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

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DOF: 03/03/2020

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 says: 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 FINANCIAL MATTERS

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 September 18, 2019, the

Official Gazette of the Federation published the

General Provisions on Financial Matters of the Retirement Savings Systems, with the object

of making conceptual clarifications, and clarifying the corresponding regulatory burdens,

seeking to reduce the risk to which the portfolios are exposed in events of extreme volatility;

That in order to safeguard the interests of the Workers and the commercial viability of the

regulated entities themselves, it is necessary to modify the Liquidity Coefficient methodology, with the objective of making

the pension grow through a long-term strategy, decreasing the tactical operation of the Administrators with derivatives,

especially with options of some portfolios;

That it is necessary to make clarifications to the already established methodology, specifically to what

corresponds to the annual limit of the tracking error, to provide greater legal certainty to the regulated

entities regarding the scope and objects of the regulations, thus facilitating

the attention and follow-up of the same.

That the risk measure for Generational Funds is precisely the Tracking Error, since

this indicates how they adhere to the planned risk/return level, having to have a liquidity budget

in accordance with the expected outflows, and

That to comply with 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 bodies of the Federal Public Administration,

regarding the issuance of general administrative acts to which article 69-H of the Federal Law

of Administrative Procedure applies ", the simplification carried out in articles 27, 180

fractions II subsections a, b, c and d, III, subsection c, fourth paragraph, IV subsection b, IV, subsection c, VIII, of the Modifications and

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

published in the Official Gazette of the Federation on September 13, 2019, identified with the folio

47645 and the file 05/0060/030719 of the National Commission for Regulatory Improvement , as well as Annex U

of these modifications and additions, in terms of the Regulatory Quality Annex corresponding,

has deemed it appropriate to issue the following:

MODIFICATIONS AND ADDITIONS TO THE GENERAL PROVISIONS ON FINANCIAL MATTERS

OF THE RETIREMENT SAVINGS SYSTEMS

FIRST.- The

articles 2, fractions VIII and XVIII, 3, fraction XI,

11,

fraction XVIII, 14,

fraction XII, 141 ninth paragraph in force, 142, fraction IX, 165, 166, 167, fractions I, II and III, 169, paragraphs

first and fifth, 172, first paragraph, 173 paragraphs first, third and fourth, fractions I, II; Third

Transitory, and Annexes N, P and S fraction II, numeral 1, subsection c); are ADDED articles 141 with an

eighth paragraph, moving the current eighth and ninth paragraphs to become ninth and tenth,

article 173 sixth paragraph, and Annex W; as well as are REPEALED subsection a) of Annex U, 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, to remain in the following

terms:

" Article 2.-...

I. to VII. ...

VIII.

Liquidity Coefficient, the minimum liquidity parameter corresponding to the value of the

Provision for exposure in Derivative Instruments (PID) with respect to the Assets for

Financing the operation with Derivatives (AFD) , provided for in these Provisions to

mitigate the liquidity requirements caused by positions in Derivatives. Annex N

contains the methodology and the definitions of the variables used for the calculation of the

Liquidity Coefficient;

IX. to XVII. ...

XVIII.

...

The definition of the Investment Strategy must be consistent with the definition of the

Investment Trajectory and must contemplate the maximum annual limit of 5% established for the

Tracking Error in the General Provisions that establish the investment regime to which

Investment Societies must be subject;

XIX. to LVI. ... "

" Article 3.-...

I. to X. ...

XI.

Early Warnings for the Liquidity Coefficient and the Provision for exposure in

Derivative Instruments (PID), as well as other minimum liquidity parameters by positions in

Derivatives. Likewise, Early Warnings for the Tracking Error;

XII. to XXIV. ...

...

...

... "

" Article 11.-...

I. to XVII . ...

XVIII.

The daily level of the Liquidity Coefficient

and the Provision for exposure in

Derivative Instruments (PID)

and, if applicable, those minimum liquidity parameters 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. Additionally, this report

must be reported daily to the Head of the Investments Area;

XIX. to XXV. ... "

" Article 14.-...

I. to XI . ...

XII.

Calculate the Early Warnings at different levels for the Liquidity Coefficient and the Provision

for exposure in Derivative Instruments (PID) , as well as other minimum liquidity

parameters by positions in Derivatives defined by the Financial Risk Committee;

XIII. to XVIII. ...

...

...

... "

" Article 141. ...

...

