a period of five business days counted from the respective notification to remedy such deficiencies. This period may be extended only once for up to five additional business days, with the prior authorization of the Commission.

(15) If the deficiencies referred to in the preceding paragraph are not remedied, the self-correction program shall be deemed not presented, and consequently, the irregularities or non-compliance committed may not be the subject of another self-correction program.

(15) Article 9 Bis 3.- During the validity of the self-correction programs authorized by the Commission under the terms of Articles 9 Bis 1 and 9 Bis 2 above, it shall refrain from imposing on the entities the sanctions provided for in the laws governing them, for the irregularities or non-compliance whose correction is contemplated in said programs. Likewise, during such period, the statute of limitations for imposing sanctions shall be interrupted, resuming until it is determined that the irregularities or non-compliance subject to the self-correction program were not remedied.

(15)The audit committee or whoever exercises the oversight functions in the entities shall be obliged to follow up on the implementation of the authorized self-correction program, and report on its progress to both the board of directors and the General Manager or to the equivalent bodies or persons of the entity, as well as to the Commission, in the form and terms that it establishes in the general provisions referred to in Article 9 Bis 2 of this Law. The foregoing, independent of the Commission's power to supervise, at any time, the degree of progress and compliance with the self-correction program.

(15) If, as a result of the reports of the audit committee or of whoever exercises the oversight functions in the entities or derived from the inspection and oversight activities of the Commission, it determines that the irregularities or non-compliance subject to the self-correction program were not remedied within the established period, it shall impose the corresponding sanction increasing the amount thereof by up to forty percent; said amount being adjustable in terms of the applicable tax provisions.

(15) Article 9 Bis 4.- Natural persons and other legal entities subject to the supervision of the Commission may submit to its authorization a self-correction program when, in the course of their activities, they detect irregularities or non-compliance with what is provided in this Law or the laws governing such persons and other applicable provisions, subject to what is provided by Articles 9 Bis 1 to 9 Bis 3 of this Law, as applicable.

SECOND TITLE
On Organization
CHAPTER I
On the Bases of Organization

Article 10.- The Commission, for the achievement of its object and the exercise of its powers, shall have:

I. Government Board;
II. Presidency;
III. Vice-Presidencies;
IV. Internal Comptrollership; 1
V. General Directorates, and
VI. Other necessary administrative units.

1 The head of the Internal Comptrollership Unit depends hierarchically and functionally on the head of the Secretariat of Public Function, to whom also corresponds its designation and removal, in accordance with what is provided by the "Decree by which the Organic Law of the Federal Public Administration, the Federal Law of Parastatal Entities, and the Federal Law of Responsibilities of Public Servants" is reformed", published in the Official Journal of the Federation on December 24, 1996, through which, among others, Article 37, fraction XII of the Law cited in the first term is reformed.

CHAPTER II
On the Government Board

(18) Article 11.- The Government Board shall be integrated guaranteeing the principle of gender parity by ten board members, plus the person holding the Presidency of the Commission, who shall also be the President of the Board, and two Vice-Presidencies of the Commission that it designates. The Secretariat of Finance and Public Credit shall designate five board members; the Bank of Mexico three board members, and the National Insurance and Surety Commission and the Retirement Savings System Commission one board member each.

(18) For each principal board member, a substitute of the same gender shall be appointed. The board members must hold, at least, positions of General Director of the Federal Public Administration or its equivalent.

Article 12.- It corresponds to the Government Board:

(5) I. Repealed.

(3) II. Determine or recommend that proceedings be taken for the admonition, suspension, or removal, and, if applicable, disqualification of the councilors, executives, trustees, fiduciary delegates, attorneys, officials, independent external auditors, and other persons who may bind the entities, in accordance with what is established in the laws governing them;

III. Agree to the administrative or managerial intervention of entities with the object of suspending, normalizing, or resolving operations that put their solvency, stability, or liquidity in danger, or those violating the laws governing them or the general provisions derived from them, under the terms established by the laws themselves;

IV. Impose administrative sanctions for infringements of the laws that regulate the activities, entities, and persons subject to the supervision of the Commission, as well as to the provisions emanating from them. This power may be delegated to the President, as well as to other public servants of the Commission, considering the nature of the infringement or the amount of the fines. At the proposal of the President of the Commission, administrative fines may be partially or totally forgiven by the Government Board;

(14) V. Authorize the constitution and operation of those entities that the laws indicate, and, if applicable, agree to the revocation of said authorizations, except for investment companies;

VI. Authorize the registration in the special section of the National Securities and Intermediaries Registry, of securities issued in Mexico or by Mexican legal entities, to be subject to offer abroad;

VII. Examine and, if applicable, approve the general and special reports that the President of the Commission must submit to its consideration, regarding the activities of the Commission itself, the situation of the entities, system, and financial markets, as well as regarding the exercise of the powers referred to in fraction VIII of Article 16 of this Law;

VIII. Approve the annual budgets of income and expenses, as well as the reports on the execution of the budget;

IX. Approve the appointment and removal of the Vice-Presidents and Internal Comptroller 2 of the Commission at the proposal of the President;

X. Approve provisions related to the organization of the Commission and to the attributes of its administrative units;

XI. Approve the general working conditions that must be observed between the Commission and its personnel;

2 See note 1.

(15) XI Bis. Annually approve the programs for the granting of economic incentives to the officials of the Commission, for the fulfillment of goals subject to performance evaluation, taking into account the conditions of the labor market prevailing in the Mexican financial system.

(15) The economic incentives shall have as their objective to recognize the labor effort and the contribution of the officials to the achievement of the Commission's objectives, subject to the limits and expenditures that are approved for said concepts in the Expenditure Budget of the Federation;

XII. Constitute committees for specific purposes;

XIII. Appoint and remove its Secretary, as well as its substitute, who must be public servants of the Commission;

XIV. Resolve on other matters that the President submits to its consideration, and

XV. The other powers conferred by other laws.

Article 13.- The Government Board shall hold sessions whenever it is convened by its President and shall meet at least once every two months.

There shall be a quorum with the presence of at least seven members of the Board. Resolutions shall be taken by majority vote of those present, and the President shall have a casting vote in case of a tie.

CHAPTER III
On the Presidency

Article 14.- The President is the highest administrative authority of the Commission and shall be appointed by the Secretary of Finance and Public Credit.

Article 15.- The appointment of the President of the Commission must fall upon a person who meets the following requirements:

(1) I. Be a Mexican citizen by birth who does not acquire another nationality and be in full enjoyment of their civil and political rights;

II. Have held, for at least five years, high-level positions in the Mexican financial system or in the departments, agencies, or institutions that exercise authority functions in financial matters;

III. Not hold elected office, nor be a shareholder, councilor, official, trustee, attorney, or agent of the entities.

This requirement shall not be breached when they have investments in terms of what is provided by Article 16 Bis 7 of the Securities Market Law;

IV. Not have a pending lawsuit with the Commission, and

V. Not have been convicted by an irrevocable sentence for an intentional crime that imposes more than one year of prison, and if it is a property crime, committed intentionally, whatever the penalty, nor be disqualified from exercising commerce or from holding an employment, position, or commission in the public service or in the Mexican financial system.

(14) The provisions of fractions III to V of this article shall be applicable to the members of the Government Board, Vice-Presidents, Internal Comptroller, and General Directors.

Article 16.- It corresponds to the President of the Commission:

I. Have in charge the legal representation of the Commission and the exercise of its powers, without prejudice to those assigned by this Law or other laws to the Government Board;

II. Declare, with the agreement of the Government Board if applicable, the administrative or managerial intervention of entities with the object of suspending, normalizing, or resolving operations that put their solvency, stability, or liquidity in danger, or those violating the laws governing them or the general provisions derived from them;

III. Designate an inspector in the cases provided for in the laws that regulate the entities;

IV. Impose the corresponding sanctions according to the powers delegated to it by the Government Board, as well as hear and resolve on the revocation appeal, under the terms of the applicable laws and the provisions emanating from them, as well as propose to the Board the total or partial forgiveness of the fines;

V. Authorize, suspend, or cancel the registration of securities in the securities section of the National Securities and Intermediaries Registry;

VI. Execute the agreements of the Government Board;

VII. Inform the Government Board, annually or when it requests it, on the activities of the offices under its charge and obtain its approval for all general provisions that it deems pertinent;

VIII. Present to the Government Board reports on the situation of the entities, system, and financial markets, as well as regarding the exercise of the powers indicated in fractions IV and V of this provision, Articles 4 fractions XIV, XV, XVII, XXIV, and XXXV, and 7 of this Law, 2nd, last paragraph, and 16 of the Securities Market Law;

IX. Inform the Secretariat of Finance and Public Credit regarding specific cases that it requests;

(14) X. Inform the Bank of Mexico, on the liquidity and solvency of the entities, when it requests it;

(14) XI. Formulate annually the budgets of income and expenses of the Commission, as well as the programs of economic incentives for the officials of the Commission, which once approved by the Government Board, shall be submitted to the authorization of the Secretariat of Finance and Public Credit.

(14) The Secretariat of Finance and Public Credit shall establish criteria in matters of economic incentives that must be observed by the President of the Commission in its proposal to the Government Board. Likewise, the Commission shall provide the said Secretariat with the information it requests;

XII. Provide what is necessary for the fulfillment of the programs and the correct execution of the approved expenditure budget;

XIII. Inform the Government Board on the execution of the expenditure budget;

XIV. Propose to the Government Board the appointment and removal of the Vice-Presidents and Internal Comptroller 3 of the Commission, as well as appoint and remove the General Directors and Directors of the same;

(14) XV. Present to the Government Board draft provisions related to the organization of the Commission and to the attributes of its administrative units;

3 See note 1.

(14) XVI. Authorize the organization and functioning of investment companies, and (15) XVII. Such other powers as this Law, other laws, and their respective regulations assign to it.
The President shall exercise his functions directly or, through a delegation agreement, through the Vice Presidents, General Directors, and other public servants of the Commission. The agreements by which powers are delegated shall be published in the Official Gazette of the Federation.
(14) The non-delegable powers of the President are those set forth in fractions II to IV, VII, IX to XII, and XIV of this article and, as applicable within the scope of their competence, those contained in fractions XXII and XXIV of Article 4 of this Law. Without prejudice to the foregoing, the President may delegate to other public servants of the Commission the task of notifying the agreements of the Board of Government. In temporary absences of the President, he shall be replaced by the Vice President designated for that purpose.
Article 17.- For the purposes of fraction I of Article 16, the President shall be invested with the broadest powers required for that case by the laws, including those requiring a special clause under the same.
In judicial, administrative, or labor proceedings in which the Commission is a party or may be affected, the President, directly or through public servants of the Commission designated for that purpose in the delegation agreements, shall exercise actions, exceptions, and defenses, present arguments, offer evidence, file appropriate appeals, may withdraw claims, and in general perform all procedural acts corresponding to the Commission or its organs, including in amparo trials the submission of the reports required by law. The President and Vice Presidents shall only be obligated to answer interrogatories or give testimony in court, representing the Commission or by virtue of their functions, when the interrogatories and questions are formulated by means of an official letter issued by a competent authority, which they shall answer in writing within the term established by said authority.

THIRD TITLE
General Provisions
SINGLE CHAPTER
(11) Article 18.- Financial sector entities and issuing companies, as well as savings and loan cooperative societies with operation levels I to IV, and the protection fund referred to in the Law to Regulate the Activities of Savings and Loan Cooperative Societies; the federations and the protection fund referred to in the Popular Savings and Credit Law; as well as other natural or legal persons, subject in accordance with this and other Laws to the supervision of the Commission, shall pay the corresponding fees in accordance with the applicable legal provisions. The fees referred to in this article shall be used to cover the Commission's budget. If at the end of the budgetary year there is a balance from income from fees, the President shall transfer the uncommitted part of the budget to a special reserve, which shall be used to cover expenses corresponding to subsequent fiscal years. (15) Article 18 Bis.- The Commission, prior to agreement of its Board of Government, may allocate resources from its annual budget to the Service for Administration and Disposal of Assets, so that said agency carries out liquidation or bankruptcy proceedings of entities subject to the supervision of the Commission, understanding that such resources may exclusively be used to cover expenses associated with publications and other procedures related to such proceedings, when it is evident that they cannot be borne by the assets of the entities themselves due to lack of liquidity, or insolvency.

Article 19.- Financial sector entities subject to the supervision of the Commission shall be obligated to provide it with data, reports, records, minute books, auxiliary books, documents, correspondence, and in general, any information it deems necessary in the form and terms specified by it, as well as to allow it access to their offices, premises, and other facilities.
Article 20.- The labor relations between the Commission and its workers shall be governed by the provisions of Section B of Article 123 of the Political Constitution of the United Mexican States and by the Federal Law of Workers Serving the State, Regulating Section B of Article 123 of the Constitution.
(14) Article 21.- The Commission shall provide assistance and legal defense to those who are or have been members of its Board of Government and to public servants who work or have worked in the Commission itself, with respect to acts that the aforementioned persons carry out in the exercise of the functions entrusted to them by law.
(7) Financial entity inspectors appointed by the Commission in accordance with applicable laws, as well as those provided for in this Law, and auxiliary personnel to whom such inspectors grant powers because it is necessary for the performance of their functions, shall also be subject to assistance and legal defense for acts performed in the exercise of the powers entrusted to them by law derived from the intervention, when the entity in question does not have sufficient liquid resources to cover such assistance and legal defense. (7) Legal assistance and defense shall be provided from the resources available to the Commission for these purposes in accordance with the general guidelines approved by the Board of Government of the Commission itself, in which the case must be provided for that if the competent authority issues a final resolution against the subject of legal assistance that becomes final, such subject must reimburse the Commission for the expenses and any other disbursements incurred in connection with the assistance and legal defense. (7) For these purposes, the Ministry of Finance and Public Credit, hearing the opinion of the Commission, shall establish the necessary mechanisms to cover the expenses resulting from the legal assistance provided for in this article.

TRANSITORY PROVISIONS
(Decree of the Law of the Banking and Securities Commission, of April 24, 1995, published in the Official Gazette of the Federation on April 28, 1995) FIRST.- This Law shall enter into force on May 1, 1995.
SECOND.- Chapter I of Title Seven of the Credit Institutions Law, Articles 40, 41 fractions I, II, III, IV, VI to VIII, XI to XXII and the last paragraph, and 42 to 46 of the Securities Market Law, and fraction V of Article 29 of the Investment Companies Law are repealed.
THIRD.- The National Banking Commission and the National Securities Commission are transformed into the decentralized body referred to in this Law.
Movable and immovable property owned by the Federal Government, which at the entry into force of this Law is assigned to the National Banking Commission and the National Securities Commission, shall be assigned to the National Banking and Securities Commission.
FOURTH.- The rights and obligations of the workers of the National Banking Commission and the National Securities Commission, which by virtue of this Law are transformed into the National Banking and Securities Commission, shall not suffer any modification by that act.
FIFTH.- References that other laws, regulations, or provisions make regarding the National Banking Commission or the National Securities Commission shall be understood to be made regarding the National Banking and Securities Commission.

Furthermore, any reference to the heads or other public servants of the National Banking Commission or the National Securities Commission shall be understood to be made to the President and other public servants of the National Banking and Securities Commission.
The references provided for in Article 47 of the Securities Market Law to fractions VII and VIII of Article 41 of the same instrument shall be understood to be made to fractions XV and XVII of Article 4 of this Law, respectively. In turn, the reference contained in Article 40 of the Investment Companies Law to fraction IV of Article 45 of the Securities Market Law shall be understood to be made to fraction III of Article 16 of this Law. SIXTH.- Public servants of the National Banking Commission and the National Securities Commission shall continue in the performance of their functions and exercising their respective attributes, until the corresponding appointments are issued. SEVENTH.- Until such time as the delegation agreements provided for in the penultimate paragraph of Article 16 of this Law are issued, the Internal Regulations of the National Banking Commission, published in the Official Gazette of the Federation on August 4, 1993, shall remain in force, as applicable, as well as the delegation agreements issued by the governing bodies of the National Banking Commission and the National Securities Commission. EIGHTH.- The Regulations of the National Banking and Insurance Commission on Inspection, Surveillance, and Accounting, published in the Official Gazette of the Federation on November 24, 1988, shall remain in force until the Regulations referred to in Article 5 of this Law are issued. NINTH.- Until the National Banking and Securities Commission issues the general provisions referred to in this Law, those issued by the National Banking Commission and the National Securities Commission prior to the entry into force of the same in the corresponding matters shall continue to apply. TENTH.- Authorizations granted and other administrative acts carried out on the basis of laws relating to the financial system, which in accordance with the provisions of this Law correspond to be carried out by the National Banking and Securities Commission, shall remain in force until, if applicable, they are expressly revoked or modified by said Commission. ELEVENTH.- Any procedure pending before the National Banking Commission and the National Securities Commission, or in which said decentralized bodies participate, whether judicial, administrative, or labor, shall be continued by the National Banking and Securities Commission, in accordance with this Law and other applicable laws and provisions. Mexico, D.F., April 24, 1995.- Dip. Sofía Valencia Abundis, President.- Sen. Martha Lara Alatorre, President.- Dip. José Antonio Hernández Fraguas, Secretary.- Sen. Antonio Manríquez Guluarti, Secretary.- Signatures. In compliance with the provisions of fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the residence of the Federal Executive Power, in Mexico City, Federal District, on the twenty-seventh day of the month of April of nineteen hundred ninety-five.-
Ernesto Zedillo Ponce de León.- Signature.- The Secretary of the Interior, Esteban Moctezuma Barragán.- Signature.

TRANSITORY PROVISION
(Decree by which various legal instruments are reformed, of December 12, 1997, published in the Official Gazette of the Federation on January 23, 1998) SINGLE.- This Decree shall enter into force on March 20, 1998.
Mexico, D.F., December 12, 1997.- Sen. Heladio Ramírez López, President.- Dip. Luis Meneses Murillo, President.- Sen. José Antonio Valdivia, Secretary.- Dip. Jaime Castro López, Secretary.- Signatures.

In compliance with the provisions of fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the residence of the Federal Executive Power, in Mexico City, Federal District, on the thirtieth day of the month of December of nineteen hundred ninety-seven.- Ernesto Zedillo Ponce de León.- Signature.- The Secretary of the Interior.- Emilio Chuayffet Chemor.- Signature.

TRANSITORY PROVISIONS
(Decree of the Law for the Protection and Defense of Users of Financial Services, of December 13, 1998, published in the Official Gazette of the Federation on January 18, 1999) FIRST.- This Law shall enter into force ninety days after its publication in the Official Gazette of the Federation.
SECOND.- Articles 119 and 120 of the Credit Institutions Law; 102 and 103 of the General Law of Organizations and Auxiliary Credit Activities; 87 and 88 of the Securities Market Law; 45 of the Investment Companies Law; fraction XI of Article 108 of the General Law of Insurance and Mutual Society Institutions; fraction XII of Article 5, 109 and 110 of the Law on Savings Systems for Retirement, and fraction X of Article 4 of the Law of the National Banking and Securities Commission are repealed, as well as other provisions that oppose this Law. THIRD.- For the purposes of Articles 72 and 83 of this Law, references to the National Insurance and Surety Commission in Articles 135 and 136 of the General Law of Insurance and Mutual Society Institutions, and 93 and 94 of the Federal Law of Surety Institutions, shall be understood to refer to the National Commission for the Defense of Users of Financial Services. FOURTH.- Procedures that the National Commissions carry out to protect the interests of the public individually, and which as of the date of entry into force of this Law are pending, shall be concluded definitively by the National Commission, in accordance with the provisions that were in force at the time the procedure began. FIFTH.- The Ministry shall carry out the necessary procedures and actions so that the human, material, and financial resources of the National Commissions, related to the powers attributed to the National Commission by this Law, are transferred to it. Such transfer shall include furniture, vehicles, instruments, apparatus, machinery, files, and in general, the equipment that the National Commissions have used to attend to matters under their charge. SIXTH.- Personnel of the National Commissions who, under the application of this Law, become part of the National Commission shall in no way be affected in their acquired labor rights. SEVENTH.- The Register of Financial Service Providers referred to in Title Four, Chapter I, of this Law, must be established within six months following the date on which this Law enters into force. EIGHTH.- The Ministry shall carry out the necessary procedures so that the National Commission is included in the Federal Expenditure Budget for the fiscal year 1999. NINTH.- The installation of the first Board of Government referred to in Article 16 shall be concretized in the following terms:
I. The Ministry, the Bank of Mexico, and the National Commissions shall designate their representatives, and the Secretary of Finance and Public Credit shall appoint the President of the Commission;
II. The representatives referred to in the preceding fraction shall issue the bases on which the integration and installation of the National Advisory Council shall proceed, within a period not exceeding 30 days; and
III. The members of the Board of Government referred to in fraction I of this article shall proceed to integrate the National Advisory Council, in accordance with the bases set forth in
the preceding fraction, within a period not exceeding fifteen days from the issuance of the bases referred to in fraction II of this article, and said National Advisory Council shall designate the members thereof, who shall form part of the Board of Government.
TENTH.- All provisions that oppose this Law are repealed.
Mexico, D.F., December 13, 1998.- Dip. Luis Patiño Pozas, President.- Sen. José Ramírez Gamero, President.- Dip. Espiridión Sánchez López, Secretary.- Sen. Gabriel Covarrubias Ibarra, Secretary.- Signatures.
In compliance with the provisions of fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the residence of the Federal Executive Power, in Mexico City, Federal District, on the thirty-first day of the month of December of nineteen hundred ninety-eight.- Ernesto Zedillo Ponce de León.- Signature.- The Secretary of the Interior, Francisco Labastida Ochoa.- Signature

TRANSITORY PROVISIONS
(Decree by which various provisions of the Securities Market Law and the Law of the National Banking and Securities Commission are reformed, added, and repealed, published in the Official Gazette of the Federation on June 1, 2001).
FIRST.- This Decree shall enter into force the day after its publication in the Official Gazette of the Federation.
SECOND.- Until the Ministry of Finance and Public Credit, the National Banking and Securities Commission, and the Bank of Mexico issue the general provisions referred to in the Securities Market Law, those issued prior to the entry into force of this Decree shall continue to apply.
THIRD.- Persons who provide the services referred to in Article 12 Bis of the Securities Market Law contained in this Decree shall notify the National Banking and Securities Commission of the activities they perform with such character, within a period not exceeding ninety days, counted from the entry into force of said Decree.
FOURTH.- Issuing companies with securities registered in the Securities Section or Special Section of the previous National Register of Securities and Intermediaries shall adjust their corporate statutes, as well as integrate and appoint their boards of directors, audit committees, and members of these organs, in the terms and conditions established in Article 14 Bis 3 of the Securities Market Law referred to in this Decree, at the next shareholders' meeting, if any, held, or in that held in connection with the closing of their social year. The foregoing shall not affect in any way the rights corresponding to their shareholders to exercise in accordance with said legal provision. FIFTH.- Brokerage houses that maintain their registration in the Intermediaries Section of the previous National Register of Securities and Intermediaries, as of the date of entry into force of this Decree, may continue operating under the same, without requiring to obtain the authorization referred to in Article 17 Bis of the Securities Market Law, provided they comply with the legal and administrative provisions applicable to them. SIXTH.- Appointments of directors, general manager, compliance officer, and executives with the immediate lower hierarchy than the general manager, commissioners, and external auditors, of brokerage houses and securities depository institutions, which at the entry into force of this Decree are in the process of approval by the Board of Government of the National Banking and Securities Commission, shall be subject to the provisions of Articles 17 Bis 6, 56 fraction VI, last paragraph of the Securities Market Law modified by this Decree, with such brokerage houses having a period of thirty business days from said date to manifest to said Commission that they have carried out the verification referred to in said article.

SEVENTH.- Stock exchanges and securities depository institutions must adapt their corporate bylaws to the provisions of Articles 31, 31 Bis, and 56 of the Securities Market Law contained in this Decree, no later than within six months following the date of entry into force of the aforementioned Decree, and must submit said bylaw modifications to the approvals provided for in Articles 30, second paragraph, and 56, fraction IX, respectively, of the cited Law. The corporate bylaws of stock exchanges and securities depository institutions will remain in force until the modifications referred to in the preceding paragraph are carried out.

