Modifications and Additions to the General Provisions on Financial Matters of the Retirement Savings Systems

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DOF: 07/09/2020

MODIFICATIONS and additions to the General Provisions on Financial Matters of the Retirement Savings Systems

At the margin, a seal with the National Coat of Arms, which reads: United Mexican States.- TREASURY.- Ministry of

Finance and Public Credit.- National Commission of the Retirement Savings System.

MODIFICATIONS AND ADDITIONS TO THE GENERAL PROVISIONS

ON MATTER

FINANCIAL OF THE RETIREMENT SAVINGS SYSTEMS

The President of the National Commission of the Retirement Savings System, based on the

articles 1st., 2nd., 5th. fractions I, II, III, VI, VI bis, VII, XIII bis, and XVI; 12 fractions I, VI, VIII and XVI; 18, 25, 29,

30, 36, 39, 42, 42 bis, 43, 44, 44 bis, 45, 46, 47, 47 bis, 48, 64, 64 bis, 67, 68, 69, 70, 89, 90 fractions II, IV,

V, VI, VII, IX, XII and XIII, 100 bis, 100 ter and 100 quáter of the Law of the Retirement Savings Systems; 106

of the Law of the Institute of Security and Social Services for State Workers; 1st., 2nd., 14, 17, 18,

19, 20, 21, 22, 23, 24, 25, 33 subsection A fraction VIII and subsection B, 139, 140, 141, 154 and 155 of the Regulation of the

Law of the Retirement Savings Systems and 1, 2 fraction III, and 8 first paragraph of the Internal Regulation of

the National Commission of the Retirement Savings System, and

CONSIDERING

That on May 31, 2019, the "General Provisions establishing the investment regime to which Specialized Investment Companies for Retirement Funds must be subject" were published in the Official Gazette of the Federation, through which the provisions related to Certificates Linked to Real Projects were repealed, subjecting their entry into force to the specific requirements to be determined in the "General Provisions on financial matters of the Retirement Savings Systems", in this sense it is important to eliminate all references to said Instrument and modify some of the obligations applicable to Securitized Instruments in order to comply with what is provided in the first Transitory Provision, fraction I, of the aforementioned "General Provisions establishing the investment regime to which Specialized Investment Companies for Retirement Funds must be subject";

That Fiduciary Certificates for Investment Projects that participate in activities or projects outside national territory may have an investment component in national territory that must be evaluated by the Investment Committee, therefore a series of requirements are established for this;

That for investments in Structured Instruments, it is important to strengthen the minimum governance requirements and determine the maximum costs that Investment Companies may assume, in accordance with international standards for investments in alternative assets, in order to maintain alignment with the interests of Workers;

That the investments of Investment Companies in Equity Instruments may be associated with optional titles provided in subsection d) fraction LII of the Second Provision of the General Provisions establishing the investment regime to which investment companies must be subject, which may be used in the investment in Companies without operational history seeking the acquisition or merger of other companies, and that, in such case, a series of criteria different from those existing for investments in companies with operational history are required;

That it is important to establish responsibilities regarding the credit risk level assumed by the investment portfolios of Investment Companies, therefore the selection of credit risk that the Head of the Investment Area must report to the Investment Committee regarding Debt Instruments is incorporated;

That in terms of article 64 of the Law of the Retirement Savings Systems, Administrators must at all times avoid any type of operation that implies a possible conflict of interest, therefore it is important to include definitions and obligations in order to comply with said objective;

That for operations with Derivatives, it is important to determine clear parameters so that Administrators obtain non-objection in order for Investment Companies to operate with said Assets, through which the main objective must be risk coverage and speculation in the management of Investment Company resources must be avoided;

That the operation of Derivatives by Administrators in accordance with these modifications and additions will improve their risk management, and limit the probability of loss due to poor management of credit and liquidity risk of said operations, especially in stress situations where pro-cyclical effects may occur;

That in accordance with what is provided in the General Provisions establishing the investment regime to which specialized investment companies for retirement funds must be subject, as well as in the General Provisions establishing the procedure for the construction of the Net Performance Indicators of Specialized Investment Companies for Retirement Funds, it is important to update the Investment Prospectus Model and Information Brochure that must be disclosed to Workers;

That compliance is given to what is established in article 78 of the General Law of Regulatory Improvement, as well as to Article Fifth of the "Agreement that establishes the guidelines that must be observed by the dependencies and decentralized organisms of the Federal Public Administration, regarding the issuance of general administrative acts to which article 69-H of the Federal Administrative Procedure Law applies", since the prudential rules on risk management to which retirement fund administrators, specialized investment companies for retirement funds, and operating companies of the National SAR Database must be subject, published in the Official Gazette of the Federation on May 25, 2016, as well as various obligations are abrogated through these Modifications and Additions to the General Provisions on financial matters of the retirement savings systems, in accordance with what is detailed in the Regulatory Impact Analysis form corresponding; with this it was evidenced that the eliminations and simplifications carried out by this Decentralized Body represent benefits and savings superior to the implementation costs, has issued the following:

MODIFICATIONS AND ADDITIONS TO THE GENERAL PROVISIONS

ON MATTER

FINANCIAL OF THE RETIREMENT SAVINGS SYSTEMS

FIRST.- Articles 1, 2, first paragraph, fractions XVIII, XXIII, XXV, and LIII, 3, first

paragraph, fractions II, III, IV, V, VI, VII, XII, XIV, XVIII, 5 first paragraph, 6, last paragraph, 11, first paragraph,

fractions I, III, IV, VIII, XI, XIII, and XVIII, 13, fraction III, 14, fractions II, III, IV, XVI, XVII, and XVIII, 16, fractions

I, IX, X, XIV, XXVII, and XXVIII, 28, fraction V, 29, fractions III, and XI, 30, first paragraph, fractions I, and II, last

paragraph, IV, V VI, VII, IX, XVI, subsection e), as well as paragraphs third, fourth, and fifth, 31, fractions III and VII,

33, second paragraph, numeral 1.2, 34, fractions III, VIII, and IX, as well as the second paragraph, 35, fraction VIII,

36, fractions I, and III, subsection b), 52, fractions VI, XIII, subsection c), 54, 63, 107, fraction IX, 119, second paragraph,

122, first paragraph, fractions I, II and III, 127, 129, first paragraph, 131, first paragraph, 139, fractions I,

subsection A, II, III and IV, 151, paragraphs sixth, seventh and ninth, 165, 167, first paragraph, Annexes B, Chapter

I, fractions I and III, Chapter II, second paragraph, fraction II, C, fraction I, K, L, fraction VII, M, N, fourth paragraph

and seventh, fractions I and II, P, Q, R, fraction I, T, last paragraph, U, second paragraph, subsection a); are ADDED

articles 2, fractions III bis, VIII bis, XI ter, XVII bis, XX bis, XXVII bis, XXXVI bis, XXXVIII bis, XLVIII bis,

XLVIII ter, XLVIII quáter and XLVII quinquies, 2 bis, 2 ter, 3, fractions XXV, XXVI, XXVII, XXVIII, XXIX, 3 bis, 7

bis, 10, fraction VIII, 11, fractions X bis, XXVI, and XXVII, as well as paragraphs second and third, 11 Bis, 13,

fraction IX, 14, fractions XIX and XX, 16, fractions XXXIV, XXXV, and XXXVI, as well as the second paragraph, 30,

fractions XXIII, XXIV, and XXV, 31, fraction IX, 33, fractions IX, and X, 51, fraction IV, 52, fraction XIV with the

subsection e), as well as the eighth paragraph, 67, fractions IV and V, as well as a second paragraph is added,

shifting the current second paragraph, third, and fourth to become third, fourth, and fifth, 70, with

a seventh paragraph, 70 Bis, 122, fractions IV, V, and VI, as well as paragraphs second, third, fourth, fifth,

sixth, seventh, and eighth, 122 bis, 182 Bis, 182 Ter, 182 Quáter, 186, Annexes B, Chapter III, J, numeral 4, and

X; as well as Articles 30, fractions III, XI, and XXII, 52, fraction XV, 60, 131, third paragraph,

shifting the current fourth, fifth and sixth paragraphs to become third, fourth and fifth, 151,

eighth paragraph, shifting the current ninth paragraph to become eighth, all of the "General Provisions

on financial matters of the Retirement Savings Systems", published in the Official Gazette of the Federation on September 18, 2019, with its modifications and additions published in

the same instrument, to read as follows:

" INDEX

...

TITLE IV.

...

Chapter IV.

On the Certification and Training of Officials

...

TITLE X.

ON THE OPERATION WITH STRUCTURED INSTRUMENTS, AND FIBRAS AND SECURITIZED INSTRUMENTS

...

TITLE XIV BIS

ON REGULATORY OVERSIGHT

...

ANNEX "B".

On Structured Instruments, FIBRAs and Securitized Instruments

Chapter I

Elements that must be foreseen in the policies defined by Investment Committees to carry out investments

in Structured Instruments, FIBRAs and Securitized Instruments

Chapter II

Elements that must contain the selection questionnaires for Structured Instruments, FIBRAs and

Securitized Instruments

Chapter III

Minimum elements that Structured Instruments must comply with

...

ANNEX "V"

List of Stock Indices of Eligible Countries for Investments approved to determine the

maximum investment limits in shares of National Issuers listed.

ANNEX "W"

Methodology to calculate the write-down to be reimbursed for non-compliance with the limits of the

Liquidity Coefficient and Provision for Exposure in Derivative Instruments, due to causes attributable to the

Administrator.

ANNEX "X"

Maximum total costs for Structured Instruments. "

" Article 1.- These Provisions aim to regulate the aspects of integral management of the

investment portfolios of Investment Companies, as well as adequate risk management in the

management and investment of workers' resources by Investment Companies, to which

Administrators and Investment Companies operated by them must be subject. "

" Article 2.- For the purposes of these General Provisions, in addition to the

definitions indicated by the Law of the Retirement Savings Systems, its Regulation, as well as

the

General Provisions establishing the investment regime to which Investment Companies must be subject, the General Provisions establishing the patrimonial regime to which

Retirement Fund Administrators, Pensionissste and Investment Companies and the

Special Reserve must be subject, the General Provisions establishing the procedure for the construction

of the net performance indicators of Investment Companies, and the General Provisions

on the registration of accounting, preparation and presentation of financial statements to which

Investment Companies must be subject, the following shall be understood:

I.

to III. ...

III bis.

Tactical Allocation, to the operation with Investment Assets that is carried out

based on expectations of return and risk for a term less than or equal to six months.

Tactical Allocations may generate an over or under weighting by underlying,

Risk Factor or Asset Class with respect to the Investment Trajectory;

IV.

to VIII. ... .

VIII bis.

Business Combination, to any act by which the transfer or

circulation, as applicable, of assets, liabilities, shares or partnership interests is effected for the

consolidation of one or more businesses;

IX

to XI bis. ...

XI ter.

Control, to the capacity of a person or group of persons, to carry out any of the

following acts:

a)

Impose, directly or indirectly, decisions in the general assemblies of

shareholders, partners or equivalent bodies, or appoint or remove the majority of

board members, managers or their equivalents, of a legal entity;

b)

Maintain the ownership of rights that allow, directly or indirectly, to exercise the

vote with respect to more than fifty percent of the share capital of a legal entity;

c)

Direct, directly or indirectly, the administration, strategy or main

policies of a legal entity, whether through the ownership of securities, by

contract or in any other form;

XII.

to XVII.

...

XVII bis.

Private Issuers without Operational History, to any legal entity, trustee, National

Issuer or Foreign Issuer, excluding Governments, Central Banks and Government

Agencies, that issues securities under the regulation and supervision of Eligible Countries

for Investments without having at least one year of verifiable operation in the annual

financial statements of the immediate previous year;

XVIII.

Investment Strategy, to the policies defined by the Investment Committee of each

Investment Company operated by the Administrator, regarding the purchase or sale of

Investment Assets and the aggregate composition of the investment portfolio,

in accordance with the prudential framework on risk management defined and approved by the Financial Risk Committee of the Investment Company, in accordance with the

present Provisions, and the General Provisions establishing the investment regime to which Investment Companies must be subject;

XIX

to XX. ...

XX bis.

Business Group, to the set of legal entities organized under schemes of

direct or indirect participation in share capital, in which the same company maintains

Control of said legal entities. Likewise, financial groups constituted in accordance with the Law to Regulate Financial Groupings shall be considered as a Business Group;

XXI.

to XXII. ...

XXIII.

Securitized Instruments, to those provided for in the Second Provision fraction XLVIII of the

General Provisions establishing the investment regime to which

Investment Companies must be subject.

The instruments referred to in this fraction shall be considered as issued by an independent issuer when they comply with what is provided in Annex R of

these Provisions.

XXIV.

...

XXV.

Prudential Limit, to the limits defined by the Financial Risk Committee or by the

Investment Committee as part of their internal investment and risk management policies, and that are different and additional or complementary to regulatory limits;

XXVI.

to XXVII.

...

XXVII bis.

Notes, to Debt Instruments or Foreign Debt Securities, with principal protected

at maturity linked to one or more of the indices, or basket of indices, established in the

General Provisions establishing the investment regime to which

Investment Companies must be subject, as well as to Debt Instruments or

Foreign Debt Securities structured together with Equity Components that behave like the aforementioned;

XXVIII.

to XXXVI.

...

XXXVI bis.

Related Parties, to those with respect to an Administrator that fall under any of the

following situations, and be directly or indirectly:

a)

Persons who exercise Control in a financial entity or legal entity that

is part of the Business Group to which the Administrator belongs as well as

counselors or managers, the general director and any natural person who

holding an employment, position or commission in the Administrator or in the members of the

Business Group to which it belongs, adopt decisions that transcend significantly in the

administrative, financial, operational or legal situation of the

Administrator or the Business Group to which it belongs.

b)

Persons who have Command Power in a financial entity or legal entity

that is part of the Business Group to which the Administrator belongs.

c)

The spouse, concubine or concubine and persons who have kinship by

cognate, affine or civil up to the fourth degree, with natural persons who fall under any of the

situations indicated in subsections a) and b) above, as well

as partners and co-owners of the natural persons mentioned in said

subsections with whom they maintain business relationships.

d)

Legal entities over which any of the persons referred to in

subsections a) to c) above exercise Control.

XXXVII.

to XXXVIII.

...

XXXVIII bis.

Command Power, to the capacity to influence decisively in the agreements adopted in the

shareholders' meetings or board of directors sessions, or in the management,

conduct and execution of the business of an issuer or legal entities that it

controls or in which it has significant influence. It is presumed that they have Command Power in a legal entity, the persons who fall under any of the following situations:

a)

Shareholders who have Control;

b)

Individuals who have ties with the legal entity or the legal entities that

make up the Business Group to which it belongs, through lifetime positions,

honorary or with any other title analogous or similar to the aforementioned;

c)

Persons who have transferred Control of the legal entity under any

title and gratuitously or at a value lower than market or book value, in favor of

individuals with whom they have kinship by cognate, affine or civil up to the

fourth degree, the spouse, concubine or concubine, or

d)

Those who instruct relevant counselors or executives of the legal entity, the

taking of decisions or the execution of operations in a company or in the legal entities that it controls;

XXXIX.

to XLVIII.

...

XLVIII bis.

Legal Risk, to the potential loss due to non-compliance with agreements and contracts

related to the administration and investment of workers' individual account resources, as well as the application of sanctions incurred by the Administrator or the

Investment Company;

XLVIII ter.

Operational Risk of the Investment Company, to the potential loss due to failures or deficiencies

in information systems, in internal controls or by errors in the processing

of operations of Investment Companies;

XLVIII quáter.

Selling Syndicate, to the set of Brokerage Houses or banks that participate in the

placement of a public offering syndicated or as co-leaders;

XLVIII quinquies. Securities Monitoring System, to the computer system that allows verifying and

monitoring the status of securities transfers;

XLIX.

to LII.

...

LIII.

UAIR, to the Integral Risk Management Unit of the Administrator specialized

in financial risk matters in which the Financial Risk Committees and

the Investment Committees of Investment Companies are supported to carry out the

Financial Risk Management, in accordance with these Provisions;

LIV.

to LVI. ... "

" Article 2 Bis. The Governing Body of each Investment Company, for the integral administration of

risks, will be assisted by the following bodies:

I.

The Financial Risk Committee, and

II.

The UAIR.

For such purposes, the Governing Body of each Investment Company must constitute a Financial Risk Committee for each Investment Company. "

" Article 2 Ter. Administrators, for the Financial Risk Management of Investment Companies

they operate, must:

I.

Identify, measure, monitor, limit, control, inform and disclose the quantifiable risks to which

Investment Companies are exposed, and

II.

Develop policies and procedures for the management of the different types of risks to which

they are exposed, in accordance with the limits on risk exposure defined by their

Governing Bodies.

Administrators must clearly delimit the different functions and responsibilities of their

areas and personnel thereof, in relation to the Financial Risk Management of Investment

Companies they operate, in accordance with what is provided in these provisions. "

" Article 3.- The Financial Risk Committee of each Investment Company shall have the purpose of the

Financial Risk Management to which it is exposed, as well as to supervise that the realization of

financial operations comply with the limits, policies and procedures for the Management of

Financial Risk, therefore it must define, approve and follow up, within the limits authorized by

the General Provisions establishing the investment regime to which Investment Companies must be subject and these Provisions, with the approval of the majority of Independent Counselors who are members of said Committee, on the following:

I.