...

...

...

...

...

...

For the purposes of calculating the limit applicable to the Total Asset of the Investment Society regarding

the maximum limit of the Tracking Error of 5% annual established in the General Provisions

that establish the investment regime to which Investment Societies must be subject,

they will be subject to the calculation methodology approved by the Risk Analysis Committee, through

which the daily Tracking Error is obtained, which is annualized through the following

formula:

...

For the purposes of calculating the limits applicable to the Total Asset of the Investment Society regarding

the Liquidity Coefficient and the Provision for exposure in Derivative Instruments (PID) , it will be subject to

the criteria defined in Annex N of these Provisions. "

" Article 142.- ...

...

I to VIII ...

IX.

When the Liquidity Coefficient and the Provision for exposure in Derivative Instruments

(PID) of the Total Asset of the Investment Society, exceeds the maximum provided in Annex N of

these provisions;

X to XI ..."

" Article 165.- Investment Societies that exceed the limit of the Conditional Value at Risk Differential, the Liquidity Coefficient and 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 , contravening the respective Provisions, must reconstruct their

portfolio in accordance with what is provided in this Section . "

" Article 166.- The Head of the Risk Area must notify in writing to the Commission and to

the Financial Risk and Investment Committees, when 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 of the Investment Society exceeds the maximum provided in the

Authorized Investment Regime and in these Provisions , on the next business day after the one in which

said limit has been exceeded. "

" Article 167.- The Financial Risk Committee must propose to the Investment Committee, a program

of portfolio reconstruction in which various strategies are recommended that allow restoring the limit

of the Conditional Value at Risk Differential, the Liquidity Coefficient and the Provision for exposure in

Derivative Instruments (PID) , the Tracking Error or in its case the Value at Risk of the Investment

Society, in accordance with what is provided in the General Provisions that establish the investment regime

to which Investment Societies must be subject and what is provided in these

Provisions .

For the purposes of the foregoing, the Financial Risk Committee must analyze the following information:

I.

If the limit of the Conditional Value at Risk Differential, of the Liquidity Coefficient, of the

Provision for exposure in Derivative Instruments (PID), the Tracking Error or in its

case the Value at Risk was exceeded due to volatility events, or by the Investment

Strategy;

II.

The worst scenarios corresponding to the confidence level of the Conditional Value at Risk

Differential, of the Value at Risk, of the Tracking Error , of the day on which the excess

in the limit of the Conditional Value at Risk Differential occurred,

of the Value at Risk or of the Tracking Error, and

III.

The Conditional Value at Risk Differential or in its case the individual Value at Risk of the

Investment Assets of the investment portfolio and its marginal contribution to it, as well

as the Contribution to the Tracking Error. "

" Article 169.- In case of extreme volatility events in the markets, where to protect the interests of the

Workers it is convenient to maintain the Investment Strategy determined by the Investment

Committee, Investment Societies may present to the Commission a special portfolio reconstruction program, to the effect of being able to have excesses in the limit of the Conditional Value at Risk Differential,

of the Liquidity Coefficient, of the Provision for exposure in Derivative Instruments (PID), the Tracking Error or in its case the Value at Risk.

...

...

...

The excess in the limit of the Conditional Value at Risk Differential, of the Liquidity Coefficient, of the

Provision for exposure in Derivative Instruments (PID) , of the Tracking Error or in its case the

Value at Risk occurred under a special portfolio reconstruction program authorized and

in force, will not count for the affectation of the special reserve referred to in the last paragraph of

article

44 of the Law. "

" Article 172.- When the Investment Society in question fails to comply with the limits provided in the

Authorized Investment Regime and in these Provisions , by exceeding the limit of the Conditional Value at

Risk Differential, of the Liquidity Coefficient, of the Provision for exposure in Derivative

Instruments (PID) , of the Tracking Error or in its case the Value at Risk and the notification is not presented

as referred to in article 166 above within the time limit provided for such effect, the Administrator that operates it

will cover the daily shortfalls that have occurred between the day of non-compliance and the day on which the notification is presented

...

... "

" Article 173.- In case an Investment Society fails to comply with the limits provided in the Regime

of Authorized Investment and in these provisions by exceeding the limit of the Conditional Value at

Risk Differential, of the Liquidity

Coefficient, of the Provision for exposure in Derivative

Instruments (PID) , of the Tracking Error or in its case the Value at Risk for reasons attributable to it, the daily shortfalls that occur must be covered until it presents the

corresponding portfolio reconstruction program. In this case, the Investment Society will not enjoy

any time limit for the presentation of said program.