EIGHTH.- When stock exchanges integrate their boards of directors and appoint the members of the board, auditors, general manager, and executives with the hierarchy immediately below the latter, and external auditor, they shall be subject to the provisions of Article 31, fraction VIII, in relation to Articles 17 Bis 5 and 17 Bis 6 of the Securities Market Law modified by this Decree, having a period of thirty business days from the entry into force of the cited Decree to notify the aforementioned Commission that they have carried out the verification referred to in said article.

NINTH.- Infractions and crimes committed before the effective date of this Decree shall be sanctioned in accordance with the previously applicable texts of the Securities Market Law.

TENTH.- The provisions of Articles 127 to 130 shall enter into force on January 1, 2002.

ELEVENTH.- The provision in Article 14 Bis 3, fraction II, second paragraph of the Securities Market Law shall not be applicable regarding secondary public offers of sale of shares carried out by shareholders of issuers with securities registered in the National Securities Registry or to the acquisition or placement of own shares carried out by issuers, whose shares were registered prior to the date of entry into force of this Decree. (6) Issuers that have issued the shares or implemented the mechanisms referred to in the second and third paragraphs of fraction II of Article 14 Bis 3 prior to the start of the validity of said provision shall not be subject to the restrictions established therein, provided that they have complied with the corresponding legal provisions for such purposes. (6) In case of modifications to share capital, the aforementioned exceptions shall be applicable as long as they aim to increase the proportion of original ordinary shares or, when the issuer's situation justifies it, to maintain said proportion, provided that the investing public is revealed that with the modification to the capital, it still does not comply with the current regime. In both cases, prior authorization from the National Banking and Securities Commission will be required, which will proceed when, in its judgment, it is accredited that the interests of the investing public are not affected.

TWELFTH.- Issuing societies that, on the date of entry into force of this Decree, maintain shares registered in the National Securities Registry, shall not provide in their corporate bylaws for the additional clauses referred to in Article 14 Bis 3, fraction VII of the Securities Market Law, until they strictly comply with the provisions of fractions II to VI of said Article 14 Bis 3.

THIRTEENTH.- The reformed Article 43 shall enter into force six months after the rest of this Decree enters into force.

FOURTEENTH.- The requirement of authorization referred to in Article 116, second paragraph, of the General Law of Mercantile Societies, by the National Banking and Securities Commission, shall not be exigible regarding the independent appraisers referred to in said legal provision.

Mexico, D.F., April 30, 2001.- Dip. Ricardo García Cervantes, President.- Sen. Enrique Jackson Ramírez, President.- Dip. Manuel Medellin Milán, Secretary.- Sen. Yolanda González Hernández, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the Residence of the Federal Executive Power, in Mexico City, Federal District, on the thirtieth day of the month

of May of two thousand one.- Vicente Fox Quesada.- Signature.- The Secretary of the Interior, Santiago Creel Miranda.- Signature.

TRANSITORY
(Decree by which a second paragraph is added to the eleventh transitory article of the Decree published on June 1, 2001, and various provisions of the Securities Market Law and the Law of the National Banking and Securities Commission are reformed, added, and derogated, published in the Official Gazette of the Federation on January 23, 2004).

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

Mexico, D.F., December 27, 2003.- Dip. Juan de Dios Castro Lozano, President.- Sen. Enrique Jackson Ramírez, President.- Dip. Amalín Yabur Elías, Secretary.- Sen. Lydia Madero García, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the Residence of the Federal Executive Power, in Mexico City, Federal District, on the twenty-second day of the month

of January of two thousand four.- Vicente Fox Quesada.- Signature.- The Secretary of the Interior, Santiago Creel Miranda.- Signature.

TRANSITORY
(Decree by which Article 21 is added to the Law of the National Banking and Securities Commission, published in the Official Gazette of the Federation on June 20, 2005).

SOLE ARTICLE.- This Decree shall enter into force the day following its publication in the Official Gazette of the Federation.

Mexico, D.F., December 14, 2004.- Dip. Manlio Fabio Beltrones Rivera, President.- Sen. Diego Fernández de Cevallos Ramos, President.- Dip. Marcos Morales Torres, Secretary.- Sen. Sara I. Castellanos Cortés, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the Residence of the Federal Executive Power, in Mexico City, Federal District, on the twenty-seventh day of the month

of April of two thousand five.- Vicente Fox Quesada.- Signature.- The Secretary of the Interior, Santiago Creel Miranda.- Signature.

TRANSITORY
(Decree by which the Law for the Transparency and Ordering of Financial Services, published on January 26, 2004, is abrogated, the Law for the Transparency and Ordering of Financial Services is issued, and various provisions of the Credit Institutions Law, the Law for the Protection and Defense of Financial Services Users, and the Law of the National Banking and Securities Commission are reformed, added, and derogated, published in the Official Gazette of the Federation on June 15, 2007)

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

SECOND ARTICLE.- Infractions to the general provisions issued by the Bank of Mexico, in matters of total annual cost (CAT), credit cards, advertising, statements of account, and contracts, committed by credit institutions and limited object financial societies, before the entry into force of this Law, shall be sanctioned by the Bank itself in accordance with the laws in force at the time the aforementioned infractions were committed.

THIRD ARTICLE.- Entities shall have a period of up to one hundred eighty calendar days from the entry into force of this Decree to comply with its provisions.

FOURTH ARTICLE.- For the purposes of what is provided in Article 48 Bis 2 of the Credit Institutions Law, the Bank of Mexico shall have thirty days from the entry into force of this Decree to issue general provisions.

FIFTH ARTICLE.- Upon entry into force of this Decree, the Law for the Transparency and Ordering of Financial Services published in the Official Gazette of the Federation on January 26, 2004, shall be abrogated.

SIXTH ARTICLE.- Upon entry into force of this Decree, the following legal provisions are derogated from the Law on Transparency and Promotion of Competition in Guaranteed Credit:
Articles 3, fraction I, 10, and 16 first paragraph.
Article 4. Without prejudice to the foregoing, the General Rules issued by the Secretariat of Finance and Public Credit under said article shall continue in force, with respect to the Entity in question, until such time as the authorities that result competent, in accordance with what is stated in Article 12 of this Law for the Transparency and Ordering of Financial Services, issue in the scope of their respective competence, the general provisions that this latter Law provides for in matters of advertising.
Article 8. Without prejudice to the foregoing, the General Rules issued by the Secretariat of Finance and Public Credit under said article shall continue in force, with respect to the Entity in question, until such time as the authorities that result competent, in accordance with what is stated in Article 11 of this Law for the Transparency and Ordering of Financial Services, issue in the scope of their respective competence, the general provisions that this latter Law provides for in matters of adhesion contracts, understanding that said provisions will contemplate the minimum content indicated in fractions I to VI of said Article 8 for Guaranteed Credit for Housing.
Article 12. Without prejudice to the foregoing, when the authorities that result competent, in accordance with what is stated in Article 13 of this Law for the Transparency and Ordering of Financial Services, issue in the scope of their respective competence, the general provisions that this latter Law provides for in matters of statements of account, they must include the calculation of the Total Annual Cost corresponding to the remainder of the validity of the Guaranteed Credit for Housing.

SEVENTH ARTICLE.- Upon entry into force of this Decree, Articles 87-I, fraction II; 87-L, second paragraph, and 87-M, fraction IV, are derogated from the General Law of Organizations and Auxiliary Credit Activities.

EIGHTH ARTICLE.- The general provisions that the Bank of Mexico has issued in matters of advertising, statements of account, or adhesion contracts directed to credit institutions or limited object financial societies shall remain in force until such time as the general provisions that, in accordance with what is provided in this order, the National Banking and Securities Commission issues regarding the mentioned topics enter into force.

Mexico, D.F., April 26, 2007.- Sen. Manlio Fabio Beltrones Rivera, President.- Dip. Jorge Zermeño Infante, President.- Sen. Renan Cleominio Zoreda Novelo, Secretary.- Dip. Antonio Xavier Lopez Adame, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the

Residence of the Federal Executive Power, in Mexico City, Federal District, on the twelfth day of the month

of June of two thousand seven.- Felipe de Jesús Calderón Hinojosa.- Signature.- The Secretary of the Interior, Francisco Javier Ramírez Acuña.- Signature.

TRANSITORY PROVISIONS
(Decree by which various provisions of the Credit Institutions Law, the Law for the Transparency and Ordering of Financial Services, and the Law for the Protection and Defense of Financial Services Users are reformed, added, and derogated, published in the Official Gazette of the Federation on June 25, 2009)

Only the article applicable to this Law is transcribed.

SIXTH ARTICLE. Fraction XXXVII of Article 4 of the Law of the National Banking and Securities Commission is derogated.

Mexico, D.F., April 30, 2009.- Sen. Gustavo Enrique Madero Muñoz, President.- Dip. César Horacio Duarte Jáquez, President.- Sen. Adrian Rivera Perez, Secretary.- Dip. Jose Manuel del Rio Virgen, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the

Residence of the Federal Executive Power, in Mexico City, Federal District, on twenty-three of June of two thousand nine.- Felipe de Jesús Calderón Hinojosa.- Signature.- The Secretary of the Interior, Lic. Fernando Francisco Gómez Mont Urueta.- Signature.

TRANSITORY PROVISIONS
(Decree by which the Law for Regulating the Activities of Savings and Loan Cooperative Societies is issued and various provisions of the General Law of Cooperative Societies, the Popular Savings and Credit Law, the Law of the National Banking and Securities Commission, and the Credit Institutions Law are reformed, added, and derogated, published in the Official Gazette of the Federation on August 13, 2009)

FIRST.- This Decree shall enter into force the day following its publication in the Official Gazette of the Federation, except for what is provided in the following Second Article.

SECOND.- The derogations made by Article THIRD of this Decree to Articles 4 Bis, 4 Bis 1, 4 Bis 2, and 4 Bis 3 of the Popular Savings and Credit Law, as well as by Article SIXTH of this Decree to the Seventh Transitory Article of the “Decree by which various provisions of the Popular Savings and Credit Law are reformed and added” published in the Official Gazette of the Federation on May 27, 2005, shall enter into force one hundred eighty calendar days following the publication of this Decree.

THIRD.- Until the National Banking and Securities Commission issues the general provisions referred to in the Law for Regulating the Activities of Savings and Loan Cooperative Societies, those issued by said Commission under the terms of the Popular Savings and Credit Law shall continue to apply.

FOURTH.- References that other Laws, regulations, or provisions make regarding Savings and Credit Popular Entities shall be understood to refer to Popular Financial Societies and Savings and Loan Cooperative Societies with Operation Levels I to IV.

FIFTH.- The Federal Executive shall make its best efforts to disseminate the benefits of this reform among savers and Savings and Loan Cooperative Societies.

SIXTH.- All provisions that oppose this Decree are derogated.

Mexico, D.F., April 30, 2009.- Sen. Gustavo Enrique Madero Muñoz, President.- Dip. César Horacio Duarte Jáquez, President.- Sen. Adrián Rivera Pérez, Secretary.- Dip. Margarita Arenas Guzmán, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the

Residence of the Federal Executive Power, in Mexico City, Federal District, on eleven of August of two

thousand nine.- Felipe de Jesús Calderón Hinojosa.- Signature.- The Secretary of the Interior, Lic. Fernando Francisco Gómez Mont Urueta.- Signature.

TRANSITORY PROVISIONS
(Decree by which various Federal Laws are reformed, with the object of updating all those articles that make reference to the Secretariats of State whose denomination was modified and to the Government of the Federal District insofar as applicable; as well as eliminating the mention of administrative departments that no longer have validity, published in the Official Gazette of the Federation on April 9, 2012)

First. This Decree shall enter into force the day following its publication in the Official Gazette of the Federation.

Second. From the date this Decree enters into force, provisions that contravene or oppose it are left without effect.

Mexico, D.F., February 21, 2012.- Dip. Guadalupe Acosta Naranjo, President.- Sen. José González Morfín, President.- Dip. Laura Arizmendi Campos, Secretary.- Sen. Renán Cleominio Zoreda Novelo, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the

Residence of the Federal Executive Power, in Mexico City, Federal District, on thirty of March of two thousand twelve.- Felipe de Jesús Calderón Hinojosa.- Signature.- The Secretary of the Interior, Alejandro

Alfonso Poiré Romero.- Signature.

Transitory Provisions
(Decree by which various provisions in financial matters are reformed, added, and derogated, and the Law for Regulating Financial Groupings is issued, published in the Official Gazette of the Federation on January 10, 2014)

FIFTIETH ARTICLE.- In relation to the modifications referred to in Articles Forty-First to Forty-Ninth of this Decree, the following shall apply:
I. Article Forty-Third, which shall enter into force thirty calendar days following the publication of this Decree, and
II. Article Forty-Seventh, which shall enter into force seven hundred thirty calendar days following the publication of the Decree by which the Insurance and Surety Institutions Law is issued and various provisions of the Insurance Contract Law are reformed and added, published on April 4, 2013, in the aforementioned Official Gazette.
III. Infractions and crimes committed prior to the date of entry into force of this Decree shall be sanctioned in accordance with the law in force at the time the aforementioned infractions or crimes were committed.
In administrative proceedings that are pending, the interested party may opt for their continuation in accordance with the procedure in force at their initiation or for the application of the

provisions applicable to administrative proceedings stipulated by this Decree.
IV. The obligation to have the certification referred to in Article 4, fraction X, of the Law of the National Banking and Securities Commission, shall enter into force as of January 1, 2015. The general provisions referred to in said provision shall be issued by the Commission no later than in September 2014.

TRANSITORY PROVISION OF THE DECREE
(Decree by which various provisions in financial matters are reformed, added, and derogated, and the Law for Regulating Financial Groupings is issued, published in the Official Gazette of the Federation on January 10, 2014)

SOLE.- This Decree shall enter into force the day following its publication in the Official Gazette of the Federation, except for what is provided in ARTICLES TWENTY-FIFTH, fraction I; THIRTIETH, fractions IV and VI; FORTIETH, fractions I and II; and FIFTIETH, fractions I and II, which shall enter into force on the dates established in said provisions.

Mexico, D.F., November 26, 2013.- Dip. Ricardo Anaya Cortes, President.- Sen. Raúl Cervantes Andrade, President.- Dip. Javier Orozco Gomez, Secretary.- Sen. María Elena Barrera Tapia, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree at the

Residence of the Federal Executive Power, in Mexico City, Federal District, on nine of January of two

thousand fourteen.- Enrique Peña Nieto.- Signature.- The Secretary of the Interior, Miguel Ángel Osorio Chong.- Signature.

TRANSITORY
(Decree by which the Law for Regulating Financial Technology Institutions is issued and various provisions of the Credit Institutions Law, the Securities Market Law, the General Law of Organizations and Auxiliary Credit Activities, the Law for the Transparency and Ordering of Financial Services, the Law for Regulating Credit Information Societies, the Law for the Protection and Defense of Financial Services Users, the Law for Regulating Financial Groupings, the Law of the National Banking and Securities Commission, and, the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin are reformed and added, published in the Official Gazette of the Federation on March 9, 2018)

SOLE.- This Decree shall enter into force the day following its publication in the Official Gazette of the Federation, unless otherwise provided in the Transitory Provisions of this Decree.

Mexico City, March 1, 2018.- Sen. Ernesto Cordero Arroyo, President.- Dip. Edgar Romo García, President.- Sen. Rosa Adriana Díaz Lizama, Secretary.- Dip. Ana Guadalupe Perea Santos, Secretary.- Signatures.

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree in the

municipality of Acapulco de Juárez, state of Guerrero, on eight of March of two thousand eighteen.- Enrique

Peña Nieto.- Signature.- The Secretary of the Interior, Dr. Jesús Alfonso Navarrete Prida.- Signature.

TRANSITORY
(DECRETE by which various provisions of the Federal Law of Public Defense, the General Health Law, the General Law of Physical Culture and Sport, the General Law of Climate Change, the Organic Law of the Taxpayer Defense Procuratorship, the Organic Law of the Mexican Culture Seminar, the Law of the Agency

National Industrial Safety and Environmental Protection Agency for the Hydrocarbon Sector, of the Federal Electricity Commission Law, of the Law of the Banking and Securities Commission, of the Law Creating the Mexican State News Agency, of the Law of the Mexican State Public Broadcasting System, of the Law of Insurance and Surety Institutions, of the Law of the Mexican Petroleum Fund for Stabilization and Development, of the Electricity Industry Law, of the Law of the Social and Solidarity Economy, Regulatory of the Eighth Paragraph of Article 25 of the Political Constitution of the United Mexican States, with respect to the Social Sector of the Economy, of the Law of the Mexico Mint, of the Mercantile Bankruptcy Law, of the Biosafety Law of Genetically Modified Organisms, of the National Waters Law, of the Social Assistance Law, of the General Law of Social Development, of the Organic Law of the National Financial Institution for Agricultural, Rural, Forestry and Fisheries Development, of the Federal Law for the Administration and Alienation of Public Sector Assets, of the Federal Law of Plant Varieties, of the Federal Law of Plant Health, of the Federal Law of Animal Health, of the Federal Law for the Promotion of Activities Carried Out by Civil Society Organizations, of the Organic Law of the National Council for Science and Technology, of the Law for the Protection of Bank Savings, of the Law of the National Institutes of Health, of the Law of Science and Technology, regarding gender parity.)

First. This Decree shall enter into force the day following its publication in the Official Gazette of the Federation.

Second. In accordance with the Transitory Article Third of the Decree reforming articles 2, 4, 35, 41, 52, 53, 56, 94, and 115 of the Political Constitution of the United Mexican States, regarding Gender Parity, the principle of parity must be observed progressively, starting from the new appointments and nominations that correspond, in accordance with the law.

Third. All obligations generated with the entry into force of this Decree shall be covered from the budget approved for the responsible spending executors for the current and subsequent fiscal year, so no additional resources will be authorized for such purposes, and, in case any modification to its organizational structure is made, it must also be covered with its authorized budget and in accordance with applicable legal provisions.

Statement of Reasons
(Decree, published on April 28, 1995)

The Banking and Securities Commission is a decentralized body of the Ministry of Finance and Public Credit that, in terms of the Law governing it, has technical autonomy and executive powers, and whose object is to supervise and regulate financial entities in order to ensure their stability and proper functioning, as well as to maintain and promote the sound and balanced development of the financial system as a whole, in protection of the interests of the public saver.

In accordance with the Law of the Banking and Securities Commission, the aforementioned decentralized body exercises its powers through its Board of Directors, the Presidency of the Commission itself, the Vice Presidencies, the General Directorates, and other necessary administrative units.

Likewise, the aforementioned Law of the Banking and Securities Commission establishes the powers of the Commission, also indicating those corresponding to its Board of Directors and the President of the Commission itself. It is important to mention that the laws regulating the financial entities subject to the supervision and regulation of the Banking and Securities Commission complement the scope of competence of said body.

It must be highlighted that when exercising the powers entrusted to the Banking and Securities Commission by Law, the heads of its administrative units may generate consequences that impact the legal sphere of third parties.

In this order of ideas, Article 4, fraction XV of the Law of the Banking and Securities Commission, provides that it corresponds to the Commission to intervene administratively or managerially in financial entities, with the object of suspending, normalizing, or resolving operations that put their solvency, stability, or liquidity in danger, or those violating the laws that regulate them or the general provisions derived from them.

The power indicated in the previous paragraph, that is, the declaration of intervention, is exercised through the Board of Directors of the Banking and Securities Commission, with the President of this decentralized body being responsible for designating the intervener in the cases provided for in the laws regulating the entities.

In this case, through managerial intervention, the administration of the financial entities subject to the Commission's supervision is replaced; a situation that may result in an impact on the organization and functioning of a legal entity.

Experience has demonstrated that the adoption of resolutions as referred to in the previous paragraphs may motivate lawsuits, complaints, or charges against the natural persons through whom the inspection and surveillance functions of the Banking and Securities Commission are materialized. In view of this, it is considered necessary that to protect the proper exercise of the Commission's functions, mechanisms be established that provide those competent to exercise them with the security and confidence that allow them to adopt resolutions based on law.

It should be noted that the Basel Committee in its supervisory principles establishes that supervisors must be protected when facing legal processes for actions carried out in good faith and in compliance with their functions.

International experience is consistent with the above principle. Studies conducted by international organizations indicate that, in general, there are two legal protection regimes for financial supervisors. The first consists of releasing any responsibility from the natural persons who exercise supervision functions in good faith, delegating responsibility to the supervisory body. This regime is applicable in the cases of Germany, Hong Kong, and Switzerland.

On the other hand, the type of legal protection system for natural persons participating in the exercise of supervisory powers consists of them being responsible for the exercise of their functions, with the body, if applicable, covering the legal assistance costs generated due to legal actions. This system is collected in the legislations of countries such as the Philippines and New Zealand.

Another relevant aspect is the fact that, according to the legal regime applicable to the Banking and Securities Commission, as well as to the financial entities subject to its regulation and supervision, various persons who have no employment link whatsoever with the aforementioned Commission participate in the adoption of resolutions related to the exercise of the functions legally entrusted to it.

In this order of ideas, it must be highlighted that the Board of Directors of the Banking and Securities Commission is composed of the President of the Commission itself and two vice presidents designated by him; five members designated by the Ministry of Finance and Public Credit; three designated by the Bank of Mexico; one member designated by the National Insurance and Surety Commission and one more by the National Retirement Savings System Commission. As can be seen, ten of the thirteen members of the Board of Directors of the Commission are public servants who have no employment link whatsoever with the aforementioned decentralized body, and despite this, they participate in the exercise of the powers legally corresponding to the Banking and Securities Commission.

On the other hand, the persons who, if applicable, perform the function of managerial intervener do not necessarily have to be public servants of the Commission. Furthermore, in the case of credit institutions, Article 140 Bis of the Credit Institutions Law establishes that interveners must meet the requirements provided in the aforementioned regulation for the case of the general director of multiple banking institutions and officials occupying positions in the two immediate lower hierarchies thereof.

The evolution of the financial market makes evident the need to have a supervisory body that exercises its functions with a high degree of professionalization, and that at the same time has the necessary conditions for its proper exercise. From the international experience referred to, as well as from the recommendations of international specialized organizations in financial supervision, it is appreciated that providing legal assistance to the natural persons through whom the exercise of these functions is materialized constitutes a sound practice for the development of the financial sector. This is independent of the employment link that may exist between the natural person and the supervisory body.

Additionally, the possibility that a natural person is exposed to challenges on a personal basis for the exercise of the powers legally corresponding to the supervisory body, could foster important risks regarding the objectivity and impartiality of the decisions that must be taken within their competence, while also weakening the achievement of the institutional objectives provided for in the laws.

The initiative presented today seeks to establish the possibility of providing legal assistance to the public servants who integrate the Banking and Securities Commission, to the members of its Board of Directors, whether they are part of or not part of the aforementioned Commission, as well as to the interveners designated by the Commission itself and to the auxiliary officials of the intervention, who do not have an employment link with it.

Likewise, the present initiative provides that, for the purpose of providing legal assistance to the aforementioned persons, the Ministry of Finance and Public Credit, hearing the opinion of the Commission itself, will establish the necessary mechanisms to cover the costs derived from the assistance and legal defense.

The present initiative adheres to those schemes of protection of supervisory functions, which allow facing the imputation of responsibilities to the natural person exercising functions linked to those of the supervisory body, providing said natural person with the possibility of being provided with the necessary means for their proper defense.

For the aforementioned reasons, I permit myself to submit to the consideration of this Sovereignty, based on what is provided by Article 71, fraction II, of the Political Constitution of the United Mexican States, the following:

Statement of Reasons
(Decree published on January 23, 1998)

In March 1997, the Permanent Constituent reformed various articles of the Political Constitution of the United Mexican States with the main objective of preserving Mexican nationality, regardless of whether any other nationality or citizenship is adopted.

