Organic Law of the National Bank of Foreign Trade

ORGANIC LAW OF THE NATIONAL BANK OF FOREIGN TRADE Published in the Official Gazette of the Federation on January 20, 1986.
Updated with reforms published in the same Gazette on June 24, 2002; August 1, 2005; April 9, 2012 and January 10, 2014.

ORGANIC LAW OF THE NATIONAL BANK OF FOREIGN TRADE INDEX
Chapter One
On the Society, Name, Object and Domicile
Chapter Two
Objectives and Operations
Chapter Three
Social Capital
Chapter Four
Administration and Oversight
Chapter Five
General Provisions
Transitory Articles
Statement of Reasons
References

ORGANIC LAW OF THE NATIONAL BANK OF FOREIGN TRADE
CHAPTER ONE
On the Society, Name, Object and Domicile
Article 1. This Law governs the National Bank of Foreign Trade, National Credit Society,
a development banking institution, with its own legal personality and assets.
Article 2. The Society, in its capacity as a development bank, will provide the public service of banking
and credit subject to the objectives and priorities of the National Development Plan, and especially those of the National Programs for Development Financing and for Industrial and Foreign Trade Promotion, to promote and finance the activities and sectors entrusted to it in this Law.
Article 3. The National Bank of Foreign Trade, as a development banking institution, shall have the
objective of financing the country's foreign trade, as well as participating in the promotion of said activity.
The operation and functioning of the Institution shall be carried out in accordance with the applicable legal framework and sound banking practices and usages, seeking to achieve within the sector entrusted to it the general objectives indicated in Article 3 of the Regulatory Law of the Public Banking and Credit Service.
Article 4. The domicile of the National Bank of Foreign Trade, National Credit Society,
a development banking institution shall be that determined in its Organic Regulations, but it may establish or close branches or agencies or any other kind of offices and appoint correspondents, in the country or abroad, with prior authorization from the Ministry of Finance and Public Credit.
Article 5. The duration of the Society shall be indefinite.
CHAPTER TWO
Objectives and Operations
Article 6. In order to ensure the efficiency and competitiveness of foreign trade, including
pre-export, export, import and import substitution of goods and services; in the exercise of its object, it shall be authorized to:
I. Grant financial support;
II. Grant credit guarantees and those usual in foreign trade;
III. Provide information and financial assistance to producers, merchants, distributors and
exporters, in the placement of Articles and provision of services in the international market; (1) IV. When it is in the interest to promote Mexican exports, it may participate in the social capital of foreign trade companies, export consortia and companies that provide credit insurance to foreign trade, in terms of Article 31 of this Law. Likewise, it may participate in the social capital of investment companies and operating societies thereof;
V. Promote, channel and coordinate the investment of capital into companies dedicated to export;
(1) VI. Grant financing to indirect exporters and generally to the exportable productive apparatus, in order to optimize the production chain of exportable goods or services, as well as to contribute to the promotion of the country's foreign trade and to carry out all acts and procedures that allow attracting foreign investment to the country;
VII. When it is in the interest to promote Mexican exports, it may grant financial support to
export trading companies, consortia and analogous entities of foreign trade;

VIII. Promote joint financing and assistance actions in foreign trade matters with
other credit institutions, development funds, trusts, auxiliary credit organizations and with the social and private sectors; (4) VIII Bis.- Promote joint financing and assistance actions for persons, companies and productive and marketing organizations, in indigenous towns and communities, in matters of foreign trade with other credit institutions, development funds, trusts, auxiliary credit organizations and with the social and private sectors;
IX. It may act as a financial agent of the Federal Government regarding the negotiation, contracting and management of foreign credits, whether these are granted by foreign institutions, private, governmental and intergovernmental;
X. Participate in the negotiation and, if applicable, in the financial agreements of Compensated Exchange or reciprocal credits, as indicated by the Ministry of Finance and Public Credit;
XI. Study policies, plans and programs in matters of foreign trade promotion and its
financing, and submit them to the consideration of the competent authorities;
XII. Act as a consulting body for the competent authorities, in matters of foreign trade
and its financing;
XIII. Participate in activities inherent to the promotion of foreign trade, such as dissemination,
study of exportable products and services, sales systems, support for commercialization and organization of producers, merchants, distributors and exporters;
XIV. Advise, upon request directly formulated by the competent authorities, on treaties and
agreements that the country plans to conclude with other nations, in matters of foreign trade and its financing;
XV. Participate in the promotion of the exportable supply;
XVI. When requested, it may act as a conciliator and arbitrator in disputes involving
importers and exporters with domicile in the Mexican Republic; and
XVII. Those others conferred by this Law, others and their respective regulations.
(6) Article 7.- For the fulfillment of the objectives referred to in Articles 3 and 6 above, the Society may:
(6) I. Carry out the operations and provide the services referred to in Article 46 of the Law of Credit Institutions.
(6)The operations indicated in said Article 46, fractions I and II, shall be carried out in terms of
Article 47 of said regulation;
II. Participate in the social capital of companies, in terms of fraction IV of Article 6 above and Article 32;
III. Issue development bank bonds. Such titles will seek to promote the development of the
capital market and institutional investment, and will be susceptible of placement among the general investing public, in which case the respective legal provisions will apply to them;
IV. Contract credits whose resources will be channeled to its sector, in accordance with applicable legal provisions;
V. Administer on its own or on behalf of others any kind of companies or societies;
(8) V Bis. Carry out the investments provided for in Articles 75, 88 and 89 of the Law of Credit Institutions;