...

II.

Prudential Limits applicable to investments of the Total Asset of the

Investment Company in Investment Assets, directly or, through Vehicles or Vehicles

of Real Estate Investment. Such limits must be applied to the parameters of the portfolio of

investment that the Financial Risk Committee defines based on its own risk management policies and on the best international practices observed in the

market. The arguments and analysis that justify the establishment of Prudential Limits must be recorded in the Detailed Minutes of the corresponding sessions;"

Prudential Limits of maximum exposure to each Counterparty and each Issuer. For such purposes, said limits will consider the term, the underlying to which the exposure is acquired, the Asset Class, and the credit quality of the issuer or Counterparty, based on internal analyses or opinions of third-party specialists in the matter. Such limits must be defined for each Asset Class with which the Investment Society finances or maintains exposure with the entity in its capacity as issuer and Counterparty. Likewise, an aggregate maximum limit must be provided that simultaneously covers all Asset Classes authorized to finance or maintain exposure with the entity in its capacity as issuer and Counterparty. Such limits will apply to direct operations, through Vehicles or Real Estate Investment Vehicles, and will also consider the guarantees received by the Investment Society. The Financial Risk Committee may define the Prudential Limits referred to in this subsection based on its own risk management policies and on best international practices observed in the market;

IV.

Measures to evaluate maximum leverage in an aggregated manner for the investment portfolio, in addition to those provided in the General Provisions that establish the investment regime to which Investment Societies must be subject, which each Investment Society must observe. Likewise, the Financial Risk Committee may define leverage measures by Asset Class, by Risk Factor, or by underlying;

V.

Policies to receive and deliver guarantees backing authorized operations with Derivatives, securities lending, and repos. Such policies must consider the type of issuer of the guarantee and its credit quality based on fundamental factors that determine its viability, based on the additional credit evaluation of the Counterparties in operations with Derivatives in over-the-counter markets, as well as the legal structure of the execution of guarantees. Regarding the guarantee, the policies must take into consideration the type of instrument, the maturity term, the liquidity, the discount to be applied, and the markets in which it can be alienated. Likewise, the policies must establish the following:

a)

Prudential Limits, and the measures to be used, regarding the maximum exposure that the Investment Society can have through each of the following operations:

i.

Derivatives;

ii.

Securities lending, and

iii.

Repo;

b)

For over-the-counter Derivative operations:

i.

Policies for the calculation and definition of the initial guarantee deposit (also known as independent amount) and the minimum amount of guarantee transfer.

ii.

Policies to investigate and remedy failures in the delivery and receipt of guarantees.

c)

Aggregate Prudential Limit of exposure of the Investment Society applicable to each issuing entity, including all Investment Assets issued by it, as well as all operations in which it is a Counterparty;

VI.

Methodologies for the calculation of observed return, expected return, risk-adjusted return, sensitivity, and market risk, which will be applied to the investment portfolio of the Asset Managed by the Investment Society and in an aggregated manner for each of the following types of investments or underlyings:

a)

Commodities;

b)

Currencies;

c)

Debt instruments and interest rates;

d)

Foreign Debt Securities;

e)

Equity components;

f)

FIBRAS, and

g)

Real Estate Investment Vehicles;

Likewise, the methodology for the calculation of observed return, expected return, and risk-adjusted return applied to the Investment Trajectory, which must be congruent with the methodology applied to the investment portfolio, so as to allow comparison between the investment portfolio and the Investment Trajectory. Likewise, the methodology to perform said calculations must be established, including the Managed Assets by the Mandatories, and obtain them for the Total Asset of the Investment Society. The foregoing may have a calculation frequency different from that corresponding to the Asset Managed by the Investment Society.

The Investment Committee or, as applicable, the Financial Risk Committee, as determined by the Administrator, must define the methodologies to perform the calculations of the expected returns referred to in this subsection;

VII.

Methodologies to perform the calculation of the contribution of return and risk of the investment portfolio of the Asset Managed by the Investment Society, as well as the attribution to the return and risk of the investment portfolio of the Asset Managed by the Investment Society with respect to the Investment Trajectory. In the case of operations with Derivatives, the calculation and results must additionally be obtainable for each Tactical Allocation with Derivatives defined by the Investment Committee. Likewise, it must define policies to present the results in the application of said methodologies at the level of disaggregation by Asset Class, Risk Factor, or underlying defined by the Financial Risk Committee.

In the case of Assets Managed by the Mandatories, a methodology must be established to include them in the aforementioned return and risk contribution and attribution calculations, considering the Total Asset of the Investment Society; these calculations may be performed with a frequency different from that corresponding to the Asset Managed by the Investment Society;

VIII.

to XI. ...

XII.

Early Warnings for the Maximum Deviation determined in an aggregated manner and by Asset Class or Risk Factor, as well as for Value at Risk, Conditional Value at Risk, and the Conditional Value at Risk Differential;

XIII.

...

XIV.

Policies for the determination of concentration limits for the Asset Managed by the Investment Society, which in case are defined, by Counterparty or issuer considering for the latter the structure of each issuance, in an exemplary but not exhaustive manner, the type of payment seniority, enhancers, or those known in practice and in the English language as "covenants", according to the additional credit evaluation referred to in the previous subsection XIII. For the above purpose, the Financial Risk Committee must define and approve the following:

a) to e) ... .

f)

The Head of the Risk Area must present in each ordinary session of this Committee, the usage percentages of the concentration limits.

The frequency of items a), b), d), and e) must be annual or with a lower frequency. In the case of item c), the frequency must be semi-annual or lower.

XV to XVII.

...

XVIII.

Methodologies and measurement elements, whether internal or external, for the evaluation of liquidity risks of the investment portfolio of the Total Asset of the Investment Society, considering demographic, statistical, actuarial, financial, and operational elements that affect the liquidity requirement of the investment portfolio, as well as the terms to estimate liquidity requirements coming from, among others: results of financial operations, particularly operations with Derivatives, margin calls, execution of guarantees, capital calls coming from Structured Instruments, periodic contributions to individual accounts, assignments and reassignments of individual accounts, flow for payment of Coupons, dividends, and distributions, maturity profile in the next ten years, early amortizations, and distribution of resources in each Investment Society.

The liquidity risk measurement methodology must also consider the liquidity requirement under the stress scenarios defined by the Financial Risk Committee, among which those established in article 11, subsection X bis of these provisions must be considered. The review and update of demographic and actuarial elements must be performed at least annually;

XIX.

to XXIV.

...

XXV.

Policies to determine and carry out the challenge of prices of Investment Assets, including Derivatives both in listed markets, as well as in over-the-counter markets. As well as policies that must be observed to determine and resolve controversies with Counterparties, which must be consistent with what is set forth in the corresponding master contracts.

XXVI.

The analysis that must be performed at least quarterly on the Financial Risk exposure assumed, on the negative effects that could be produced in the operation of the Investment Society, as well as on the non-compliance with the exposure limits to Financial Risk established. The result of the analysis performed by the Financial Risk Committee must be reported to the Investment Committee of the Investment Society;

XXVII.

The compliance with the investment regime applicable to the Investment Society and, in case of non-compliance, to report to the board of directors and the Investment Committee on said non-compliance and its possible repercussions, at least quarterly, or immediately if the repercussions so warrant, in addition to performing the functions provided in the portfolio recomposition rules issued by the Commission;

XXVIII.

The corrective measures it deems necessary, taking into account the result of audits related to the procedures for Financial Risk Management;

XXIX.

The Management of Credit Risk, Liquidity Risk, and Market Risk, respectively, considering as a minimum:

a)

To be subject to risk limits by sector of the economy and by country risk determined by this Financial Risk Committee;

b)

To have a plan that incorporates the actions to be taken in case of liquidity requirements, and

c)

Comparison of estimated Market Risk exposures with results actually observed. In case that projected and observed results differ significantly, the assumptions and models used to perform the projections must be analyzed and, if applicable, modify said assumptions or models.

...

To comply with what is provided in article 30, subsection XXIII of these Provisions, approval from both the Financial Risk Committee and the Investment Committee must be obtained. Likewise, both the Financial Risk Committee and the Investment Committee must give their approval to the analysis referred to in article 31, subsection IX, numeral ii of these Provisions.

...

...

" Article 3 bis.- Regarding investments in Structured Instruments, FIBRAS, and Securitized Instruments, the Financial Risk Committee, with the approval of the majority of Independent Directors who are members of said Committee, or the risk area as indicated, must:

I.

The Financial Risk Committee must approve the content of the questionnaire through which the risk area will evaluate compliance with the eligibility policies defined by the Investment Committee regarding the administrator or corresponding figure in each instrument; said questionnaire must correspond to that provided in Annex B, Chapter II of these provisions. Without prejudice to the foregoing, the Financial Risk Committee may opt to apply contents different from those provided in the aforementioned Annex B, chapter II, likewise, it may establish additional eligibility policies, with the purpose of managing the risk of investments in said instruments. In case the Financial Risk Committee decides not to include some of the contents of the cited Annex in this subsection, it must justify such decision, which must be recorded in the corresponding Detailed Minutes. Likewise, the Financial Risk Committee must clearly indicate if there is any additional information that must be added to the questionnaire referred to in this subsection, which must be clearly recorded in the corresponding Detailed Minutes.

The risk area will collect the questionnaire information for each instrument in which it is intended to invest based on the information available for the holders of the instrument in accordance with the rights and obligations established in each instrument, as well as in terms of the Securities Market Law and the General Provisions applicable to securities issuers and other participants in the securities market, issued by the National Banking and Securities Commission. The Administrator must designate the Official responsible for complying with the analyses or application of the referred questionnaire, and such designation must be included in the Financial Risk Manual.

II.

The risk area must evaluate the compliance of each Structured Instrument and FIBRA with the eligibility policies referred to in subsection II of article 30 of these provisions; as well as, the compliance of each Securitized Instrument with the eligibility policies referred to in subsection IX of article 33 of these provisions. The foregoing must be based on publicly available information in accordance with the placement mechanism of the instrument in question and in terms of what is provided in the Securities Market Law and in the General Provisions applicable to securities issuers and other participants in the securities market, issued by the National Banking and Securities Commission. For the evaluation of Fiduciary Investment Project Certificates, it must additionally consider the information, if any, provided by the co-investor. For the evaluation of Structured Instruments, it must additionally consider the information, if any, provided to the holders of said instruments in accordance with what is stipulated in the Securities Market Law and in the General Provisions applicable to securities issuers and other participants in the securities market, issued by the National Banking and Securities Commission, as well as the information, if any, provided by the independent appraiser.

III.

The Financial Risk Committee must verify that the valuation by the independent appraiser, in the case of FIBRAS and Structured Instruments, adheres to the international standards issued by "International Valuation Standards Council", IVSC, "or to that international valuation standard defined by the Financial Risk Committee. "

" Article 5.- The Financial Risk Committee of each Investment Society must be integrated at least by the Head of the Risk Area, one Independent Director and one non-independent Director of the Investment Society in question, who must not be members of the Investment Committee of the same Investment Society, and the general director of the Administrator that operates the Investment Society. The Financial Risk Committee must be presided over by the general director of the Administrator or by an Independent Director.

...

...

..."

" Article 6.- ...

...

The creation of subcommittees does not exempt the Financial Risk Committee from having the necessary information for its decision-making and to fully comply with what is provided in the Law, and these Provisions. "

" Article 7 Bis.- The Risk Committee must approve the policies for the management of Operational Risk of the Investment Society, for which it must consider the following:

I.

Implement internal controls that ensure security in operations, that allow verifying the existence of a clear delimitation of functions in their execution, providing for different levels of authorization, based on the taking of risk positions;

II.

In order to comply with what is provided in the previous subsection, in all securities purchase and sale operations carried out directly by the Administrators, the following must be observed:

a)

Both the quotations made by telephone, as well as the negotiation of the operations, must be recorded or kept on magnetic or documentary media, and the recordings, magnetic media, or documents in which they are recorded must be preserved for a period of two years for negotiations and six months for quotations. The recording system or mechanism used for the preservation of quotations and the negotiation of the same, must be used exclusively by the Administrator;

b)

The recording system or mechanism for preservation on magnetic or documentary media referred to in the previous paragraph, must allow the location and identification, on the equipment itself, of any type of quotation and operation negotiated that the Regulatory Comptroller or the Commission requests;

c)

The operations must be confirmed in writing or by electronic means by the intermediary with whom the operation is concluded;

d)

It must be regularly supervised that the operations comply with applicable internal and external standards and that they have been carried out under market conditions, and

e)

The person in charge of carrying out securities purchase and sale operations must send, in documentary or electronic form, each of the operations concluded, to the area in charge of the registration, assignment, and settlement of the same. This area, in addition to the data of the negotiated operation, must have the date and time of negotiation, the name of the official who negotiated it, and the telephone number or extension where the conversation was recorded.

III.

In purchase and sale operations carried out through a Financial Service Provider, it must be verified that the operations comply with what was agreed in the contracts;

IV.

Establish mechanisms for the control of the settlement of operations, in accordance with the following:

a)

A detailed record of the operations and the movements corresponding to each operation in the securities and cash accounts must be kept;

b)

With the exception of operations carried out with Derivatives, operations will be carried out only under the delivery against payment system and documentary evidence of said process must be provided by the Custodian or with the printout of the screens of the Securities Monitoring System, which must contain frequently updated information during each day;

c)

The securities purchase and sale order of each operation must be sent in writing, either electronically or documentally, to the area in charge of the settlement and administration of securities, as soon as the operation is closed.

The instruction for the settlement of cash transfer and securities transfer of each operation must be carried out only by the officials of the area in charge of the settlement and administration of securities who are authorized in the respective contracts; said officials must contact the Custodian or Custodians designated by the Investment Committee to carry out said transfers or settlements;

d)

The officials authorized to issue settlement instructions, securities transfer, or cash transfer, must be attached to the treasury, administration, assignment, securities settlement, or finance areas. Said officials in no case may depend on the person responsible for carrying out the Investment Strategy. To this effect, the internal manuals must clearly determine the functions that pertain to each area;

e)

Those in charge of settlement may only order the deposit of securities or cash into accounts previously registered in the Investment Society's systems. Deposits into accounts that are not registered will require additional authorization from the Investment Committee. Internal manuals must establish the procedure for such authorization;

f)

It must be validated daily that the Investment Society has sufficient and available resources to meet the operations that will be negotiated during the day;

The validation referred to in this item must be reported to the person responsible for executing the Investment Strategy, and to the person responsible for the UAIR through a cash flow report that contemplates all cash and availability inflows and outflows at the start of the day, providing, if applicable, for said flow, all inflows and outflows for the concept of administration of Derivative instruments;

g)

To have systems for tracking the securities accounts used by the Investment Society;

h)

To ensure that, both the settlement instructions, as well as those related to the transfer of securities and cash to the Investment Society's accounts, and the movements of said accounts, must be authorized by at least two people jointly. Said people must be duly accredited in the respective contracts and in the corresponding signature cards;

i)

At the close of operations, it must be verified that there is a match between the negotiated operations, as well as between the securities and the cash of the Investment Society;

j)

Contingency systems must be available for the transfer of securities and cash. Likewise, all processes and procedures relative to contingency must be established in the Policies and Procedures Manuals for Financial Risk Management;

k)

Confirmation of settlement instructions, cash transfers, and securities transfers must be sent and received. The area in charge of executing the instructions must keep the receipts of acknowledgment for at least one year, either on magnetic or documentary media, and, if applicable, have authorized electronic signatures to order the transfers;

l)

The contracts celebrated for the negotiation of operations, for the custody of securities and cash, as well as the attached authorized signature cards, must be available, detailing, if applicable, that settlement instructions, cash transfers, and securities transfers, can only be carried out with instructions duly signed by officials who are authorized in the aforementioned signature cards, and

m)

The Administrator will be responsible for keeping updated, with the personnel in office, the signature cards attached to the contracts celebrated for the negotiation of operations, for the custody of securities and cash;

V.

To have information processing systems for the Management of Risk

Financial plans that contemplate contingency plans in the event of technical failures, case fortuitous or force majeure, and

VI.

Establish procedures regarding the storage, custody, maintenance and control of files corresponding to the operations and instruments acquired. "

" Article 10.- ...

I.

a VII.

...

VIII.

Recommend to the general director, the Investment Committees, the persons responsible for the realization of the investments and the execution of the strategy dictated by each Investment Committee, as well as to the persons responsible for the different areas involved in the operation that, as a result of their functions, they are involved in taking risks, the reduction of risk exposure within the limits previously approved by the Financial Risk Committee, when these have been exceeded. "

" Article 11.- The UAIR, in matters of Financial Risk, must inform monthly or with greater frequency when necessary, to the Financial Risk Committees and Investment Committees, to the general director of the Administradora and to the Normative Controller, on the following matters applicable to the investment portfolio of the Total Asset of the Investment Society:

I.