The cited constitutional reforms responded to the demand of a large group of Mexicans by birth who, for economic and family reasons, have had to emigrate abroad. Adherence to national culture, traditions, and values frequently causes these Mexicans not to adopt the nationality offered by other States, finding themselves at a disadvantage compared to the nationals of those States.

Thus, the new constitutional text favors the protection of the rights of our nationals and provides them with the possibility of developing in an area of equality in the societies of which they are part, while simultaneously conserving their rights as Mexicans.

This important constitutional reform will enter into force in March 1998, so it is indispensable to carry out the corresponding modifications to secondary laws. It is in this context that the present initiative is inscribed.

The Decree submitted to the consideration of that Sovereignty consists of two articles. In the first of them, a new Nationality Law is proposed, as the constitutional reform implied a radical change to the current legal framework that until now recognized Mexican nationality as unique and allowed this nationality to be lost. In the second article, provisions of various legal orders affected by the aforementioned constitutional reform are proposed to be reformed.

I. Nationality Law

As for the Nationality Law, it comprises five chapters, namely: general provisions, Mexican nationality by birth, Mexican nationality by naturalization, loss of Mexican nationality by naturalization, and infractions and administrative sanctions.

In the chapter of general provisions, among other issues, the appropriate documents to prove Mexican nationality would be regulated, as well as the faculty of the Ministry of Foreign Affairs to require the interested party to provide additional necessary proof to verify such nationality and verify the authenticity of the documentation accrediting it. Of course, this request by the authority must refer to appropriate proofs for such effects.

It is also foreseen the presumption, unless proven otherwise, that a Mexican has acquired a foreign nationality when performing any legal act to obtain or conserve it, or when presenting themselves as a foreigner before any authority or in any legal instrument.

The valuation of the constitutional reform involved the need not only to foresee possible legal conflicts derived from dual nationality, but to avoid them.

Attending to this concern, the new law regulates, in the corresponding chapter to Mexican nationality by birth, the exercise of rights that Mexican legislation would grant to Mexicans who possess or acquire another nationality, and establishes rules to avoid conflicts due to dual nationality.

In this sense, since the constitutional reform aims for Mexicans who acquire another nationality to maintain their links with Mexico unchanged, to conserve their rights as nationals, and not to be subject to the restrictions imposed on foreigners in our country, the initiative sets clear rules to avoid fraud against the law or that Mexican nationality is used only as a nationality of convenience to obtain undue benefits aimed at evading national laws to the detriment of the Nation.

In this way, in Article 12 of the project, the obligation is imposed on Mexicans who enter or leave national territory, to always do so as nationals, even if they possess or acquire another nationality.

In this same context, and recognizing that double or multiple nationality may originate conflicts of an economic or jurisdictional order, Article 13 specifies that Mexicans by birth who possess or acquire another nationality will act as nationals with respect to the legal acts they celebrate within or outside national territory, and whose effects are produced in Mexico. Among these legal acts are participations, in any proportion, in the capital of any Mexican legal entity, the granting of credits to such entities, as well as the ownership of real estate located in national territory.

In the case that the interested party acts holding another nationality, they must declare it in writing at the moment of performing the act in question, and in this case, they will be subject to the conditions and restrictions that apply to foreigners for such acts, including the Calvo Clause.

Indeed, regarding the referred legal acts, the project explicitly states that one cannot invoke the protection of a foreign government, and whoever does so will lose in favor of the nation the goods or any other right over which such protection has been invoked.

On the other hand, the text of Article 32, second paragraph, of the reformed constitutional text, opened the possibility of reserving the exercise of certain public offices to Mexicans by birth who do not acquire another nationality.

In this sense, Article 16 of the project establishes as a prior requirement for the appointment of officials aspiring to the aforementioned positions, the obligation to present the Mexican nationality certificate, provided that another State considers them as nationals. In this same provision, it is specified the obligation of the corresponding authorities to require the interested parties to present said certificate.

Additionally, to give efficacy to these provisions, the sanction of immediate separation from the office or function is established in case another nationality is acquired during its exercise.

It should be noted that the request to obtain the Mexican nationality certificate implies for the interested parties the express renunciation, among other issues, of the nationality attributed to them; to all submission, obedience, and fidelity to any foreign government, and to the rights that international treaties grant to foreigners. Correlatively, the interested parties must protest adherence, obedience, and submission to Mexican laws and authorities. All of the above would be regulated in article (sic) 17 of the project.

In the chapter regarding Mexican nationality by naturalization, the requirements that the foreigner must fulfill according to the path they intend to naturalize are established. Among these requirements stand out the obligation to formulate the renunciations and protest required for the nationality letter, prove mastery of the Spanish language and integration into national culture, and, as a general rule, prove having resided in national territory for at least five years prior to the date of the application.

When elaborating this initiative, two aspects were specially cared for: first, that Mexicans continue to maintain ties with our country, for which the limit on the transmission of nationality to the first generation born abroad is confirmed; second, the need to strengthen, regarding foreigners who marry Mexicans, the specific criteria to ensure that Mexicans by naturalization fully prove an effective link with the country and a real will to be Mexican.

The first aspect aims to avoid creating generations abroad that would no longer be truly linked to the country. However, to provide other subsequent generations born abroad with the opportunity to establish links with our country, this law initiative fixes a privileged naturalization path for descendants in the direct line of Mexicans by birth who prove residence in the country for more than two years.

The objective of the second point is to avoid cases of fraud against the law continuing, making clear that marriage does not automatically grant the right to naturalization. In this way, in this

The initiative defines the concept of marital home as that legally established by the spouses in national territory, in which they live together for more than two years, which remains as a requirement to obtain naturalization through marriage.

With respect to the chapter on loss of nationality, since the constitutional reform enters into force, loss of Mexican nationality by birth will no longer operate; therefore, the figure of recovery of nationality is eliminated from the text of the law, as it will have no application.

In the case of Mexicans by naturalization, the project maintains a regime similar to that in force before the entry into force of the constitutional reform, and therefore, they would not recover Mexican nationality if they were to lose it, but would have to fulfill all legal requirements again to reacquire it.

The initiative resumes as causes for loss of naturalization those established in Article 37, Section B of the Constitution, namely: acquiring a foreign nationality voluntarily; passing oneself off in any public instrument as a foreigner; using a foreign passport; accepting or using noble titles implying submission to a foreign State, and residing continuously for five years abroad.

Finally, a chapter of administrative sanctions is established that would be applied for non-compliance with the provisions of the Nationality Law and its Regulations. These sanctions are primarily directed at preventing fraudulent conduct, which seeks to use Mexican nationality solely to obtain personal benefits to the detriment of the interests of the Nation.

II. Modifications to various legal provisions.

Article 32, second paragraph, of the reformed constitutional text opened the possibility of reserving the exercise of certain public offices to Mexicans by birth who do not acquire another nationality, provided that the respective legal orders so indicate.

In this way, the preservation of national interest would disqualify persons with dual nationality who maintain an ambivalent situation, having legal and moral duties with more than one State.

To achieve this objective, consultations were carried out with various dependencies and entities, which issued their opinion regarding the positions and functions that are reserved exclusively for Mexicans by birth who have not acquired another nationality.

Since nationality is a legal bond that unites individuals with the State, and conditions the former to obedience and fidelity toward the latter, it is clear that persons with dual nationality have a special situation, since in addition to the bond with our country, (sic) they have legal and moral duties to another or other countries, which should disqualify them from holding positions and commissions that must be reserved for those persons who solely and exclusively possess Mexican nationality.

In this order of ideas, the reform to various legal orders is submitted to the consideration of that Sovereignty with the sole objective of expressly indicating those positions that remain reserved for Mexicans by birth who, in addition, have not acquired another nationality.

It is important to highlight that the determining criterion for establishing the referred reservations has to do with positions related to the sovereignty, independence, and security of the State.

Thus, for example, modifications are proposed to the Organic Law of the Mexican Navy, the Organic Law of the Mexican Army and Air Force, the Military Justice Code, the Military Service Law, the Navigation Law, and the Civil Aviation Law, among others, (sic) with the objective of making effective the limitations contained in the third and fourth paragraphs of Article 32 of the reformed constitutional text.

Likewise, by their very nature, functions to be carried out within the Mexican Foreign Service would remain reserved for Mexicans by birth who do not acquire dual nationality.

Within social security, the reforms establish that to be a member of collegiate bodies or heads of social security institutions, it is required to be a Mexican by birth with a single nationality, as a condition to fulfill the function of protecting the health and salary of workers, as well as providing the corresponding benefits and insurance.

In matters of procuration and administration of justice, due to the importance of the work performed and given the significance of the attributes, it would not be pertinent for circuit magistrates and district judges to avail themselves of the benefit of dual nationality, at least, in the exercise of their office.

The same applies to the Public Prosecutor who has charge of the exercise of penal action, which cannot be entrusted to Mexicans whose loyalty (sic) could be compromised due to links (sic) with a foreign State, derived from their second nationality. The same case would apply to the Magistrates of the Federal Tax Court.

With respect to the Ministers of the Supreme Court of Justice and the Magistrates of the Electoral Tribunal, it is appropriate to clarify that these positions are included in the reservation by virtue of the cited constitutional article 32.

Likewise, it is estimated that to hold executive positions in the Federal Electoral Institute, it is necessary to be a Mexican citizen and not have acquired another nationality. This is because the state function of organizing elections constitutes a fundamental aspect for the integration of government bodies and the legitimacy of our elected authorities.

On the other hand, it is considered that decentralized agencies, majority state-owned companies, and public trusts—which comprise a considerable universe—have in charge the carrying out (sic) of activities corresponding to the strategic or priority areas of the State; therefore, the criterion is adopted that the direction of such entities not be exercised by Mexicans by birth with dual nationality, in order to avoid the possibility of conflicts of interest arising between the Mexican State and persons of foreign nationality who direct this type of entities.

In accordance with the above criteria, the content of Article two of this Decree was simplified (sic), trying to reform the smallest number of legal provisions, proposals from interested dependencies were unified by subject matter, and thus discrepancies and inconsistencies were avoided.

Positions and functions that are not related to the sovereignty, independence, or security of the Nation and the State are capable of being occupied by Mexicans with dual nationality.

Finally, in the same set of orders that are proposed to be modified, there are some proposals that, in addition to the reservation regarding the position, relate to specific aspects on the acquisition of nationality, licenses, pensions, and investments made by Mexicans with dual nationality.

Regarding the transitional regime, it is necessary that the reforms and adjustments to secondary legislation enter into force simultaneously with the reform to which the Constitution was subjected. Therefore, the entry into force of the Decree is proposed as March 20, 1998.

In strict compliance with the transitional regime established in said constitutional reform, in the fifth transitional article of this project, it is established that those born and conceived before the entry into force of the reform will respect the benefits and rights granted to them by the regime that was repealed.

To give legal certainty to the situation referred to in the previous paragraph, it specifies that those born alive and viable within three hundred days after the entry into force of the present initiative will be understood as conceived, which is consistent with the provisions of the Civil Code for the Federal District in Common Matter (sic) and for the entire Republic in Federal Matter.

For the above, and based on Article 71, fraction I, of the Political Constitution of the United Mexican States, through the worthy channel of you, citizens Secretaries, I allow myself to submit to the elevated consideration of the Honorable Congress of the Union the present initiative of

Statement of Motives
(Published Decree of January 18, 1999)

The undersigned deputies members of the parliamentary group of the Institutional Revolutionary Party, in exercise of the faculty granted to us by fraction II of Article 71 of the Political Constitution of the United Mexican States and based on what is provided by articles 55 fraction II, 56, and 62 of the Regulations for the Internal Government of the General Congress, through the worthy channel of you, present before the Plenary of this Honorable Assembly, the following Initiative of Law of the Commission for the Protection of Financial Services Users, based on the constitutional and legal provisions invoked, as well as on the considerations formulated below.

Based on what is provided in fractions X, XI, and XXX of Article 73 of the Fundamental Law of the Republic, the Congress of the Union has the faculty to legislate throughout the Republic on intermediation and financial services, to create and suppress public positions of the Federation, as well as to issue all laws that are necessary, in order to make effective the previous faculties and all others granted by the Federal Constitution to the powers of the Union.

In virtue of this, we allow ourselves to propose to the consideration of this Honorable Chamber of Deputies, as the Chamber of Origin, the bill by means of which the Commission for the Protection of Financial Services Users is created, with the fundamental purpose of promoting and protecting the rights and interests of users of the services provided by financial intermediaries.

Regarding this, the Congress of the Union has issued various orders that regulate the protection of the interests of the public user of financial services. These orders are the Law of Credit Institutions, in its articles 117 to 122; the Law to Regulate Financial Groups, in its numerals 28 to 30 C; the General Law of Organizations and Auxiliary Credit Activities, in its articles 102 and 103, as well as the Law of the National Banking and Securities Commission, in fraction X of Article 4.

Although it is true that the invoked provisions contemplate schemes of protection for the public user of financial services, and provide them with defense mechanisms, it is also true that the lack of uniformity in the legislation and in the established procedures, as well as the multiplicity of authorities and criteria involved, makes it difficult for those involved to achieve the purpose pursued by these provisions, that is, the protection of their rights and interests.

The faculties currently granted to the Federal Public Administration in the matter that now concerns us are faculties limited in their sanctioning aspect, therefore, basically, it can only act as a conciliator or arbitrator in the solution of conflicts. The legislation contemplates in a limited and diversified manner the protection of the interests of the public user of financial services, in addition to which the corresponding procedures are presented as alternative solutions to judicial procedures.

Consequently, there is a clear tendency to resolve in jurisdictional organs the conflicts arising between financial entities and the public user of their services, without previously exhausting the conciliatory stage and without regulating in a punctual manner the form to inform, orient, promote, and protect the rights and interests of users of the services provided by financial intermediaries, seeking equity and legal certainty in the relations between users and financial intermediaries.

The greater number, the diversity of intermediaries, and the specialization of financial services, as well as the consequent administrative complexity that the supervision and surveillance organs offered by current legislation pose to users, raise the convenience and even the necessity that the public user have a single, specialized organ to protect their rights and interests and that, through economic sanctions, contribute to eliminating the irregularities committed in the provision of financial services.

Likewise, there is a notable lack of information related to the financial products offered by members of the sector, especially regarding the risks they entail; risks increased due to worldwide economic instability that affects the national market. There is also a lack of dissemination by an impartial organ of the various products offered by entities that are part of the financial system, as well as their characteristics, benefits, and risks.

In the current situation, users lack certainty and legal security regarding the services they receive, not only due to the lack of objective and simplified information on the conditions of financial services, but also due to the lack of coercive measures that promote equity in the relations between users and financial entities. There are also no studies, analyses, and investigations in matters of protection of financial services users.

In this context, it appears indispensable and urgent to have an independent, impartial, and specialized body in the solution of conflicts arising from the provision of different financial services. It is not only about creating a culture of financial services, through the dissemination of the advantages and disadvantages of the various products offered by financial entities, but above all through the establishment of uniform regulations for conciliation and arbitration procedures for any conflict arising in the provision of these services.

This means prioritizing an instance different from the jurisdictional one, which, in a mandatory and binding manner for the parties, contributes to the solution of the mentioned conflicts and thereby provides protection and legal certainty to the public user.

It is important to highlight that it is not about creating a greater bureaucratic apparatus, but that the budgetary, human, and material resources currently dedicated by the National Supervisory Commissions to the attention of the public user would be used, by virtue of the legal faculties in force, which would be absorbed by the Commission whose creation is proposed. In this way, in addition, the existing National Commissions could perform their supervision and surveillance tasks with greater efficiency, leaving the functions of public attention and dispute resolution to the specialized organism proposed.

The legal order subject of the present initiative contains 72 articles distributed in five titles and three transitional provisions, dedicated to regulating the following aspects:

• the object and patrimony of the Commission for the Protection of Financial Services Users;
• the information regime and the attention of complaints; the organization, government, and surveillance of the Commission;
• the resources and administrative sanctions, and
• the general provisions.

The decentralized body of the Federal Public Administration whose creation is proposed, would have legal personality and its own patrimony, would be sectorized to the Ministry of Finance and Public Credit, would have a governing body presided over by said State Secretariat, and with a general director of the organism who would participate with voice and vote. The general director would be appointed by the Federal Executive through the Secretary of Finance and Public Credit.

The creation of an Advisory Council is also contemplated, which would be integrated by: financial authorities, the president of the Commission, representatives of financial entities, and representatives of users. Its object will be to give representativeness to the entities within the Commission, but the solution of disputes would be reserved exclusively to the Commission. To make the complaint resolution process more agile, the governing body would not have attributes to resolve them.

It would only be in charge of administrative, budgetary issues, and orientation of the functions of the organism.

The attributes proposed to be granted to the Commission for the Protection of Financial Services Users to fulfill their institutional purposes, can be summarized as follows:
a) Promote and protect the rights and interests of users of the services provided by financial intermediaries.

b) Seek equity and legal certainty in the relations between users and financial entities. c) Apply the necessary measures to promote security and legal certainty between users and financial intermediaries. d) Act as a "single window" for the reception of complaints. e) Promote information to users related to the services and products offered by entities, as well as elaborate dissemination programs of users' rights. f) Inform the public about those entities that maintain optimal levels of attention, as well as about those that have the highest levels of complaints. g) Act as arbitrator or conciliator in the solution of such irregularities. h) Execute its resolutions and sanction those entities that commit irregularities in the development of their activities. i) Be authorized to act before all financial intermediaries. j) Orient the financial sector on the needs of users. k) Collaborate with other authorities in financial matters, to achieve an equitable relationship between financial entities and their public user, as well as a healthy development of the financial sector. l) Disseminate through the media, analyses of the various products offered by financial intermediaries. Likewise, it is intended to provide financial services users with complete and truthful information on the different elements governing the user-intermediary contractual relationship.

By seeking the dissemination of the financial services and products offered by intermediaries, the Commission would promote the formation of a financial culture among users and at the same time greater competition among intermediaries, by forcing them to improve their services and products.

It is not considered appropriate that the functions that the Commission would perform be attributed to the Federal Consumer Protection Agency, nor that they continue to be retained by the National Banking and Securities Commission, the National Insurance Commission, etc., due to the following reasons:

It is intended to equip the Commission with faculties to resolve the controversies that will be the subject of attention by the same and not only to act as an arbitrator, which is the faculty that the Federal Consumer Protection Agency and the National Banking and Securities Commission or the National Insurance Commission currently have. To greater extent, Profeco is an entity sectorized to the Ministry of Commerce and Industrial Development, and the faculty of supervision and regulation of financial entities is entrusted by law to the Ministry of Finance and Public Credit.

In addition, the financial system is increasingly specialized, due to the activities developed by the entities that integrate it, which requires that the authorities in this matter be equally specialized to be able to fulfill their institutional purpose adequately.

To formulate the proposal contained in the present initiative, we have taken into account the existence of analogous organisms in other countries. Such is the case of England, where conflicts between banks and users are resolved through a procedure operated by the "Banking Ombudsman". This instance was created in January 1986, to attend to complaints from users of banking services. The service it provides to complainants is free and has executive attributes; its resolutions are mandatory for banks, while the complainant, if they wish, has the option to go to the courts.

The existing body in England does not address the complaints of all users, as it limits its intervention to individuals, small merchants, partnerships, associations, and companies with operations of less than one million pounds. The procedure that the complainant must fulfill as a prerequisite to approach said body is that they have previously established their complaint with the bank. If the complaint is not resolved through their internal customer service units, the complainant has a maximum period of six months to approach the "Banking Ombudsman."

In the United States of America, on the other hand, there is a Consumer Protection Ombudsman, whose principle is to protect consumers against unfair, deceptive, and fraudulent practices. This institution applies laws originating from Congress as well as rules issued by various national commissions, insofar as they aim to protect the consumer. Its attributes include investigations and actions, both administrative and judicial, the elaboration of procedural norms, etc.

The American body is divided into five departments, each with its specific areas, which are: the advertising practices division, the credit practices division, the enforcement or law imposition division, the market practices division, and the industrial services practices division. The credit practices division applies laws regarding users of financial services at the national level, such as: prohibition of discrimination, information handled by credit bureaus, costs of financial services, problem resolution regarding collection, and unfair or abusive practices, among others.

For the foregoing and with support for what is provided and established in the constitutional and secondary provisions invoked in the preamble of this initiative, we permit ourselves to submit to the consideration of this Honorable Assembly the following

Statement of Reasons
(Published Decree on June 1, 2001)

International experience demonstrates that in the development of financial markets, the participation of institutional investors, such as investment companies, has constituted one of the most important pillars for its strengthening, being a determining factor for this, transparency in the administration of resources that the public channels through them. In particular, investment companies have been the channel through which the general investing public has been able to access the securities market directly, enjoying, regardless of the amount of their investments, the advice of professional fund managers and the benefits that represent a diversified investment.

Likewise, investment companies are called to play a role of primordial importance in channeling savings in our country. To the extent that this sector develops, it will be able to channel an increasing amount of resources into investment projects, financed through the issuance of debt and capital in the securities market. International experience is clear proof of the capacity of the securities market to become a source of financing as important or more important than that originating in the banking system.

In recent years, the existence of a clear conflict of interest has been evidenced in brokerage firms and credit institutions acting as operating companies of investment companies, in virtue of the fact that the Law did not establish barriers that prevent or limit the identity of the members of the board of directors of the investment companies and those who operate them. This lack of independence fosters conflicts in the management of resources entrusted by the public to investment companies, since those who oversee the decision-making for their investment also have the responsibility to manage the resources of third parties who are clients of the brokerage firm or credit institution and the investments that these companies make on their own behalf, in addition to placing securities issued by them or third parties. Although in recent years independent operating companies of investment companies have emerged, free from any financial group, the market continues to be dominated by investment companies administered by brokerage firms or banks that are part of a financial group.

For this reason, it is necessary to establish a series of measures aimed at preventing the aforementioned conflict of interest and guaranteeing that the resources entrusted to investment companies are managed with the sole objective of obtaining the best returns for the investing public, subject to the level of risk agreed upon by the client and the respective company. Therefore, it is indispensable that whoever is responsible for the administration of said resources, that is, the members of the board of directors of the investment companies, must have as their sole objective to fulfill this mandate.

On the other hand, the development of investment companies has been hindered, to some extent, by the excessive rigidity to which the structure and composition of the portfolio of investment companies has been subject, which has made it impossible to develop investment vehicles that are attractive to a significant sector of the investing public. The problem mentioned has its origin in the legislation applicable to investment companies; therefore, to respond to the requirements of modernity in their operation, it is necessary to flexibilize their investment regime and in this way facilitate access for the investing public to a wider range of savings vehicles.

In view of the number of modifications required by the current legal framework, it is convenient to propose the formation of a new law that incorporates, in an integral manner, all aspects that contribute to achieving the stated objectives.

The initiative for the new Investment Company Law fundamentally contemplates a change in focus in the regulation of investment companies, centering the activity of the sector on the investment company as the entity that groups the interests of savers and no longer on the operating companies of investment companies, which simply offer a service, that of asset administration, to them. In this way, the new Law establishes corporate governance rules at the level of investment companies that promote the defense of the interests of the public saver. This corporate governance structure is centered on two principles: the composition and obligations of the board of directors of investment companies and the regulation of the services that they must contract.

Investment companies will continue to be organized as anonymous societies in accordance with the provisions of the General Law of Commercial Societies and special rules contained in the proposed Law, highlighting the integration of the board of directors by a minimum of five and up to fifteen counselors. Limiting the number of counselors aims to make the board of directors a functional and efficient body in its management. In addition, with the purpose of holding each counselor responsible for their role, each owner counselor will have only one substitute to represent them in case of absence.