VI. Grant prior guarantees to the presentation of a bid, maintenance of the bid, execution,
return and to the exporter; and
(2) Guarantee obligations of third parties, either through particular operations or massive guarantee programs, without the limitations provided in Article 46 fraction VIII of the Law of Credit Institutions being applicable, and
VII. Carry out analogous and related activities to its objectives in the terms indicated for this purpose by the Ministry of Finance and Public Credit.
Article 8. As an exception to what is provided in the last paragraph of Article 348 of the General Law of Titles and Credit Operations and in subsection a), of fraction XVIII of Article 84 of the Regulatory Law of the Public Banking and Credit Service, in contracts entered into to guarantee the rights of the National Bank of Foreign Trade, National Credit Society, development banking institution, it may act in the same business as trustee and beneficiary and carry out operations with its own Society in the fulfillment of trusts and mandates.
The Society, at the express request of the governments of the federative entities, may carry out the same functions of trustee, mandatary, depositary and administrator of the resources that said federative entities establish in support of foreign trade.
(1) Article 9. The Ministry of Finance and Public Credit, as an exception to what is provided by Articles 48 of the Law of Credit Institutions and 26 of the Law of the Bank of Mexico, shall determine through general provisions the characteristics of the active operations, passive operations that do not imply the collection of public resources and services, except with respect to trusts, mandates and commissions, that the Society carries out to fulfill the objective and exercise the powers entrusted to it in its capacity as a development bank in this Law. (1) It corresponds to the Bank of Mexico, in terms of its Law, to regulate through general provisions the characteristics of passive operations that imply the collection of public resources, trusts, mandates and commissions, operations in the money market, as well as financial operations known as derivatives that the Society concludes.
Article 10. The Federal Government shall at all times respond for the operations contracted by the National Bank of Foreign Trade, National Credit Society, development banking institution:
I. With national individuals or legal entities; and
II. With foreign institutions, private, governmental and intergovernmental.
CHAPTER THREE
Social Capital
Article 11. The social capital of the National Bank of Foreign Trade, National Credit Society,
development banking institution, shall be represented by equity contribution certificates in a 66% of series A and 34% of series B. The nominal value of these titles shall be determined in its Organic Regulations.
Series A shall only be subscribed by the Federal Government, issued in a title that shall not carry coupons, which shall be non-transferable and under no circumstances may change its nature or the rights it confers to the Federal Government itself.
Series B may be subscribed by the Federal Government, by the governments of the federative entities and municipalities, or by Mexican individuals or legal entities from the social and private sectors, giving preference to those related to foreign trade.
The Ministry of Finance and Public Credit may authorize which entities of the federal public administration, the governments of the federative entities and municipalities, may acquire certificates of the