The exposure of the investment portfolio of the Asset Managed by the Investment Society and by type of risk. The reports on risk exposure must include:

a)

Sensitivity analysis of the investment portfolio, which must be disaggregated by Risk Factors or Asset Class, in accordance with what is established in the methodology defined by the Financial Risk Committee, and

b)

Stress test scenarios for the portfolio, which must be presented for the investment portfolio of the Asset Managed by the Investment Society, as well as by Risk Factors or Asset Class.

II.

...

III.

The observed return, risk-adjusted return and expected return of the investment portfolio of the Asset Managed by the Investment Society and in an aggregated manner for each of the following types of investments or underlyings:

a)

Commodities;

b)

Currencies;

c)

Debt instruments and interest rates;

d)

Foreign Debt Securities;

e)

Equity Components;

f)

FIBRAS, and

g)

Real Estate Investment Vehicles.

The return must be calculated for the different time horizons defined by the Financial Risk Committee and must be quantified against the Investment Trajectory, in an aggregated manner for the investment portfolio of the Total Asset of the Investment Society, as well as for the Asset Classes determined by the Investment Committee. The area of investments or, if applicable, the risk area, must perform the calculations of the expected returns referred to in this section;

IV.

The contribution to return and the contribution to risk, based on the methodology approved by the Financial Risk Committee. For this purpose, the contribution to return and risk of the investment portfolio of the Asset Managed by the Investment Society observed for each Asset Class or Risk Factor that constitutes the portfolio of the Investment Society must be identified, which must be calculated for different time horizons, and the contribution to return and risk must be identified with respect to the Total Asset of the Investment Society, in accordance with the methodology established by the same committee, to incorporate the Assets Managed by the Mandatarios into the calculation. In the case of the Investment Trajectory, the attribution of return and risk must be calculated, based on the methodology approved by the Financial Risk Committee, of the investment portfolio of the Total Asset of the Investment Society with respect to the Investment Trajectory and must be presented quarterly in the sessions of the Investment Committees and Financial Risk Committees. For the case of Derivatives, it must additionally be able to identify the contribution and attribution to return and risk of the Tactical Allocations with Derivatives defined by the Investment Committee;

V.

a VII.

...

VIII.

The results of the portfolio tests applicable to the investment portfolio of the Asset Managed by the Investment Society under stress scenarios assuming adjustments in the Risk Factors that the Financial Risk Committee determines as relevant;

IX.

a X.

...

X bis.

The results of portfolio tests under stress scenarios, considering the effect consecutive and cumulative on the investment portfolio of the Asset Managed by the Investment Society, of historical or hypothetical scenarios with a duration of at least 6 months defined by the Financial Risk Committee. In the case of operating Derivatives, positions in them and margin calls or execution of guarantees that would take place under such scenarios must be considered;

XI.

The values of the sensitivity measures for the investment portfolio of the Asset Managed by the Investment Society defined by the Financial Risk Committee in the Manual of Policies and Procedures for the Administration of Financial Risk, specifying which measures are applicable for each Investment Object Asset;

XII.

...

XIII.

The elements of liquidity risk measurement applicable to the investment portfolio of the Asset Managed by the Investment Society, defined by the Financial Risk Committee, including estimates of the liquidity requirement by financial and operational flows of each Investment Society at various terms and under stress scenarios. Likewise, for the investment portfolio of the Total Asset of the Investment Society, a classification of the assets that make up the investment portfolios of the Investment Societies must be carried out according to their liquidity characteristics. For the purposes of the provisions of this paragraph, Administradoras may define policies applicable to the Asset Managed by the Mandatarios;

XIV.

a XVII.

...

XVIII.

The daily level of the Liquidity Coefficient and the Provision for exposure in Derivative Instruments (PID) and, if applicable, those parameters of minimum liquidity by positions in Derivatives applicable to the investment portfolio of the Asset Managed by the Investment Society, defined by the Financial Risk Committee, as well as the Early Warnings at different levels defined by the Financial Risk Committee;

XIX.

a XXV.

...

XXVI.

The defaults that have occurred on the part of the Counterparties or of the Investment Societies in Derivative operations; as well as those cases in which the challenge of prices and other disputes in operations with Derivatives. The foregoing must be included in the executive report, provided for in article 12 of these provisions, and must be reported from the day it occurs until the resolution thereof.

XXVII.

The contribution to leverage of each risk factor or asset class.

The Financial Risk Committee, with the favorable vote of the majority of the Independent Directors and recorded in the Detailed Minutes of the corresponding session, may determine that the report to the general director of the Administradora and to the Investment and Risk Committee on some or all of the matters referred to in this article be with less frequency than monthly, as well as establish policies and guidelines so that the Head of the Risk Area determines and presents only those matters whose monitoring is required. The provisions of this paragraph are not applicable to the sections of this article where the periodicity is specified, as well as to the sections II, III, V, VI, VII, XV, XVI, XVIII, XIX, XXII and XXIII above.

Likewise, the Head of the Risk Area must ensure that the UAIR informs timely the Investment Committee, Financial Risk Committee, general director of the Administradora and Normative Controller, about any aspect referred to in this article when it significantly affects the level of risk of the investment portfolio. "

" Article 11 Bis.- Administradoras must have reports that are based on complete, precise and timely data related to the Administration of Financial Risk of the Investment Societies that they operate, which must contain at least the following:

I.

The degree of compliance with the policies and procedures for the Administration of Financial Risk, and

II.

The summaries of the results of the evaluations regarding compliance with the policies and procedures for the Administration of Financial Risk, as well as regarding the evaluations of the risk measurement systems.

Any significant change in the content and structure of the reports, as well as in the methodologies used in risk measurement, must be specified within the reports themselves. "

" Article 13.-

...

I.

a II.

...

III.

Provide that the Integrated Automated System for the activity of registration of operations inform the Operator, prior to the negotiation, when the level of risk associated with certain Investment Object Assets reaches the limits provided for this purpose in the General Provisions that establish the investment regime to which Investment Societies must be subject, the Prudential Limits and the Early Warnings. Such risk level must be calculated in the Integrated Automated System for risk management activity and, if applicable, transmit the alerts that apply to the Operator through the Integrated Automated System. It must be documented in the Manual of Policies and Procedures for the Administration of Financial Risk, the procedure that will be followed to detect what is described in this paragraph.

In the case of Investment Object Assets that do not have market prices or Risk Factors, Generic Instruments may be used, based on the policies defined by the Financial Risk Committee;

IV.

a VIII.

...

IX.

Periodically compare the estimates of risk exposure against the results effectively observed for the same measurement period and, if applicable, modify the assumptions used in formulating such estimates.

... "

" Article 14.-

...

I.

...

II.

...

a)

Extreme events on different Risk Factors that the Financial Risk Committee deems relevant;

b)

Stress scenarios equivalent to the four historical financial crises defined by the Financial Risk Committee;

c)

Hypothetical scenarios defined by the Financial Risk Committee, known in English as "what if" scenarios

under extreme conditions;

d)

The scenarios referred to in article 11, section X bis.

III.

Monitor the percentage of use of the Prudential Limits and calculate the Early Warnings that the Financial Risk Committee of the Investment Society has approved;

IV.

Analyze the impact on the limits provided for this purpose in the General Provisions that establish the investment regime to which Investment Societies must be subject and the Prudential Limits upon the incorporation of new Investment Object Assets into the investment portfolio of the Investment Societies, with the advance notice provided for this purpose by the Financial Risk Committee. The calculations referred to in this section must be performed using the parametrization defined by the risk area in the Integrated Automated System, for which there must be inviolable evidence registered in the Integrated Automated System that allows identifying the users who performed the parametrization or executed the calculation processes provided for in this section. In case that market prices or Risk Factors are not available, Generic Instruments may be used. The investment area may perform the calculations provided for in this section;

V.

a XV.

...

XVI.

Calculate the Tracking Error, as well as monitor the use of the regulatory limit and calculate the Early Warnings established for this metric;

XVII.

Calculate the Contribution to Tracking Error, as well as monitor the use of the Maximum Drawdown and calculate the Early Warnings established for these metrics;

XVIII.

Calculate for each Investment Society, the standard deviation of the returns historical returns of 6 months and 1 year, both of the investment portfolio of the Investment Society, as well as of the Investment Trajectory, considering the composition of the Investment Trajectory in the quarter in which the corresponding Investment Society is located;

XIX.

Calculate the contribution to risk and return of the investment portfolio of the Total Asset of the Investment Society, as well as the attribution to risk and return with respect to the Investment Trajectory, in accordance with the methodology defined by the Financial Risk Committee, both by Asset Class and by Risk Factor, as well as for each Tactical Investment Allocation with Derivatives defined by the Investment Committee, and

XX.

Calculate the contribution to leverage by risk factor or asset class.

...

...

... "

" Article 16.-

...

I.

The policies that will apply related to exposure to Financial Risks. The Prudential Limits and Early Warnings will be defined based on their own risk management policies and on the best international practices observed in the market;

II.

a VIII.

...

IX.

The methodology used for the valuation of Derivatives, clearly specifying the inputs and parameters used;

X.

The methodology used for the valuation of the optional securities referred to in subsection d) of section LII of the Second Provision of the General Provisions that establish the investment regime to which investment societies must be subject, as well as of the shares representing the share capital of the same Private Company to which the aforementioned optional securities are adhered. In the case of the investments referred to in section IX of article 31 of these provisions, it must specify the valuation methodology that will be used prior to the announcement of the target merger or acquisition, the methodology to be followed once it is announced and finally, the one that will be used once it is carried out. In case that the methodology prior to said announcement is based on the recovery value of the resources in trust, the costs that will be covered with said resources and their interest in case the Business Combination is not carried out must be considered. The methodology after the announcement of the target merger or acquisition must consider the dilution to which the instrument will be subject as a result of its execution;

XI.

a XIII.

...

XIV.

In case that operations with Derivatives are intended to be carried out, the logistics to operate them and a description of best execution practices, as well as policies and the limit maximum leverage of the investment portfolio, approved by the Financial Risk Committee, that the Investment Society must observe when using these instruments;

XV.

a XXVI.

...

XXVII.

The methodology to determine the prudential leverage measures of the operations with Derivatives referred to in article 11, section XVI of these provisions, as well as the contribution to leverage of each risk factor or asset class and the maximum leverage limits applicable in an aggregated manner to the portfolio of the Investment Society;

XXVIII.

The methodology to perform the contribution of return and risk of the portfolio of investment of the Asset Managed by the Investment Society, and the attribution of return and risk of the investment portfolio of the Asset Managed by the Society Investment with respect to the Investment Trajectory. Likewise, it must establish the methodology to perform and follow up on such calculations considering the Total Asset of the Investment Society, specifying how the Assets Managed by the Mandatarios will be included;

XXIX.

a XXXIII. ...

XXXIV.

The policies to determine and carry out the challenge of Derivative prices both in listed markets, as well as in over-the-counter markets, in case that such operations are intended to be carried out. As well as policies that must be observed to determine and resolve disputes with Counterparties, which must be consistent with what is set forth in the corresponding master contracts;

XXXV.

The implementation of action plans for contingency cases due to fortuitous event or force majeure, which prevent compliance with the risk exposure limits established, as well as their dissemination mechanisms, and

XXXVI.

Training programs for UAIR personnel and for all those involved in operations that imply risk for the Investment Societies operated by the Administradora.

Likewise, when the Administradora intends for the Investment Societies it administers and operates to carry out operations with Derivatives, it must consider in the Manual of Policies and Procedures for the Administration of Financial Risk, what is provided for in article 122, section I, if applicable, and section V. "

" Article 28.-

...

I.

a IV.

...

V.

Provide policies so that the investment area of the Investment Society has, prior to the realization of investments in Commodities or authorized Commodity indices, an analysis on the characteristics and risks inherent to each type of underlying. In investments made through Commodity indices, they must have an analysis for the sectors that together constitute the investment. Such analyses must adhere to what is provided for in these Provisions;

VI.

a VIII.

...

... "

" Article 29.- ...

I.

a II.

...

III.

Provide policies so that the investment area of the Investment Society has, in a manner prior to the realization of investments in each Mutual Fund and in case of each Equity, debt and real estate Vehicle, an analysis on the characteristics and inherent risks, in accordance with what is provided for in these Provisions, the General Provisions that establish the investment regime to which Investment Societies must be subject and the criteria defined by the Risk Analysis Committee;

IV.

a X.

...

XI.

For the case of Mutual Funds, ensure that the maximum amount invested by the set of Investment Societies operated by the same Administradora in each Mutual Fund is not greater than 10% of the net assets of said Mutual Fund. The Investment Committee may determine to invest a percentage greater than that provided for in this section, provided that it does not exceed 35% of the net assets, considering criteria of fund performance, fund size, fund cost, concentration of the investment portfolio of the Investment Society in the underlying assets of the fund, as well as the additional criteria determined by the Committee. The foregoing must be clearly recorded in the corresponding Detailed Minutes, with the favorable vote of the majority of the Independent Directors who are members of said committee;

XII.

a XV.

...

... "

" Article 30.- The Investment Committees must approve and follow up on the investment in Structured Instruments, FIBRAS and Real Estate Investment Vehicles, for which they must:

I.

Define and approve the Investment Strategy in Structured Instruments, FIBRAS and Real Estate Investment Vehicles, within the authorized limits in accordance with the General Provisions that establish the investment regime to which they must be subject Investment Societies, the criteria defined by the Risk Analysis Committee and the limits defined by the Financial Risk Committee. For such purposes, the Investment Committee must define the following:

a)

a f)

...

The Investment Committee may define and approve additional criteria that constitute the Investment Strategy focused on Structured Instruments, FIBRAS and Real Estate Investment Vehicles. The foregoing, with the objective of prudently administering pension resources in accordance with the profile of the Investment Society in question. In case that the Investment Committee decides not to add additional elements in the definition of the Investment Strategy, it must leave it clearly recorded in the Detailed Minutes of the corresponding session.

...

II.

Provide eligibility policies that the risk area of the Investment Society must evaluate prior to the realization of investments in Structured Instruments, FIBRAS and Real Estate Investment Vehicles. Such eligibility policies will include the following:

a)

a b)

...

The Investment Committee must provide eligibility policies on the concepts provided for in Annex B, Chapter I of these Provisions. In case that the Committee of Investment decides not to provide eligibility policies for any of the concepts of the Annex in question, it must justify such decision and record it in the Detailed Minutes corresponding.

The Investment Committee must propose to the Officials or internal or external representatives of the Administradora who must attend the technical committees of the trusts corresponding to the Structured Instruments, ensuring that, when two or more representatives attend the technical committees, at least one of them is independent of the Administradora. The foregoing must be carried out in accordance with the rights and obligations established in each instrument, as well as in accordance with the rules provided for in the Securities Market Law and in the General Provisions applicable to securities issuers and other participants in the securities market, issued by the National Banking and Securities Commission.

Likewise, the Investment Committee must approve the mechanism proposed by the Head of the Investment Area so that the Administradora does not have control of the projects financed, in terms of the Securities Market Law, through the Structured Instrument.

The Investment Committee must define and approve policies regarding the alienation of assets or projects that have been part of the patrimony of the trusts corresponding to the Structured Instruments and, if applicable, to the FIBRAS or Real Estate Investment Vehicles, in accordance with best practices for these purposes, caring that at all times the interest of affiliates to the Savings System for Retirement is protected.

III.

Repealed.

IV.

---

Regarding Structured Instruments and FIBRAs, they must define policies that the administrator or the corresponding figure must observe regarding the evaluation of operational, legal, technical, political, and social risks to which the underlying investments forming the estates of the trusts corresponding to said instruments are exposed. The Investment Committee must consider the foregoing for purposes of the eligibility of the administrators or the corresponding figure for the instruments in which the Investment Companies operated by the Administrator will invest. These policies and their evaluations may be differentiated for each type of asset that makes up the set of the trusts corresponding to the Structured Instruments and FIBRAs, which must be clearly recorded in the corresponding Detailed Minutes.

V.

To opine on and authorize the amounts to be invested in Structured Instruments, FIBRAs, and Real Estate Investment Vehicles, based on the elements referred to in this article. The Investment Committee may define differentiated policies for each type of asset considered within the Structured Instruments, FIBRAs, and Real Estate Investment Vehicles.

Additionally, for investment in Structured Instruments, the Investment Committee or, where applicable, the Financial Risk Committee, as determined by the Administrator, must define the maximum percentage of concentration in the same issuance, in the same financed project, as well as in the same administrator. The Investment Committee, or in its case the Financial Risk Committee, must record in the Detailed Minutes of the corresponding session that it has the favorable vote of the majority of Independent Councilors who are members of the Investment Committee, or in its case the Financial Risk Committee, of the maximum concentration percentage determined for each of the elements referred to in this paragraph, as well as the analyses by which they determined said maximum percentages.

...

...

VI.

To approve, where applicable, and in accordance with fraction II of Article 139 of these Provisions, an investment program in Structured Instruments referred to in subsection a), fraction LI, Second Provision of the General Provisions establishing the investment regime to which the Investment Companies must be subject, and one in FIBRAs, in substitution for the individual authorizations of these assets. For such purposes, the types of eligible assets for each program must be defined precisely. Likewise, it must provide policies so that the investment area of the Investment Company, when implementing each investment program provided for in this paragraph, reports to the Investment Committee on the compliance of each instrument that forms part of each program. Such reporting must be with respect to the fractions provided for in this article. These investment programs may be differentiated for each of the types of assets considered in this paragraph;

VII.