Likewise, with the purpose of having counselors who guarantee that the investment policies carried out have no other purpose than to maximize the return of resources invested in the company according to the risk profile authorized by savers, it is contemplated that at least one-third of the counselors are independent of the shareholders of the fixed capital of the investment company, who are commonly persons linked to a financial group. This group of independent counselors will be key to the most transcendent decisions of the investment company. Thus, for example, only with the approval of the majority of these may the hiring of persons who provide services to the investment company be authorized, including the operating company of investment companies. In this way, if a financial group decides, through its operating company, to create an investment company, it can only retain the administration of the assets of said company to the extent that, in the opinion of the independent counselors of the investment company, it offers good service and does so at competitive prices.

By creating the possibility that an operating company loses the administration of an investment company, even of investment companies founded by it, the draft Law seeks to intensely promote competition among operating companies so that they offer high-quality services at competitive costs.

It will also be required to have the favorable vote of the majority of independent counselors for the taking of decisions regarding the approval of the code of conduct, the norms to prevent conflicts of interest, and the execution of operations with related persons or entities.

In addition to the foregoing, and without the need for the favorable vote of the majority of the independent, the board of directors must establish the investment and operation policies of investment companies, dictate measures for the proper observance of the information prospectus to the investing public, and analyze and evaluate the result of the management of investment companies.

The other important component for the good corporate governance of investment companies is the subcontracting, with independent third parties, of those activities that, if carried out within the investment company itself, would represent a conflict of interest. This is the case of the valuation and rating of the investment company.

A transparent valuation process of open investment companies, those in which the company itself repurchases from investors the shares representing their equity when they withdraw their investments, and the most suitable to receive the savings of small and medium savers, is fundamental to achieving conditions of equity among investors and therefore their confidence in investment companies as an attractive alternative to channel savings.

It is for this reason that the hiring, by investment companies, of a price provider, an independent legal entity from the investment companies whose sole activity is to value daily the instruments that make up their portfolios, is provided for. This figure, which was recently incorporated into the market through the issuance of provisions by the National Banking and Securities Commission, has proven extremely useful to homogenize valuation criteria among the various investment companies, giving greater transparency to the determination of prices at which savers acquire and alienate shares representing the equity of these companies. It is for this reason that it is now proposed to recognize this figure in Law, which in turn is expected to promote competition among these price providers, improve quality, and decrease the cost of said service.

In the special case of capital companies, in which the majority of their assets are not securities, but shares of companies that do not trade on the securities market, and therefore where price providers are not the appropriate body for their valuation, the existence of a valuation committee within the investment company itself is provided for.

As for the rating of investment companies, it aims to facilitate the investing public's understanding of the inherent risk in the securities portfolios managed by each investment company as well as the quality of their administration. As in the case of valuation, the rating of investment companies is required today by the National Banking and Securities Commission, and it is estimated convenient to incorporate it into the Law. The rating of investment companies is a service that cannot be provided jointly with any other, so it is provided that it be performed exclusively by authorized securities rating institutions as such by the aforementioned Commission.

There are some other activities that investment companies must carry out as an integral part of their function, which by their nature, it is more efficient for them to contract specialists who already have adequate organizational structures and experience in the matter, seeking to significantly reduce operational costs and consequently improve the profitability of investors. Thus, it is provided to allow investment companies to contract with third parties the services of asset administration, distribution of shares, deposit and custody of these, accounting, administration, and others.

The administration of assets consists of carrying out, on behalf and order of the investment company, the purchase and sale operations of securities that are part of its assets, as well as the management of its investment portfolio. This service may only be provided by operating companies of investment companies that have been approved as such by the National Banking and Securities Commission.

As already mentioned, it is indispensable to achieve that the investment policies of investment companies are carried out with the sole interest of seeking the highest possible return on resources contributed by savers, subject to the agreed risk level. As also already mentioned, for this purpose, it is provided that at least one-third of the members of the board of directors of each investment company are independent, and that they are responsible for contracting the services required by the company, including the administration of assets. Despite the foregoing, and since said board of directors will delegate daily investment decisions to the operating company, it is equally important to avoid a conflict of interest at the level of the operating company.

It is for this purpose that the draft Law contemplates, unlike what occurs today, the prohibition for brokerage firms and credit institutions to act directly as an operating company. If a credit institution or a brokerage firm, due to the comparative advantages it has, intends to provide the asset administration service to an investment company, it must form an operating company of investment companies as a subsidiary entity with administration distinct from its own. This separation, which already exists today for the case of retirement fund administrators, will largely avoid situations in which those responsible for carrying out operations on behalf and order of investment companies have the incentive to benefit with their decisions the entities, officials, or clients related to the financial institution in question, to the detriment of the interests of the investors of the investment companies.

Likewise, seeking to provide operating companies of investment companies with efficient internal control mechanisms, and based on the positive experience of retirement fund administrators, the figure of the regulatory controller is introduced as support for the board of directors of the operator. The regulatory controller will be responsible for establishing procedures to comply with applicable external and internal regulations, proposing to the board of directors the establishment of measures to prevent conflicts of interest and ensuring the proper observance of the information prospectus of the investment companies to which the operator provides services.

Since the investment advisory service should ideally be carried out free of conflicts of interest, and the structure of operating companies seeks precisely that, it is proposed that operating companies may provide such investment advisory services not only to investment companies, but also to other investors, natural and legal persons.

Perhaps the main cause of the low penetration of investment companies in the Mexican economy is the lack of adequate distribution channels, through which the small and medium saver finds easy access mechanisms to these investment instruments, which in turn allow them to obtain competitive returns regardless of the amount of their investments. The reason why such distribution channels have not been created until today consists of the convergence of the existing prohibition to sell shares of investment companies administered by a third party and the fact that investment companies with greater market penetration are administered directly by a credit institution or a brokerage firm belonging to a financial group that has within its structure a credit institution. As long as a credit institution has the possibility of capturing resources at the counter paying interest rates several percentage points below interbank interest rates, it, or the brokerage firm belonging to its financial group, will not have incentives to use its branch network in order to give access to the small saver to investment companies managed by it. Thus, in order to massify the securities market through investment companies, it is indispensable that distribution structures be generated, taking advantage of economies of scale, allowing the opening of accounts with relatively small investment amounts.

With this purpose, the project contemplates breaking with the exclusive distribution scheme, by an operating company, that exists today, in order to allow the existence of companies whose sole purpose consists of distributing shares of investment companies. This service may be provided by any legal entity authorized for such purpose by the National Banking and Securities Commission, among them, credit institutions, brokerage firms, insurance companies, exchange houses, limited object financial companies, and auxiliary credit organizations.

The foregoing will allow: i) that savers are able to acquire shares of various investment companies administered by different operating companies without it being necessary to celebrate a multiplicity of contracts; ii) that clients receive consolidated statements showing their investments in investment companies administered by various operating companies; iii) that intermediaries with developed distribution channels and without conflict of interest promote the sale of investment companies among their clientele; iv) that distribution companies create new distribution channels, taking advantage of the advantages offered by new technology in telecommunications and information systems; and, v) that distributors do not incur the cost of organizing and operating their own investment companies, with the purpose of selling said products.

On the other hand, investment companies will be authorized to contract the service of deposit and custody of the securities that make up their assets, as well as of the shares representing their equity, which will be provided, the first, by institutions for the deposit of securities, and the

seconds, by credit institutions, brokerage houses, investment society operating companies, and share distribution companies. Likewise, they must hire the corresponding accounting and administrative services, which may be offered by investment society operating companies, valuation companies, and independent professionals.

Currently, debt investment societies and common societies only have the possibility of investing in securities that are registered in the National Registry of Securities and Intermediaries. Although there is a wide range of securities within this universe, this restriction certainly imposes some limitations on the type of products that can be offered under the investment society regime. The foregoing has caused, among other things, that the savings that could potentially have been channeled through investment societies, are channeled through the opening of trusts, with the costs this implies, or are channeled outside the national financial system.

Therefore, the Bill project contemplates the possibility that investment societies may acquire for their investment portfolio securities other than those registered in the National Registry of Securities and Intermediaries. This will allow, once approved by the Banking and Securities Commission or the Bank of Mexico, through general rules, as applicable, that investment societies may, among others, acquire: i) derivative products, which will facilitate the hedging of their risks and promote their investment in long-term securities; ii) invest in securities denominated in foreign currency issued by either Mexicans or foreigners, which will incentivize the repatriation of capital; and, iii) invest in real estate, which will facilitate the reactivation of the real estate market and promote investment in it.

Similarly, it is foreseen, as in other markets, the possibility that investment societies invest in shares representing the social capital of other investment societies, creating what in other markets is known as "fund of funds". In many cases, this figure is ideal for investors who not only do not wish to be exposed to market risks, but also do not wish to be exposed to the operational risks of the investment societies or operating companies involved.

The flexibility in the investment regime will also promote the use of the investment society figure, taking advantage of the physical and regulatory infrastructure created, to channel the savings of figures that until now have used trusts for such purposes, such as private pension funds and the own savings of some life insurance products, among others. To achieve this objective, in addition to flexibilizing the investment regime, individual holding limits per client are also liberalized, always adhering to what is provided in the respective information prospectus.

Consistent with greater openness regarding the type of assets an investment society can acquire, and in accordance with internationally accepted practices, the Bill project emphasizes the need to have an information disclosure regime that allows savers to understand the advantages and risks inherent in acquiring shares of a particular investment society. Specifically, it is foreseen that the boards of directors of investment societies must include in the information prospectus the necessary information so that the investing public can form, at all times, a reasoned opinion about the type of investment and the risks inherent in it.

Additionally, and as already mentioned, in order to support decision-making by investors, a regime for rating the risk of the investment portfolio and the quality of fund administration is established.

As important as investors having all relevant information for decision-making is that such information is accessible in the sense of not requiring specialized knowledge to understand it. It is for this reason that the Bill project proposes granting the Banking and Securities Commission broad powers to issue, through general rules, not only those aspects that the information prospectus must contain, but also the manner in which such information is presented, so that it is easily understandable.

In this same sense, the work performed by promoters to inform the investor about the characteristics of the product they are promoting is extremely important. Thus, it is foreseen that the promotion and sale of shares of investment societies must be carried out by persons who have demonstrated technical and moral capacity, regardless of the entity or company where they carry out such function, in order to increase the quality conditions in advising the investing public.

For the organization and functioning of investment societies, the authorization regime is maintained, which would be granted discretionarily, once the requirements established by the Law itself are met, including those of quality and content of the information prospectus to the investing public and the code of conduct to which the councilors of the investment societies and the persons who will provide them with services must adhere, which must be indicated in the respective application, as well as the requirements of experience, capacity, honorability, and credit quality that founders, councilors, and executives must demonstrate, without prejudice to also demonstrating that they meet the minimum capital requirements, among others.

It is proposed to change the name of common investment societies to variable income investment societies, in order to more clearly identify the type of investments they can make. Likewise, the definitions applicable to open and closed investment societies are specified, modalities that different types of investment societies must necessarily adopt, and whose difference lies in the possibility or not of repurchasing or amortizing the shares they issue.

Additionally, a new type of investment society is incorporated, of limited object, whose purpose will be to predominantly invest in assets other than those provided in current regulation, thereby providing the ease for new investment and financing alternatives.

Likewise, the power is established for the Banking and Securities Commission to determine different classifications of investment societies, attending to the criteria of diversification, specialization, liquidity, and applicable investment regimes.

With the intention that subsidiary companies of Foreign Financial Institutions that carry out activities in the country are constituted and operate under the same conditions as national ones, the corresponding provisions are homologated and the possibility is foreseen that subsidiary distribution companies may be constituted.

As a result of the growing use of electronic media in all activities, it is necessary to incorporate into the operation of investment societies the use of these tools for the dissemination of information, the negotiation and execution of operations, as well as for the identification of participants, granting them the same effects that the laws confer on documents, so that consequently, they will have the same probative value.

Finally, seeking to strengthen the sector and its participants, as well as to increase the protection of the investing public, some powers are incorporated to the Banking and Securities Commission to: i) regulate the remuneration regime applicable to investment societies and the contracting of services; ii) conduct inspection visits and, if applicable, intervene in the institutions provided for in this Law; iii) remove, suspend, or disqualify councilors, officials, executives, auditors, controllers, and attorneys-in-fact of investment societies and companies that provide them with services; and, iv) order the temporary or definitive suspension of the placement or repurchase of shares by investment societies, to protect the interests of investors.

Similarly, it is specified that persons who are responsible for any damage to the detriment of investors must compensate them, regardless of the applicable sanctions.

The typification of crimes and the corresponding sanctions are incorporated for those who dispose of the society's assets for purposes other than those provided; for those who omit, alter, conceal, or falsify records or information, and the applicable regulation is incorporated to prevent and, if applicable, sanction money laundering crimes.

Likewise, in order that the activities that the proposed project confers on investment societies and other persons who provide them with services, the project foresees that such activities be developed only by entities supervised by the Banking and Securities Commission, establishing in effect a sanction regime for those who carry out such activities without the respective authorization.

For the foregoing and in exercise of the power conferred on the Federal Executive by section I of article 71 of the Political Constitution of the United Mexican States, through that Chamber of Senators, I permit myself to submit to the consideration of the Honorable Congress of the Union the following Initiative with Statement of Motives (Published Decree of January 23, 2004)

Economic growth depends largely on investment in physical and human capital, which depends on efficient intermediation between savings and investment. Within the financial sector, the securities market plays a fundamental role, allowing companies to access non-banking financing sources at competitive prices and with flexible payment profiles. At the same time, it allows investors to have more alternatives to channel their savings, with risk and return profiles consistent with their preferences.

With the reforms to the Securities Market Law and the Banking and Securities Commission Law published on June 1, 2001, it was sought to make the securities market more modern and efficient, but above all more transparent, increasing the level of protection for the investing public and limiting uses contrary to sound market practices. An important aspect considered in the 2001 reforms was the role of non-voting or restricted voting shares. In the statement of motives for the reform, it was noted that when a company's capital is significantly represented by shares that restrict voting rights and a smaller part is represented by ordinary shares, this differentiation can incentivize the group controlling the company through majority voting positions, but relatively small in capital, to act in their own benefit, even at the expense of the company itself and to the detriment of minority investors.

The 2001 reform included two key measures to avoid this phenomenon. On the one hand, it made stricter the limits applicable to the issuance of non-voting or restricted voting shares, raising them from 25% of social capital to 25% of capital placed among the investing public, and prohibited the instrumenting of mechanisms through which these types of shares are negotiated or offered to the public, jointly with ordinary shares. The established limits are consistent with investor protection since, to the extent that a company's capital is predominantly represented by ordinary shares, minority shareholders will be in better conditions to enforce their corresponding rights.

On the other hand, the law laid the foundations to protect minority shareholders against changes in control of the company. Currently, it is mandatory to make a public acquisition offer when it is intended to take control of an issuer. That is, when an issuer is going to change its control group, the buyer has the obligation to make a public purchase offer directed to all shareholders of the company, offering them the same price per share as is offered to the controlling shareholders.

However, it has been identified that, due to the lack of an explicit transitional regime, uncertainty has been generated for those companies that had issued shares other than ordinary shares before the 2001 reform, and that complied with the limits in force at the time, but which now exceed the limits currently in force. This uncertainty hinders the obtaining of financing and some routine corporate processes, such as the payment of dividends in shares.

Thus, this uncertainty derives from the fact that, a large part of companies have already placed non-voting shares among the public, which operate in the market with satisfactory liquidity levels. In this sense, if now this company is obliged to adapt to the new limits, in the capital increases it carries out to finance new investment projects, it can only issue ordinary shares (with voting rights), and these, not being equivalent to those already trading in the market, due to granting their holders different rights, will enjoy less liquidity and therefore investors will be willing to pay a lower price or even not be willing to acquire them.

This initiative establishes a transitional provision, which aims to provide full legal certainty to societies that, before the 2001 reform, already had shares other than ordinary or had instrumented mechanisms linking these types of shares with ordinary shares, allowing them to adjust to the limits established in the Law, gradually and orderly, provided they meet the following conditions:

First, that the proportion of ordinary shares in the social capital tends to increase or, in exceptional cases, when the company's situation and the transaction so justify, remains constant.

Second, that the Banking and Securities Commission authorizes in both cases the gradual adjustment of the capital structure, ensuring the protection of the interests of the investing public and always that it is revealed to the market that with the modification to the social capital, it still does not adjust to the current regime.

With this adaptation, the provided regime will be at the level of market needs and will eliminate the difficulties that various companies currently face in obtaining equity financing and therefore will facilitate the development of productive projects, which translate into jobs and economic well-being.

Likewise, this adaptation complements and is complemented by the advances of the 2001 reforms in corporate governance practices, information disclosure, and protection of minority shareholders' rights. In conclusion, the proposed gradual adaptation regime is consistent with the principles of transparency and equity in the market.

For the above, this initiative proposes adding a second paragraph to the eleventh transitional article of the Decree published in the Official Gazette of the Federation on June 1, 2001, by which various provisions of the Securities Market Law and the Banking and Securities Commission Law are reformed, added, and repealed.

Statement of Motives
(Published Decree of June 20, 2005)

The Banking and Securities Commission is a decentralized agency of the Ministry of Finance and Public Credit that, in terms of the Law governing it, has technical autonomy and executive powers, and whose object is to supervise and regulate financial entities in order to ensure their stability and correct functioning, as well as to maintain and promote the sound and balanced development of the financial system as a whole, in protection of the interests of the public saver.

In accordance with the Banking and Securities Commission Law, the aforementioned decentralized agency exercises its powers through its Board of Directors, the Presidency of the Commission itself, the Vice Presidencies, the General Directorates, and other necessary administrative units.

Likewise, the aforementioned Banking and Securities Commission Law establishes the powers of the Commission, also indicating those corresponding to its Board of Directors and the President of the Commission itself. It is important to mention that the laws regulating the financial entities subject to the supervision and regulation of the Banking and Securities Commission complement the scope of competence of said agency.

It must be highlighted that in exercising the powers entrusted to the Banking and Securities Commission by the Law, the heads of its administrative units can generate consequences that impact the legal sphere of third parties.

In this order of ideas, article 4, fraction XV of the Banking and Securities Commission Law, provides that it corresponds to the Commission to intervene administratively or managerially in financial entities, with the object of suspending, normalizing, or resolving operations that put their solvency, stability, or liquidity in danger, or those violating the laws that regulate them or the general provisions derived from them.

The power indicated in the previous paragraph, that is, the declaration of intervention, is exercised through the Board of Directors of the Banking and Securities Commission, with the President of that decentralized agency responsible for designating the intervener in the cases provided for in the laws regulating the entities.

In this case, through managerial intervention, the administration of the financial entities subject to the Commission's supervision is replaced; a situation that may result in an affectation to the organization and functioning of a legal entity.

Experience has demonstrated that the adoption of resolutions as referred to in the previous paragraphs may motivate lawsuits, complaints, or charges against the natural persons through whom the Commission's inspection and surveillance functions are materialized. In view of this, it is considered necessary that in order to protect the correct exercise of the Commission's functions, mechanisms be established that provide the competent persons to exercise them with the security and confidence that allow them to adopt resolutions based on law.

It should be noted that the Basel Committee in its supervision principles establishes that supervisors must be protected when facing legal processes for actions performed in good faith and in compliance with their functions.

International experience is consistent with the above principle. Studies conducted by international organizations indicate that, in general, there are two legal protection regimes for financial supervisors. The first consists of releasing any natural persons who exercise supervision functions in good faith from any responsibility, relegating responsibility to the supervisory body. This regime is applicable in the cases of Germany, Hong Kong, and Switzerland.

On the other hand, the type of legal protection system for natural persons participating in the exercise of supervision powers consists of them being responsible for the exercise of their functions, with the body possibly covering the legal assistance costs generated by legal actions. This system is collected in the legislations of countries such as the Philippines and New Zealand.

Another relevant aspect is the fact that, according to the legal regime applicable to the Banking and Securities Commission, as well as to the financial entities subject to its regulation and supervision, various persons who have no employment link with the aforementioned Commission participate in the adoption of resolutions related to the exercise of the functions legally entrusted to it.

In this order of ideas, it must be highlighted that the Board of Directors of the Banking and Securities Commission is composed of the President of the Commission itself and two vice presidents designated by him; five members designated by the Ministry of Finance and Public Credit; three designated by the Bank of Mexico; one member designated by the National Insurance and Surety Commission and one more by the National Retirement Savings System Commission. As can be seen, ten of the thirteen members of the Board of Directors of the Commission are public servants who have no employment link with the aforementioned decentralized agency, and despite this, participate in the exercise of the powers legally corresponding to the Banking and Securities Commission.

On the other hand, persons who, if applicable, perform the function of managerial intervener do not necessarily have to be public servants of the Commission. Furthermore, in the case of credit institutions, article 140 Bis of the Credit Institutions Law establishes that interveners must meet the requirements provided in the own regulation for the case of the general director of multiple banking institutions and officials occupying positions in the two immediate lower hierarchies thereof.

The evolution of the financial market makes evident the need to have a supervisory body that exercises its functions with a high degree of professionalization, and that at the same time has the necessary conditions for its adequate exercise. From the international experience referred to, as well as from the recommendations of international organizations specialized in financial supervision, it is appreciated that providing legal assistance to the natural persons through whom the exercise of these functions is materialized constitutes a sound practice for the development of the financial sector. This is independent of the employment link that may exist between the natural person and the supervisory body.

Additionally, the possibility that an individual may be exposed to personal lawsuits for exercising the powers granted by law to the supervisory authority, could foster significant risks regarding the objectivity and impartiality of the decisions they must make within their competence, while also weakening the achievement of institutional objectives provided for in the laws.

The initiative presented today seeks to establish the possibility of providing legal assistance to public servants who are part of the National Banking and Securities Commission (CNBV), to the members of its Board of Government, whether or not they are part of the aforementioned Commission, as well as to the auditors appointed by the Commission itself and to the auxiliary officials of the audit, who do not have an employment link with it.

Likewise, this initiative provides that, for the purpose of providing legal assistance to the aforementioned persons, the Ministry of Finance and Public Credit, hearing the opinion of the Commission itself, will establish the necessary mechanisms to cover the expenses derived from the assistance and legal defense.

This initiative adheres to those schemes for the protection of supervisory functions, which allow addressing the attribution of responsibilities to the individual exercising functions related to the supervisory body, providing said individual with the possibility of being provided with the necessary means for their adequate defense.

For the reasons stated above, I allow myself to submit to the consideration of this Sovereignty, based on the provisions of Article 71, fraction II, of the Political Constitution of the United Mexican States, the following:

Statement of Motives
(Published Decree of June 15, 2007)

State intervention in the banking sector following the 1994 crisis resulted in two types of outcomes: on one hand, a policy of mergers and market division that led to a market equilibrium in the banking sector with oligopolistic characteristics. A second result was that banks had certain inefficiencies, because the absence of real competition did not create incentives to minimize or rationalize the cost structure, and these inefficiencies were passed on to consumers.

This financial crisis showed that government intervention should not be limited to strategies for saving depositors and banking institutions, but that it can and must strive to improve the performance of the financial system through adequate regulation applicable to banking in our country.

Paradoxically, the current Mexican Banking System, which should find its main source of profits in granting credits, ends up basing its good results on onerous charges for commissions and services. Leaving aside the support and promotion of the development of the country's productive forces. According to our Political Constitution, in its article 25 of the section on Individual Guarantees:

"It corresponds to the State the direction of national development to ensure that it is integral and sustainable, that strengthens the Sovereignty of the Nation and its democratic regime and that, through the promotion of economic growth and employment and a fairer distribution of income and wealth, it allows the full exercise of freedom and the dignity of individuals, groups and social classes, whose security this Constitution protects..."

In this sense, the Law of Credit Institutions in its fourth article establishes that:

"The State will exercise the direction of the Mexican Banking System, so that it fundamentally orients its activities to support and promote the development of the country's productive forces and the growth of the national economy, based on a sovereign economic policy, promoting savings in all sectors and regions of the Republic and its adequate channeling to a wide regional coverage that promotes the decentralization of the System itself, in accordance with sound banking practices and uses...."