said series B in a proportion greater than that established in Article 15 of the Regulatory Law of the Public Banking and Credit Service.
Article 12. The net capital referred to in Article 34 of the Regulatory Law of the Public Banking and
Credit Service shall be that fixed by the Ministry of Finance and Public Credit, hearing the opinion of the Bank of Mexico and the National Banking and Insurance Commission.
Article 13. Under no circumstances may foreign individuals or legal entities, nor Mexican societies whose statutes do not include a clause of direct or indirect exclusion of foreigners, participate in any form in the capital of the Society.
Persons who contravene what is provided by this Article shall lose in favor of the Federal Government the participation in question.
Article 14. The Ministry of Finance and Public Credit shall establish the form, proportions and other conditions applicable to the subscription, holding and circulation of the certificates of series B.
CHAPTER FOUR
Administration and Oversight
Article 15. The administration of the National Bank of Foreign Trade, National Credit Society,
development banking institution, shall be entrusted to a Board of Directors, a Committee for the Promotion and Support of Foreign Trade and a General Director, in their respective spheres of competence.
(1) Article 16. The Board of Directors shall be composed of fifteen advisors designated as follows:
(1) I. Nine advisors will represent series "A" of equity contribution certificates, which shall be:
a) The Secretary of Finance and Public Credit, who shall preside over the Board of Directors.
(1) b) The Secretary of Economy, who shall have the status of vice president; (6) c) The heads of the Secretariats of Agriculture, Livestock, Rural Development, Fishing and Food; Foreign Relations; Energy; the Undersecretary of Finance and Public Credit; the Undersecretary of Expenditures; the Undersecretary of Foreign Trade and a representative designated by the Governor of the Bank of Mexico within the 3 upper hierarchical levels of the central institute. (6)Substitutes for the aforementioned advisors shall preferably be public servants of the immediately lower level. In the absence of the Secretary of Finance and Public Credit, the Undersecretary of Finance and Public Credit shall have the status of president of the Board of Directors; in the absence of the latter, the status of president shall have the substitute of the Secretary of Finance and Public Credit and in the absence of all the aforementioned, whoever is designated by the present advisors from among the advisors of series "A".
II. Four advisors from series B who shall be designated in the terms established for this purpose by the
Organic Regulations.
(3) Second paragraph.- Repealed.
For each principal advisor, a substitute shall be appointed, in the form and terms in which the principals are appointed.
(3) Fourth paragraph.- Repealed.
(3) Fifth paragraph.- Repealed.

(2) III. Two advisors from series "B" designated by the Federal Executive, through the Ministry of Finance and Public Credit, who shall have the status of independent advisors. The appointments of independent advisors must fall on persons of Mexican nationality who by their knowledge, honorability, professional prestige and experience are widely recognized. (2) The Board of Directors may invite to its sessions persons whose activities are related to the object of the Society. (2) The agenda of the Board of Directors sessions must list the matters to be discussed and general matters shall not be included. (6) Article 17. The Board of Directors shall meet at least quarterly and shall validly session with the attendance of seven advisors, provided that, among them, at least four of those appointed by series "A" are present. Resolutions shall be taken by majority vote of the present advisors, with the President having a casting vote in case of a tie. (2) Independent advisors shall not have substitutes and must attend at least seventy percent of the sessions that have been convened in a fiscal year and in case of failure, others may be appointed with the same characteristics in their place, provided that the absences are not justified in the judgment of the Board of Directors.
Article 18. The following may not be advisors:
(1) I. Persons who are in the cases indicated in the penultimate paragraph of Article 41 of the Law of Credit Institutions; (1) II. Two or more persons who have between them, kinship up to the third degree of consanguinity or by affinity; (2) III. Those who hold an elected office, while they are in the exercise of the same, and (2) IV. Additionally, independent advisors must not have:
(2) a) Labor nexus or link with the Society;
(2) b) Significant patrimonial nexus and/or labor link with an individual or legal entity that is a creditor, de debtor, client or supplier of the Society; (2) c) Conflict of interest with the Society, as clients, suppliers, debtors, creditors, important or of any other nature, and (2) d) The representation of associations, guilds, federations, confederations of workers or employers, or sectors of attention that relate to the object of the Society or are members of its governing bodies. (2) Advisors must communicate to the president of the Board of Directors about any situation that could result in a conflict of interest, as well as abstain from participating in the corresponding deliberation. Likewise, they must maintain absolute confidentiality on all those acts, facts or events that could affect the operation of the Society, including the deliberations of the Board of Directors, while such information has not been made known to the public. (2) Article 18 bis. Causes for the removal of advisors from series "B" and independent advisors are:
(2) I. Mental incapacity, as well as physical incapacity that prevents the correct exercise of their functions for more than six months;