To expressly manifest its opinion on the information gathered through the questionnaire provided for in Annex B, Chapter II that is provided by the risk area, regarding each Structured Instrument and FIBRA in which investment is intended.

For Certificates Bursátiles Fiduciarios de Proyectos de Inversión (Trust Certificates for Investment Projects), the Investment Committee must consider the additional information that, where applicable, is provided by the co-investor.

For Structured Instruments and FIBRAs, policies must be provided so that the investment area of the respective Investment Company has an analysis on the characteristics and inherent risks of each instrument provided for in this paragraph in which investment is made. When subsequent investments are made in any of the instruments referred to in this paragraph that have been previously acquired by the Investment Company, it will not be necessary to perform said analysis of the subsequent investments in that instrument. What is provided for in this paragraph must be carried out in accordance with what is established in Article 139 of these Provisions;

VIII.

...

IX.

To approve the function or policy for charging commissions of the Structured Instrument, FIBRA, or Real Estate Investment Vehicle, provided for in the placement prospectus, including that applicable during the period of searching for projects and on any other concept provided for in the placement prospectus of the instrument in question. Such approval must be effected prior to the acquisition of the Structured Instruments, FIBRAs, or Real Estate Investment Vehicles, and in the immediate subsequent session after there is any change to the commission charging policy of any of these instruments. For Structured Instruments, the respective trust contract must establish that the payment of commissions, compensations, fees, distributions, incentives, or similar applicable to the administrator, the settlor, or persons related to them, must be subordinated to the payment of a certain determined or determinable amount to the holders of said instruments, except for those commissions, fees, distributions, or similar that are necessary for the operation of the administrator, settlor, or persons related to them, in relation to the services they provide to the respective trust. Regarding this, the Investment Committee may agree that modifications to the commission structure be proposed, which must be recorded in the Detailed Minutes of the corresponding session, have the favorable vote of the majority of the Independent Councilors, and express the reasons, as well as have available to the Commission the analyses that gave rise to said proposal.

With respect to Structured Instruments, Administrators must cover the excess of total costs over the maximums established in Annex X of these provisions, for which they must follow the methodology established in said Annex.

X.

...

XI.

Repealed.

XII.

a XV.

...

XVI.

In the case of Trust Certificates for Investment Projects, they must verify that:

a)

a d)

...

e)

In the event that investment within national territory is less than the percentage defined in Provision Twenty-Fourth, fraction VI of the General Provisions establishing the investment regime to which specialized investment societies for retirement funds must be subject, the Trust Certificates for Investment Projects will be computed with the methodology established in Annex T of these provisions within the limit referred to in Provision Sixteenth, fraction I, subsection d) of said provisions. For the calculation of the percentage of investment within national territory, the capital effectively invested by the Trust Certificate for Investment Projects in activities or projects within national territory with respect to the total capital effectively called by the Trust Certificate for Investment Projects until the closures of June and December of each calendar year will be considered, both through the issuance in which the Investment Company participates, as well as through the capital calls associated with said issuance; likewise, investments both abroad and within national territory must be made in accordance with the investment objectives and guidelines of the instrument.

In the event that investment within national territory is equal to or greater than the percentage defined in Provision Twenty-Fourth, fraction VI of the General Provisions establishing the investment regime to which specialized investment societies for retirement funds must be subject, the Trust Certificates for Investment Projects will not count towards the limit referred to in Provision Sixteenth, fraction I, subsection d) of said provisions, if and only if, investments both abroad and within national territory are made in accordance with the requirements established in fraction XXIII of this article.

XVII.

a

XXI. ...

XXII.

Repealed;

XXIII.

In the case of Structured Instruments, the Investment Committee must verify prior to investment that the Structured Instruments comply with all the requirements established in Annex B, Chapter III, of these provisions, as follows:

a)

The Head of the Risk Area must present to the Financial Risk Committee the result of the evaluation of the Structured Instruments in which investment is intended, with respect to what is established in Annex B, Chapter III of these Provisions. The evaluation must be accompanied by evidence of the compliance of the Structured Instruments with each of the criteria established in Annex B, Chapter III of these Provisions;

b)

The Financial Risk Committee must approve the evaluation of the Structured Instruments with respect to the criteria established in Annex B, Chapter III of these provisions, and only in the event of having the approval of the Financial Risk Committee, must said evaluation be presented for the approval of the Investment Committee. Said approvals must have the favorable vote of the majority of the Independent Councilors of the respective committee, as well as be recorded in the respective Detailed Minutes;

c)

Investment Companies may only acquire Structured Instruments that comply with what is established in Annex B, Chapter III of these Provisions, and whose evaluation so certifies. For this purpose, both the Financial Risk Committee and the Investment Committee must have issued their favorable vote regarding the compliance of the Structured Instruments with what is disposed in Annex B, Chapter III of these provisions.

The evidence of the evaluation referred to in this fraction must be available to the Commission at all times.

XXIV.

Regarding Trust Certificates for Investment Projects that invest or finance activities or projects outside national territory, the Investment Committee must:

a)

Define the Investment Strategy with respect to the component of investment in national territory, considering at least the elements established in subsections c), f), and in the last paragraph of fraction I of this article;

b)

Specify for the component of investments within national territory, the policies established in fraction II, subsection a) of this article, understanding that said policies may be different for investments abroad. Investment Companies may invest in Trust Certificates for Investment Projects that have different administrators or co-investors for investments abroad and for investments within national territory;

c)

Verify that the Administrator or corresponding figure complies with the policies referred to in fraction IV of this article, for investments within national territory and of what is established in Chapter III of Annex B of these Provisions;

d)

Opine on and specifically authorize the amounts to be invested in the component of investments in national territory. The Investment Committee may define differentiated policies for each type of asset considered within the instrument;

e)

Manifest its opinion on the information gathered through the questionnaire provided for in Annex B, Chapter II of these Provisions, likewise, must have the analysis on the characteristics and inherent risks in accordance with what is established in fraction VII of this article, specifically for the investments within national territory that are intended to be made through the Instrument;

f)

Approve the function or policy for charging commissions that establishes fraction II of this article, even for the component of investments within national territory;

g)

Ensure that the value of investments within national territory and the value of investments abroad are computed independently for purposes of the administrator's participation percentage provided for in fraction XIX of this article; ensuring that the administrator participates with at least said percentage both in investments made abroad and in investments made within national territory;

h)

Follow up on net returns, risks, and investment decisions with respect to the component of investments within national territory, and

i)

Analyze the costs of investments within national territory.

XXV.

Verify that they are not issued with the purpose of identifying and carrying out a Business Combination in which the settlor or the administrator lack an operational history.

...

The obligations provided for in this article must be evaluated and, where applicable, updated and presented by the Head of the Investment Area every year or earlier if the Investment Committee requests it based on publicly available information in terms of the Securities Market Law, the General Provisions applicable to securities issuers and other market participants, issued by the National Banking and Securities Commission, and, where applicable, based on information provided to holders of Structured Instruments, FIBRAs, and from the independent appraiser. For Trust Certificates for Investment Projects, additionally, the information that, where applicable, is provided by the co-investor must be considered. For Real Estate Investment Vehicles, the information disclosed in accordance with the applicable regulations of Countries Eligible for Investments may be considered.

The updated evaluations in terms of what is provided for in the preceding paragraph must be presented by the Head of the Investment Area, in the next ordinary session of the Investment Committee in the event that relevant changes occur in the structure or operability of any Structured Instrument, FIBRA, or Real Estate Investment Vehicle, when any of these instruments are acquired or alienated, or whenever the Investment Committee requests it.

To comply with the analyses or application of policies provided for in fractions II, VII, and XIV of this article, the Administrator must:

1.1.

Designate the Official of the risk or investment area, as appropriate, responsible for complying with the analyses or application of policies provided for in this fraction, and

1.2.

..."

" Article 31.- ...

I.

a II.

...

III.

To have previously an analysis on the characteristics and inherent risks that defines the Investment Committee in Equity Components that are intended to be acquired in accordance with what is disposed in these Provisions. In the case of investments in initial public offerings and individual shares, said analysis must include the fundamentals of the company being financed in accordance with what is established in Annex C of these Provisions.

In the case of the replication of Stock or Real Estate Indices of Countries Eligible for Investments, an analysis on the characteristics and inherent risks will be required, but not the fundamental analysis of the companies referred to in the previous paragraph. Notwithstanding the foregoing, the fundamental analysis will be required when an issuer does not form part of the index object of replication;

...

a)

a d)

...

Officials in charge of the analyses or decision-making regarding the selection of individual shares of Foreign Issuers must have at least 10 years of professional experience in investment matters in equity in international markets; or alternatively, 5 years of experience and have the certifications for individual shares in accordance with Article 70 of these provisions.

Investment Companies may only directly invest in individual shares of Foreign Issuers that are issued and supervised under the regulation of the Countries Eligible for Investments provided for in Group I of Annex D of these provisions.

IV.

a VI.

...

VII.

In the event that the Administrator, through the Investment Companies it operates, intends to participate in the initial public offering of shares representative of the share capital of a Private Company that have adhered optional titles to those referred to in subsection d) of fraction LII of the Second Provision of the General Provisions establishing the investment regime to which investment societies must be subject, they must previously have the non-objection of the Commission for the Operation of Options whose underlying assets are Equity Components. Likewise, they must have the valuation of said shares and optional titles in terms of what is provided for in Article 16, fraction X of these provisions;

VIII.

...

IX.

To verify that investments in instruments issued by Private Issuers without Operational History with the purpose of carrying out a Business Combination correspond to Equity Instruments permitted in the General Provisions establishing the investment regime to which investment societies must be subject, which may be associated with the optional titles provided for in subsection d) fraction LII of the Second Provision of said provisions. Such investment may only take place during the first 60 quarters of life of the Basic Investment Company. Additionally, they may not invest in those instruments that provide more than 18 months to announce the Business Combination, nor more than 24 months for it to be carried out.

The Investment Committee must approve and follow up on the investment in each issuance of the referred instruments in which the Investment Company intends to invest, having the approval of the majority of Independent Councilors and being recorded in the Detailed Minutes of the corresponding session, for which it must:

i.

Have the valuation of said shares and optional titles in terms of what is provided for in Article 16, fraction X of these provisions;

ii.

Perform an analysis containing what is provided for in the previous fraction III, as well as what is established in Chapter I, fraction I, subsection a) to d) and Chapter II, fraction I, subsections a) to g), i) and k), of Annex B of these Provisions.

For the analysis containing what is provided for in the previous fraction III, it must consider the available information on the selection criteria of the target company; additionally, it must consider information on the issuer, at least for subsections a), b), e) and f) of Annex C and of the other factors that the Financial Risk Committee determines as relevant. The analysis on the target company must be updated once the issuer reveals the company that has been identified as the object of the Business Combination.

The Financial Risk Committee must ensure that the disclosure of information by the issuer of the instrument is sufficient to carry out the analyses provided for in this numeral, likewise, the risk area of the Investment Company may gather additional public information, through the pertinent means that the Financial Risk Committee defines. The Financial Risk Committee, with the favorable vote of the majority of its Independent Councilors, must determine that the gathered information is sufficient to carry out said analyses, being recorded in the Detailed Minutes of the corresponding session; otherwise, the instrument will not be eligible for investment by the Investment Companies.

iii.

Ensure that the investment prospectus guarantees that the Investment Company will recover at least 100% of the amount invested in the issuance in the event that the Business Combination is not carried out, or in the event that the Investment Company decides to exercise its right of redemption of the acquired values and not participate in the financing of the Business Combination. Therefore, the investment prospectus must indicate that the entirety of the resources obtained in the initial offering will be deposited in the trust or custody account, and cannot be used for administration costs and expenses, payments to creditors, nor the other expenses related to the issuance;

iv.

Analyze the capacity to vote in favor or against the Business Combination that the Investment Company will have and the risk that its decision-making power is limited; for which they must consider the participation they intend to acquire in the Instrument, the voting rights granted to holders, including the minimum approval percentage and the minimum to veto it, as well as the voting capacity that administrators and, where applicable, the placer will have, including whether they are allowed to purchase shares in the secondary market, if they are obliged to vote with the majority, and other clauses related to what is provided for in this numeral;

v.

Analyze the alignment of interests of the instrument's administration team with the holders. Said analysis must include: a) the compensation amount of the promoter and the administration team, including the costs and expenses thereof borne by the holders' resources and the interests generated by the trust or custody account, the price difference between the shares and optional titles acquired by the promoter or the administration team and the price for the investing public, as well as the percentage they will represent with respect to the circulating share capital, and the other sources of compensation provided for; b) the co-investment of the promoter or the administration team in the instrument, as well as the mechanisms by which said co-investment will be carried out; c) the risk of conflicts of interest and the conditions the promoter provides for to mitigate them; and d) the disclosure of information.

The Investment Committee must determine a minimum percentage of co-investment by the promoter or administration team through the acquisition of shares and

optional titles in a previous or parallel private offering to the public offering, which must have the same price and composition as the shares and titles offered to the public investor; said percentage may not be less than 5% of the resources raised in the offering; however, it must ensure that the promoter or the management team cannot participate in the funds of the trust or custody account in the event of liquidation.

Likewise, the Investment Committee must determine a maximum percentage difference in price between the optional shares and titles acquired at preferential prices by the management team or the promoter compared to the price for the public investor, as well as a maximum percentage of participation of the same in the share capital of the target company.

Additionally, it must ensure that the prospectus stipulates at least one year after the Business Combination for the promoter or the management team to be able to sell the optional shares and titles they have acquired, as well as minimum prices at which the shares must reach in the market for them to exercise the optional titles they have acquired at a preferential price, separately or together with shares.

vi.

Ensure that the prospectus contains sufficient clauses for the mitigation of conflicts of interest of the members of the management team, including at least: a) that the target company of the Business Combination does not determine special conditions for any member of the management team; b) the prohibition of participating in the search for similar businesses for acquisition or merger through another instrument, otherwise, preference must be given to the instrument in which the Investment Society invests; c) the prohibition of offering services to similar companies or in the same sector as the target company, until the time period determined in the prospectus has elapsed since the Business Combination; d) the prohibition of the Business Combination being with respect to any company with which the placement agent, the promoter, or any member of the management team of the instrument is a Related Person or has Financial Links; unless said conflict of interest is revealed and there is a favorable opinion from an independent multiple banking institution to the operation that states that the investment will be financially fair for the investors;

vii.

Conduct a comparative analysis of the investment costs in the instrument compared to the investment cost in individual shares of operating companies, which must include all costs and expenses to be covered, as well as the dilution effect that will occur on the investment when the Business Combination is carried out. In the event that the Investment Committee approves the investment, it must justify its decision regarding the advantages it foresees over the investment in individual shares of issuers with characteristics similar to the target company and the objectives it pursues in the investment in the Instrument as part of the Investment Strategy;

viii.

Ensure that the funds of the trust or custody account are invested exclusively in government debt securities;

ix.

Ensure that the Business Combination and all investments made with the trust's equity are carried out within national territory;

The Investment Committee must justify its decision to invest in each issuance based on items i to ix above; likewise, only instruments that comply with what is established in items iii, viii, and the last three paragraphs of item v will be eligible for investment.

The Investment Committee must opine and approve that the Investment Society participates in the Business Combination or redeems its investment once the promoter announces the specific target company, for which it must have the approval of the majority of the Independent Directors, as well as analyze, at least:

a.

The variation in the price of shares and optional titles in the secondary market as a result of the announcement;

b.

The valuation of the target company provided by the promoter of the Instrument;

c.

The valuation of the shares and, if applicable, of the optional titles according to the methodology provided in article 16 fraction X of these provisions;

d.

The analysis of the fundamentals of the target company according to Annex C of these provisions;

e.

The compliance of the target company with the selection criteria provided in the prospectus;

f.

Governance aspects of the target company, such as the governing bodies and organizational structure, the history and capabilities of the members of the company's management team, the compensation and incentive plans for the same, in case members of the management team of the Instrument offer their services to the same, the description of what they will consist of, as well as any others that the Investment Committee considers pertinent, and

g.

The information on relevant events that have been disclosed by the instrument.

Investment Societies may only carry out operations in the secondary market of the shares and optional titles referred to in this fraction once the Business Combination has been announced. This must be considered in the liquidity analysis referred to in fraction IV of this article.

...

1.1.

a 1.2. ...

..."

" Article 33.-

...

I.

a VIII.

...

IX.