The National Development Plan 2001-2006 recognized that the last crises left insufficient savings and a high fiscal cost of the banking rescue. Therefore, credit remains expensive and scarce; the lack of competitiveness and the fragility of stock and banking markets persist. The Mexican financial system has not been able to channel savings into financing, and numerous socially profitable projects have not been able to start due to the lack of adequate and competitive financial instruments.

The strong economic imbalances and disequilibriums of the nineties, the structural and operational backlog of intermediaries, as well as the lack of an adequate regulatory framework, have prevented greater financial depth.

The common denominator in the recurrent crises observed during the last decades was the very weak formation of internal savings, which has kept real interest rates high and restricted the contribution of the financial system to development.[1]

On the other hand, according to the report of the National Commission for the Protection and Defense of Financial Service Users (CONDUSEF), published in September 2004. In the last four years, commissions went from representing 13 percent of Mexican banking income to 39 percent currently due to the contraction of credit. This places Mexico above countries such as Brazil and Great Britain, where commissions represent 36 percent of entity income. Also from France, where they equate to 33 percent, and from Spain, where commissions are located at 30 percent.

Furthermore, the study revealed that some of the main foreign banks operating in Mexico - such as Citigroup, HSBC, BBVA and Scotiabank - charge much higher commissions in the Latin American country than in their own countries of origin; in some cases, commissions are slightly lower in Mexico, but in other categories they reach up to 8 and 10 times higher in this country than in the United States, Great Britain, Canada or Spain.

For example: HSBC charges its clients in Mexico a Total Annual Cost (CAT) of 77% on credit cards, while in England the rate is 16%; Scotiabank charges Mexicans 77% and Canadians 18%. In BBVA Bancomer the charge is 80% for plastic, and in Spain 25%, and Banamex Citigroup 85%, while in the United States it is 9%.

In Mexico, up to 1.7 dollars is paid to withdraw money from an automated teller machine that is not part of the bank's network, while in Chile, Argentina and Venezuela less than 1 dollar is paid; and the average cost of a rejected check in Mexico is close to 800 pesos (about 70 dollars), while this charge in the United States is around 30 dollars.

Today's reality has not changed entirely, despite the fact that there is greater banking competition due to the entry of new banking institutions into the financial market, there is no body that regulates the commissions charged by banking institutions for their services. The legal and regulatory framework for commissions and fees has not accommodated this problem, and discriminatory practices continue in the provision of widely used financial services, in addition to the lack of sufficient transparency in the publication of the criteria applied to determine commissions and fees, the income received by institutions for each type of service provided, and much less information by type of service, value, and number of transactions.

This problem has been recognized and widely debated in our country by financial authorities such as the Ministry of Finance, CONDUSEF, and the Bank of Mexico, as well as by the Federal Competition Commission, which have repeatedly pointed out the disproportionate level of commissions for banking services to the detriment of the consumer.

The Law for Transparency and Order of Financial Services, and the provisions issued by the Bank of Mexico regarding advertising on the costs, fees, and interest rates of the different products offered to the public, has allowed greater competition among banks, slightly halting the escalation in commissions and interest rates, since the user now has a greater possibility of comparing the products offered by banks, so as to make a better decision on which offers better services at lower costs; however, this has not been enough.

There is great interest and commitment in the Senate of the Republic with Mexicans to legislate on this matter, as evidenced by the initiatives presented in this and other legislatures by senators from different parliamentary groups. In the LIX Legislature and the current one, various legislative reform initiatives have been proposed with the aim of regulating commissions and fees for financial services, which are under analysis, and if approved, will be reported. One of the first antecedents is the initiative proposed by Dulce Maria Sauri Riancho, Senator of the Republic from the Institutional Revolutionary Party Parliamentary Group, in the LIX Legislature on November 19, 2003, which seeks to add article 49 to the Law of Credit Institutions so that the Bank of Mexico evaluates the existence of reasonable competition conditions regarding commissions or fees, with respect to active, passive, and service operations of financial entities.

Subsequently, then Senator Luis Alberto Rico Samaniego from the National Action Parliamentary Group, on April 4, 2006. Proposed an initiative that sought to grant powers to the National Banking and Securities Commission to regulate financial services and the charging of commissions.

Consecutively, an initiative was presented on December 20, 2006, by current Senator Ricardo García Cervantes from the same parliamentary group, an initiative with a Draft Decree by which articles 4 and 7 of the Law for Transparency and Order of Financial Services, article 26 of the Bank of Mexico Law, and articles 48 and 49 of the Law of Credit Institutions are reformed. An initiative that seeks that the Bank of Mexico establishes the bases and procedure to determine the commissions and fees of credit institutions, currently under report and study.

The closest antecedent is the initiative presented on February 20, 2007, by Senator Arturo Escobar y Vega, from the Parliamentary Group of the Ecologist Green Party of Mexico, which contains a draft decree by which article 48 of the Law of Credit Institutions is added. This initiative seeks to establish a series of ethical principles that banking institutions must comply with regarding commissions, such as that they are truly necessary, not surprising, not abusive, legal, connected to banking activity, and charged by legally authorized entities.

Internationally, there is regulation regarding banking service commissions that Mexico does not have, and which this initiative seeks to reform and create; just to mention some countries, we have that:

In Spain, credit entities are obliged to notify the Bank of Spain, prior to their application, the commission tariffs and recoverable expenses that they will apply as a maximum to the operations and services they provide to their clientele (the entity declaring them cannot apply others higher than those notified or charge for concepts not mentioned in them).

Each entity applies the commissions it deems appropriate, after consultation with the Bank of Spain and the National Securities Market Commission. Consumer protection regulations include the obligation to inform the user. Entities must publish these tariffs on their notice boards and provide the client with an extract of them.

The Banking Order Law"...

Article 43. It will correspond to the Minister of Finance, prior to the report of the Bank of Spain and the Superior Banking Council:
a) To indicate the maximum interest rate payable on current accounts, deposits, and other similar operations. b) To set the maximum and minimum interest rates and commissions in active operations and the conditions for their application. In any case, the difference between both interest rates must be established based on the cost of money. However, variations in rates and conditions may be authorized in certain places or for certain sectors or activities of the national economy when special circumstances so advise.

On the other hand, in Argentina, the Law of Financial Entities states in Article 30 that the entities included in this Law will adhere to the norms that are issued in particular regarding:
a) "... c) Terms, interest rates, commissions, and charges of any nature; e) ..."

In the United States of North America, the Federal Reserve Act establishes:
Section 11 A - Cost of Services
"...
By the first day of the sixth month following the date of enactment of the 1980 Control Act, the Directive must publish for public knowledge a "set" of main costs according to this section and a table of proposed tariffs according to these principles, for the banking services of the Federal Reserve to deposit institutions and by the first day of the eighteenth month following the date of enactment of the 1980 Control Act, the Directive will apply the table of tariffs and commissions for said services based on these principles.

The services covered by that tariff table under regulation are:

1. Currency and money services
2. Collection and checking
3. Electronic transfer
4. Automatic clearing
5. Account settlement
6. Security and custody of securities
7. Federal Reserve flotation
8. Any new service that the Federal Reserve offers, including but not limited to payment services to affect electronic transfers.

The table of tariffs and commissions will be based on the following principles:

1. Prices will be explicit (clear)
2. They will be available to all bank clients and said services must have the price charged to clients.
3. Prices will be complete (no additional charges)
4. Interest on credited items before charging will be charged according to the rate applicable in the Federal Funds market.

The directive may request proportional reductions to the operating budgets of Federal Reserve banks proportional given any decline in the volume of services provided to said banks. Any savings generated thereby will be delivered to the Treasury of the United States of North America.

All deposit institutions may receive deposits and as deposits, transaction accounts of other deposit institutions or of any other office of the Federal Reserve bank without restriction of any Federal or State Law.

..."

Another example of clear regulation is the Central Bank of Venezuela, which administers the mechanisms for the purpose of publishing information related to commissions and banking fees; since financial institutions are the ones that supply and charge this information directly on the website of the Central Bank of Venezuela.

The monetary authority points out that in article 49 of its legislation, it is provided that this entity can regulate, in addition to interest rates, set the maximum and minimum commissions or surcharges caused by accessory operations and the different services it qualifies as related, directly or indirectly, to the aforementioned active and passive operations. It is equally empowered to set the fees that banks or credit institutes may charge for the different services they provide.

Considering the above, we believe it is prudent to reform the Law for Transparency and Order of Financial Services, empowering the National Banking and Securities Commission (CNBV) as the regulatory entity for the charging of commissions and interbank fees carried out by financial entities, and for the issuance of additional provisions aimed at achieving the purposes of the law; this institution may establish the maximum and minimum rates of commissions and fees for the services provided by said entities. Obliging that the amounts of commissions charged by financial entities for their services are always accompanied by the advertising and provisional information of the product in question and by any advertising medium used in a manner understandable to the public.

The CNBV has a legal mandate to supervise and regulate financial markets and institutions, including banks, in order to ensure their solvency and proper functioning. In recent years, they have managed to clean up and consolidate the financial system, such that banks are today solvent and stable. In recent years, they have carried out a significant effort to modernize the national financial system. This strategy is part of a broader integral agenda of structural changes that includes vigorously promoting economic growth, reducing poverty, raising the level of well-being of society as a whole, and generating more jobs. None of this can be achieved since currently the CNBV does not have the authority to set or limit the tariffs, prices, and fees charged by banks for the services they provide, as this is an attribute of the Bank of Mexico.

We believe it is important to empower this institution since, through good regulation, the objective of banking in Mexico can be reoriented for the benefit of users and the economic growth of the country.

This initiative does not intend to subordinate the Bank of Mexico, since it has three seats on the Board of Government of this commission, a regulatory entity whose object is:

Law of the National Banking and Securities Commission
Chapter I
On nature and object
"...
Article 2. Supervise and regulate, within the scope of its competence, financial entities, in order to ensure their stability and proper functioning, as well as maintain and foster the sound and balanced development of the financial system as a whole, in protection of the interests of the public.
..."

International experience demonstrates the viability of this initiative since, in terms of regulating the charging of commissions, countries such as Spain and Argentina, to mention a few, have lower commissions in their banking services. In this context, last year the president of the National Banking and Securities Commission (CNBV), Jonathan Davis Arzak, declared that there is considerable room to lower the commissions charged by banks for the services they provide and the best way to promote it is by fostering competition. That banking institutions charge in a manner

appropriate for the services they offer, not excessive fees, and that these services are of quality, where banks have shown weakness.[3] To carry out this reform, it is important to consider the commission structure that exists in the country and that this is influenced by multiple factors: volume of operation, degree of banking penetration, efficiency of the payment system, regulatory cost, legal system, customer usage patterns, and diversity of products available, among others. In addition, one must take into account the aspects of the payment system in the country compared to other countries. Taking these elements into account, the reform must be integral and in line with our financial structure. According to CNBV figures, multiple banking institutions reported a net result for the third quarter of 2006 of 49,136 million pesos, which implies a growth of 36.23% in relation to the same period of the previous year. This increase was fundamentally due to annual increases of 19.95% in the financial margin; 14.91% in net commissions; and 26.91% in intermediation results.[4] These results demonstrate the profitability and solidity of banking and corroborate the viability of greater regulation translated into more and better services, at competitive and more accessible prices for users, as well as more dedicated work in financing the private sector. On the other hand, this initiative also seeks to contribute to transparency and to establish a true order in the operation of financial services that the Law for Transparency and Ordering of Financial Services has not been able to establish. It is indispensable for the country to have real and not feigned competition among financial entities, for the benefit of the banking system on one hand, and, more importantly, for the benefit of the public users of financial services and the economy in general. To do this, it is necessary to guarantee the protection of the public's interests; this will be achieved if the CNBV is empowered to regulate the charging of commissions and interbank fees carried out by financial entities. To ensure that this reform is integral, it must also be empowered to issue additional provisions aimed at achieving the purposes of the law; and to establish the maximum and minimum rates of commissions and fees for the services provided by said entities. It is worth noting that the present initiative intends to resume the main points of the proposals previously presented by senators from different parliamentary factions. Based on the above, I submit to the consideration of this Sovereignty, the present initiative with the Draft Decree that reforms various provisions of the Law for Transparency and Ordering of Financial Services, the Law of the Bank of Mexico, the Law of the National Banking and Securities Commission, and, the Law of Credit Institutions.

EXPLANATION OF MOTIVES
(Decree published on June 25, 2009)
Since the economic crisis of 1995, the Legislative Branch has approved various reforms implemented in the Mexican financial system to strengthen and adequately regulate the securities market sector, the specialized financial intermediaries sector, and above all, it has carried out very important reforms to the banking regulatory framework, which have proven their usefulness by having served to mitigate to a considerable extent the effects of the great financial crisis that the world is experiencing, regarding the financial intermediaries operating in our country. Additionally, the Legislative Branch has sought to protect the interests of the clientele of financial intermediaries through the issuance of regulation such as the new Law for Transparency and Ordering of Financial Services, and reforms to the Law of Credit Institutions to incorporate the basic banking product, which allows a large part of the population to access financial services at low cost. The atypical financial situation that the world is currently experiencing imposes new challenges when issuing financial norms, especially with regard to the protection of users of financial services. With respect to the work of the Legislative Branch in these times of global financial crisis, it is imperative to issue norms that protect clients of financial institutions from the predatory practices of various intermediaries, in protection of their particular interests and of the financial system itself. One of the immediate problems that has been widely commented on is the overdue portfolio in credits granted through credit cards, since this type of credit is the main component of the commercial banking consumer credit portfolio. At the close of the first semester of 2008, the financing granted by banks through this product stood at 315 billion pesos, which represents a real annual increase of 15.6 compared to the figures recorded at the close of the first semester of 2007. Within this portfolio, the current portfolio registered a real annual variation of 13.0%, while the overdue portfolio has presented a real annual increase of 55.8%. Given this financial landscape, it is necessary to take legislative measures to reverse this trend before it damages the financial system and harms the domestic economy of cardholders. Likewise, norms are required to avoid bad practices by Entities that provide financial services from the commercial sphere or the financial sector that seriously damage users of financial services, and which therefore inhibit the population from accessing the regulated and supervised sector to access other types of dangerous financing sources. It is for this reason that the present reform establishes a combined strategy to promote and protect the rights of users of financial services against the harmful practices of Financial Entities, which has the following aspects:

1. Strengthening of norms in matters of transparency and protection of users of financial services, grouped into four categories:
   I. Information Disclosure. Measures related to addressing problems of asymmetry and low quality in information.
   II. Credit Cards. Measures aimed at guaranteeing access to clear and precise information, regarding commissions and interest.
   III. Good Practices. Measures aimed at avoiding over-indebtedness of consumers.
   IV. Transaction Costs. Measures to foster competition by decreasing costs for switching from one financial institution to another.
2. Strengthening of the functions of CONDUSEF, namely:
   I. Preventive Functions, through the strengthening of those aimed at avoiding negative conduct against the consumer, such as:
   a) Information, education for consumption and guidance b) Supervision and monitoring of compliance with provisions that have a direct impact on the user of financial services.
   II. Conciliatory Functions, through the strengthening of its attributions in the conciliatory and arbitral procedure in favor of the user of financial services.
   III. Corrective Functions, through the strengthening of its attributions to correct negative conduct to the detriment of the consumer.

It should be mentioned that the present initiative largely resumes the results of the conference on Financial Education, Consumer Protection and Competition that took place in the city of Querétaro on July 11, 2008.
From what was expressed at said conference, the speakers agreed on the importance of fostering regulation in matters of consumer protection, particularly in matters of transparency in information in account statements, adhesion contracts, and advertising.
Likewise, the importance of measures that foster competition was highlighted, such as the elimination of the costs that it represents for a user to switch financial institutions and guarantee non-discriminatory access to infrastructure for all credit institutions.
In addition to the results of the conference on Financial Education, Consumer Protection and Competition, various practices that have been implemented in several countries that would be useful for the better development of the Mexican financial system were mentioned.
It is for this reason that the initiative presented deals with the topics detailed below:
I. Information Disclosure.
The issue of information disclosure has already been addressed in various regulations such as the Law for Transparency and Ordering of Financial Services. Nevertheless, it is very important to homogenize the information and make it accessible to clients of financial institutions in deposit and credit operations, for which the measures exposed below are proposed.
It is proposed to impose the obligation of financial institutions to show in account statements the charges accumulated during the year, derived from the payment of interest and commissions.
Additionally, account statements for both passive and active operations must incorporate a standardized box format for all Entities containing the most important elements of the operation in question, such as commissions charged, interest charged or paid, as applicable, balances, credit limits, and warnings that allow the user of said services to be informed about the risks in case of delayed payments, making only minimum payments, as well as annualized information regarding payments of commissions and interest. On the other hand, it is important to establish by law that account statements incorporate warnings of the consequences of making late payments, as well as the risks and costs of making only the minimum payment. Likewise, a standardized cover sheet for adhesion contracts for credit operations must be established, which contains the key elements that allow the user to make an immediate comparison of the same type of services offered by various institutions, such as the interest rate, the CAT (Total Cost of Credit), commissions, and warnings regarding rates or commissions that represent a penalty for the client, as well as the circumstances in which they would be applicable, and a box incorporating information regarding guarantees granted by the borrower or a third party. In this sense, it must be mandatory that when providing information about a financial service to a client at a branch, a copy of at least the cover sheet of the adhesion contract must be delivered. With respect to deposit operations, cover sheet formats for contracts will be prepared, with the disclosure elements that include the consequences of not maintaining a minimum balance in the account through payment methods such as debit cards. Additionally, in the formats for account statements and contract cover sheets, clear fields will be established that allow distinguishing commissions, as well as their impact on a specific credit line or deposit operation. (sic) credit.

Likewise, establish that whoever offers credit cards with different interest rates or credit limits must clearly publish the conditions that the credit applicant must meet for each type of advertised product.
It is proposed that when a loan requires a guarantor, the following legend should be incorporated in a visible manner to the naked eye in the contract in the space where it must be signed as determined in secondary rules, in order to warn of the risks incurred.
It should also be established the obligation that Entities, prior to contracting their products, keep standardized formats with relevant information for comparison purposes available to the public, whose period of validity will be determined in Law, and the format will have the characteristics determined by CONDUSEF in rules.
II. Credit Cards
The issue of credit card regulation is one of the most relevant, for which the adoption of various norms in protection of users of financial services is proposed, such as granting a reasonable time to pay them, which implies that if the payment deadline falls on a weekend or other non-working day, payment is allowed on the next working day.
Likewise, it is important to prohibit the practice consisting of Entities charging their Clients on credit cards based on balances from days prior to the most recent account statement cut-off. In this way, abusive practices on the part of the E In the event that a user pays an amount greater than the minimum on a credit card, there must be the possibility of applying the payment in the way that most benefits the user, as is the case where there are differentiated rates, for example in a case of balances interest-free months, that the excess payment falls on amortizing the part of the credit that does generate interest. Likewise, it is intended to establish the procedure to be followed in the event that a user of financial services, who has a contract for the opening of credit in a current account with a financial institution, objects to a payment. A norm is incorporated that establishes that in credit cards, if the interest rate is increased, it cannot be applied to charges made prior to said increase. Likewise, any charge for overdraft on said instruments will be prohibited, and Condusef will have attributions to regulate minimum payments in each type of credit card through general rules.
III. Good Practices
In the category here called "good practices," a series of norms are incorporated that directly tend to foster an equitable relationship between the user of financial services and the Entities with which such services are contracted, as well as to avoid excessive indebtedness by borrowers that could diminish their family economy.
It is for this reason that it is proposed that there be a mechanism that clearly leaves the consumer with the limit to which they can incur debt, through the inclusion in relevant documents of a legend that indicates, by way of a traffic light, that if their credit commitments exceed the equivalent of two months of their income, they should be very careful with their indebtedness and if they exceed the equivalent of four months of income, they may be in a very serious situation. On the other hand, consumers must be aware of the consequences of providing false information to obtain credit, for which this information must be evidenced, for which credit applications in adhesion contracts must contain a legend that warns borrowers of the civil or criminal penalties to which they may be subject in such cases. Additionally, it will be prohibited and severe penalties will be imposed on whoever provides for adjustments to interest rates on amounts already disbursed. Likewise, the obligation must be established that potential borrowers or their joint obligors, prior to formalizing a contract, sign a separate document containing important recommendations regarding their rights. It is proposed to expressly prohibit the granting of credit to minors, as well as the sending of any information to them related to the granting of credit. It is also proposed to prohibit the delivery of pre-approved credit cards without them being requested. It should be noted that, the faculty to cancel a consumer credit contract before its settlement must be established, in which case the relationship regarding the repayment of the credit and payment of the interest rate will remain in force. Additionally, it will be established in Law that in the contracting of credits the institution must have life insurance and, if applicable, damage insurance, and that the cost of said insurance is absorbed by the institution itself, reflecting it in the interest rate. The lender in a credit card must be prohibited from raising the credit limit without the user's request. Likewise, establish that when insurance is offered for the use of a Credit Card, in the application format, the cost of the insurance is provided separately and indicated, above the user's signature, that the contracting of the insurance is optional. On the other hand, it is proposed to establish restrictions on the hours in which Entities make offers to Clients either directly or by phone, at their workplace. It is proposed to establish a grace period for the user of financial services to cancel an operation within ten working days following the signing of a contract without incurring a penalty. For these purposes, the financial institution must notify the contracting user of this right in order for the stated grace period to begin to run. Likewise, the scope of the simplified clarification process provided for in article 23 of the Law for Transparency and Ordering of Financial Services must be expanded, in order for it to
apply to all types of operations.
IV. Transaction Costs
In order to foster competition, the first step is the decrease in transaction costs, that is, the costs incurred by a client for switching their operations from one institution to another. In this sense, it is proposed first to establish rules that facilitate the transfer of payroll deposits.
Likewise, it is proposed to flexibilize the requirements for a client to switch banks, for which a user of financial services can make the change in a package that includes various products of the same Entity, such as their credits and deposit operations. It is proposed to simplify procedures, in order that with a written notice to the originating and receiving entity, the receiving entity can carry out the procedures before the originating entity to carry out the movement. In this sense, norms in matters of "portability" of financial services will be incorporated into the Law of Credit Institutions, which contain measures to carry out the transfer of financial services. The efficiency in the procedures for changing financial services from one company to another could provide guidelines for having something similar to the "portability" of said services, which would foster competition among financial service providers. It is established that credit institutions cannot charge commissions or fees for the cancellation of active and passive operations, in this sense it is important to highlight that Banks do not present monetary losses when carrying out these cancellations since the costs of the operation were absorbed during the contractual relationship.

Strengthening of the functions of CONDUSEF
The Law for the Protection and Defense of Users of Financial Services, published in the Official Journal of the Federation on January 18, 1999, was a significant step taken by the State to create the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF).
Since the date of entry into force of the Law for the Protection and Defense of Users of Financial Services, thousands of users of financial services have benefited, although the effectiveness expected at the time of the publication of the law has not yet been achieved.
This legal body has been modified on successive occasions by the H. Congress of the Union as the needs of the sector have advanced, together with the development of other legal bodies such as the Law of Credit Institutions and the Law for Transparency and Ordering of Financial Services.
These legal orders have allowed, on the one hand, to achieve greater achievements for the benefit of users of financial services, and on the other hand, work has been done with financial institutions to promote better practices.
This effort made by CONDUSEF represents a fundamental advance in its action, however, the attributions with which said Commission currently has are insufficient, since the lack of attributions that allow it to regulate and supervise financial entities for the benefit of users of financial services, causes its scope of effectiveness to be limited.
The fact that CONDUSEF does not have attributions to sanction non-compliance with financial regulation linked to the user of financial services (Transparency, adhesion contracts, misleading advertising, among others), results in that equity in the relationship between users and financial institutions cannot be effectively procured.
In this context, adjustments are proposed both to the Law of Credit Institutions, to the Law for Transparency and Ordering of Financial Services, as well as to the Law for the Protection and Defense of Users of Financial Services, in order to endow CONDUSEF with greater attributions, and thus grant greater benefits in favor of users of financial services and stimulate greater growth of the financial sector, as referred to below. 1.- Reforms to the Law of Credit Institutions It is necessary to reform the Law of Credit Institutions, since it is intended to responsibly expand the scope of action of CONDUSEF. It is proposed the transfer of attributions from the CNBV to supervise the transfer of savers' resources to a global account and their prescription in favor of public beneficence when accounts have had no movement. It is also planned the transfer from the CNBV of the attributions to issue norms in matters of sound commercial uses in the offering and provision of financial services, the above for the benefit of users of said services. Additionally, it is proposed the transfer of attributions from the CNBV for the issuance of norms in matters of accounts that banks open to provide assistance for catastrophes.