(2) II. Failure to comply with the agreements of the Board of Directors or acting deliberately in excess or defect of their attributes; (2) III. Using, for their own benefit or that of third parties, the confidential information they possess by reason of their position, as well as disclosing said information without the authorization of the Board of Directors, and (2) IV. Knowingly submitting false information to the consideration of the Board of Directors. (2) In addition to the causes for removal indicated in this provision, advisors from series "A" and the General Director shall be removed from their office when their responsibility is determined by a final resolution issued by a competent authority, by being in any of the situations contained in the Federal Law of Administrative Responsibilities of Public Servants.
Article 19. The Board shall direct the Society in terms of what is provided by Article 20 and others
related to the Regulatory Law of the Public Banking and Credit Service.
The Board of Directors may agree to carry out operations inherent to the object of the Society.
Agreements that it may issue regarding the operations provided for in fractions VI and XI of Article 30 of the Regulatory Law of the Public Banking and Credit Service, must consider the proposal of the General Director.
Article 20. The following shall also be powers of the Board of Directors:
I. Approve the Annual Activity Report submitted by the General Director;
(8) II. Repealed.
III. Approve investments in venture capital referred to in fraction IV of Article 6, fraction
II of Article 7 and Article 32 of this Law and their alienation, establishing the modalities it considers convenient; (1) IV. Approve other specific programs and internal regulations of the Society submitted by the general director, with prior authorization from the Ministry of Finance and Public Credit; (1) V. Those others provided for in the organic regulation; (2) VI. Issue the norms and criteria to which the elaboration and exercise of the budget of current expenditure and physical investment of the Society must be subject, as well as approve said budget and the modifications that correspond to make during the fiscal year, once the global amounts of these concepts have been authorized by the Ministry of Finance and Public Credit, and (8) VII. Approve, upon proposal of the human resources and institutional development committee, in accordance with what is provided in Article 42, fraction XVIII of the Law of Credit Institutions, the organizational structure, salary scales and benefits, wage policy and for the granting of extraordinary perceptions for the fulfillment of goals subject to performance evaluation, taking into account the labor market conditions prevailing in the Mexican financial system; promotion policies, promotions and retirements; guidelines for selection, recruitment and training; separation criteria; and the other economic and social security benefits established for the benefit of public servants who work in the Society.
Article 21. The Committee for the Promotion and Support of Foreign Trade, a delegated body of the
Board of Directors, shall be composed of five principal advisors who shall be the Secretary of Commerce and Industrial Development, who shall preside over it; the Secretary of Finance and Public Credit; the Secretary of Foreign Relations; the General Director of the Bank of Mexico and the General Director of the National Bank of Foreign Trade. Each principal advisor shall designate their respective substitute, who shall correspond to the official of immediate lower hierarchy than the head.

Article 22. The Committee shall meet at least once a month or with greater frequency if the importance of the matters so warrants; it shall hold valid sessions with the attendance of three of its members, titular councilors.

Article 23. The Committee for the Promotion and Support of Foreign Trade shall have the following powers:
a) Propose policies on the granting of credits and guarantees to support the country's foreign trade. b) Recommend maximum credit liability risks by country, in those export operations. c) Recommend maximum insurance and credit guarantee liability risks by country. d) Suggest when an export operation should be considered of national interest. e) Consider those operations that by their own characteristics do not correspond to international practice. f) Suggest participation in activities inherent to the promotion of foreign trade, such as dissemination, study of exportable products and services, sales systems, support for commercialization, and organization of producers, merchants, distributors, and exporters. g) Create Regional Advisory Committees with the participation of organized exporters.

Those others that the Governing Council entrusts to it.

Article 24. The General Director shall be appointed by the Federal Executive through the Secretary of Finance and Public Credit, and such appointment must fall upon a person who meets the requirements established in Article 24 of the Regulatory Law of the Public Banking Service.