It must foresee eligibility policies that both the risk area and the investment area of the Investment Society must evaluate, prior to carrying out investments in Marketable Instruments. These eligibility policies will include the following:

a)

The settlor and the administrator or operator of the portfolios or assets that make up the trust's equity, including among other factors, the functions of the agents involved in the instrument and the points referred to in Annex B, Chapter I, fraction III of these Provisions. In the event that the Investment Committee decides not to foresee eligibility policies for any of the concepts in the aforementioned Annex, it must justify such decision and record it in the corresponding Detailed Minutes.

b)

The operating structure, including among other factors, the equity and purposes of the trust, destination of the resources of the issuance, payment cascades, guarantees, the sectors or economic activities in which it operates.

c)

Policies for the investment area of the Investment Society in question to have an analysis of the characteristics and risks inherent to each Instrument in which it invests, considering in an enumerative but not limiting manner the financial, operational, legal, technical, political, and social risks to which the credits or underlying assets of the trust's equity are exposed; as well as that the administrator or operator of the collection rights that derive from them, carries out a sufficient evaluation of said risks. It will not be necessary to carry out this analysis for subsequent investments in the same instrument that has been previously acquired by the Investment Society. The analysis of the characteristics and inherent risks of Marketable Instruments must be made considering the aspects established in items i to vii of section A of fraction I of article 139;

d)

The function or policy of expenses and collection of commissions of the Marketable Instrument, taking care of the interests of the workers. The Investment Committee must approve the expense and commission policy and have the favorable vote of the majority of the Independent Directors, as well as have at the Commission's disposal the analyses that supported the approval. The approval by the Investment Committee and the reasons must be recorded in the Detailed Minutes of the corresponding session, either prior or immediately subsequent to the acquisition of the Marketable Instrument, as well as when changes are made to the expense and commission collection policy.

e)

Policies regarding the alienation of assets or projects that have been part of the trust's equity, in accordance with best practices for these purposes, ensuring that at all times the interest of affiliates to the Retirement Savings System is protected.

X.

Verify that they are not issued by Private Issuers without Operational History for the purpose of identifying and carrying out a Business Combination in which, in the case of Marketable Instruments, the settlor or the administrator lack an operational history.

...

1.1.

...

1.2.

The information from fractions II, VI, VII, VIII and IX: in accordance with what the Investment Committee establishes, and

1.3.

...

...

...

... "

" Article 34.- ...

I.

a II.

...

III.

Define a collateral administration policy that at least contemplates the type of collateral to be received, the minimum collateral amounts, and the methodology for following up on the collateral amount, this last with respect to the value of the transactions agreed upon, which it may give and receive during the validity of the operations, as well as the minimum amount of collateral transfer that it defines for each operation with Over-the-Counter Derivatives, in accordance with the policies established in article 3, fraction V of these Provisions. The threshold defined in operations with Over-the-Counter Derivatives must be zero;

IV.

a VII.

...

VIII.

Define and follow up on Tactical Allocations, to be carried out through Derivatives. These allocations must indicate their objective, the operation or combination of operations to be used, as well as the underlying assets, policies on exercise prices and on the expiration dates of the operations. The objective of these operations can only be hedging, rebalancing, or reduction of Tracking Error;

IX.

It must have an analysis of the liquidity risk of the investment portfolio of the Asset Managed by the Investment Society, for the positions in Derivatives, considering margin calls and collateral execution, in accordance with what is defined by the Financial Risk Committee. Said analysis must include the calculation of the Provision for exposure in Derivative Instruments (PID), the Assets to Finance the Derivative operation (AFD) and the Liquidity Coefficient. Likewise, it must consider the cumulative effect on said calculations, when making adjustments to the Risk Factors corresponding to the stress scenarios defined in article 11 of these provisions. The Investment Committee must consider the results of this analysis to, if applicable, modify the Investment Strategy with Derivative Instruments;

X.

...

The Head of the Investment Area must present to the Investment Committee the updated information referred to in this article with the periodicity indicated below, or earlier if said Committee so determines:

1.1.

The information from fractions I, II, IV, VI, VII and X: annually, and

1.2.

The information from fractions III, V and IX: every four months.

1.3.

The information from fraction VIII: monthly.

... "

" Article 35.- ...

I.

a VII.

...

VIII.

Determine the periodicity of the calculation, as well as its horizon of contribution to the risk and return of the investment portfolio of the Asset Managed by the Mandatary, as well as the attribution to risk and return with respect to the reference portfolio, applying a methodology approved by the Financial Risk Committee.

...

...

... "

" Article 36.- ...

I.

...

a)

a b)

...

i.

Asset Classes indicated in fraction VII, of article 2 of these Provisions. The Investment Committee may assign a weight equal to zero for one or more of said Asset Classes as part of the Investment Trajectory, as well as consider additional asset classes to those provided for in this subsection;

c)

a e)

...

f)

The formulas for the attribution of return and risk of the investment portfolio of the Total Asset of the Investment Society relative to the Investment Trajectory, and

g)

...

II.

...

III.

...

a)

...

b)

The Administrator, through the UAIR, will prepare the analysis of attribution of return and risk of the investment portfolio of the Total Asset of the Investment Society relative to the Investment Trajectory applicable to the investment portfolio of the Total Asset of the Investment Society;

c)

a f) ...

IV.

...

...

...

...

... "

" Article 51.- The Head of the Investment Area will be in charge of, at least, the following functions:

I.

a III.

...

IV.

For the selection of credit risk, it must inform the Investment Committee, regarding Debt Instruments issued by Private Companies in which the Investment Society invests or intends to invest, when they are under the following circumstances:

a)

When the issuers do not comply with the General Provisions that establish the investment regime to which specialized investment societies for retirement funds must be subject.

b)

When the investment in said Instruments does not adhere to the credit risk exposure policies defined by the Financial Risk Committee, as well as those defined as part of the Investment Strategy by the Investment Committee.

The above must be presented at the Investment Committee session that takes place immediately after the aforementioned circumstances have been presented.

Likewise, in the corresponding Detailed Minutes it must be recorded:

i.

The issuers and investments that have been placed in the circumstances established in subsections a) and b) above.

ii.

The issuers and investments that have not been placed in the circumstances established in subsections a) and b) above; but that some market parameter required by the Investment Committee does not meet the expectation previously determined by that committee. The amount of the issuance cannot be part of the exclusion parameters required by the Investment Committee. "

" Article 52.- ...

...

...

...

...

...

I.

a V.

...

VI.

The methodology that must be followed in order to carry out the analyses referred to in article 139 of these Provisions;

VII.

a XII.

...

XIII.

...

a)

a b)

...

c)

In the relationships of the third party with the groups and financial entities with which it has Financial Links, what is provided in articles 64 and 69 of the Law, what is provided in the General Provisions that establish the investment regime to which Investment Societies must be subject issued by the Commission, and in these Provisions will be observed.

XIV.

...

a)

a d)

...

e)

Extraordinary liquidity requirements of the investment portfolio under stress scenarios according to the liquidity risk measurement methodology defined by the Financial Risk Committee.

XV.

Repealed;

XVI.

a XIX.

...

...

Likewise, when the Administrator intends for the Investment Societies it administers and operates to carry out operations with Derivatives, it must consider in the Investment Manual, what is provided in article 122, fraction IV. "

" Article 54.- Administrators during the implementation of the Automated Integrated System must simultaneously use the system they have to comply with what is established in these Provisions. During the substitution of the Automated Integrated System, the Administrator will be responsible for any non-compliance caused to these Provisions, to the General Provisions that establish the investment regime to which Investment Societies must be subject, to the General Provisions on the registration of accounting, preparation and presentation of financial statements to which Investment Societies must be subject, to the General Provisions that establish the patrimonial regime to which Administrators, Pensionissste and Investment Societies and the special reserve will be subject, to the General Provisions that establish the procedure for the construction of the net performance indicators of Investment Societies, and to the General Rules that the Commission establishes for the delivery of information. "

" Article 60.- Repealed. "

" Article 63.- The Head of the Investment Area, or whom he designates, must consider for its investment decisions in FIBRAS, Real Estate Investment Vehicles, Commodities, Currencies, Debt Instruments, Foreign Debt Securities, Equity Instruments and Foreign Equity Securities that are part of the Asset Managed by the Investment Society, the results of the tests prepared by the UAIR referred to in Title II, Chapter II of these Provisions.

In the case of FIBRAS, Real Estate Investment Vehicles and Marketable Instruments, Investment Societies may use Generic Instruments to carry out the tests referred to in this article. For the case of Structured Instruments, portfolio tests must also be prepared, which will only be enforceable from the time the Structured Instrument has investments, and will be satisfied with the risk reports provided for such purposes by the administrator or the independent appraiser of the Vehicle in question. The Head of the Investment Area, or whom he designates, must know and, if applicable, request modifications through the technical committees of the Structured Instruments, regarding the contents of the tests provided for in this paragraph.

The results of these tests must be made known to the Financial Risk Committee.

The Head of the Risk Area must present the results of the tests referred to in this provision to the Investment Committee so that it considers them in its investment decisions, with the periodicity determined by the Investment Committee or, if applicable, the Financial Risk Committee, as determined by the Administrator. The results of the tests must be kept available to the Commission. "

" Article 67.- ...

I.

a III.

...

IV.

Participate in the initial public offering of Structured Instruments, FIBRAS-E and the Instruments referred to in article 31, fraction IX of these provisions, when the Administrator that operates the Investment Society has a Financial Link or is part of the same Business Group with a brokerage house or bank that is part of the Placement Syndicate, whether the placements are on a firm basis or best efforts, and

V.

Participate in the initial public offering of Debt Instruments issued by Private Companies, Structures Linked to Underlyings, Generic FIBRAS, Equity Instruments other than those referred to in fraction IX of article 31 of these provisions, and Foreign Securities, when the Administrator that operates the Investment Society has a Financial Link or is part of the same Business Group with a brokerage house or bank that is part of the Placement Syndicate. Except, when the Placement Syndicate is formed by two or more brokerage houses with which the Administrator has no Financial Link nor belongs to the same Business Group, and there is authorization from the Governing Body of the Administrator, with the favorable vote of the majority of Independent Directors, to invest in securities through this type of placement.

Investment Societies may participate in the initial public offering of Investment Target Assets when the placement agent is a Related Person with respect to the Administrator that operates the Investment Society, provided that this is revealed to the General Manager, the Regulatory Comptroller and the Governing Body of the Administrator, and the authorization of the Investment Committee is recorded, with the favorable vote of the majority of the Independent Directors; likewise, the natural person who is situated as a Related Person must abstain from decision-making with respect to said offering.

...

... "

" CHAPTER IV

ON THE CERTIFICATION AND TRAINING OF OFFICIALS

Article 70.- ...

...

...

...

...

...

To comply with what is established in article 31, fraction III of these provisions, regarding the certification of Officials for investment in individual shares of Foreign Issuers, the Officials of the investment area who make investment decisions must have the specific certification for individual shares provided for in Annex J of these Provisions, without prejudice to the general certification in financial matters referred to in this article. "

" Article 70 Bis.- Investment Societies and the Administrators that operate them must implement a continuous training program, directed at the operators of the Investment Societies, their support staff, the UAIR, and in general, all personnel involved in the operation of the Investment Societies. "

" Article 107.-

...

I.

a VIII.

...

IX.

That the contract provides for the obligation to calculate the contribution to the risk and return of the investment portfolio of the Asset Managed by the Mandatary, as well as the attribution to risk and return with respect to the reference portfolio, applying any methodology approved by the Financial Risk Committee. The periodicity of the calculation as well as the horizon must be defined by the Investment Committee;

X.

a XII.

...

... "

" Article 119.- ...

Investment Societies may not carry out operations in the national or international market with any Custodian that fails to comply with what is provided in the General Provisions that establish the investment regime to which Investment Societies must be subject issued by the Commission, these Provisions, the criteria defined by the Risk Analysis Committee and the regulations issued for such purposes by the National Banking and Securities Commission or has any pending violation or investigation with the corresponding supervisory authority.

...

... "

" Article 122.- Administrators that intend for their Investment Societies, either directly or through Mandatories, to initiate operations with Derivatives authorized by the Bank of Mexico in terms of article 48 fraction IX of the Law, or with the Derivatives and underlyings referred to the

Annex M of these Provisions, must request the non-objection of the Commission, for which they must previously prove compliance with the following requirements, which will be evaluated by the Commission to validate compliance and be in a position to issue its non-objection:

I.

In the projects of the manual referred to in article 62 of these provisions or in the Manual of Policies and Procedures for the Administration of Financial Risk, they must detail the procedures and mechanisms through which they will comply with the management of Operational Risk of Derivatives operations, in accordance with article 7 Bis of these Provisions.

II.

At least one Operator and the Head of the Investments Area, as well as one Official and the Head of the Risks Area, must hold a valid certification, issued by one of the independent third parties designated by the Commission for Derivatives operations.

For each of the areas of, regulatory oversight, confirmation, settlement, accounting registration, and generation of financial statements of Investment Societies, there must be at least one Official certified by one of the independent third parties designated by the Commission for Derivatives operations. The certifications referred to in this section shall have the validity established in Annex J of these Provisions.

III.

Have an Integrated Automated System that allows them to measure and evaluate daily the risks arising from Derivatives operations, their margin accounts and guarantees, as well as to account for these operations and inform the Operator in case the risk level reaches the limits provided for in the investment regime or the Prudential Limits defined by the Financial Risk Committee. These systems must allow access to their information by the UAIR at all times, as well as present the consolidated position of securities and Derivatives operations. For this purpose, the Integrated Automated System must be configured for the incorporation of Derivatives operations, and execute the activities referred to in articles 13, section III and 14, sections I, II, VIII, XII, XIII, XV and XIX; Annex L, section VII, items d), f), g) h) , i), l); as well as to value Derivatives and, if applicable, perform the independent valuation for over-the-counter operations; in addition to keeping their accounting records in accordance with what is established in the General Provisions on the registration of accounting, preparation and presentation of financial statements to which participants in the retirement savings systems must adhere.

IV.

Must have a draft annex to the Investment Manual, approved by the Investment Committee of the corresponding Investment Society and with the approval of the majority of the Independent Directors of said committee, which contains, regarding the aforementioned Derivatives operations:

a)

Their incorporation into the Investment Strategy, including target exposure percentages or maximums through Derivatives, both by Asset Class and in aggregate for the portfolio with respect to the value of the Total Assets of the Investment Society and the policy for the use of Derivatives in accordance with article 34 of these provisions. Likewise, the exposure and use of Derivatives must be consistent with the liquidity required in the portfolio and with the tolerated sensitivity policies of the portfolio to the corresponding Risk Factors for Derivatives;

b)

The policies on firm price positions and other acquisition policies defined by the Investment Committee;

c)

Policies to follow up on investment through Derivatives, by underlying, market, Counterparty, to Tactical Allocations, to risk and yield level, leverage and to liquidity requirements for Derivatives positions, considering the reports delivered by the investments area, by the UAIR and the measures generated by the Integrated Automated System.

V.

Have a draft annex to the Manual of Policies and Procedures for the Administration of Financial Risk, approved by the Financial Risk Committee and with the approval of the majority of the Independent Directors of said committee, which contains the complete framework for the administration of Financial Risks associated with the aforementioned Derivatives operations, namely:

a)

The valuation methodology for said operations, whether it is intended to trade Derivatives on Derivatives Exchanges or in over-the-counter markets;

b)

Their incorporation into the models and methodologies for the valuation of Financial Risks, section II of article 16 of these provisions;

c)

The Prudential Limits and Early Warnings applicable to them in accordance with the parameters defined by the Financial Risk Committee, as well as for Counterparties, Clearing Houses and for the Liquidity Coefficient and the provision for exposure in Derivative Instruments and other minimum liquidity parameters. Likewise, policies to correct deviations observed from prudential and regulatory limits;

d)

Their incorporation into the methodology referred to in section XXV of article 16 of these provisions;

e)

The prudential leverage limits and measures, as well as the methodology to determine them;

f)

The calculation methodology and sensitivity measures for Derivatives, as well as their incorporation into the sensitivity analysis at the investment portfolio level;

g)

The methodology for portfolio stress testing referred to in article 11 of these provisions, incorporating Derivatives operations;

h)

The methodology for evaluating the liquidity risk of the investment portfolio of the Total Assets of the Investment Society, considering Derivatives operations;

i)

The methodology for calculating observed yield, expected yield, risk-adjusted yield of the aforementioned operations, and how they will be computed in the yield calculations for the investment portfolio of the Total Assets of the Investment Society in aggregate or by Asset Class;

j)

Their incorporation into the methodology referred to in section XXVIII of article 16 of these provisions;

k)

The policies to receive and deliver guarantees backing authorized Derivatives operations referred to in section V of article 3 of these provisions;

l)

The logistics and best execution practices for Derivatives operations provided for in article 122 Bis of these provisions;

m)

The policies referred to in article 16, section XXXIV of these provisions.

n)

The requirements and procedures of the Integrated Automated System to comply with section III of this article.

VI.

Have a declaration signed by the independent expert referred to in TITLE XIV BIS of these Provisions, stating that they reviewed the framework for the administration of Financial Risks for Derivatives operations and its compliance with what is established in sections I to III and V above, and that there are no pending observations to be resolved by the Administrator.

Once the Administrators comply with the requirements provided for in sections I to VI above, they must inform the Commission and request that it go to their domicile to verify compliance with said requirements.

If the Commission determines that the Administrators comply with the requirements established in the regulations, it will issue its non-objection so that the Investment Societies they administer and operate can conduct Derivatives operations.