It is proposed to transfer the powers of the SHCP regarding the authorization of the use of reserved words (bank and similar) in the names and establishments of persons who do not have authorization, as well as the creation of a registry of such authorizations, since these rules are established for the protection of the general public.

It is necessary for CONDUSEF to have the authority to impose administrative fines for violations of the Credit Institutions Law, the provisions of the SHCP, and those issued by the Commission itself, as it currently lacks this faculty.

It is also proposed that CONDUSEF be able to report to the Federal Economic Competition Commission when, in the exercise of its powers, it detects any of the practices mentioned in Article 119 of the Credit Institutions Law. This is to avoid monopolistic practices to the detriment of users.

A very important point is that the proposed reform will allow CONDUSEF to supervise and monitor, within its jurisdiction, multiple banking institutions regulated by the Credit Institutions Law.

It should be noted that, with the reforms to this Law, CONDUSEF will be able to conduct visits to credit institutions, so that they comply with the provisions issued by the Commission itself, which will allow financial institutions to make the appropriate corrections, if any were found during the visits.

Finally, CONDUSEF will be able to investigate facts, acts, or omissions regarding violations of the Credit Institutions Law and other provisions derived from it, within its jurisdiction, which will bring greater benefits to users of financial services.

2.- Reforms to the Law for the Transparency and Ordering of Financial Services

On June 15, 2007, the new Law for the Transparency and Ordering of Financial Services was published in the Official Gazette of the Federation.

The reform proposed today grants greater legal certainty to users of financial services, as it will transfer the regulatory, supervisory, and sanctioning powers in said Law from the CNBV to CONDUSEF. This is because the Law for the Transparency and Ordering of Financial Services contains norms of great interest to users of financial services, so it is more consistent that they fall under the scope of action of CONDUSEF rather than the CNBV.

On the other hand, the commission registry will be made not only at the Bank of Mexico but also at CONDUSEF, to give said registry a greater focus on the protection of the user of financial services.

Likewise, when the Bank of Mexico issues norms regarding the calculation of the CAT, it must hear the opinion of the Bank of Mexico.

The foregoing will undoubtedly result in greater benefits for users of financial services and will give them greater legal certainty in the celebration of operations with credit institutions.

3.- Reforms to the Law for the Protection and Defense of Users of Financial Services

First, it is proposed to reform Article 11 of the aforementioned Law, in order for CONDUSEF to protect and represent the interests of Users in controversies between them and Financial Institutions.

Likewise, by reforming the aforementioned article, it is intended to promote and protect the rights of the User, as well as to apply the necessary measures to promote equity and legal certainty in the relationships between Financial Institutions and Users.

It should be mentioned that it is necessary for CONDUSEF to be able to report to the Public Ministry when it learns of facts that could constitute crimes in general, and to the Ministry of Finance and Public Credit when they are crimes typified in financial laws. Likewise, it can report to the competent authorities, acts that constitute administrative violations.

It is important to highlight that CONDUSEF must be endowed with powers to monitor and verify compliance with the provisions contained in the Credit Institutions Law and other financial laws within its jurisdiction, as this would prevent bad practices in the sector.

On the other hand, and given the experience of the Federal Consumer Protection Agency (PROFECO), several of the powers it has have been taken up to incorporate them into the Law for the Protection and Defense of Users of Financial Services. This is so that CONDUSEF achieves greater efficacy for the benefit of users of financial services.

Now, although the National Banking and Securities Commission issues rules for the proper performance of financial institutions, it is necessary to grant powers to CONDUSEF so that it can require Financial Institutions to take appropriate measures to combat, stop, modify, or avoid any kind of practices that harm the interests of Users.

In this sense, CONDUSEF, in coordination with the Ministry of Finance and Public Credit, must promote the formulation, dissemination, and use of codes of ethics by Financial Institutions, the foregoing for the benefit of users of financial services.

Likewise, it is necessary to promote new or better systems and mechanisms that facilitate Users' access to the products or services provided by Financial Institutions. In this regard, CONDUSEF plays a leading role, as it is an adequate channel between financial institutions and users of financial services, so it must have tools that allow it to achieve this goal.

On the other hand, the creation of a Financial Services Arbitration System is proposed, to entrust CONDUSEF with the organization, operation, and promotion of said system, which would have the objective that financial institutions issue public offers of submission to arbitration to solve future controversies, thereby enhancing the confidence in financial activities and distinguishing from the public the institutions that voluntarily adhere to the arbitration system.

Finally, it is necessary for CONDUSEF to have powers so that it can order that Users be informed about the actions or omissions of Financial Institutions that affect their interests or rights, in order that they have adequate tools for decision-making.

In view of the foregoing and founded, I submit to the consideration of this Honorable Sovereignty the following

STATEMENT OF REASONS
(Decree published on August 13, 2009)

Popular savings banks in Mexico have their origins in the mid-last century, driven by the Mexican Social Secretariat. In 1951, the first three banks were established in Mexico City, and in 1954, the first National Congress of Popular Savings Banks was convened, giving rise to the Central Council of Popular Savings Banks and subsequently to the constitution of various regional federations.

In 1964, the Mexican Confederation of Popular Savings Banks was founded, a fact that marked a new stage in the history of popular savings banks, as it promoted the unification of the federations of Yucatan, Jalisco, the Federal District, the State of Mexico, Zacatecas, Coahuila, and Queretaro. For that year, the banking movement was integrated by approximately 500 banks with a little more than 30 thousand members and savings close to 12 million pesos.

However, the size that the banking movement was acquiring all those years, subsisted and evolved without government support or recognition.

It was not until 1991 that the reform of the General Law of Organizations and Auxiliary Credit Activities gave rise to savings and loan societies (SAP), a legal figure that recognized the non-profit purpose and social object of popular savings banks, for which several of them opted to register under this associative figure and thus obtain legal recognition.

It should be mentioned that savings and loan societies, for their constitution and operation, like other auxiliary credit organizations, required authorization from the Ministry of Finance and Public Credit.

In August 1994, the General Law of Cooperative Societies, unlike the 1938 law, recognized the savings and loan cooperative society as a modality of the consumption society, having its own mechanisms for constitution, organization, and self-regulation. In this way, most of the banks that were in the process of authorization as savings and loan societies adopted the figure of cooperative society.

Thus, from 1991 some and from 1994 others, around 500 popular savings banks that operated without any formalization or regulation, decided to transform into savings and loan societies or savings and loan cooperative societies. However, this double regime facilitated the abuse of the cooperative figure by some people and groups who, hiding behind these figures, carried out improper operations that finally defrauded hundreds of savers.

The foregoing motivated the issuance of the Popular Savings and Credit Law in 2001. The purpose of this Law was to concentrate the various popular finance organizations such as popular savings banks, cooperatives, savings banks, credit unions, microfinance institutions, solidarity banks, among others, so that they would transform into popular savings and credit entities and thus come under a single regulatory framework.

From the entry into force of that law, societies that were constituted or were already operating as such, should obtain authorization from the National Banking and Securities Commission (CNBV), to continue operating as popular savings and credit entities, and additionally adopt the figures of savings and loan cooperative society or, if applicable, the popular financial society.

Problematic regarding the current regulation of savings and loan cooperative societies

The Popular Savings and Credit Law has been in force for more than seven years and during this period it has undergone eight reforms, particularly with respect to the provisions regarding the deadlines to comply with it and the prudential rules of regulation and supervision issued by the National Banking and Securities Commission (CNBV), through a myriad of transitional articles.

Initially, a transitional period of two years was established in this Law so that the various organizations with savings collection activities and subsequent placement as loans (savings and loan societies, credit unions, savings and loan cooperative societies, cooperatives with savings and loan sections) would begin their authorization process to operate as a popular savings and credit entity before the National Banking and Securities Commission (CNBV) under the terms of this Law.

However, given the complexity of that law, to this day most of these organizations have not obtained such authorization, despite the fact that through various reforms the deadlines to comply with said process have been modified.

To date, the subjects that have been authorized by the National Banking and Securities Commission to operate as popular savings and credit entities are 73 in total, of which 41 are authorized savings and loan cooperative societies and 32 are popular financial societies.

This number represents only 14% of a universe of approximately 500 banks, if we take as a base the figures reported by the National Banking and Securities Commission itself. However, specialists in the subject point out that the universe of banks operating in the country is much larger, as there are estimates that there are thousands of organizations that carry out these savings and loan activities, so that sector authorities do not even have a registry and therefore do not regulate them.

It was for this concern that during the last year and a half, senators and deputies from the Economic Promotion and Cooperative Promotion and Social Economy Commissions respectively, and responsible for the subject in the two Chambers, initiated a consultation process through the holding of Forums, in which representatives of the sector, national and foreign specialists, and the financial authorities themselves participated. Likewise, various organizations that group these societies, higher education institutions, and some local governments did the same. In all of them, the problematic nature of the fact that, almost eight years after the entry into force of the Popular Savings and Credit Law, a minimal part of the savings and loan cooperative societies have obtained the authorization of the National Banking and Securities Commission, was exposed and discussed.

The main conclusions of this consultation process can be synthesized in the following points:

The Popular Savings and Credit Law inappropriately regulates organisms that have different legal nature, purposes, and objectives. On the one hand, savings and loan cooperative societies, which are organizations belonging to the social sector of the economy, and on the other, popular financial societies, which are constituted as anonymous societies and belong to the private sector.

The Popular Savings and Credit Law does not recognize the nature of cooperatives as non-profit organisms belonging to the social sector.

This Law poses a double regulation with respect to the General Law of Cooperative Societies regarding the constitution of savings and loan cooperative societies, as well as the organisms in which they voluntarily group for their representation, which are the Confederation and the Federations.

It distorts the figure of federations and confederations, making them entities that passed to be supervised and authorized by the National Banking and Securities Commission, while auxiliary supervision functions and the administration of the protection fund were granted to them, respectively.

It is not appropriate for the Popular Savings and Credit Law to grant organisms and individuals, who are not authority, powers to impose conventional penalties and to issue regulation, since such attributes must correspond exclusively to the authorities of the financial sector.

It was agreed on the need to create a legal framework that exclusively regulates savings and loan cooperative societies and that recognizes and respects their nature appropriately.

Law formulation process.

Taking these conclusions as a base, from January of this year, in order to analyze the regulation applicable to savings and loan cooperative societies, a working group was integrated in which representatives of the two main organizations of the savings and loan cooperative society sector (Mexican Council of Popular Savings and Credit, COMACREP and the National Cooperative Alliance, ALCONA); financial authorities, including the heads of the National Banking and Securities Commission (CNBV) and the Undersecretariat of Finance and Public Credit; as well as senators and deputies from the Commissions related to the subject of cooperativism and the social economy participated.

The working group began to meet and generated a draft document with the topics that was defined should contain the new legal order that will regulate savings and loan cooperative societies. This document was analyzed and discussed, being enriched with the proposals, opinions, or observations of all participants.

Finally, a consensus document was obtained, which contains the proposals with which legislators, financial authorities, and sector representatives agree. This document was named: "Fundamental aspects that must be considered in the drafting of the: 'Law that Regulates the Activities of Savings and Loan Cooperative Societies (LRASCAP)'".

It has been a process in which the objective that animated the parties, both the savings and loan cooperative societies that are authorized, or in the process of being so under the terms of the Popular Savings and Credit Law, and those that did not consider their compliance possible, has been to find coincident points to reach agreements that allow a consensual reform and that provide certainty to the operation of savings and loan cooperative societies, as well as to their members who entrust their savings to them.

Content of the new regulation

The new legal framework for the regulation of savings and loan cooperative societies is based on the following principles:

Respect the nature and form of organization of savings and loan cooperative societies as non-profit societies belonging to the social sector of the economy.

Register and regulate, if applicable, all cooperative societies that offer savings and loan services to their members, without exception and regardless of their size or geographic location, with the objective of promoting their growth and development.

Recognize the authorizations and other administrative acts issued in favor of savings and loan cooperative societies under the Popular Savings and Credit Law, maintaining their total validity upon incorporation into the new law that will regulate their activity.

Maintain the leadership of financial authorities and, specifically, reiterate the powers of the National Banking and Securities Commission of authorization, supervision, regulation, and sanction of the sector, in order to foster its healthy development in protection of savers.

Law to Regulate the Activities of Savings and Loan Cooperative Societies

The present draft decree issues the Law to Regulate the Activities of Savings and Loan Cooperative Societies, as a law of public order, social interest, and general observance throughout the national territory.

It should be noted that in this new Law, the character of "Social Interest" is added, as it is based on the recognition of the belonging of savings and loan cooperative societies to the social sector of the economy, as well as their social, non-profit nature.

The object of the Law to Regulate the Activities of Savings and Loan Cooperative Societies is:

To regulate the activities and operations of savings and loan cooperative societies, in particular, the collection of funds or monetary resources and their placement through loans, credits, or other operations carried out by savings and loan cooperative societies with their members;

To promote their healthy and balanced development; the protection of the interests of member savers and the general public; and

To establish the terms under which the State, through the corresponding authorities, will exercise the functions of authorization, regulation, supervision, and sanction of the sector.

Among the contributions of this new Law, we can mention the following:

The National Banking and Securities Commission will have the powers to authorize, regulate, supervise, and sanction savings and loan cooperative societies with assets greater than 6.5 million Investment Units (UDIs), which will be classified into four levels of operation.

It should be noted that the regulation issued by the National Banking and Securities Commission for this effect will be defined based on the activities, operations, products, and amount of assets of the savings and loan cooperative societies.

Cooperative savings and loan societies with assets less than 6.5 million Investment Units (UDIs) will not be supervised nor have deposit insurance, unless they request and obtain authorization to operate at a level other than the basic due to their own interests. Such authorization aims to subject them to the supervision of the National Banking and Securities Commission (CNBV) and to make the corresponding contributions to the Protection Fund.

A private Protection Fund will be created through a trust established in a Development Bank, which will centralize the following two functions: i) auxiliary supervision, through an Auxiliary Supervision Committee, with a central office and regional offices, and ii) administration of the Protection Fund through another independent committee, which will be called the Cooperative Savings Protection Committee.

General Law of Cooperative Societies: Consequently, the project contains reforms, additions, and repeals to various provisions of the General Law of Cooperative Societies, highlighting the following:

To provide certainty, it is now defined that this law establishes the provisions relative to the organization, social nature, and constitution of cooperative savings and loan societies. Likewise, the constitution, organization, and functioning of the federations and Confederation of cooperative savings and loan societies will also be established in the General Law of Cooperative Societies. Therefore, these federations and confederation will not have the functions of auxiliary supervision and administration of the protection fund that were conferred upon them by the Popular Savings and Credit Law.

The General Law of Cooperative Societies will provide for the existence of a single Confederation that groups all cooperative savings and loan societies, and which will be a body of consultation and collaboration with the State.

The election of directors and the designation of officials will depend on the cooperative savings and loan societies themselves, and the procedures for election and designation, as well as the requirements to hold each position, must be specified in their constitutive bases, so their determination will correspond to the corresponding assemblies.

Popular Savings and Credit Law:
With respect to the Popular Savings and Credit Law:
This Law will cease to regulate cooperative savings and loan societies, as it will exclusively regulate popular financial societies and their federations, who will exclusively group and auxiliary supervise these societies.

Therefore, all those provisions that refer to cooperative savings and loan societies are repealed, added to, and modified, since they will no longer be regulated by this Law.

Likewise, the regulatory framework regarding the powers of the National Banking and Securities Commission for the supervision of popular financial societies is updated.

Law of the National Banking and Securities Commission.

Finally, reforms are included in the Law of the National Banking and Securities Commission, which consist of the following:

Expanding the legal mandate of the National Banking and Securities Commission so that the powers it currently has to regulate, supervise, and sanction cooperative savings and loan societies that are part of the social sector, are exercised with a new approach that would be subject to the following principles:

Recognizing that the Mexican financial system has two large sectors, the first corresponding to financial entities constituted based on commercial and financial laws, corresponding to the public and private sector, and the second corresponding to cooperative savings and loan societies, as societies constituted in accordance with the General Law of Cooperative Societies and members of the social sector.

Subjecting the powers of supervision, regulation, and sanction of the National Banking and Securities Commission, with respect to cooperative savings and loan societies, to the terms of the laws that govern them, such as the General Law of Cooperative Societies and the Law to Regulate the Activities of Cooperative Savings and Loan Societies:

Among other reforms to the Law of the National Banking and Securities Commission, the Commission is authorized to supervise and regulate within the scope of its competence and in an auxiliary manner through the supervision bodies established, public and private financial entities, in accordance with their own regulation, and on the other hand, cooperative savings and loan societies through their own Law to Regulate the Activities of Cooperative Savings and Loan Societies, in order to ensure their stability and proper functioning, as well as to maintain and foster the healthy and balanced development of cooperative savings and loan societies.

For the above reasons, the following is submitted to the consideration of this Sovereignty:

Statement of Motives
(Decree of April 9, 2012)

In our country, at the federal level, in accordance with what is provided in article 80 of the Constitution of the Political Constitution of the United Mexican States, there is a Supreme Executive Power of the Union, which is deposited in a single individual called the President of the United Mexican States.

Article 90 of this same instrument provides that the Federal Public Administration will be Centralized and Paraestatal in accordance with the Organic Law issued by Congress.

In this way, the Organic Law of the Federal Public Administration establishes the bases for the organization of the Federal Public Administration, centralized and paraestatal.

According to this Law, the President of the Republic is assisted, in the exercise of his attributes and for the handling of administrative order business entrusted to each of the State Secretariats and paraestatal entities.

This Law states in its article 1 that the Centralized Public Administration is integrated by the Presidency of the Republic, the State Secretariats, the Administrative Departments, and the Legal Counsel of the Federal Executive.

On the other hand, decentralized bodies, state participation companies, national credit institutions, national auxiliary credit organizations, national insurance and surety institutions, and trusts, make up the paraestatal public administration.

Administrative centralization is the fundamental form in which public entities of an administrative nature are organized, and its main quality is that centralized entities are related to each other by a constant hierarchical link. At the top of the centralized public administration is the President of the Republic, and subordinate to him are all those lower public organs.

Currently, the Organic Law of the Federal Public Administration provides, in its article 26, that for the handling of administrative order matters, the Executive Power has the following Administrative dependencies:

• Ministry of the Interior.

• Ministry of Foreign Affairs.

• Ministry of National Defense.

• Ministry of the Navy.

• Ministry of Public Security.

• Ministry of Finance and Public Credit.

• Ministry of Social Development.

• Ministry of Environment and Natural Resources.

• Ministry of Energy.

• Ministry of Economy.

• Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food.

• Ministry of Communications and Transportation.

• Ministry of the Public Function.

• Ministry of Public Education.

• Ministry of Health.

• Ministry of Labor and Social Welfare.

• Ministry of Agrarian Reform.

• Ministry of Tourism.

• Legal Counsel of the Federal Executive.

Throughout the history of our country, the federal public administration has been updated and transformed. The organic structure of the public administration has evolved, such that the competencies of the administrative organs that make it up have been redistributed or reassigned on several occasions.

Competence consists of a series of faculties and legal obligations that the legislation attributes to the organs of the administration. It fixes the circumstances in which the organ has the obligation to act or abstain in a certain matter or area of administration, and determines the degree of action and the territorial surface in which the action of the organ will be circumscribed. And linked to competence is the denomination received by each administrative organ, which establishes the attributes corresponding to each of these.

It is for this reason that the denomination received by the organs of the public administration must be consistent throughout our legal order. The lack of timely updating of the denominations of the dependencies in the different federal laws has had harmful consequences on the legal certainty that must prevail, both in inter-institutional relations and in the relationship of institutions with individuals.

In the conception of the economist, Douglass C. North, the function of institutions is to reduce uncertainty by providing a structure for daily life. Thanks to institutions, understood as rules and norms of coexistence, we can foresee the consequences of our conduct or the reactions of others and thus carry out human exchanges that constitute the matter of our daily life.

Institutions are mechanisms of social order and cooperation that order the behavior of a group of individuals through the elaboration and implementation of rules. It is thus that institutions transcend human lives and intentions by identifying with the permanence of a social purpose: to give order to society.

In any legal system, to have efficacy, not only must the normative assumption exist, but it must be accurate, clear, and explicit with reality to be applied, and to not create a difficulty in the sense of the provision itself.

In this way, it is necessary to keep updated the denomination of the various dependencies of the Federal Public Administration in all laws and in the various instruments in which reference is made to them, since if not done, it promotes a lack of legal logic and certainty, not only by the simple denomination of the dependency, but by the inconsistencies and possible contradictory effects when these entities do not respond promptly to the denominations found in the legal norms.

It is of great importance that at all times the legal security enshrined in articles 14 and 16 of the Political Constitution of the United Mexican States prevails in the relationship between government and governed.

The need for this legal security has been expressed in various jurisprudence theses that are transcribed below:

a. Jurisprudence Thesis P./J 10/94 of the Full Court of the Supreme Court of Justice of the Nation, published in the Gazette of the Judicial Seminar of the Federation, Number 77, May 1994, page 12, rubric: "Competence, its justification is an essential requirement of the authority's act":
".... the guarantee of justification enshrined in article 16 of the Political Constitution of the United Mexican States, carries with it the idea of exactness and precision in the citation of legal norms, that empower the administrative authority to issue the act of annoyance in question, attending to the legally protected value by the constitutional requirement, which is the possibility of granting certainty and legal security to the individual against the acts of the authorities that affect or injure their legal interest and, therefore, ensure the prerogative of their defense, before an act that does not meet the necessary legal requirements...".

b. Contradiction of theses 94/2000-SS. Between those sustained by the Third Collegiate Tribunal in Administrative Matters of the Sixth Circuit and the First and Fourth Collegiate Tribunals in Administrative Matters, both of the First Circuit. October 26, 2001. Unanimity of four votes. Absent: Juan Díaz Romero. Reporter: Guillermo I. Ortiz Mayagoitia. Secretariat: Lourdes Margarita García Galicia. Jurisprudence Thesis 57/2001. Approved by the Second Chamber of this High Tribunal, in private session on the thirty-first of October two thousand one, with the rubric:
"Administrative authorities. Are obliged to cite the legal provisions that justify their competence":
"Article 16 of the Federal Constitution prescribes that acts of annoyance, to be legal, must come from a competent authority and meet the essential formalities that give them legal efficacy, which means that every act of authority must be issued by who is legitimized for it, expressed in the act itself of annoyance, the device, agreement or Decree that grants such legitimation, since if not, the governed is left in a state of defenselessness by not being able to examine if the action of the issuing authority is within the respective competence scope".

c. Appendix to the Judicial Seminar of the Federation 1917-1995, Volume VI, Common Matter, page 111, thesis 165 with rubric: "Competence. Its justification is an essential requirement of the authority's act." Subjects: Constitutional-Administrative, Type: Jurisprudence by repetition of criteria.
"...It is indispensable that both the attributes of the authority, as well as its competence and its name or identification as a moral entity remain clear and expressly contemplated in the norms that give it life and legal attributes for greater security and certainty of the governed..."

However, there are still gaps in the articles of many federal laws, in which citation, validity, and responsibility are still given to dependencies and institutions that no longer exist today; or to institutions that have changed their denomination and even their functions.

The primary legal framework must be adapted to the social and political conditions of the country, and it is a task of our legislative work to give certainty and legal security to the citizen through the updating of current legislation.