...

It will be understood that an Investment Society fails to comply with the limit of the Conditional Value at

Risk Differential, of the Liquidity Coefficient, of the Provision for exposure in Derivative Instruments (PID) ,

of the Tracking Error

or in its case the Value at Risk for reasons attributable to it, when by

using the investment portfolio that constitutes the Investment Society on the day of the first violation and the

scenarios that were used to calculate 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 of the previous business day, the cited limit of the Conditional Value at Risk

Differential, of the Liquidity Coefficient, of the Provision for exposure in Derivative Instruments (PID) ,

of the Tracking Error or in its case the Value at Risk is exceeded.

In the case of repeated and consecutive violations, it will be assumed that an Investment

Society fails to comply with the limit of Conditional Value at Risk Differential, of Liquidity Coefficient,

of the

Provision for exposure in Derivative Instruments (PID) , of the Tracking Error or in its

case of

Value at Risk for reasons attributable to it on a specific day when the following

conditions occur:

I.

A violation of the limit of the Conditional Value at Risk Differential, of the Liquidity

Coefficient, of the Provision for exposure in Derivative Instruments (PID) ,

of the Tracking

Error or in its case the Value at Risk occurred on the previous day, and

II.

By using the investment portfolio that constitutes the Investment Society on the specific day of the

violation and the scenarios that were used to calculate 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 of the previous business day,

the limit of the Conditional Value at Risk Differential, the Liquidity Coefficient, of

the Provision for exposure in Derivative Instruments (PID) , of the Tracking Error

or in

its case the observed Value at Risk on the previous business day is exceeded.

...

The calculation of the shortfall to be reimbursed by the Administrator for non-compliance with the limits

established for the liquidity coefficient and the Provision for exposure in Derivative Instruments

(PID) will be carried out in consideration with what is established in Annex W of these provisions "

" TRANSITORIES

...

ARTICLE THIRD. Administrators must prove compliance with what is provided in

Title II, Chapter II, article 14 and Title III, Chapter IV of these Provisions for purposes

of compliance with what is provided regarding the special reserves of Investment Societies in the

Second Transitory provision fraction II of the General Provisions that establish the

asset regime to which administrators of retirement funds will be subject, the PENSIONISSSTE

and the specialized investment societies for retirement funds and the special reserve published in the

Official Gazette of the Federation on October 22, 2019 .

..."

" ANNEX N

Methodology for calculating the Liquidity Coefficient

Investment Societies must comply daily with the following level of Liquidity Coefficient

(CL)

and Provision for exposure in Derivative Instruments (PID):

The Financial Risk Committee may increase the allowed level of the PID, such that from the

Total Asset of the Investment Society; for which it must have the favorable vote of the

majority of Independent Councilors members of the committee and it must be recorded in the Detailed Minutes of the corresponding session.

The numerator of the liquidity coefficient " PID " corresponds to the value of the Provision for exposure in

Derivative Instruments and the denominator " AFD " corresponds to the value of the Assets for Financing the

operation with Derivatives.

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

be in the same Currency:

Where:

represents the market value of the n-th OTC derivatives operation O, which lacks a

collateral management agreement also known as " Credit Support Annex " (CSA), and that

is permitted within the m-th Master Contract approved by the " International Swaps and

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

as the International Swaps Association or its equivalent (hereinafter the

" contract " in this Annex) for OTC derivatives operation (each counterparty may

maintain only one OTC derivatives contract with the Investment Society in question or have more

than one and therefore consider the contracts and not the counterparties). It should be noted that this sum

allows netting the debtor and creditor positions of the Investment Society, provided for in a

same contract. The net balance of a contract that is computed is non-positive. Netting is not allowed

the balances between the different contracts.

represents the market value of the n-th OTC derivative with CSA, for the m-th

OTC derivatives contract with CSA.

represents the value of the guarantees delivered under the m-th contract of

derivatives with CSA.

It should be noted that in the second sum, netting of debtor positions, creditor positions

and guarantees delivered by the Investment Society, resulting from OTC derivatives operations

with CSA provided for in the same contract is allowed. The net balance of a contract that is

computed is non-positive. Netting is not allowed between the balances of the different contracts.