Article 25. The General Director shall be in charge of the administration and legal representation of the National Bank of Foreign Trade, National Credit Society, a development banking institution, and without prejudice to the attributions corresponding to the Governing Council to that effect, shall have the following powers and functions:

(1) I. In the exercise of its legal representation attributions, it may celebrate or grant all kinds of acts and documents inherent to the object of the Society. It shall have for this purpose the broadest powers to perform acts of dominion, administration, litigation, and collection, even those that require special authorization according to other legal or regulatory provisions. In virtue of this, and in an enunciative and not limiting manner, it may issue, endorse, and negotiate credit instruments, file complaints and grant forgiveness, exercise and waive judicial actions, including in the amparo trial; commit to arbitration and settle, grant general and special powers with all the faculties that correspond to it, even those that require a special clause, substitute them, revoke them, and grant substitution faculties to attorneys-in-fact, obtaining express authorization from the Governing Council when it comes to granting general powers for acts of dominion;

(7) I Bis. Inform the Secretariat, prior to the authorization of the corresponding instances, of the operations that could be linked to the object of the other development banking institutions;

II. Execute the resolutions of the Governing Council;

III. Carry the corporate signature;

IV. Act as General Trustee Delegate;

(7) IV Bis. Decide on the designation and hiring of the public servants of the Society, other than those indicated in Article 42 of the Credit Institutions Law, as well as the designation and removal of the trustee delegates; administer the personnel as a whole, and establish and organize the offices of the institution;

V. Those delegated to it by the Governing Council; and

VI. Those indicated by the Organic Regulation of the Institution.

(6) Article 26. The supervision of the Society shall be carried out by the organs and in the terms indicated in the Credit Institutions Law and the general provisions issued by the National Banking and Securities Commission.

(3) Article 27. Repealed.

Article 28. Only the Managers may appear to answer positions in the terms of the corresponding procedural law. The other officials shall do so by official letter.

FIFTH CHAPTER
General Provisions

Article 29. The Secretariat of Finance and Public Credit shall interpret this Law for administrative purposes, and may issue the complementary provisions required for its application.

Article 30. The operations and services of the Society shall be governed by what is provided in this Law, and suppletorily by the Regulatory Law of the Public Banking Service, by the Organic Law of the Bank of Mexico, and by the other applicable provisions.

(1) Article 31. The Society shall formulate annually its financial programs, general budgets of expenses and investments, as well as its operational programs according to the guidelines, measures, and mechanisms established by the Secretariat of Finance and Public Credit.

(1) The modalities in the allocation of resources shall be authorized by the Secretariat of Finance and Public Credit, in the terms of Article 31 of the Credit Institutions Law; which shall seek the best use and the most adequate channeling of the institution's resources within the framework of the management autonomy required for its effective functioning, in accordance with the applicable legal provisions.

Article 32. The participation in the social capital of companies referred to in fraction IV of Article 6th and fraction II of Article 7th of this Law, shall be subject, in an analogous manner, to what is provided in Article 57 of the Regulatory Law of the Public Banking Service.

The investments referred to in this Article shall only count to consider the issuers as state participation companies, when the Federal Executive issues the respective agreement in which it is declared that the companies, in the terms of the applicable provisions, have been considered as entities of the Federal Public Administration.

Article 33. Prior authorization from the Secretariat of Finance and Public Credit, the Society must constitute the reserves and funds necessary for the adequate fulfillment of the object entrusted to it by this Law. The amounts that have been carried to said reserves and funds shall not be considered as operating surplus.

Once the amount of the surplus is fixed and the amount corresponding to pay the respective tax and the workers' participation in the institution's profits is separated, the balance shall be applied in the terms provided by the Organic Regulation.

(6) Article 34. The Society shall have a human resources and institutional development committee, which shall be integrated as follows:

(6) Three representatives of the Secretariat of Finance and Public Credit, the Undersecretary of Expenditures, the Undersecretary of Finance and Public Credit, and the Head of the Development Banking Unit;

(6) One person designated by the Governing Council, who by their knowledge and professional development, has extensive experience in the human resources area;

(6) A member of the Governing Council who has the status of independent;

(6) The General Director of the Society, and

(6) A representative of the National Banking and Securities Commission with voice, but without vote.

(6) The General Director of the Society shall abstain from participating in the sessions of the Committee, which have the purpose of issuing opinions or recommendations regarding their salary, economic benefits, and social security.

(6) This Committee shall opine and propose, salary and benefit scales, salary policy, and for the granting of extraordinary perceptions for the fulfillment of goals subject to performance evaluation; promotion and retirement policies; guidelines for selection, recruitment, and training; separation criteria; and the other economic benefits and social security established for the benefit of the public servants working in the Society.

(6) The Secretariat of Finance and Public Credit shall establish criteria in matters of occupational structure, salary movements, extraordinary perceptions, and benefits, which must be observed by the Committee. Likewise, the Society shall provide the indicated Secretariat with the information it requests.