In addition to the above, on November 13, 2007, the Decree by which articles 29, 73, 90, 92, 93, 95, 110, and 111 of the Political Constitution of the United Mexican States are reformed was published in the Official Journal of the Federation, through which the denominations of some State Secretariats were updated and the Administrative Departments, which were mentioned in our Magna Carta, were eliminated.

The second transitory article of said Decree provided as follows: "The Congress of the Union at the beginning of the validity of this Decree will make the corresponding updates to federal legislation, in accordance with what is stipulated in this Decree. The states and the Federal District must adapt their laws in accordance with the provisions of this Decree no later than six months after its publication in the Official Journal of the Federation."

Thus, the purpose of this initiative is to follow up and continue the task of the Mexican Congress, to update in all Federal Laws the current denominations of all the State Secretariats cited in them.

Finally, it is important that the technological advances of our time become part of the tools that allow us to improve legislative work and therefore, in order that in the future any change in the denomination of state secretariats can be reflected in the respective laws, a database of federal laws in which their articles refer to various institutions and dependencies, with updated denominations including the changes included in this initiative, is attached with this initiative in an electronic device. This database will allow updates to the respective laws to be made, when for some reason it is decided to change the name of the State Secretariats, thus giving the legal certainty that is required to have in all laws.

For all the above stated and founded, the following is submitted to the consideration of this Sovereignty:

Statement of Motives
(Decree of January 10, 2014)

In view of the State's obligation to observe the bases and principles that must prevail in the exercise of the right to access information, as well as the guarantee of protection of personal data, derived from recent reforms to articles 6 and 16 of the Constitution, respectively, it is pertinent to adapt the current regulatory framework, to give publicity to the sanctions imposed by the National Banking and Securities Commission within the scope of its competence, in order to generate disciplines in the markets it regulates, supervises, and sanctions.

In the framework of the above, through this initiative, it is proposed to reform the Law of the National Banking and Securities Commission, in order to empower said Commission to disseminate through its Internet portal, the resolutions it issues as a consequence of the substantiation of administrative sanctioning procedures.

It is important to maintain that the name, denomination, or corporate name of the offender must be specified, which does not constitute an act privative of any right, given the transparency that permeates the dissemination we are concerned with, by requiring the sanctioning authority to also specify the means of defense that the accused has asserted or are susceptible to be interposed for that effect. This, in full compliance with what is prescribed by the first and second paragraphs of article 16 of the Constitution.

In congruence with the above, reforms are proposed in the same sense in the Law to Regulate the Activities of Credit Information Societies.

In addition to the above, it was decided to include in the reforms proposed to the Law of the National Banking and Securities Commission, those highlighted below:

• It is proposed to include in the text of the cited instrument, the precision that exchange centers and money transmitters are subject to supervision by the Commission, in view that on August 3, 2011, the "Decree by which various provisions of the General Law of Auxiliary Credit Organizations and Activities are reformed, added, and repealed" was published in the Official Journal of the Federation, through which the National Banking and Securities Commission was empowered to supervise exchange centers, money transmitters, and unregulated multiple-object financial societies, exclusively regarding compliance with what is provided in article 95 Bis of the General Law of Auxiliary Credit Organizations and Activities, and the provisions emanating from said article in matters of prevention, detection, and reporting of acts, omissions, or operations that could be located in the circumstances of articles 139, 148 Bis, or 400 Bis of the Federal Penal Code.

• It is intended to add powers to the Commission so that it can elaborate and publish statistics of entities and financial markets, solvency, stability, and liquidity indicators, as well as to publish representative samples of databases. The foregoing, always that the corresponding information does not contain reserved or confidential information.

• It is proposed to empower the Commission to order corrective measures, regarding various aspects in prudential matters, accounting records, and financial statements, as well as in relation to the calculation of the capitalization index or level.

• It is proposed to expressly incorporate in the powers with which the Governing Board of the Commission has, that consisting of revoking the authorizations of the entities that said collegiate body has granted, in order to give greater legal certainty.

• It is intended to limit the indelegable powers of the President of the Commission to those that by their importance merit it, being able to exercise the other powers other public servants of said Commission with the object of giving speed to the exercise of such attributes.

• It is proposed to strengthen the information exchange regime of the Commission with foreign financial authorities, in order that it has broad attributes, being able to provide information protected by confidentiality provisions as long as there is an agreement where the principle of reciprocity is contemplated. Likewise, it is proposed the possibility that the Commission itself carries out inspection visits to issuers with securities registered in the National Securities Register or in the case of subsidiaries, to procure better understanding between financial authorities.

• In consideration of the supervision attributes that our legal system confers to financial authorities, it is not extraordinary that situation in which the same financial entity is subject to supervision visits at different moments within the same year by the public servants of each authority. In this regard, it is convenient to establish in law, a mechanism by which the different financial authorities procure to program, to the greatest extent possible according to their capabilities, joint visits to the same entity, without this imposing an obstacle for the verification and inspection activities that these authorities have in charge.

• It is proposed to include provisions relative to self-correction programs to which financial entities supervised by the Commission may be subject for violations of what is provided in the laws that govern them, in order to recognize the figure that exists in other jurisdictions. These self-correction programs will have the purpose of remedying non-compliance with laws, as long as such conduct is not considered as serious infractions. The foregoing will generate discipline in the markets, thereby reducing administrative sanctioning procedures regarding those more relevant conduct.

Finally, it is proposed to limit the restriction requiring Mexican citizenship by birth and not having acquired another nationality, only for the President of the National Banking and Securities Commission; this is to avoid inconsistencies in the application of other laws, particularly those regarding the requirements applicable to the other members of the Board of Directors of said Commission, and to relax it for the case of the Vice Presidents, Head of the Internal Control Body, and General Managers.

As in the case of the National Banking and Securities Commission Law, it is proposed to include regulation on self-correction programs in the Law for Regulating Credit Information Societies, with the objective of having solid and consistent legal frameworks, generating certainty in the application and execution of such programs.

Likewise, in order to provide greater certainty in the exercise of the authority currently held by the National Banking and Securities Commission contained in other financial legislations regarding the possibility of reprimanding offenders, it is proposed to establish in the Law for Regulating Credit Information Societies that when imposing the described sanction, the Commission must consider the personal antecedents of the offender, the gravity of the conduct, that there are no elements that allow demonstrating that the interests of third parties or the financial system itself are affected, as well as the existence of mitigating factors.

In the same vein, it is also planned to provide in the Law for Regulating Credit Information Societies the authority of said Commission to abstain from imposing the respective sanctions. Now, the aforementioned legal provisions will prevent that the described authority must be exercised considering, among others, that the facts, acts, or omissions in question do not have gravity, there is no recidivism, and they do not constitute a crime.

As a complement to the strengthening of the sanctioning capacities of the National Banking and Securities Commission that is intended to be achieved with the provisions described above, it is proposed to reinforce the action of the Bank of Mexico in this matter. This is because the Permanent Constituent endowed the Bank of Mexico, in addition to regulatory powers over exchange, intermediation, and financial services, with the necessary authority attributes to carry out such regulation. This last attribute cannot be understood without the power to supervise and monitor, directly, the financial entities subject to its regulations. It is for this reason that it is proposed to establish in the Bank of Mexico Law itself, the means through which the Central Bank can verify compliance with these norms and, if applicable, sanction non-compliance more effectively.

Likewise, as part of the inherent tasks already assigned by Law to the Bank of Mexico, to promote the sound development of the financial system, the proper functioning of payment systems, and, predominantly, the protection of the public's interests, it is also proposed to redefine some conduct of agents of financial intermediation, whose prohibition is necessary to establish.

As a consequence of the above, the modification of the correlative sanctions is planned, in order to ensure that they fulfill the dual purpose, corrective and dissuasive, proper of a State under the Rule of Law.

In line with what was proposed above, the catalog of crimes considered serious in the Federal Code of Criminal Procedures is specified.

In addition to the previous proposals, it is considered important to provide in the Law for Regulating Credit Information Societies the possibility of creating a credit information society as a para-statal entity that is part of the financial system, in order to improve competition conditions in this sector, which will impart dynamism and promote the creation of value-added products, which will be reflected in the cost of credit.

Finally, it is important to highlight that the opening to foreign investment that has been implemented in the Mexican financial system since the early nineties, has had a positive impact on said system insofar as it has significantly increased the level of capitalization of the same, competition among the different participants, as well as innovation in the financial products offered in the market, among other benefits.

In this sense, the interaction of international financial systems has increased drastically in the last 20 years. The globalization of financial services has brought as an inevitable consequence that operations carried out by a financial intermediary could undermine the state of other intermediaries even when they are governed by different legal orders, due to the correlation of financial markets at the global level.

In this context, it is important to highlight that the reforms that have been carried out in recent years on various financial laws and that have allowed the participation of foreign capital in financial intermediaries, reiterate the conviction that the State's leadership over the financial system relies on the Law and the powers to regulate and supervise the intermediaries themselves, and not on the nationality of their capital. Under this same principle, the modifications to the laws and secondary norms have privileged strengthening the prudential and preventive framework over that of corrective measures.

It is for this reason that the present reform initiative intends to release the limits on foreign investment in financial entities; therefore, it is necessary:

I. Reinforce the current premise in order to establish that in order to participate in financial entities in Mexico, foreign official persons must, in addition to not exercising authority functions, certify the independence of their decision-making bodies.

This addition will contribute to guaranteeing that the action of said persons as direct or indirect shareholders of financial entities in Mexico obeys technical reasons and not political objectives.

II. Explicitly contemplate the exceptions that currently provide the treaties and international agreements that Mexico is a party to, especially with regard to the prudential measures that countries implement when they are facing financial crisis scenarios, especially since such measures necessarily result in benefit for the Mexican subsidiaries of financial entities from abroad.

III. Allow the participation of foreign governments when the same represents a minority portion of the social capital of the intermediaries, that is, when it comes to investments whose objective is solely to obtain financial benefits, and not to seek control or effective administration of the financial entity in question.

Additionally, it is proposed to eliminate the requirement to obtain a favorable resolution from the National Commission of Foreign Investments, so that foreign investment exceeds 49% in credit information societies, securities rating agencies, and insurance agents.

With this, it is sought that by releasing foreign investment in these sectors, the development of the activities they perform will be promoted, by having greater participation and capital to increase the volume of their operations, which would result in better service for the general public.

Finally, the reforms to the Savings for Retirement Systems Law that are proposed, attend to the State's commitment to the workers of the country as a fundamental premise, so the present initiative seeks to strengthen the supervisory activity and the regulatory framework that regulates the imposition of administrative sanctions on Participants in the Savings for Retirement Systems.

This is in order for the State to safeguard the interests of the workers and that they obtain a pension that satisfies their needs for maintenance and survival.

For the aforementioned reasons and based on article 71, fraction I, of the Political Constitution of the United Mexican States, I submit to the consideration of the Congress of the Union the following initiative of:

Statement of Motives
(Decree of March 9, 2018)

Based on article 71, fraction I of the Political Constitution of the United Mexican States, I allow myself to submit, through its dignified channel, before that Honorable Assembly, the present Initiative of decree by which the Law for Regulating Financial Technology Institutions is issued and various provisions of the Credit Institutions Law, the Securities Market Law, the General Law of Organizations and Auxiliary Credit Activities, the Law for the Transparency and Ordering of Financial Services, the Law for Regulating Credit Information Societies, the Law for the Protection and Defense of Users of Financial Services, the Law for Regulating Financial Aggregations, the National Banking and Securities Commission Law, and the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin are reformed, added, and repealed.

In recent decades, technology has radically transformed the way in which the trade of goods and services is carried out globally. This revolution of innovation, driven by the wide availability of technology, has had a very important impact on the financial services sector.

The impact of technology has transformed the provision of traditional banking and credit services, through innovations that have generated a significant reduction in the use of branches for the provision of financial services.

This type of technologies have been developed in recent years in harmony with the legislation applicable to regulated and supervised financial entities, but likewise in this period other technological innovations and business models have emerged that do not have regulation and supervision by the authorities on the operations they carry out with their clients, which makes it necessary to include them within the regulated and supervised sector of the financial system.

In addition to the above, it is foreseeable to think about new technologies that promote the decentralization of systems such as blockchain technology (Blockchain in English), as well as the proliferation of the collaborative economy and person-to-person financial services, will modify even more the panorama regarding the way in which financial services are provided in the coming years.

The capacity for expansion of financial services through new technologies is enormous. According to the Fourth Quarterly Statistical Report 2016 prepared by the Federal Institute of Telecommunications, by December 2016 the number of mobile phone subscriptions in Mexico reached 111.7 million, while the number of mobile broadband subscriptions was 74.5 million.

In view of the above, the present Initiative has the object of granting a regulatory space so that innovation through technologies, of financial services, develops and flourishes. This is with the purpose of putting Mexico at the forefront in the development of financial services that are capable of increasing the level of financial inclusion throughout the country and improving competition conditions in the Mexican financial system.

The initiative proposes creating a new Law that will be called "Law for Regulating Financial Technology Institutions", which has as its object to regulate Financial Technology Institutions (FTIs) and the establishment of conditions so that financial entities regulated by this and other financial laws, can develop technological innovations in safe regulatory spaces.

With the presentation of the Initiative, the need is recognized that such a dynamic sector as that of technological innovation requires having a regulatory framework that allows authorities to mitigate risks and allow its expansion in a competitive environment. It is for this reason that the Law for Regulating Financial Technology Institutions is a law that establishes principles, so that from these, the different competent financial authorities emit secondary regulation according to the dynamism inherent to said sector.

The Law for Regulating Financial Technology Institutions is based on the principles of financial inclusion and innovation, consumer protection, preservation of financial stability, promotion of healthy competition, and prevention of money laundering and terrorist financing.

With the principle of financial inclusion, it is sought to bring financial services closer to people and sectors that traditionally have not been part of the financial system, promoting greater financial education and advice on these new alternatives. Likewise, complementing financial inclusion, is the principle of innovation which seeks to provide tools to increase the use of the mentioned services.

The principle of consumer protection has as its objective to protect the client by establishing defense mechanisms and verification of minimum standards, as well as granting regulatory and supervisory powers to financial authorities. Likewise, guidelines for the protection of personal data are established, as well as the obligation of complete disclosure to clients and investors of the operation model and risk factors that the FTI could represent.

As for the principle of preservation of financial stability, what is sought is to establish a general framework of authorized and supervised operation for FTIs, imposing prudential rules proportional to the risks they represent in different matters, such as those financial, operational, market, technological (cyber-security), corporate governance, and accounting rules. Likewise, it is sought that the financial technology market develops with limits and maximum operation amounts in order to avoid regulatory inequality with other financial sectors, thus seeking a level playing field and healthy and balanced competition.

Healthy competition is one of the key factors that is intended to be promoted and at the same time cared for, in virtue of the fact that the Financial Technology industry will allow greater diversity and new distribution channels for financial services, as well as the reduction of costs and improvement in the provision of said services.

A concern that has been the cause of the creation of standards, controls, and regulation for the provision of financial services, both nationally and internationally, has been the risk of money laundering and terrorist financing. It is for this reason that the last mentioned principle intends to prevent and mitigate said risk, seeking the correct financial functioning and its integrity, establishing the regulatory framework already accepted and proven, with minimum identification standards of the client that allow preventing this type of conduct.

In addition to the above, it is relevant to mention that the Law for Regulating Financial Technology Institutions is technologically neutral, that is, the technology is indifferent with respect to the service that is provided.

It is of utmost importance to highlight that the over-regulation of this sector could bring as a consequence a result opposite to the end that this new regulation pursues, potentially damaging the financial market and causing a disincentive in financial inclusion, in addition to creating barriers that could be insurmountable for entrepreneurs, as well as for those who wish to opt to operate with any of the figures recognized in the Law for Regulating Financial Technology Institutions. As a consequence of the above, in the Law only a general regulatory framework is provided, that is, it is only intended to establish the bases and a minimum regulation that must govern FTIs, leaving the rest to be regulated in secondary provisions with the objective of having greater flexibility in its regulation, which would allow it to adapt according to the constant dynamism of this sector.

Although there must be flexibility in the regulation of FTIs, this should not be interpreted as the existence of regulatory arbitrage since FTIs, according to the Law for Regulating Financial Technology Institutions, must comply with the established requirements regarding amounts and limits just as the other entities of the sector comply according to their respective financial laws. However, it is also necessary to emphasize that FTIs must comply with these obligations proportionally to the risks they incur.

Now well, once the principles that guide the action of the entities regulated by the Law for Regulating Financial Technology Institutions and that must also be followed by the authorities in the exercise of their powers are established, the Law establishes the regulation for the different types of FTIs.

FTIs will be authorized, regulated, and supervised entities by financial authorities. To operate as an FTI, the Law for Regulating Financial Technology Institutions establishes that they will require an authorization from the National Banking and Securities Commission, which will be granted prior to the review of the information and documentation mentioned in said Law and prior agreement of the Interinstitutional Committee. Said Committee would be integrated by three key financial authorities, namely, the Ministry of Finance and Public Credit, the National Banking and Securities Commission, and the Bank of Mexico.

The Law for Regulating Financial Technology Institutions will recognize two types of FTIs: collective financing institutions and electronic payment fund institutions.

Collective financing institutions (crowdfunding in English) are those platforms that put in direct contact with people interested in participating in debt, equity, and co-ownership or royalty schemes. These institutions provide access to new sources of financing to segments of the population that are normally not attended by traditional financial entities, regulating three forms.

Debt collective financing institutions are those in which the institution puts in direct contact with investors with applicants who require financing, who, subsequently, will return the resources, generally, with the payment of an interest. Equity collective financing institutions are those that facilitate that investors contribute resources, through the institution, to obtain participations in the social capital of legal person applicants that are promoted by this means to subsequently be participants in the profits of said legal persons. Finally, co-ownership or royalty collective financing institutions are those in which investors contribute resources to a project obtaining a participation in a good or right. This figure has been regulated at the international level in countries such as the United States, Canada, China, Spain, Italy, France, the United Kingdom, and New Zealand.

The Law that is proposed to issue contains the regulation of electronic payment fund institutions, as a consequence of the increase in the use of this payment modality in commerce, since it offers security and acceptance in the businesses that are affiliated.

Regarding this, Peru, Paraguay, Brazil, Colombia, Uruguay, Kenya, and the European Union, among other jurisdictions, have regulated electronic payment funds, defining them in similar terms, as the monetary value represented by a credit enforceable against its issuer, stored in an electronic or digital medium, whose value is constant, denominated in the same currency and equivalent to the funds received by the issuer against its delivery.

In the regulation that is proposed in the Law for Regulating Financial Technology Institutions, electronic payment fund institutions will perform services of issuance, administration, reporting, and transmission of electronic payment funds (e-money in English). Electronic payment funds shall be understood as the monetary value issued at par against the receipt of legal tender currency, which will serve to make payments and transfers.

Likewise, it is proposed that FTIs have the capacity to operate with virtual assets. In this sense, virtual assets are representations of a verifiable digital value, that are not issued nor backed by any central bank or financial entity, that is, they do not have legal tender, and despite that, they generate utilities for their exchange due to their acceptance by the public. In recent years, the use of virtual assets, especially "Bitcoin", has increased, as well as its acceptance and value, so the regulation of institutions in which intermediation with these assets takes place has become increasingly pertinent. Additionally, it is proposed that persons who offer in national territory the purchase and sale of virtual assets, remain subject to the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin.

Considering that the speed with which technological advances occur does not allow adjusting the premises of legal norms with the adequate opportunity and that many of the companies that develop innovative schemes or means are of recent creation, the Initiative contemplates, in addition to FTIs, the regulation of Novel Models. To operate said models, societies must have a temporary authorization granted by the competent Supervisory Commission in the matter of innovation, with the purpose of testing their innovative business models based on technology in financial activities currently regulated by some law of the current financial system. With this, it is sought that societies operating with Novel Models provide their services to a reduced number of clients and for a limited time, which allows experimenting and developing their innovation in the real market in a controlled and supervised manner by the authorities.

The authorization of Novel Models is being implemented in several countries, among which the United Kingdom and Singapore deserve special mention, pioneers in creating a figure known in English as Regulatory Sandbox. Additionally, the Initiative contemplates the possibility of granting

Temporary authorizations to Financial Entities to carry out activities contemplated in their corporate purpose through Novel Models when exceptions to the general provisions applicable to them are necessary.

In matters of protection for users of services offered by Fintech Institutions (ITFs), their supervision shall be subject to the powers of the National Commission for the Protection and Defense of Financial Services Users, for which secondary regulation related to the formalization of legal relationships and the resolution of disputes will be issued. In this regard, the Law for the Protection and Defense of Financial Services Users is amended, and Fintech Institutions are included as financial entities under the terms of the Law for Transparency and Regulation of Financial Services.

Internationally, there is a set of rules and specifications that allow technological applications to communicate with each other. These rules and specifications are called APIs (from the English acronym, which stands for Application Programming Interface). This Initiative proposes that financial entities and Fintech Institutions have open APIs, allowing the interconnectivity of digital financial services as long as there is prior user consent, specifically mentioning that this would not be a violation of financial secrecy. It is important to mention that to use the data shared through APIs, compliance with the general provisions issued by the competent authority is required.

The Federal Executive has sought to generate an environment of greater financial inclusion, in which the increase in well-being for the population is promoted, the movement of financial resources and the obtaining of credit and other financial services under convenient conditions for different sectors of society is incentivized, and competition is promoted, while at the same time ensuring the stability and security of the financial system, risks are mitigated, and the consumer is protected.

This Initiative continues this same trend and fosters innovation in the financial system so that it becomes another engine of growth for the country.

Among the National Goals established in the National Development Plan 2013-2018 is "Prosperous Mexico," whose purpose is to promote sustained growth in productivity, considering that adequate infrastructure and access to strategic inputs can foster competition and allow greater flows of capital and knowledge, in addition to providing favorable conditions for economic development, through regulation that allows healthy competition among companies and the design of a modern economic promotion policy focused on generating innovation and growth in strategic sectors.

To achieve the above, strategies and lines of action were established, among which are: maintaining the macroeconomic stability of the country, democratizing access to financing for projects with growth potential, and guaranteeing clear rules that incentivize the development of a competitive internal market.

As has been established throughout this exposition, among the objectives of the Law are the increase in the level of financial inclusion throughout the country, the increase in access to financing, and the improvement of competition conditions in the Mexican financial system, so the Law to Regulate Fintech Institutions will be an adequate instrument that will help in the fulfillment of the National Development Plan 2013-2018.

For the foregoing and in exercise of the power conferred upon me by Article 71, Section I of the Political Constitution of the United Mexican States, as well as Article 73, Section X of the same instrument, I submit to the consideration of the Honorable Congress of the Union, the following Initiative:

STATEMENT OF MOTIVES
(Decree of May 11, 2022)

On June 6 last, the Decree by which various articles of the Political Constitution of the United Mexican States are reformed, in matters of gender parity, was published in the Official Gazette of the Federation. In the second transitory article, it was established that the Congress of the Union must, within an irrevocable period of one year from its entry into force, make the corresponding normative adjustments, in order to observe the principle of gender parity established in the Constitution.

This is the 10th of 55 initiatives required to comply with the aforementioned Decree.

In that sense, this Initiative aims to reform Article 11 of the Law of the National Banking and Securities Commission, in order for its Board of Directors to be integrated observing the constitutional principle of gender parity.