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

member in the respective listed market.

represents the value of the guarantees delivered under the m-th contract of

listed derivatives (clearing member of said market).

It should be noted that in the third sum, netting of debtor positions, creditor positions

and guarantees delivered by the Investment Society, resulting from listed derivatives operations

in the same market carried out with the same clearing member is allowed. The net balance

of

a contract that is computed is non-positive. Netting is not allowed between the balances of the different

contracts.

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 netting of margin calls is allowed 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 netting of margin calls is not allowed.

The estimation of and will be carried out with the fixed scenarios that count in the

Conditional Value at Risk Differential, being the responsibility of the Administrators

to follow up on the update of the list of fixed scenarios, as well as to comply

with the criteria approved by the Risk Analysis Committee.

Regarding the denominator of the CL,

" AFD "

corresponds to the following, assuming that margin calls

and the value of the operations at maturity are settled in national currency:

Where:

represents the Assets

for Financing the operation with Derivatives denominated in the currency

and issued by country k, where the values for each subscript will be the following:

Understanding as Assets

for Financing the operation with Derivatives

(AFD) as the following:

I.

Debt Instruments issued or guaranteed by the Federal Government and those issued by the Bank

of Mexico; with maturity less than or equal to 1 year, contemplated within the investment strategy

with the exclusive objective of financing the operation with derivatives.

II.

Foreign Debt Securities; with maturity less than or equal to 1 year, contemplated within

the investment strategy with the exclusive objective of financing the operation with

derivatives; issued by governments of Countries Eligible for Investments that have a

credit rating 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 securities rating

agencies recognized in the General Provisions that establish the investment regime to which

Investment Societies must be subject;

III.

Cash deposits in banks, custodians or trading partners in the currency in question;

IV.

Amounts of repurchase operations with a term of one day (currently only counts for the

liquidity requirement in national currency, according to what is provided in the Law on this

type of operations);

V.

Excess Minimum Initial Contributions (known by the acronym AIMs), and

VI.

Assets that are already under guarantee are not allowed, for example cash deposits with clearing members or Debt Instruments or Foreign Debt Securities that are committed (explicitly or implicitly) as guarantee or credit enhancement in any transaction. "

ANNEX P

Model of Information Prospectus

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

Specialized Investment Societies for Retirement Funds

BASIC PENSION INVESTMENT SOCIETY

BASIC INVESTMENT SOCIETY 55-59

BASIC INVESTMENT SOCIETY 60-64

BASIC INVESTMENT SOCIETY 65-69

BASIC INVESTMENT SOCIETY 70-74

BASIC INVESTMENT SOCIETY 75-79

BASIC INVESTMENT SOCIETY 80-84

BASIC INVESTMENT SOCIETY 85-89

BASIC INVESTMENT SOCIETY 90-94

BASIC INITIAL INVESTMENT SOCIETY

SOCIEDAD DE INVERSIÓN ADICIONAL

I. General Data

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

Social Name of Administrator

Social Name of each Investment Society

Types of Investment Societies

Types of Workers who may invest in the Investment Societies

Dates and Numbers of Authorization

___ of ___________ of ______ by letter number ______________ of the National Commission for the Retirement Savings System.

Patrimonial Links and Related Societies Among Themselves of the Administrator.

The Patrimonial Links and Related Societies Among Themselves of the Administrator operating the Investment Societies must be identified in accordance with the General Provisions establishing the investment regime to which specialized retirement fund investment societies must be subject, issued by the Commission.

of the SIEFORE (Maximum 400 words).

ii.

Explain how they incorporate these principles in risk management (Maximum

400 words):

Authorized Asset Classes in

the investment regime

Assets in which the

SIEFORE

invests

PENSION

BASIC

Assets in which the

SIEFORE

invests

BASIC

55-59

Assets in which the

SIEFORE

invests

BASIC

60-64

Assets in which the

SIEFORE

invests

BASIC

65-69

Assets in which the

SIEFORE

invests

BASIC

70-74

...

Demand Deposits

Debt Instruments

A.

Governmental

B.

Private

C.

Hybrid debt instruments

D.

Securitized Instruments

Foreign Debt Securities

A.

Governmental

B.

Private

Equity Securities

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

For the case of Basic Investment Societies, general information about the Investment Trajectory that the corresponding Investment Societies will follow shall be indicated in accordance with

Annex K of these provisions.