(6) This Committee shall meet at the request of the General Director of the Society, who shall send the respective summons to its members, where it shall establish the agenda, as well as the place and date for the holding of the session. Its decisions shall be taken by majority vote. The Undersecretary of Finance and Public Credit, who shall preside, shall have a casting vote in case of a tie. Likewise, the Committee shall have a technical secretary, who shall have voice, but without vote.

(6) Except for the independent councilor and the professional with experience in the human resources area, the other members of the Committee shall have their respective substitutes, who shall preferably be public servants of the next lower level and must have at least the level of General Director.

(6) In the event of the absence of the Undersecretary of Finance and Public Credit, without prejudice to the voting right of their substitute, the Head of the Development Banking Unit shall preside over the Committee and exercise the casting vote.

(2) Article 35. The Society shall grant its financing through private financial institutions that assume partial or total risk of recovery of these supports.

(2) The provisions of the previous paragraph shall not be applicable to the following operations:

(2) I. Shareholder investment and investments in the money market;

(2) II. Financing with a total amount equal to that determined by the Governing Council with the prior authorization of the Secretariat of Finance and Public Credit;

(2) III. Operations corresponding to labor benefits granted in a general manner;

(2) IV. Operations carried out with the Federal Government, entities of the para-state sector, federative entities, and municipalities, and

(2) V. Financing for infrastructure and public service projects derived from concessions, service provision contracts, public works, housing, and industrial parks, permits and authorizations from federal authorities, federative entities, and municipalities, as well as from their para-state and paramunicipal entities.

(2) The financing referred to in this fraction may be granted provided that it concerns projects related to its object in a majority manner.

(7) Article 36.- The Society shall provide legal assistance and defense services to the members of its Governing Council, committees established by it, or provided for by regulatory provision, and to the public servants who work or have worked in the institution itself, with respect to the acts that these persons carry out in the exercise of the functions entrusted to them by law and in accordance with the guidelines issued for such effect by the Secretariat of Finance and Public Credit.

(7) The aforementioned legal assistance and defense shall be provided even when the indicated persons cease to perform their functions or provide their services to the Society, provided that it concerns acts carried out in the performance of their functions or activities in service of the Society.

(7) Legal assistance and defense shall be provided from the resources available to the Society for these purposes. In the event that the competent authority issues a final resolution against the subject of legal assistance that becomes final, such person must reimburse the Society for the expenses and any other disbursement that it has made on account of the legal assistance and defense.

(7) The provisions of this article shall apply without prejudice to the obligation that the subjects of legal assistance and defense have to render the reports required of them in terms of the applicable legal provisions as part of the performance of their functions.

TRANSITIONAL PROVISIONS
(Decree by which the Organic Law of the National Bank of Foreign Trade is issued, published in the Official Gazette of the Federation on January 20, 1986) FIRST. This Law shall enter into force the day following its publication in the Official Gazette of the Federation.
SECOND. The authorizations, powers, mandates, and other legal acts and administrative measures, granted, dictated, or celebrated based on the applicable provisions, shall remain in force until they are revoked or modified by the competent organs and authorities.
THIRD. The Organic Regulation of the Society must be issued within a period not exceeding 180 days, counted from the date of the validity of this Law. Until then, the one issued on July 26, 1985, shall remain in force.
FOURTH. Until the Organic Regulation referred to in the previous Article is issued, the corporate domicile of the National Bank of Foreign Trade, National Credit Society, a development banking institution, shall be the city of Mexico, Federal District.
Mexico, D.F., on December 19, 1985.- Fernando Ortiz Arana, Dip. President.- Rubric.- Socorro Díaz Palacios, Sen. President.- Rubric.- Juan Moisés Calleja, Dip. Secretary.- Rubric.- Guillermo Mercado Romero, Sen. Secretary.- Rubrics.
In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States and for its due publication and observance, I issue this Decree, in the residence of the Federal Executive Power, in the City of Mexico, Federal District, on the twentieth day of the month of December of nineteen hundred and eighty-five.- Miguel de la Madrid H.- Rubric.- The Secretary of Governor, Manuel Bartlett D.- Rubric.- The Secretary of Foreign Relations, Bernardo Sepúlveda Amor.- Rubric.- P.A. of the Secretary of Finance and Public Credit, the Acting Undersecretary of the Office, Francisco Suárez Dávila.- Rubric.- The Secretary of Programming and Budget, Carlos Salinas de Gortari.- Rubric.- The Secretary of the General Comptroller of the Federation, Francisco Rojas Gutiérrez.- Rubric.- The Secretary of Energy, Mines and Para-State Industry, Francisco Labastida Ochoa.- Rubric.- P.A. of the Secretary of Commerce and Industrial Development, the Acting Undersecretary of the Office, Mauricio de Maria y Campos.-Rubric.- The Secretary of Agriculture and Hydraulic Resources, Eduardo Pesqueira Olea.- Rubric.