The Board has primary powers to determine or recommend that proceedings be taken for the admonishment, suspension, or removal and, if applicable, disqualification of councilors, executives, commissioners, fiduciary agents, attorneys-in-fact, officials, independent external auditors, and other persons who may obligate the entities, in accordance with what is established in the laws that govern them; to agree on administrative or managerial intervention of the entities in order to suspend, normalize, or resolve operations that put their solvency, stability, or liquidity in danger, or those violating the laws that govern them or the general provisions derived from them, under the terms established by the laws themselves; to impose administrative sanctions for infractions to the laws that regulate the activities, entities, and persons subject to the supervision of the Commission, as well as to the provisions emanating from them. This power may be delegated to the President, as well as to other public servants of the Commission, considering the nature of the infraction or the amount of the fines. At the proposal of the President of the Commission, administrative fines may be partially or totally forgiven by the Board of Directors; to authorize the constitution and operation of those entities that the laws indicate, and, if applicable, to agree on the revocation of said authorizations, except in the case of investment companies; to authorize the inscription in the special section of the National Registry of Securities and Intermediaries, of securities issued in Mexico or by Mexican legal entities, to be the object of an offer abroad; to examine and, if applicable, approve the general and special reports that the President of the Commission must submit to its consideration, regarding the work of the Commission itself, the situation of the entities, system, and financial markets, as well as regarding the exercise of the powers referred to in Section VIII of Article 16 of the Law in this matter; to approve the annual budgets of income and expenses, as well as the reports on the exercise of the budget; to approve the appointment and removal of the Vice Presidents and Internal Comptroller of the Commission at the proposal of the President; to approve provisions related to the organization of the Commission and to the attributes of its administrative units; to approve the general working conditions that must be observed between the Commission and its personnel.

In ancient Egypt, Greece, or Rome, we were conceived as unequal to man, with weakness and dependence towards them; for example, in Greece, Aristotle considered that woman was an incomplete human being, with lesser capabilities and skills than man, and her only function was reproductive; Plato, for his part, was the first to recognize that both woman and man have the same nature, and are therefore capable of studying and learning. In ancient Rome, woman was considered part of the property and possessions of man or "pater familias," lacking political and civil rights. For her part, in Egypt, there was no equality between women and men; however, in the exercise of power, they could make some decisions for the benefit of their peoples, since legitimacy of a reign was transmitted through the maternal line.

Our struggle to achieve a world and a Mexico with equality has been historical.

Since Mexico began its transformation as an independent State, it had the participation of heroic women who performed various tasks in this struggle. Emblematic cases such as Josefa Ortiz, Leona Vicario, or María Ignacia "La Güera" Rodríguez, belonging to an elite class of New Spain, contributed money and actions to the insurgent cause and served as an example to thousands of women from all corners of the country to make us visible the capacity that woman had to transform her environment.

Time has been ungrateful to the brave women who helped achieve an Independent Mexico.

Some were defamed and accused of being heretics, seductresses, impostors, and murderers, therefore, when various movements emerged formed by Mexicans who wished to participate in public life, they were left behind, since that right was consecrated exclusively for men.

For the second half of the 19th century, our presence in the civil sphere had been increasing; we could finally own real estate, we had contractual capacity, and even, despite being inappropriate, we could involve ourselves in judicial processes or dedicate ourselves to commerce, of course, for this, we had to have the backing of the man of the family, whether our fathers or our husbands, who had to issue through public deed, the express authorization.

Despite the liberal ideology of the Reform, characters like Melchor Ocampo still conceived us as beings of moral superiority but diminished condition compared to men, which can be perceived in his famous epistle:

"The man whose sexual gifts are mainly heat and strength, must give and will give to the woman, protection, food, and direction, always treating her as the most delicate, sensitive, and fine part of himself, and with the magnanimity and generous benevolence that the strong owes to the weak, essentially when this weak one surrenders to him, and when Society has entrusted her to him.

The woman, whose main gifts are self-denial, beauty, compassion, perspicacity, and tenderness, must give and will give to her husband obedience, pleasure, assistance, comfort, and advice, always treating him with the veneration due to the person who supports and defends us, and with the delicacy of one who does not want to exasperate the rough, irritable, and hard part of himself proper to his character."

During the era of the Reform, and despite the diminished condition in which we were considered, we were granted -as a concession- the opportunity to study and to exercise the teaching of pedagogy. In 1869, the first Secondary School for Young Ladies was established, in which pedagogy was introduced in 1875, becoming a Normal School, it was socially accepted that we could exercise the profession of teaching. At that time, we had civil personality, religious participation, and we could even exercise teaching; however, political recognition was still lacking, which we had fought for for so many decades.

By the end of the century, we not only dedicated ourselves to raising children or domestic chores; we also worked cultivating the land or in textile factories, always receiving a lower payment compared to men, even when the same activities were performed. As a result of these discriminatory conditions, in 1884 the saraperas of Puebla and in 1887 the cigarreras of Mexico City, we manifested for equal working conditions and fairer remunerations; however, we did not have an echo in the government's public policies.

During the Porfiriato era, we not only stood out in areas such as writing, music, poetry, or teaching, but also as professionals. Such was the case of Margarita Chorné y Salazar, who on February 1, 1886, managed to graduate as a dentist, being the first to obtain a professional title in Latin America; she was followed by Dr. Matilde Petra Montoya Lafragua on August 24, 1887, who graduated as a medical surgeon; and on July 9, 1898, María Asunción Sandoval de Zarco obtained her title as a lawyer.

From the moment women had access to university education, multiple feminist liberation movements emerged, giving rise to organizations, newspapers, magazines, and conventions that sought to recognize our labor, civil, and political rights. In 1904, the Society for the Protection of Women was founded, which promoted labor rights, and marked the beginning of the feminist movement in Mexico.

In 1906, the group Admirers of Juárez was formed, in which Eulalia Guzmán, Luz Vera, and Hermila Galindo participated, which was emblematic for the Mexican feminist movement, as the right to vote was openly discussed. Unfortunately, after the Revolution, Mexico went through a period of chaos, so the suffragist struggle was reduced to a pending issue.

We had to knock on many doors to be heard by the new constitutionalists, who were not convinced that we were necessary to build a new State.

Subsequently, between 1910 and 1915, at the Law School of Mérida, separate theses on divorce and the recognition of women's rights were developed.

Fortunately, there were characters like Salvador Alvarado, governor of Yucatán, who believed that to rebuild our country, both women and men with convictions were needed, so in 1916 he organized the First Feminist Congress in Yucatán, to which 617 delegates attended, highlighting the participation sent by Hermila Galindo, who in her presentation "Woman in the Future,"

argued that women and men are intellectually equal and therefore demanded the right to the female vote. Similarly, topics such as secular education, the eradication of legal discrimination against women, and the right to participate at all levels of government were touched upon.

Favorable changes came for us after the Feminist Congress of Yucatán; then-President Venustiano Carranza in 1917 reformed the Law on Family Relations, recognizing the legal personality of married women for the celebration of contracts, appearing in trials, and administering their personal assets, as well as recognizing the equality of man and woman in the authority of the home; furthermore, he was an assiduous promoter of the right to divorce.

On January 23, 1917, Hermila Galindo together with Edelmira Trejo and a hundred women, we demanded that the Constituent Congress in Querétaro recognize our political rights. The following words emerge from the exposition:

"The Mexican woman who worries about everything pertaining to the homeland, who has not been indifferent to the course of the revolutionary movement by contributing in various forms, beats at this moment with the same enthusiasm as the members of that Honorable Congress to finally look forward without fear to the lintels of a promising national future, sanctioned the social reforms that satisfy all aspirations, claims for our Republic the unfading glory of being in the Hispanic American continent the point of aim and convergence in the future stages of the civilization of the Spanish-speaking world."

"The nation and the entire world are waiting for your work, gentlemen deputies, and I expect from that new code that will be entrusted to your patriotism and equity as popular representatives forming political parties with legitimate aspirations without personalist obstacles so that the Mexican woman, who has not been excluded in the active revolutionary part, is not excluded in the political part and that, therefore, she achieves from the new situation, rights even if incipient, that put her on the path of her dignification, from which in large part stems the dignification of the homeland."

"It is strict justice that women have the vote in the elections of authorities, because if she has obligations with the social group, it is reasonable that she lacks no rights. The laws apply equally to men and women: the woman pays contributions, the woman, especially the independent one, helps with community expenses, obeys government provisions and, in case she commits a crime, suffers the same penalties as the guilty man. Thus, for obligations, the law considers her equal to man, only when it comes to prerogatives, it denies her and grants her none of those enjoyed by the male."

Unfortunately, we were not heard by the Constituent Assembly and Article 34 of the Constitution excluded us again:

Art. 34.- Are citizens of the Republic all those who, having the quality of Mexicans, additionally meet the following requirements:
I.- Having completed eighteen years, if married, or twenty-one if not, and II.- Having an honest way of living.

The struggle for the recognition of our political rights gained more strength and even some progressive local Congresses emerged that granted us the right to vote in local elections. Perhaps the most emblematic case was in 1922, when the Congress of Yucatán approved the right to vote for women, resulting in winners in the 1923 elections: Rosa Torre González, as the first Female Mayor of Mérida, and three local deputies Elvia Carrillo Puerto, Beatriz Peniche, and Raquel Dzib Cícero; however, none of the three legislators could exercise their office and shortly thereafter the norms that recognized this prerogative to us were repealed.

Reforms like that of Yucatán opened the possibility that in other local Congresses the possibility of recognizing our political rights would be glimpsed, perhaps the one that society most refused to recognize us. An example of the above was Chiapas, who in 1925 granted us the right to vote, under the argument that we had the same rights as men, and even morally we were superior; as a result of this reform, was the deputyship of Florinda Lazos, the first local legislator.

Many positions opposed recognizing us, it was even believed that "granting the right to vote to women was giving a double vote to the married man," or that we were "dominated by religion and would vote according to what our confessors dictated"; nothing further from reality, as we had demonstrated that more than daughters, sisters, wives, or mothers, we were Mexicans concerned about the future and well-being of our country.

Convinced that we needed to make ourselves visible, we formed new associations such as the Revolutionary Feminist Party, the National Block of Revolutionary Women, or the Single Front for Women's Rights, who despite having diverse ideological positions, converged on the same proposal: it was necessary that we be recognized the right to vote and to be voted for.

Great advances were achieved again in our favor, such as in 1929, when the Civil Code recognized seventeen causes of divorce, the matrimonial regime was protected, and institutions such as parental authority and alimony were established; and in the Federal Labor Law of 1931, maternal care was recognized, dangerous work was prohibited, and maternity leave was granted.

The announcement of President Lázaro Cárdenas placed us on the same level as men, as he said, "it would not be fair that we were claiming their presence [of women] in social acts, if we have not placed them on a plane of political equality." Therefore, in 1937, he presented an initiative to reform Article 34 of the Constitution and grant us full citizenship; years later, this proposal would be discussed in the Federal Congress, which was overshadowed by the 1940 elections. President Cárdenas himself argued that it would be a danger to grant us the right to vote that year, as the conservative candidate could benefit from the female vote for being closer to the Catholic Church.

The suffragist struggle of 1937 did not see the fruits of its tireless struggle, as despite the fact that local Congresses had approved the constitutional amendment, federal congressmen never issued the declaration of approval and we retreated terribly in the recognition of our rights.

Persistent and committed women sent to the Congress of the Union various letters requesting that the legislative process be completed, as emerges from the letter of Esther Chapa who for 22 years demanded that our demands be attended:

"The Female Coordinating Committee for the Defense of the Homeland addresses that H. Permanent Commission once again with all anticipation to the opening of the ordinary sessions of that H. Congress in order to request that the Modification of Article 34 of the Constitution be included in the Agenda of the next period in the terms in which it was approved by the H. Chamber of Deputies, by the H. Chamber of Senators, and by the local legislatures of the States of Aguascalientes, Campeche, Guanajuato, Jalisco, Morelos, Nayarit, Nuevo León, Oaxaca, Chihuahua, Querétaro, Sinaloa, Tabasco, Tamaulipas, Tlaxcala, Veracruz, Zacatecas, and Michoacán. Taking into account that Chiapas and Puebla have granted the vote to women since the years 1925 and 1936, for all which we consider that the requirements marked by Article 135 of the Constitution of the Republic have been met, to modify or add to the Magna Carta and that it only remains for the Congress of the Union to comply with said Article 135 by making the Declaration that we have referred to so many times so that the Mexican woman, as a citizen that she is, enjoys all her political rights."

In 1945, around 10 thousand women in Mexico City, we again demanded our political rights; however, we were not heard, it seemed that our struggle did not echo in the conscience of legislators and governors.

Tired of being relegated, approximately twenty thousand women took the streets of Mexico City in 1952 so that the presidential candidate Adolfo Ruiz Cortines would know us and commit to our struggle of so many years. We managed to sensitize him and in his speech he affirmed that:

"if the vote favors us in the next elections, we propose to initiate before the Chambers the necessary legal reforms so that women enjoy the same political rights as men".

At the same time, the United Nations ratified the Convention on the Political Rights of Women, which stated that for a state to be democratic, it had to recognize the citizenship of both women and men; Mexico had committed itself to international organizations to be a vanguard country, so it adopted said Convention years later.

Finally, the suffragist movement saw its expectations fulfilled in the presidential initiative of December 10, 1952, which reformed Article 34 of the Constitution to recognize the citizenship of women and men equally. In the debate in the Chamber of Deputies on the Report presented by the Committees on Constitutional Points and on Governance, the position of Deputy Francisco Chávez González of the National Action Party stands out, who argued the following:

"In the effort of citizen formation and organization that the National Action Party has been carrying out since 1939, the participation of women in the decision of national problems has been a constant theme and a repeated demand. National Action has insistently asked for the recognition of the justification and the immense value that women's participation has for the good of Mexico and has made repeated demands for that recognition to be explicitly incorporated both in the Federal Constitution, as well as in the local ones, in municipal legislation and in electoral laws. It is, therefore, very satisfactory for the deputies of National Action the full and unrestricted recognition of women's citizen capacity.

I do not subscribe to the report rendered by the joint Committees 1st on Constitutional Points and 1st on Governance, because it insists on the error of making an anti-historical and partisan representation of the problem. It is not from now, nor from fifteen years ago, nor even from forty-two years ago, that the possibility and justification for women to participate adequately in public life arise. It is also not admissible to pretend to give that participation the aspect of a concession or conquest of a political party. The Mexican woman, in all the economic, social, and political avenues of Mexico, has always had the virtues and merits that are now invoked as the basis of the proposed reform. And such reform, on the other hand, will only have full realization when it is granted, not as a party enterprise, but as a unanimous national recognition of those merits and virtues; as a national effort as well, not to leave the right to citizenship as dead letter in the written law, but to organize it, respect it, and give it the fullness of freedom, responsibility, and efficacy that it must have for the good of Mexico.

The report itself, when referring to the 1937 initiative, recognizes that such initiative was approved by both Chambers and by the majority of the State Legislatures; but it overlooks a constitutional point of first order. It is evident that it has constituted a serious violation of constitutional principles not to have terminated the procedure established by Article 135 for the reform of the Constitution itself. Once the 1937 initiative was approved by the federal Chambers and the majority of the local ones, the constitutional procedure should have been concluded, making the count and the declaration that the provision itself provides for, as we requested in the proposition that the report deals with. It cannot be left to the judgment of Congress to conclude or not such constitutional procedure and leave it without reaching its logical end; it is a serious violation of the repeated article, the very spirit of the Constitution. Therefore, it is not incongruent, as the report affirms, but opportune and undoubtedly due the proposition we formulated for the count and corresponding declaration to be made.

The fact that the constitutional text of Article 115 resulted redundant, due to the undue addition of the paragraph that establishes that women may vote in municipal elections, with the 1937 initiative already approved recognizing full citizen capacity to the female sex, would only demand, in rigor, together with the conclusion of the constitutional procedure expressed, the approval of the reform of Article 115, to suppress in it the unnecessary paragraph.

It is opportune to warn of the intolerable conduct of the local Legislatures that have refused to incorporate in the Constitution and electoral laws of the States the provision that would give efficacy to fraction I of Article 115 of the Constitution, regarding the vote of women in municipal elections.

For the above considerations, which briefly express the basis of this instance, I formulate this particular vote, to which also corresponds the attitude of the rest of the Deputies of the National Action Party and of this same organ of citizenship, in relation to the cited report."

In an unprecedented event, on October 17, 1953, the reform of Article 34 of the Constitution was published in the Official Journal of the Federation to recognize the right to vote for women, and it remained as follows:

Article 34. Citizens of the Republic are the men and women who, having the quality of being Mexican, meet, in addition, the following requirements:
I. Having reached 18 years of age, if married, or 21 if not, and
II. Having an honest means of living.

Two years later, on July 3, 1955, Mexican women for the first time went to exercise our right to vote at the polls, breaking with any paradigm of submission or subordination by virtue of being women. In the exercise of our right, we elected the members of the Chamber of Deputies of the Congress of the Union, with Remedios Albertina Ezeta elected for the State of Mexico, Margarita García Flores for Nuevo León, Guadalupe Ursúa Flores for Jalisco, and Marcelina Galindo Arce for Chiapas. In our first elections, we bet on a new era in the conception of our work in the public life of Mexico.

Following these deputies were María Lavalle Urbina and Alicia Arellano Tapia, elected as Senators of the Republic, as well as Griselda Álvarez as Governor of Colima. The obstacles we had to face were many, as by our nature we were discredited and considered incapable of exercising exemplary management in the different spheres of government. Now our struggle focused on generating the ideal conditions to be voted for, a struggle that finally materialized only a few years ago.

Two decades had to pass for Article 4 of the Constitution to be reformed and establish legal equality between women and men, as well as Article 123 of the same instrument to eliminate any labor restriction; changes were again made to the Civil Code to recognize us legal capacity even when we had contracted marriage, and we were granted the right to transmit Mexican nationality to our spouses. At that point, it apparently seemed that all cultural, social, and of course legal transformations aimed at recognizing equality between women and men had been carried out; however, the path had not yet ended.

Our journey to achieve a democratic state in which our rights to vote, be voted for, be appointed, and hold a job or commission in the government, to associate, or even to have access to information, have been recognized, has been long.

Until 1993, we could establish in Article 175 of the Federal Code of Institutions and Electoral Procedures that, in the internal documents of political parties, the participation of women through our nomination for popularly elected positions should be promoted. The struggle did not end there; in 1996 it was established that national political parties must consider in their statutes that candidacies to the Congress of the Union did not exceed 70% of the same gender. In 2002, the Electoral Code was modified again so that we appeared in at least one out of every three positions, and sanctions were established for non-compliance with said regulation.

The advances up to that point in the public sphere were considerable; we could run for popularly elected positions, and finally, our right not to live under discrimination based on our gender was recognized. Therefore, to reinforce this principle, on August 14, 2001, the third paragraph of Article 1 of our Magna Carta was reformed, establishing that in Mexico, "all discrimination motivated by ethnic or national origin, gender, age, different abilities, social condition, health conditions, religion, opinions, preferences, marital status, or any other that attacks human dignity and has the purpose of annulling or diminishing the rights and freedoms of persons" is prohibited.

The National Action Party has always walked in our favor; it is an undeniable fact that PAN governments have achieved great achievements for us, such as the creation in 2001 of the National Institute of Women and the Law regulating it; in 2003 the Federal Law to Prevent and Eliminate Discrimination was promulgated; in 2006 the General Law for Equality between Women and Men was instituted; in 2007 the General Law for Women's Access to a Life Free of Violence was approved; and that same year the electoral code was reformed again so that candidacies for popularly elected positions did not exceed 60% of the same gender; in 2008 the Special Prosecutor's Office for Crimes of Violence against Women and Human Trafficking (FEVIMTRA) was established; while in 2009 the National Commission to Prevent and Eradicate Violence against Women (CONAVIM) was founded.

To reinforce our access to popularly elected positions, so-called gender quotas or also called quotas of participation by sex or quotas of women's participation were established, which were an affirmative action whose objective was to guarantee our effective integration in elective and decision-making positions of political parties and the State. However, political violence based on gender did not cease; in the 2009 federal elections, formulas with women as titulars and men as substitutes were registered to compete for a deputy position, both of majority and proportional representation; after taking office, we were forced to ask for leave from the position for which we were elected, leaving the male substitutes in our place. Another emblematic case was in May 2018 in Oaxaca, where 19 candidacies of transgender women were registered, of which 17 could be proven not to be so.

As has been seen, this historical struggle for the recognition of women's political-electoral rights has been framed by a dynamic of subjugation and exclusion that we now have the opportunity to transform. In this sense, we must be clear that it is not a political gift, but the vindication of women in their recognition as individuals and as citizens.

A vindication that is supported by the guarantee of the full exercise of rights that are enshrined not only in the Universal Declaration of Human Rights, but also in instruments such as the International Covenant on Civil and Political Rights, and in a very important way, in the Beijing Platform for Action, which turns 25 years old in 2020, a platform that commits the Mexican State not only to the guarantee of women's rights, but also to the generation of mechanisms that guarantee women an active participation in the political life of our country, from the different levels of government and especially with the capacity to make decisions.

For all this history of constant struggle, for the humanist pillars that govern the National Action Party, and in complete sorority, it was that I presented before the Plenary of this Senate of the Republic on September 6, 2018, the Initiative with draft decree by which Articles 3, 6, 26, 27, 28, 41, 50, 73, 89, 94, 99, 100, 102, 115, and 116 of the Political Constitution of the United Mexican States are reformed and added, to guarantee gender equality in the exercise of public power and not only limit the action of women to the popularly elected positions of the legislative power.

Historically, this initiative, along with those of other members of various Parliamentary Groups represented in this legislative body, was approved unanimously on May 14, 2019, and subsequently on the 23rd of the same month and year, approved by the Chamber of Deputies. On its part, on June 5, 2019, based on Article 135 of the Constitution, and after approval by the absolute majority of the Local Congresses, the Declaration of approval was made by the Permanent Commission of the Honorable Congress of the Union.

Following its legislative procedure, on June 6 of last year, the Decree by which various articles of the Political Constitution of the United Mexican States are reformed, in matters of gender parity, was published in the Official Journal of the Federation. In the second transitory article of said decree, it was established that the Congress of the Union must, within an irrevocable period of one year from its entry into force, make the corresponding normative adjustments, in order to observe the principle of gender parity established in the Constitution.

For the above, and in a commitment to promote, respect, guarantee, and sensitize ourselves to the human rights of women, it is necessary to make the corresponding normative adjustments so that both women and men are included in the daily work of public life on equal conditions and eliminate the obstacles that prevent us from participating in the political life of our communities, and thus take firm steps towards substantive equality.

Mexico needs both honest and intelligent women and men to dignify public service. That is where our work as legislators comes in, reforming the law so that there is equality of circumstances, so that if this initiative is approved, gender parity in the three levels of government and in autonomous public bodies will not depend on political swings. With this normative reinforcement, we eliminate discrimination, mistreatment, abuse, violence, and constant risks of violation of the fundamental rights and freedoms of women in Mexico.

For the aforementioned reasons, before the Plenary of this Permanent Commission, I present the following initiative with:

REFERENCES
1) Reformed by Decree published in the Official Journal of the Federation on January 23, 1998.
2) Repealed by the second transitory article of the Law for the Protection and Defense of the User of Financial Services published in the Official Journal of the Federation on January 18, 1999.
3) Reformed by Decree published in the Official Journal of the Federation on June 1, 2001.
4) Added by the third article of the Decree published in the Official Journal of the Federation on June 1, 2001.
5) Repealed by the third article of the Decree published in the Official Journal of the Federation on June 1, 2001.
6) Added by Decree published in the Official Journal of the Federation on January 23, 2004.
7) Added by Decree published in the Official Journal of the Federation on June 20, 2005.
8) Reformed by Decree published in the Official Journal of the Federation on June 15, 2007.
9) Added by Decree published in the Official Journal of the Federation on June 15, 2007.
10) Repealed by the sixth transitory article of the Decree published in the Official Journal of the Federation on June 25, 2009.
11) Reformed by Decree published in the Official Journal of the Federation on August 13, 2009.
12) Added by Decree published in the Official Journal of the Federation on August 13, 2009.
13) Reformed by Decree published in the Official Journal of the Federation on April 9, 2012.
14) Reformed by Article Forty-One of the Decree published in the Official Journal of the Federation on January 10, 2014.
15) Added by Article Forty-One of the Decree published in the Official Journal of the Federation on January 10, 2014.
16) Repealed by Article Forty-One of the Decree published in the Official Journal of the Federation on January 10, 2014.
17) Reformed by Article Nine of the Decree published in the Official Journal of the Federation on March 9, 2018.
18) Reformed by Article Nine of the Decree published in the Official Journal of the Federation on May 11, 2022.