Investment Societies may only conduct Derivatives operations directly for which the Administrator operating them has the non-objection of the Commission, or through Mandatories for which the latter have authorization from the corresponding authorities in the Countries Eligible for Investments.

The non-objection to conduct Derivatives operations issued by the Commission will remain valid for a period of three years, provided that, the Administrator continues to comply during said validity period, with what is provided for in this article.

In case the Commission detects in the exercise of its supervisory powers that the Administrator has ceased to comply with any of the aforementioned requirements and procedures, it must notify it, so that the Administrator in question and, if applicable, the Mandatories suspend all Derivatives operations of their Investment Societies.

In the event that the suspension referred to in the previous paragraph is determined, the Investment Society and, if applicable, the Mandatories may not enter into new Derivatives operations, except for the operations necessary to rebalance the portfolio and with respect to operations previously entered into, they must adhere to what is established in these Provisions regarding portfolio rebalancing for failing to comply with the limits established in the Investment Regime Authorized by acquisition or sale of Investment Assets, and for the violation of investment limits established for Investment Assets due to causes attributable to the Administrator, without the suspension of Derivatives operations being understood as a violation of the Investment Regime.

Mandatories may trade authorized Derivatives and authorized underlyings as long as the Administrator hiring them has the non-objection of the Commission so that the Investment Societies they administer, enter into operations with said Derivatives. For the evaluation carried out by the Commission for the purposes provided for in this paragraph, it must consider the reduction in the operational risks of the Administrator when employing an eligible Mandatory.

" Article 122 Bis.- The logistics and best execution practices for Derivatives operations that the

Administrator must observe, are the following:

I.

The UAIR, based on the information provided by the investments area, must determine the logistics for Derivatives operations, using at minimum the following:

a)

Counterparty limits;

b)

Issuer limits;

c)

Limits for listed and over-the-counter markets;

d)

Operator limits, and

e)

Marginal and total Value at Risk limits of the investment portfolio.

Regarding particular operations not provided for in the operational framework referred to in this section, the operators who execute the investment policy of the Investment Society must request from the UAIR, prior express confirmation from the Price Provider that it can carry out a daily valuation of the Instrument, that they present the operation to the Financial Risk Committee prior to its execution, for its inclusion in the investment policy.

This information, prior confirmation by the Price Provider of the possibility to value an operation or Instrument, must be submitted to the Financial Risk Committee for its approval, and, if applicable, it must be made known to the Investment Committee, so that, considering this operational framework, it decides the investment policy regarding Derivatives.

Regarding Derivatives operations conducted in over-the-counter markets, Investment Societies that do not hire a Price Provider to provide valuation services for said assets, may conduct said operations without it being necessary to have prior confirmation, from the Price Provider, of the possibility to value said assets.

In this case, the operators who execute the investment policy of the Investment Society must previously submit to the Risk Committee, for its approval, the Derivatives operation in question and, if applicable, make it known to the Investment Committee, so that, considering this operational framework, it decides the investment policy regarding Derivatives operations in over-the-counter markets;

II.

The operators of the Investment Society, in each operation they conduct with Derivatives, in accordance with the investment policy defined by the Investment Committee, must:

a)

Enter into the corresponding operation on behalf and for the order of the Investment Society, in operations conducted in over-the-counter markets or, once the contract of adherence to the relevant Exchange or Clearing House is signed, for each operation subsequently entered into, document it with confirmation letters;

b)

Calculate the Marginal Value at Risk of the operation and of the entire portfolio, with the collaboration of the UAIR;

c)

Inform the UAIR, the general director of the Administrator and those in charge of the control and registration of operations daily, of the operations entered into, and

d)

Inform the Financial Risk Committee and the Investment Committee, at each session of these, about the details of the operations entered into, the follow-up on them and the accounting and financial results;

III.

Only those in charge of the control and registration of operations may confirm and reconcile them, for the aforementioned purpose they must:

a)

Review, in coordination with the officials of the legal area of the Administrator, the terms and conditions of the contract corresponding to each operation;

b)

Keep the accounting records of the operations;

c)

Administer the margin accounts and guarantees of each operation, and

d)

Settle the operations and their margin accounts. "

" Article 127.- Derivatives operations that are not carried out on the Derivatives Exchanges

mentioned in the previous article, must be formalized using master agreements approved by the

" International Swaps and Derivatives Association, Inc. " , ISDA, by its acronym in English and translated

in Spanish as the International Swaps Association, the " International Securities

Market Association " , ISMA, by its acronym in English and translated

in Spanish as the International Securities Market Association, or by other national or international organizations of

recognized prestige in the matter that the Commission makes known through its Internet page. Likewise,

such master agreements must consider a section or supplement regarding the officials

authorized to carry out the aforementioned operations and keep them updated, including the last date of

update, or inform the Counterparties about the officials authorized to enter into operations

with Derivatives through the policy that the Investment Committee has defined for such purposes. The

Administrators must request that Counterparties keep the section or supplement of

the officials authorized for the aforementioned operations updated. The master agreements must

contain a collateral management agreement, also known as " Credit Support Annex " (CSA). "

" Article 129.- For Derivatives operations carried out both in over-the-counter markets and in

Derivatives Exchanges, the confirmation area must receive the confirmation from the Counterparty, review it against

the records of the Investment Society and, if they match, the authorized persons must ratify it to

the Counterparty. In case of mismatch, in order to maintain the independence of the process, the

operation will be reviewed with the confirmation area of the Counterparty and against the record in the magnetic as well

as electronic medium of the operation.

... "

" Article 131.- For the purposes of renewing the non-objection to conduct Derivatives operations,

the Administrators must:

I.

Send the renewal request to the Commission six months before the validity period of the non-objection expires;

II.

Have all operations entered into during the validity period of the non-objection

granted by the Commission, backed by a master agreement referred to in

article 127 of these provisions. Likewise, they must be properly

registered, accounted for, confirmed and included in all reports on Derivatives, and

III.

Must comply during the validity of the non-objection, with the follow-up activities through

the UAIR reports referred to in article 11 of these

provisions, incorporating Derivatives operations in accordance with what is established in the

Manual of Policies and Procedures for the Administration of Financial Risk, and what

is provided for in article 122 above.

...

...

...

... "

" TITLE X

ON THE OPERATION WITH STRUCTURED INSTRUMENTS, FIBRAS

AND INSTRUMENTS

LISTED

Article 139.- Investment Societies must submit to the approval of their Investment Committee,

the acquisition of Structured Instruments and FIBRAS, in accordance with the following:

I.

When they do not belong to an investment program referred to in article 30, section VI,

of these Provisions:

A.

For FIBRAS, the risk area must previously perform an analysis on the

characteristics and inherent risks of each instrument to be acquired. The

Head of the Investments Area must submit to the Investment Committee the

aforementioned analysis considering the following:

i.

...

ii.

The content of the questionnaire referred to in Annex B, Chapter II that allows

evaluating the policies defined in the different concepts of the Instrument, the

analysis must refer to the investment plan and experience of the administrator of the

portfolio of the Instrument;

iii.

For follow-up purposes, report on the results of the behavior tests

referred to in article 63 of these Provisions that are carried out, using methodologies that consider the information available at the

date of the instrument, if applicable, Investment Societies may use

Generic Instruments to carry out the tests referred to in this

section;

iv.

The known costs and commissions in favor of the administrator of the structure, the

structurer and other participants in the operation. The analysis must include the

yield corresponding to the administrator or that which performs

analogous functions;

v.

...

vi.

The valuation of the instrument and its sensitivity to the identified risks

in accordance with what is provided in this article, and

vii.

...

The Head of the Investments Area must present to the Investment Committee a general opinion on the convenience of investment in FIBRAS, prior to the

approval of the Investment Committee, as well as express its opinion on

the

information provided in items ii and iv of section A of this section.

...

The approvals granted by the Investment Committee, so that Investment

Societies invest in FIBRAS individually, must be agreed upon expressly, have the favorable vote of the majority of the Independent Directors

who are members of said Committee and be recorded in the Detailed Minutes of the session of the

corresponding Investment Committee in which the analysis described in

section A of this section was presented.

Investment Societies may only acquire FIBRAS and Structured

Instruments, that satisfy the criteria established in the general investment policies

for these Instruments, approved by the Investment Committee of the

Investment Societies. Such policies must cover the aspects referred to in

items i to vii of section A of this section, likewise, in the case

of FIBRAS, they must be approved complying with the formalities referred to in

the previous paragraph. In the case of Listed Instruments, the

Investment Societies may invest in them without it being necessary the

approval of the Investment Committee for the acquisition of each Listed Instrument,

nor that they belong to an investment program, this without prejudice to what is

established in article 33, section IX, item c of these provisions.

B.

...

II.

The Structured Instruments referred to in item a) of the Second Provision,

section LI of the General Provisions that establish the investment regime

to which Investment Societies must adhere, and FIBRAS, may be acquired in

accordance with what is provided for in article 30, section VI of these Provisions, through

investment programs that must be previously approved by the Investment

Committee and that additionally satisfy:

A.

That the program is expressly approved and has the favorable vote of

the majority of the Independent Directors who are members of said Committee and

be recorded in the Detailed Minutes of the corresponding session;

B.

The programs must cover the aspects referred to in section A of

section I above, when they include FIBRAS or section B of section I above,

when they include the Structured Instruments referred to in item a) of the

Second Provision, section LI of the General Provisions that

establish the investment regime to which Investment Societies must

adhere. The aforementioned analyses must be available to the Commission, and

C.

Investments in Structured Instruments referred to in this section

and in FIBRAS, made through investment programs are not obliged to

be presented to the Investment Committees prior to their acquisition. The results of the

analyses provided for in sections A and B of section I above, must be presented

to the Investment Committee at the session immediately following the date of acquisition of the

Structured Instrument or FIBRA.

III.

For subsequent investments in the same Structured Instrument or FIBRA, sections I and II of this article shall not apply, and

IV.

The Head of the Investments Area, or whom he designates, must follow up on the

Structured Instrument or FIBRA and the assets that compose it, if applicable, as well as

deliver to the Investment Committee the results of the analyses provided for in section I of

this article, as well as the follow-up of the analyses when relevant changes occur in the structure or operability of any Instrument, or when any Instrument is disposed of. Such analyses must be available to the Commission. "

" Article 151.- ...

I.

a V. ...

...

...

...

...

In the event that the administrator of the Structured Instruments, with the public information available and

its own, does not sufficiently diversify the investor base referred to in Annex U or

If the investment program is not complied with and causes Investment Companies to fail to meet the limits

provided for in the aforementioned Annex U of these provisions and in the General Provisions that

establish the investment regime for Investment Companies, this shall not be attributable to the Investment

Company.

Non-compliance with the criteria defined by the Risk Analysis Committee applicable to Equity Indices of

Eligible Countries for Investments, Real Estate Indices of Eligible Countries for Investments, or Debt Indices of Eligible Countries for

Investments, as well as Vehicles that replicate them, shall not be attributable to the Investment Company. Nor shall non-compliance by Active Mutual Funds in which they invest be attributable to the Investment Company, provided that the aforementioned indices and Vehicles have a current approving opinion from the independent expert referred to in Annex S of these provisions. Such opinion and evidence of compliance with the criteria defined by the Risk Analysis Committee must be available to the Commission at all times.

The independent expert referred to in the preceding paragraphs must meet the requirements

provided for in Annex S of these Provisions and shall be responsible for issuing an opinion on the compliance with the requirements established in the criteria defined by the Risk Analysis Committee of the Vehicles, as well as the Equity Indices of Eligible Countries for Investments, the Real Estate Indices of Eligible Countries for Investments, and the Debt Indices of Eligible Countries for Investments. "

" Article 165.- Investment Companies that exceed the limit of the Conditional Value at Risk Differential, the Liquidity Coefficient, the Provision for exposure in Derivative Instruments (PID), the Tracking Error, or in its case, the Value at Risk provided for in the Authorized Investment Regime and in these Provisions, thereby contravening the respective Provisions, must restructure their portfolio in accordance with what is provided for in this Section. "

" Article 167.- The Financial Risk Committee must propose to the Investment Committee a portfolio restructuring program in which various strategies are recommended that allow restoring the limit of the Conditional Value at Risk Differential, the Liquidity Coefficient, or the Provision for exposure in Derivative Instruments (PID), the Tracking Error, or in its case, the Value at Risk of the Investment Company, in accordance with what is provided for in the General Provisions that establish the investment regime to which Investment Companies must be subject and in accordance with these Provisions.

... "

" TITLE XIV BIS

ON THE REGULATORY CONTROLLER

Article 182 Bis.- Administrators must hire an independent expert who must report to the Regulatory Controller so that, at least once a year, they carry out an evaluation of Financial Risk Management.

Article 182 Ter.- The independent expert hired by Administrators for the Regulatory Controller must meet the following characteristics:

I.

Not have negative records reported to the Commission, or to any other authority of the Mexican financial system;

II.

Accredit a minimum experience of four years in Financial Risk Management, statistics, financial valuation, and computer systems;

III.

Not have been, in the last 12 months, external auditor of the Administrator to which they provide

their services, nor provide it with professional services other than the evaluation of

Financial Risk Management, and

IV.

Not evaluate the same Administrator for more than five consecutive years with respect

to Financial Risk Management.

The independent expert referred to in this rule must be approved by the board of directors of the Administrator.

Article 182 Quáter.- The evaluation of Financial Risk Management carried out by the independent expert must consider, among others, the following aspects:

I.

The development of Financial Risk Management, in accordance with what is established

in these rules and in the Manual of Policies and Procedures for the Administration

of Financial Risk;

II.

The organization of the FRM Unit and its independence from other areas;

III.

The sufficiency, integrity, consistency, and degree of integration of the systems of

information processing and for risk analysis, as well as their content;

IV.

The modifications in the risk measurement models and their corresponding approval

by each Financial Risk Committee;

V.

The approval process for the risk measurement models used by the FRM Unit, and

VI.

The adequate functioning of controls that reflect relevant changes in the

nature of the Instruments acquired by Investment Companies, in the limits of

exposure to risk and in internal control measures, occurring during the period of

review referred to in this rule.

VII.

The review of the risk management framework for Derivatives operations and its compliance with what is established in fractions I to III and V of article 122

above.

The results of the evaluation will be recorded in a report that will contain, if applicable, recommendations to solve the observed irregularities. This report will be presented to the board of directors of the Administrator and of the Investment Companies it operates, to the Investment Committees, to the Financial Risk Committee, to the general director of the Administrator and to the Regulatory Controller, and must also be kept available to the Commission. "

" Article 186.- Administrators, in relation to the contracting of services with third parties that are related to the administration of their resources, must consider the following:

I.

Have the approval of the Governing Body of the Administrator of the guidelines for the contracting of third parties;

II.

Carry out a supplier selection study, which determines that the person providing the service has the experience, material and human qualified elements and, if applicable, the necessary infrastructure to provide the contracted service;

III.

In the event that it is intended to celebrate an agreement or contract with a company with which the Administrator has patrimonial or administrative control links, it must be approved previously by the Regulatory Controller, in accordance with what is provided in the articles 64, 64 bis and 64 ter of the Law, in relation to article 70 of the same legal instrument, as well as the general provisions to that effect issued by the Commission, for that official to verify that the content of the agreement or contract adjusts to the conditions existing in the market for similar acts;

IV.

Specify in each contracted service, the nature, requirements and object of the same, as well as the rights and responsibilities of the contracting parties;

V.

Specify in the contract that the service provider must provide to the Administrators the records, databases and other information required by the Commission within the scope of its powers;

VI.

In the case of IT services, specify in the agreement or contract that the provider of the service ensures that it has the necessary information encryption mechanisms to maintain the confidentiality of the information and electronic records that are the property of the Administrator or of the Investment Companies it operates, in such a way that the confidentiality of said information is ensured;

VII.

Specify in the contract that the service provider must have contingency plans that provide the operational stability of the contracted services, considering at least the following:

a)

Protection of the service provider's facilities;

b)

Disaster plan, and

c)

Periodic information backup tests;

VIII.

Specify in the contract they celebrate with the service provider, the conditions relating to the termination of the service, and

IX.

Specify in the contract they celebrate with the service provider, the conditions of delivery of the information and records belonging to the Administrator. "

" ANNEX B

On Structured Instruments, FIBRAs and Securitized Instruments

Chapter I

Elements that must be foreseen in the policies defined by the Investment Committees to carry out investments in Structured Instruments, FIBRAs and Securitized Instruments

I.

On the eligibility of the Structured Instrument administrator:

a)

...

b)

Capabilities. Define parameters to evaluate the capabilities of the team of administration of the Structured Instrument based on the status of the businesses of financial resource management focused on the operation of funds and funds of funds, completed and in progress, including those whose object is the financing of real projects, among which are private equity funds, seed capital funds, project financing funds, infrastructure and real estate funds.

For the case of investment in Private Issuers without operational history through the instruments referred to in article 31 fraction IX of these provisions, they must also evaluate the success of the administration team in previous acquisitions and mergers. These parameters must consider countries, regions and economic sectors in which the management of investments is planned.

Likewise, it must determine with how many years of experience and amount of resources managed the administration team of the Structured Instrument must have in the elements described in this subsection;

c)

...

d)

...