SIEFORE

Maximum years

for Retirement

PENSION

BASIC SIEFORE

0

BASIC SIEFORE 55-59

5

BASIC SIEFORE 60-64

10

BASIC SIEFORE 65-69

15

BASIC SIEFORE 70-74

20

...

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 Societies to mitigate them. (Maximum 500 words)

·

The maximum limit of any of the risk control parameters to which the Investment Societies must be subject must be indicated, and which must comply with the General Provisions establishing the investment regime to which Specialized Retirement Fund Investment Societies must be subject, whether it is Value at Risk or Conditional Value at Risk Differential, as applicable.

·

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

BASIC

SIEFORE

PENSION

BASIC

SIEFORE

55-59

BASIC

SIEFORE

60-64

BASIC

SIEFORE

65-69

BASIC

SIEFORE

70-74

...

Annual Limit of

Tracking

Error

%

%

%

%

%

V. Investment Limits

·

Investment limits by Asset Class or Risk Factor, defined by the Financial Risk Committee, must be included.

VI. Operating Policies

a) Types of resources that can be invested in the Investment Society:

The subaccounts whose resources can be invested in the Investment Societies will be mentioned.

b) Commission Regime:

The current commission regime applicable to the Investment Societies, authorized to the Administrator, will be described, with a brief explanation of the calculation method and percentage to be applied by the Investment Societies, in the following format:

PENSION

BASIC SIEFORE

BASIC

SIEFORE

55-59

BASIC

SIEFORE

60-64

BASIC

SIEFORE

65-69

BASIC

SIEFORE

70-74

...

COMMISSION

(%)

The following legend must be added: "Lower commission, greater savings. "

Likewise, the following must be indicated:

" Commissions, as well as discounts, will be applied uniformly for all registered workers, without discrimination among them.

Balance commissions will only be charged when the resources are effectively invested in the Investment Societies and the necessary daily provisions have been registered in the accounting of the Investment Societies.

Special service commissions will be paid directly by the worker who requested the service and in no way can they be charged to the worker's individual account.

Without prejudice to the foregoing, complete and visible information on the commission structure and, if applicable, the discount scheme will be permanently maintained on the internet page defined by the Administrator.

As a result of the change in the commission regime, the worker may transfer their individual account to another Administrator. "

c) Price and settlement term of the shares of the Investment Societies:

The following must be indicated:

" The purchase and sale operations of shares representing the social capital of the Investment Societies will be settled on the same day they are ordered, in accordance with the General Provisions on the registration of accounting, preparation and presentation of financial statements to which retirement fund administrators and specialized retirement fund investment societies must be subject, as well as the General Provisions on Financial Matters of the Retirement Savings Systems, issued by the Commission, provided that the instruction is issued within the operating hours (____ to ____ hours, Mexico City time). Operations requested outside the aforementioned schedule will be carried out on the next business day and will be settled at the prevailing price of the society's shares on the day the sale of the shares is made. "

d) Fund holding policy:

The following must be indicated:

" The resources of the worker's individual account will remain invested in shares of the Investment Societies 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 Society operated by the same Administrator that operates their individual account, as a result of the change in the commission regime or the investment policies contained in this information prospectus, or when the Commission has assigned them an Administrator in accordance with article 76 of the Law; b) When the worker requests that the accumulated resources be invested in an Investment Society different from the one corresponding to their date of birth, so that in the Investment Society corresponding to their date of birth only new cash 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, and d) When the total resources of the individual account are withdrawn due to the contracting of a life annuity or, if applicable, 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 can 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 subaccount every _______ months after the first contribution or the last withdrawal. "

Investment Societies whose purpose is the investment of the resources referred to in articles 74 bis, 74 ter and 74 quinquies of the Law, will indicate in the information prospectus, the circumstances in which said resources can 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 Societies must be valued daily

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

The accounting registration procedure for the valuation will be subject to what is established by the General Provisions on the registration of accounting, preparation and presentation of financial statements to which retirement fund administrators and specialized retirement fund investment societies issued by the Commission must be subject, which state that accounting records will be analytical and allow the identification and sequence of operations, with accounting movements registered on the same day the operation is carried out. "

f) Repurchase Regime.

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

VII.- Fiscal Regime

The Administrator will inform the worker that the Investment Society in which their resources are invested must comply with the fiscal provisions applicable to it, for which purpose 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 Societies seek to offer workers an adequate return 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 Societies invest fluctuate daily, so the value of the investment could be decreased 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 initial investments, but only an opinion on the issuer's ability to fulfill the obligations of said securities.