II.

...

III.

On the eligibility of the settlor, administrator or operator of the portfolios, assets or projects that make up the trust estate of the Trusts of the Securitized Instruments:

a)

Independence. Determine policies related to the independence between the settlor, administrator or operator, and the trustee, the common representative, the auditor and other entities involved in the trust, safeguarding the interests of the workers;

b)

Capabilities. Define parameters to evaluate the capabilities of the operator, and in its case, administrator, including the experience in the operation and administration of the portfolios, assets or projects that make up the trust estate, as well as the sector, region or economic sector in which the management of investments is planned, and

c)

Probity of the team. Know and define policies in case the settlor, operator or administrator, or executives thereof, have pending investigations before any of the regulators of the Eligible Countries for Investments for reasons related to the non-compliance with the financial regulations of the countries in which they operate or frauds by their officials or ex-officials or non-compliance with their fiduciary responsibility.

IV.

...

Chapter II

Elements that must be contained in the selection questionnaires of Structured Instruments

FIBRAs and Securitized Instruments

... :

The questionnaire must contain the necessary questions to be able to evaluate the satisfaction of the policies provided for in the previous chapter of this Annex. In particular, it must contain questions that allow verifying that the administrator, or in the case of Securitized Instruments the corresponding figure, has an evaluation on the legal, technical, political and social risks to which the underlying investments of the assets that will make up the Structured Instruments, FIBRAs and Securitized Instruments are exposed.

I.

...

a)

a c)

...

d)

Compliance Officer in the company: Name and contact data; description of any current or potential conflict of interest; information on the existence of any legal procedure in process against the company or any member of the executive team; policies for resolution and mitigation of conflicts of interest; indicate if any member of the executive team is involved with any company with which there may be a conflict of interest; and the policies of operation with Related Persons;

k) ...

II.

For Securitized Instruments, the following shall be observed:

a)

General information of the settlor, operator or administrator of the portfolios, assets or projects that constitute the source of payment, such as their experience in the administration or operation of other portfolios, assets or projects similar, main competitors, independence of the administrator with respect to possible contracting Administrators, among others;

b)

Governing Bodies: Structure, composition and functions of the governing bodies of the entities involved in the operation of the underlying assets;

c)

Information on the Securitized Instrument: Characteristics of the credit portfolios, assets or projects that constitute the source of payment; Risk Factors; description of the expected return (ranges) of the instrument; policy on credits, loans or financing charged to the trust; leverage limits, policy on the use of derivative instruments;

d)

Description of any current or potential conflict of interest; information on the existence of any legal procedure in process against the company or of any member of the executive team; policies for resolution and mitigation of conflicts of interest; indicate if there are potential conflicts of interest; policies of operation with Related Persons, and

e)

Costs and expenses: Estimated issuance costs and other additional expenses in which the Securitized Instrument could incur.

III.

...

Chapter III

Minimum elements that Structured Instruments must meet

I.

On the corporate governance best practices of the Structured Instrument administrator. The Structured Instrument administrator must comply with the following best practices:

a)

Have a Code of Ethics on the conduct of its personnel and the type of investments to be made.

b)

Make a declaration of potential conflicts of interest with respect to:

i.

The Administrator operating the Investment Company and the Business Group to which the Administrator that intends to acquire the Instrument belongs.

ii.

Of the key executives or employees of the Structured Instrument administrator, as to whether they fall into any of the circumstances to be considered a Related Person with respect to the Administrator operating the Investment Company that intends to acquire the instrument.

c)

Have policies for hiring, as well as an updated register with respect to suppliers that provide their services in the projects financed or societies promoted by the Structured Instrument.

d)

Have an investment processes manual, as well as a risk processes manual.

e)

Have automated information systems to carry out the financial reports of the Structured Instrument, as well as for the financial control of projects financed or societies promoted by the Structured Instrument.

f)

Have a business continuity plan (BCP in English) and a disaster recovery plan (DRP in English).

g)

In the case of Structured Instruments that intend to issue more than 2,000 million, the administrator must have an independent compliance officer, who shall be designated by the holders of the Structured Instrument and whose functions include monitoring that the costs and expenses incurred by the Structured Instrument correspond to those necessary for the functioning of the instrument under the concepts established and revealed to the public investor; this, in addition to the functions of monitoring the compliance of the Structured Instrument with the applicable regulations and with the internal guidelines and manuals.

II.

On the information disclosure of the Structured Instrument.

a)

The Structured Instrument administrator must carry out quarterly reports that comply with the international disclosure standards of the " Institutional Limited Partners Association", ILPA and deliver them quarterly to the members of the technical committee of the Structured Instrument.

b)

The Structured Instrument administrator must carry out reports on special incidents that comply with the international standards of the " Institutional Limited Partners Association", ILPA and deliver them to the members of the Technical Committee of the Structured Instrument.

III.

Characteristics of the Structured Instrument administrator. The key executives of the Structured Instrument must have the following characteristics of experience and qualifications:

a)

Have at least 10 years of experience in a decision-making position in the industry or sectors in which the Structured Instrument intends to invest.

b)

Have one of the certifications of Executives for Structured Instruments that is established in Annex J of these provisions, and their validity periods established in said Annex apply to them. In case of not having the certifications established in Annex J, the key executives must accredit the exit or closure of at least one private equity fund or Structured Instruments with underlying assets in the industry or sectors in which the Structured Instrument intends to invest

c)

Not have been disqualified from the financial system, from public service and not have been found guilty of tax evasion or fraud.

d)

In the case of Structured Instruments that intend to issue more than 2,000 million pesos, be able to accredit the exit or closure of at least one private equity fund or Structured Instruments with underlying assets in the industry or sectors in which the Structured Instrument intends to invest. "

" ANNEX C

Minimum elements that must be included in the analysis of companies

I.

The Investment Committee must define and approve an Investment Strategy in individual shares, which is considered among other elements the objectives, the investment horizon, the deviation policies, leverage and liquidity. The elements of the Investment Strategy may be different for the shares of National Issuers and those of Foreign Issuers.

II.

...

... "

" ANNEX J

On the certification of Executives with activities in the management of resources of the Investment Companies

...

1. ...

2. ...

3. ...

Certification of Executives for individual shares of Foreign Issuers

Certification / Area

Investments

Risks

Regulatory Controller

Confirmation, Liquidation, Allocation, and Accounting

Validity: 4 years

Chartered Financial Analyst (CFA) Level 1

ü

Not required

Not required

Not required

Validity: 4 years

Chartered Financial Analyst (CFA) Level

2

ü

Not required

Not required

Not required

Validity: Permanent of concluded certifications

Chartered Financial Analyst (CFA)

ü

Not required

Not required

Not required

...

... "

" ANNEX K

Disclosure of the Investment Track Record and the deviation policy with the investment portfolio

For the purpose of disclosing the general characteristics of the Investment Track Record applicable to the investment portfolio of the Total Asset of the Investment Company, Administrators must publish on their Internet page at least the following elements:

a) Graph of the Investment Track Record of the Basic Investment Companies operated by the Administrator, with the allocations for Equity Instruments, Foreign Equity Securities, Debt Instruments, Foreign Debt Securities, Structured Instruments, FIBRAs and Others; in these allocations, exposure through Derivatives at market value must be included.

b) Comparison of weights of the different Asset Classes included in the Track Record with respect to the Investment Company. The following table must be presented for each of the Basic Investment Companies.

Comparison of the weights of the Investment Track Record with respect to the investment portfolio of the Investment Company

Composition by Asset Class*

Investment Track Record

Investment Company

Equity Instruments

Foreign Equity Securities

Debt Instruments

Foreign Debt Securities

Structured Instruments

FIBRAS

Others

*May consider exposure to Derivatives "

" ANNEX L

Requirements that the Integrated Automated System for the acquisition, alienation, online registration of Assets Subject to Investment of the Integrated Automated System must meet

The Integrated Automated System referred to in this Annex must allow the Administrator to comply with the following procedures, among others:

I.

a VI.

...

VII.

Generate the following daily and historical reports:

a)

a f)

...

g)

Collateral report, at market value and applying the discount, known in practice and in the English language as 'haircut', received and delivered disaggregated by Counterparty including clearing houses, by type of operation that gave rise to them, such as repo, securities lending, and Derivatives.

h)

a k)

...

l)

Report on Tactical Allocations with Derivatives, including the positions in each strategy and underlying expressed in notionals, market values and the Equivalent Delta Value, as well as the level of coverage in case of having a hedging objective.

VIII.

... "

" ANNEX M

On Operations with Derivatives on Derivatives

In accordance with articles 2, fractions XXX, XXXI and XXXII, and 122 of these Provisions, as well as the General Provisions that establish the investment regime to which Investment Companies must be subject, and Circular 6/2013, The Rules to which specialized investment societies for retirement funds must be subject in carrying out derivative operations, the latter issued by Banco de México, it is established that Investment Companies may carry out the following operations with Derivatives on Derivatives permitted:

...

I.

a III.

...

Administrators may carry out the operations listed above provided they have the non-objection of the Commission to celebrate operations with the Derivatives and underlying assets described in this Annex. "

" ANNEX N

Methodology to calculate the Liquidity Coefficient

...

...

...

In particular, the numerator of the CL coefficient is defined as follows and all summands must"

found in the same Currency:

Where:

represents the market value of the n-th OTC derivative with a collateral management agreement also known as "Credit Support Annex" (CSA), for the m-th master OTC derivatives contract with CSA.

represents the value of the collateral delivered under the m-th derivative contract with CSA.

It should be noted that in this first sum, the debtor positions, creditor positions, and collateral delivered by the Investment Company, resulting from OTC derivative operations with CSA provided for in the same contract, are allowed to be netted. The net balance of a contract that is computed is non-positive.

Netting balances between different contracts is not allowed.

represents the market value of the n-th listed derivative, for the m-th clearing house.

represents the value of the collateral delivered under the m-th listed derivative contract.

It should be noted that in the second sum, the debtor positions, creditor positions, and collateral delivered by the Investment Company, resulting from listed derivative operations in the same market or settled in the same clearing house, are allowed to be netted.

represents the Conditional Value at Risk (calculated in accordance with the Provisions issued by the Commission) of all operations carried out with the m-th counterparty, when in said operations margin calls are allowed to be netted regardless of the underlying or other characteristics of the derivatives.

represents the Conditional Value at Risk (calculated in accordance with the Provisions issued by the Commission) of the n-th derivative with the m-th counterparty, when in said operations margin calls are not allowed to be netted.

...

...

...

I.

Debt Instruments issued or guaranteed by the Federal Government and those issued by the Bank of Mexico; with a maturity of less than or equal to 1 year.

II.

Foreign Debt Securities; with a maturity of less than or equal to 1 year, issued by governments of Countries Eligible for Investments that have a credit rating of at least equivalent to AA+ on a global scale according to Standard & Poor's Ratings, or in its case, to the equivalent scales of the other recognized securities rating agencies in the General Provisions that establish the investment regime to which Investment Companies must be subject;

III.

to VI.

... "

" ANNEX P

Model of Information Prospectus

INFORMATION PROSPECTUS INVESTMENT COMPANY, S.A. de C.V.

Specialized Investment Companies for Retirement Funds

Indicate the type of Investment Company in question:

BASIC PENSION INVESTMENT COMPANY

BASIC INVESTMENT COMPANY 55-59

BASIC INVESTMENT COMPANY 60-64

BASIC INVESTMENT COMPANY 65-69

BASIC INVESTMENT COMPANY 70-74

BASIC INVESTMENT COMPANY 75-79

BASIC INVESTMENT COMPANY 80-84

BASIC INVESTMENT COMPANY 85-89

BASIC INVESTMENT COMPANY 90-94

INITIAL BASIC INVESTMENT COMPANY

ADDITIONAL INVESTMENT COMPANY

I. General Data

General information about the Administrator and the corresponding Investment Companies shall be indicated according to the following table.

Corporate Name Administrator

Corporate Name of each

Investment Company

Types of Investment Companies

Types of Workers who may

invest in the Investment Companies

Dates and Numbers of Authorization

of the Investment Company

___ of ___________ of ______ through the

office number ______________ of the

National Commission for the Retirement Savings System (CONSAR).

Patrimonial Links and Related Companies of the Administrator.

The Patrimonial Links and Related Companies of the Administrator operating the Investment Companies must be identified in accordance with the General Provisions that establish the investment regime to which specialized retirement fund investment companies must be subject, issued by the Commission.

Corresponding SIEFORE

Demand Deposits

Debt Instruments

A.

Governmental

B.

Private

C.

Hybrid debt instruments

D.

Securitized Instruments

Foreign Debt Securities

A.

Governmental

B.

Private

Equity

A.

National

B.

Foreign Equity Securities

Structured Instruments

A.

CKDs

B.

CERPIS

FIBRAS

A.

Generic

B.

Fibra-E

Real Estate Investment Vehicles

Currencies

Commodities

Type of operations

Repo

Securities Lending

Derivatives

Mandates

ETFs

Mutual Funds

III. Investment Trajectory

In the case of Basic Investment Companies, general information about the Investment Trajectory to be followed by the corresponding Investment Companies shall be indicated in accordance with subsection a) of Annex K of these provisions.

Corresponding SIEFORE

Maximum years

for Retirement

IV. Comprehensive Risk Management

·

The comprehensive risk management policy must be described, including the different types of risks to which the investment portfolios are exposed, as well as the policies of the Investment Companies to mitigate them. (Maximum 500 words)

·

The maximum limit of any of the risk control parameters to which the Investment Companies must be subject, in accordance with the General Provisions that establish the investment regime to which Specialized Retirement Fund Investment Companies must be subject, must be indicated, whether Value at Risk or the Differential of Conditional Value at Risk, as applicable, as well as any other market risk parameter defined by the Financial Risk Committee. Additionally, for those Investment Companies that operate Derivatives, the limit of the Provision for Exposure in Derivative Instruments (PID) must be indicated.

·

In the case of Basic Investment Companies, the policy of deviation between the Investment Trajectory and the investment portfolio of the Basic Investment Companies must be indicated, as well as the formula to perform said calculation.

·

The information in this section must be updated annually in accordance with article 178 of these provisions with the entry into force of the authorized commissions, or earlier if the referred policies and limits are modified.

Limit

Quarter*

1

2

3

4

5

Annual Tracking Error

(in case quarterly limits do not apply)

*Indicate the number of the quarters corresponding to the next 5 quarters, starting with the first of the calendar year for the corresponding Basic Investment Company

V. Investment Limits

·

Investment limits by Asset Class or Risk Factor, defined by the Financial Risk Committee, must be included. This information must be updated annually in accordance with article 178 of these provisions with the entry into force of the authorized commissions, or earlier if the Investment Trajectory is modified.

Asset Class/Risk

Factor

Quarter*

1

2

3

4

5

(in case quarterly limits do not apply)

...

*Indicate the number of the quarters corresponding to the next 5 quarters, starting with the first of the calendar year for the corresponding Basic Investment Company

VI. Operating Policies

" The resources of the worker's individual account will remain invested in shares of the Investment Companies for at least one year, except in the following cases: a) That the worker requests the transfer of their individual account to another Administrator, given compliance with the regulations in this matter, or their resources are transferred to another Investment Company operated by the same Administrator that operates their individual account, as a consequence of the change in the commission regime or the investment policies contained in this information prospectus, or when the Commission has designated the Administrator in accordance with article 76 of the Law; b) When the worker requests that the accumulated resources be invested in an Investment Company different from the one corresponding to their date of birth, so that in the Investment Company corresponding to their date of birth only new flows of contributions and deposits are received; c) When the Administrator enters a state of dissolution or merges with another Administrator having the status of merged entity, and d) When the entirety of the resources in the individual account are withdrawn due to the contracting of a life annuity or, in its case, the resources are exhausted due to scheduled withdrawals or the worker has the right to withdraw their resources partially or totally in a single payment.

Likewise, the terms and time frame in which withdrawals may be made must be indicated, complying at least with the time frames established by the Law.

The worker may make withdrawals from their voluntary contributions sub-account every _______ months following the first contribution or the last withdrawal. "

Investment Companies whose purpose is the investment of the resources referred to in articles 74 bis, 74 ter, and 74 quinquies of the Law, shall indicate in the information prospectus the circumstances under which said resources may be withdrawn or transferred, as well as the rights and obligations of their holders.

e) Valuation mechanics.

The following must be indicated:

" The Investment Assets that make up the securities portfolio of the Investment Companies must be valued daily

by a Price Provider in accordance with the General Financial Provisions of the Retirement Savings Systems.

The accounting registration procedure for the valuation shall be subject to what is established in the General Provisions on the registration of accounting, preparation, and presentation of financial statements to which participants in the Retirement Savings Systems must be subject, issued by the Commission, which state that accounting records will be analytical and allow for the identification and sequence of operations, with accounting movements recorded on the same day the operation is concluded. "

f) Repurchase regime.

The circumstances in which the worker has the right to have the corresponding Investment Company, through the Administrator operating it, repurchase up to 100% of their shareholding, in accordance with the legal provisions applicable to the Investment Company in question, will be indicated.