Registration in the National Securities Registry that is applicable to certain Instruments does not imply certification on the guarantee of returns of the Instrument or the solvency of each issuer.

b) Write-downs.

The following must be indicated:

" The prices of the Investment Assets, as well as the shares representing the paid-up capital of the Investment Societies, 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 special reserve of the Administrator, and in case this is insufficient, they will cover it from the social capital, in addition to establishing a portfolio reconstruction program for the Investment Societies. This in accordance with what is provided in the General Provisions on Financial Matters of the Retirement Savings Systems and in the General Provisions establishing the investment regime to which Specialized Retirement Fund Investment Societies must be subject.

On the other hand, when write-downs arise from extraordinary situations in financial markets, and having complied with what is provided in the General Provisions on Financial Matters of the Retirement Savings Systems and the General Provisions establishing the investment regime to which Specialized Retirement Fund Investment Societies must be subject, neither the Administrator nor the Commission have the obligation to compensate for said write-downs, understanding that these are part of an inherent risk of investments in financial markets.

A write-down in the Investment Society's portfolio will be understood to exist when the price of the share of said Society at the close of a day is lower than said price on the previous business day.

c) Inspection and surveillance by the Commission

The following must be indicated:

" The CONSAR is the competent authority to regulate, inspect and supervise the functioning of the Investment Societies, 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 provided by article 47 bis, third-to-last paragraph, of the Law, the Administrator operating the Investment Societies 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 Societies for safekeeping, will be indicated.

f) Rating of the Investment Societies

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 Societies by a securities rating institution, as well as its meaning. In case of any changes, 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 free public attention service via telephone, from anywhere in the country, to receive inquiries, complaints and claims about irregularities in the operation and provision of services by Administrators, at the phone number (include CONDUSEF phone

number).

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

" Social Name of the Administrator "

---

" Name and signature of the General Director "

---

---

" Name and signature of the Head of the Area

" Name and signature of the Head of the Risks Area "

of Investments "

" ANNEX S

Guidelines applicable to independent experts dedicated to evaluating and reporting on Debt Vehicles, Equity Components, Real Estate Investment Vehicles and FIBRAS,

Share Indices of Eligible Countries for Investments, Real Estate Indices of Eligible Countries for Investments and Debt Indices of Eligible Countries for Investments

I. ...

II. Of the functions that the independent expert must perform

...

a) to b) ...

c)

In the event that the Risk Analysis Committee modifies the Criteria for the selection of

share, debt and real estate indices permitted in the Investment Regime of the

SIEFORES, Criteria applicable to Investment Vehicles known as ETFs (Exchange

Traded Funds), and Criteria applicable to Mutual Funds, policies and

procedures must be in place to re-evaluate and follow up on the indices and Investment Vehicles

authorized. Administrators must inform the independent expert of the

modifications to the aforementioned criteria and other applicable agreements that the Risk Analysis

Committee establishes, within two business days following the day on which

they have been notified.

d). ...

...

III. and IV. ......

... "

" ANNEX U

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

operated by the same Administrator, in Structured Instruments.

The maximum amount to be invested by the set of Investment Societies eligible for investments in

Structured Instruments must comply with the following criteria:

a)

Repealed.

b)

...

c)

...

d)

...

...

...

...

i. to iii. ... "

" ANNEX W

Methodology for calculating the write-down to be compensated for non-compliance with the limits of the Liquidity Coefficient and Provision for Exposure in Derivative Instruments, due to causes attributable to the

Administrator

I. The amount of the write-down that an Administrator must compensate in case of non-compliance due to

causes attributable to it of the Liquidity Coefficient (CL) limit provided in Annex N of these

provisions, will be calculated according to the following formula:

TRANSITORY

SINGLE.- These modifications and additions will 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.

The modifications to the Liquidity Coefficient provided in article 2, fraction VIII and the

Annex N, as well as the PID limit will enter into force 180 natural days after the

publication of these modifications and additions. Meanwhile, Investment Societies

will observe what is established in article 2, fraction VIII and Annex N 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 the entry into force of these modifications, all those provisions that contravene these modifications and additions are abrogated.

Mexico City, on

February 25, 2020. - The President of the National Commission for the Retirement Savings

System,

Abraham E. Vela Dib .- Rubric.

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