VII.- Fiscal Regime

The Administrator will inform the worker that the Investment Company in which their resources are invested must comply with the fiscal provisions applicable to it; to this effect, the fiscal provisions to which they will be subject will be included concisely.

VIII.- General Warnings to Workers

a) Investment Risks

The following must be indicated:

Investment Companies seek to offer workers adequate returns in accordance with market conditions, strictly adhering to the Authorized Investment Regime, without this implying a guaranteed return. Likewise, the prices of the Investment Assets in which Investment Companies invest fluctuate daily, so the value of the investment could decrease depending on market conditions.

The credit ratings granted to Debt Instruments and Foreign Debt Securities by specialized agencies do not represent a guarantee of payment of the initial investments, but only an opinion on the issuer's ability to fulfill its obligations.

The registration in the National Securities Registry applicable to certain Instruments does not imply certification of the guarantee of returns of the Instrument or the solvency of each issuer.

b) Write-downs.

The following must be indicated:

" The prices of Investment Assets, as well as the shares representing the paid-in capital of the Investment Companies, may present write-downs derived from fluctuations in financial markets. In the event that there is any non-compliance with the Authorized Investment Regime, these write-downs will be attributable to the Administrators and must be compensated from the Administrator's special reserve, and in case this is insufficient, they will be covered from the share capital, in addition to establishing a portfolio reconstruction program for the Investment Companies. This in accordance with what is provided in the General Financial Provisions of the retirement savings systems and in the General Provisions that establish the investment regime to which Specialized Retirement Fund Investment Companies must be subject.

On the other hand, when write-downs occur derived from extraordinary situations in financial markets, and having complied with what is provided in the General Financial Provisions of the retirement savings systems and the General Provisions that establish the investment regime to which Specialized Retirement Fund Investment Companies must be subject, neither the Administrator nor the Commission has the obligation to compensate for such write-downs, understanding that these are part of an inherent risk of investments in financial markets.

It will be understood that there is a write-down in the Investment Company's portfolio when the price of the share of said Company at the close of a day is lower than said price on the previous business day.

c) Inspection and supervision by the Commission

The following must be indicated:

" CONSAR is the competent authority to regulate, inspect, and supervise the operation of the Investment Companies, as well as the Administrator operating them. "

d) Acceptance of the information prospectus by the worker

The following must be indicated:

" In order to comply with what is established in article 47 bis, penultimate paragraph, of the Law, the Administrator operating the Investment Companies will have this information prospectus available in its offices and branches or through the Administrator's Internet page, for registered workers. "

e) Custody of titles

The Financial Intermediaries to whom the Administrator has contracted to deposit the Investment Assets, as well as the shares of the Investment Companies for safekeeping, will be indicated.

f) Rating of the Investment Companies

The Administrator may disclose on its Internet page and in the information board of its offices and branches the current credit rating granted to the Investment Companies by a securities rating institution, as well as its meaning. In its case, these credit ratings must be modified within a maximum of 10 business days following the date on which they undergo any modification.

g) Inquiries, complaints, and claims

The following must be indicated:

" The National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) has enabled a public attention service via telephone, free of charge from anywhere in the country, to receive inquiries, complaints, and claims about irregularities in the operation and provision of services by the Administrators, at the phone number (include CONDUSEF phone number). "

Finally, the General Manager, the Head of the Investments Area, and the Head of the Risks Area of the Administrator of the corresponding Investment Companies must sign this prospectus, which must be modified within 30 natural days following the appointment of a new General Manager, Head of Investments Area, and Head of Risks Area.

" Corporate Name of the Administrator "

---

" Name and signature of the General Manager "

" Name and signature of the Head of the

Investments Area "

" Name and signature of the Head of the

Risks Area "

" ANNEX Q

Model of Explanatory Booklet

EXPLANATORY BOOKLET Corporate Name (Administrator and Investment Company)

Type of Investment Company

Note: An explanatory booklet must be prepared for each Investment Company.

I. WHERE WILL THE RESOURCES OF YOUR INDIVIDUAL ACCOUNT BE INVESTED?

Include a brief explanation of the objectives and investment policy (Maximum 200 words).

i.

The table shown on the left must be included, in which the Asset Classes in which, in accordance with the regulation, the Investment Company is permitted to invest, as well as in which of them it has investments, must be indicated.

ii.

It must be indicated how environmental, social, and corporate governance (ESG) principles are incorporated into investments and risk management, as well as briefly explain what the objective of applying said principles is (Maximum 200 words).

iii.

Through the pie chart shown below, the composition of the investment portfolio must be represented, as of the close of the previous quarter.

iv.

A brief description of the composition of the portfolio must be given (maximum 200 words). Likewise, a footnote must be included with the asset classes included in each category, for which the breakdown of the authorized asset class table in the previous investment regime will be taken as reference.

v.

The table shown below must be included, in which a comparison is shown between the investments made by the Investment Companies with respect to the Total Asset of the Investment Company and the Investment Trajectory that the Investment Company will follow, as well as a graphical representation of the corresponding Investment Trajectory in accordance with Annex K of these provisions, as shown in the figure below.

In the case of Additional Investment Companies, the investments made by the Investment Companies must be shown.

v.

For the case of Basic Investment Companies, the table shown below must be included, in which the Maximum Deviation Limit that the investment portfolio may have with respect to the Investment Trajectory must be indicated.

Comparison of Weightings Investment Trajectory vs Basic Investment Company

Asset

Investment

Trajectory

Investment

Company

...

Deviation

Limit

Equity Instruments

Foreign Equity

Securities

Debt Instruments

Foreign Debt

Securities

Structured

Instruments

FIBRAS

Others

IV. HOW COULD YOUR SAVINGS INCREASE?

a)

A table containing the Net Performance Indicator, for the Investment Company in question, with the following format, must be included and updated quarterly with information as of the close of March, June, September, and December, and within 5 business days once the Administrator has the required information:

Investment

Company ..

.

NPI (%)

The following legend must be added: " A higher Net Performance Indicator represents the possibility of obtaining a higher pension upon retirement. "

b)

Include a graph showing the annualized gross return of the investment portfolio comparing it with the Investment Trajectory defined by the Administrator, this for the last 1, 3, and 5 years, or those available in accordance with the Investment Company's history. In the case of Additional Investment Companies, it will not be necessary to present the comparison with respect to the Investment Trajectory; however, some other reference portfolio defined by the Investment Committee may be used. The observed behavior in the returns of the Investment Company must be briefly explained (Maximum 100 words).

The following legend must be added: " Past returns do not guarantee future returns. These statistics are provided for informational purposes only. "

As an example, the following graph is shown.

V. INQUIRIES, COMPLAINTS, AND CLAIMS

The following legend must be included:

" CONSAR is the competent authority to regulate, inspect, and supervise the operation of the AFORE. "

The Administrator's phone number for public attention is: (include Administrator's public attention phone number), and the toll-free phone number available by CONSAR for public attention is SARTEL: 13-28-5000.

The National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) has enabled a public attention service via telephone, free of charge from anywhere in the country, to receive inquiries, complaints, and claims about irregularities in the operation and provision of services by the Administrators, at the phone number (include CONDUSEF phone number). "

More information can be obtained at the offices and branches of the AFORE or through the Administrator's Internet page. "

Finally, the General Manager, the Head of the Investments Area, and the Head of the Risks Area of the Administrator of the corresponding Investment Companies must sign this prospectus, which must be modified within 30 natural days following the appointment of a new General Manager, Head of Investments Area, and Head of Risks Area.

" Corporate Name of the Administrator "

---

" Name and signature of the General Manager "

" Name and signature of the Head of the

Investments Area "

" Name and signature of the Head of the

Risks Area "

Corporate Address (Administrator and Investment Company) as a footer of the Explanatory Booklet. "

" ANNEX R

Criteria that Securitized Instruments must meet to be

considered as issued

by an independent issuer

I.

General criteria that Securitized Instruments in possession of Investment Companies must meet to be considered as issued by an independent issuer:

a)

The prospectus must clearly indicate the eligibility criteria of the portfolio subject to securitization, or of the assets or projects that constitute the source of payment;

b)

There must be an assignment of the collection rights of the portfolio, assets, or projects subject to securitization to an irrevocable trust;

c)

Clear rules must exist to, in its case, substitute the administrator or operator of the portfolio, assets, or projects subject to securitization. Among other reasons, for the substitution, the possible conflicts of interest of the latter with the holders must be made known, the

common representative or entities related to the payment of obligations of the

rights of collection or with the originator, the lack of experience in the administration, operation and

collection of the rights over the assets subject to securitization, or a breach of

their mandate as administrator;

d)

Authorized securities rating agencies must consider and value all

flows of the Securitization Instrument (both principal and interest) for purposes of issuing

a rating;

e)

Respect minimum standards for disclosing information about the Securitization Instrument

in compliance with the regulations issued for such purposes by the National Banking and

Securities Commission;

f)

That the valuation of the Securitization Instrument be carried out by a Price Provider, through

the use of a public methodology;

g)

There shall be no repurchase mechanisms for the portfolio subject to securitization, by

the settlor or the originator, except when the portfolio in question is mortgage or of another

nature specified by the Risk Analysis Committee, in which cases they shall be subject to the

specific rules established. Nor shall there be mechanisms for substituting

part or all of the assets affected in the irrevocable trust, except to comply

with the eligibility criteria referred to in the preceding letter a), and

h)

Have the enhancers defined by the Commission. Mortgage Securitization Instruments

will meet this requirement when they satisfy what is provided in fraction II of this

Annex.

i)

Be issued under the authority of the Securities Market Law and the General Provisions

applicable to securities issuers and other market participants,

issued by the National Banking and Securities Commission, and, where applicable, the regulation

applicable to Eligible Countries for Investments.

II.

... "

" ANNEX T

Methodology for verifying compliance with limits regarding Structured Instruments.

...

I.

...

...

Likewise, when the Investment Committee has determined to participate in voluntary participation

schemes referred to in article 30, fraction V, it will be counted within the limit of Structured Instruments

until the capital calls have been made. "

" ANNEX U

Methodology for calculating maximum investment limits for the set of Investment Societies

operated by the same Administrator, in Structured Instruments.

...

a)

The Administrator, in the investment in Structured Instruments by the Investment Societies

that it operates, must provide policies to ensure that those Structured Instruments

that the Investment Societies maintain in their portfolio from quarter 132 of the

Investment Trajectory, are in the divestment stage.

b)

to d)

...

In the case of primary offerings of Structured Instruments and for purposes of complying with the limits

provided in this annex and in the General Provisions that establish the investment regime of

specialized investment societies for retirement funds, Administrators must

require the administrator of said instruments in writing and leave evidence of it, that they commit to

diversify the investor base and to comply with the investment program so that the

Investment Societies do not fail to comply with the limits referred to in this paragraph.

...

... "

" ANNEX X

Maximum Total Costs for Structured Instruments

Maximum Total Costs for Structured Instruments

Table 1: Maximum total costs of Structured Instruments based on their classification.

Classification of the Structured Instrument

Maximum threshold for total commissions of the

Structured Instruments (basis points)

Mature

150

Initial Stage

200

Administrators must annually cover the excess over the maximum total costs that

Table 1 establishes for Structured Instruments in which the Investment Societies they manage have a position. For this purpose, on the last business day of March, the procedure described in the following section must be applied.

Procedure for covering excesses over the maximum total costs of

Structured Instruments.

a)

Calculation of the total costs of Structured Instruments

Where:

CTt= Total commission of the Structured Instrument at date "t", expressed in basis points.

CAt= sum of the concepts reported in detail 4, id 4, of Annex 123 of Circular CONSAR 19-8,

identifiers 01 to 03 of the Catalog of Commission Concepts, at date "t".

CPt= sum of the concepts reported in detail 4, id 4, of Annex 123 of Circular CONSAR 19-8,

identifiers 07, 08, 17 to

19, 23, 24, 28, 29, 32 to 41, 46 and 00 of the Catalog of Commission Concepts, at

date "t".

VN= total notional value of the issuance of the Structured Instrument.

VMt= market value of the Structured Instrument calculated by the price provider at date "t"

LLCt= notional value of pending capital calls of the Structured Instrument issued under the

capital call scheme, at date "t"

Dt= distributions paid by the Structured Instrument at date "t".

t= date of the information reported in Annex 123 of Circular CONSAR 19-8

b)

Classification of Structured Instruments

Administrators must classify the Structured Instruments in position of the SIEFORES they

manage based on the time elapsed since the issuance date, according to the following:

·

Mature Structured Instruments, when n ≥ 6

·

Structured Instruments in Initial Stage, when n<6

Where:

n must be rounded to 2 decimals

t= date of the information reported in Annex 123 of Circular CONSAR 19-8

c)

Reimbursement of excesses

In the case of Structured Instruments whose total costs are greater than those established in

Table 1 of this Annex on the date of the information reported in Annex 123 of Circular

CONSAR 19-8, General Rules to which the information that retirement fund administrators, specialized investment societies for retirement funds, receiving entities and

operators of the National SAR Database must submit to the National Retirement Savings System Commission (Circular CONSAR 19-8), the Administrator must reimburse the excess over

said threshold to the Investment Societies with a position in said Instruments according to the following

methodology:

Where:

= reimbursement to Basic Siefore "i" at date "t".

CTt= Total commission of the Structured Instrument at date "t", expressed in basis points.

Threshold IE: Refers to the maximum threshold for total commissions of Structured Instruments in

basis points, indicated in Table 1 of this Annex.

VN= total notional value of the issuance of the Structured Instrument.

VMt= market value of the Structured Instrument calculated by the Price Provider at date "t"

LLCt= notional value of pending capital calls of the Structured Instrument issued under the

capital call scheme, at date "t".

Dt= distributions paid by the Structured Instrument at date "t".

= Number of titles of the Structured Instrument in position in the Basic Investment Society "i"

at date "t".

= Number of titles of the Structured Instrument in circulation at date "t"

i= Initial Basic Siefore, Basic Siefore 90-94, Basic Siefore 85-89, Basic Siefore 80-84, Basic Siefore

75-79, Basic Siefore 70-74, Basic Siefore 65-69, Basic Siefore 60-64, Basic Siefore

55-59.

t= date of the information reported in Annex 123 of Circular CONSAR 19-8.

Regarding Structured Instruments acquired by Investment Societies on a date prior to the

entry into force of this Annex, the Administrator shall not cover the excess over the maximum total costs

established in Table 1 above. "

TRANSITORY PROVISIONS

FIRST.- These modifications and additions shall enter into force on the next business day following their

publication in the Official Gazette of the Federation, with the exception of the following:

I.

Investments in Structured Instruments, Certificates Linked to Real Projects,

and the Instruments provided for in fraction LII, letter d) of the Second Provision of the

General Provisions that establish the investment regime to which they must be subject

specialized investment societies for retirement funds that, on the date of publication of

these provisions, form part of the investment portfolios of Basic Investment Societies may be kept to maturity regardless of the adjustments cited in these

modifications and additions;

II.

Investment Societies may continue to operate Derivatives in over-the-counter markets that

do not have a collateral management agreement, but that have been formalized through

master contracts prior to the entry into force of these provisions. The foregoing

shall apply during the 180 natural days following the entry into force of these

provisions;

III.

Investment Societies that, upon the entry into force of these provisions, have

Derivative operations in which thresholds other than zero have been defined, may

continue to carry out said operations in accordance with the credit line usage and monitoring policies defined by the Investment Committee, as well as in accordance with article 60 of the General Provisions

on financial matters of the Retirement Savings Systems, with its

modifications and additions published in the Official Gazette of the Federation on September 18, 2019, and

IV.

Investment Societies shall have 90 natural days following the entry into force of these

provisions to comply with:

i.

What is stipulated in articles 3, fractions XXV and XXIX letter c); 11, fraction X bis; 16 fraction

XXXIV; as well as with letter l), fraction VII of Annex L of these modifications and

additions;

ii.

The definition of the methodology and calculation of the contribution and attribution to risk and return

of the investment portfolio including Assets Managed by Mandataries, as well as the

Tactical Allocations with Derivatives, in accordance with articles 3, fraction VII; 11

fraction IV; 14 fraction XIX and 16 fraction XXVIII of these modifications and additions, and

iii.

The incorporation of stress scenarios in the liquidity risk measurement methodology,

in accordance with article 3, fraction XVIII, as well as with the liquidity risk analysis referred to in

article 34, fraction IX of these modifications and additions.

SECOND.- Administrators who, prior to the entry into force of these provisions, have

submitted the request to obtain the non-objection of the Commission or the renewal of the non-objection for their

Investment Societies to operate with Derivatives, shall be subject to what is established in the General Provisions

on financial matters of the Retirement Savings Systems, published in the Official Gazette

of the Federation on September 18, 2019, with its modifications and additions.

THIRD.-

As of the entry into force of these general provisions, the

prudential rules on risk management to which retirement fund administrators, specialized investment societies for retirement funds and

operators of the National SAR Database must be subject, published in the Official Gazette of the Federation

on May 25, 2016, are hereby repealed. Likewise, with the entry into force of these modifications, all

those provisions that contravene these modifications and additions are hereby repealed.

Mexico City, August 27, 2020. - The President of the National Retirement Savings System Commission,

Abraham E. Vela Dib. - Signature.

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