TRANSITIONAL PROVISIONS
(Decree by which various provisions of the Law of Credit Institutions; of the Organic Law of National Financiera; of the Organic Law of the National Bank of Foreign Trade; of the Organic Law of the National Bank of Public Works and Services; of the Organic Law of the National Bank of the Army, Air Force and Navy; of the Organic Law of the National Savings Bank and Financial Services and of the Organic Law of Federal Mortgage Society of April 30, 2002, published in the Official Gazette of the Federation on June 24, 2002)
ARTICLE FIRST.- This Decree shall enter into force the day following its publication in the Official
Gazette of the Federation.
ARTICLE SECOND.- The Secretariat of Finance and Public Credit shall make known the rules for
determining the quotas referred to in article 55 bis of the Law of Credit Institutions, as well as the investment regime of the trusts, which development banking institutions must constitute within the following ninety natural days counted from the entry into force of the present Decree.
ARTICLE THIRD.- Development banking institutions shall be subject to the General Conditions of
Work in force, until such time as the new ones are issued and they enter into force.
ARTICLE FOURTH.- All provisions that oppose the laws that are reformed, added, and repealed in the present Decree are repealed.
ARTICLE FIFTH.- The procedures that had been initiated prior to the entry into force
of the present Decree, in accordance with the laws that are reformed, added, and repealed, shall continue to be governed by the provisions in force on the date of publication of this Decree.
ARTICLE SIXTH.- The human resources planning and institutional development committee shall
be integrated and enter into functions within a period not exceeding ninety natural days counted from the date on which the present Decree enters into force.
ARTICLE SEVENTH.- The comprehensive risk management committee shall be integrated and shall enter
into functions within 60 business days following the date on which the present Decree enters into force.
ARTICLE EIGHTH.- With respect to the modification to article 7th of the Organic Law of National
Financiera, the references contained in the legal orders where it is indicated that the deposits of titles, securities, or cash sums that have to be made by or before the authorities administrative or judicial of the Federation or by or before the administrative authorities of the District Federal, as well as the cash sums, titles, or values that the judicial authorities or administrative authorities of the Federation and those that are seized by the administrative authorities of the District Federal, shall be constituted in National Financiera, National Credit Society, shall be understood that the same may be constituted in the national credit societies, development banking institutions that are authorized by law for such effect.
ARTICLE NINTH.- The State and National Advisory Councils referred to in articles 33 and
34 of the Organic Law of the National Bank of Public Works and Services shall be integrated and enter into functions within 180 natural days following the date on which the present Decree enters into force.
Mexico, D.F., on April 30, 2002.- Dip. Beatriz Elena Paredes Rangel, President.- Sen. Diego Fernández de Cevallos Ramos, President.- Dip. Adrián Rivera Pérez, Secretary.- Sen. Sara Isabel Castellanos Cortés, Secretary.- Rubrics".
In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree in the Residence of the Federal Executive Power, in the City of Mexico, Federal District, on the twenty-first day of the month of June of two thousand two.- Vicente Fox Quesada.- Rubric.- The Secretary of Governor, Santiago Creel Miranda.- Rubric.

TRANSITIONAL PROVISIONS
(Decree by which various articles of the organic laws of Development Banking are reformed and added, published in the Official Gazette of the Federation on August 1, 2005) FIRST.- This Decree shall enter into force the day following its publication in the Official Gazette of the Federation.
SECOND.- The provisions that upon entry into force of the present Decree contravene the provisions of the same are rendered without effect.
Mexico, D.F., on April 26, 2005.- Dip. Manlio Fabio Beltrones Rivera, President.- Sen. Diego Fernández de Cevallos Ramos, President.- Dip. Marcos Morales Torres, Secretary.- Sen. Sara I. Castellanos Cortés, Secretary.- Rubrics."
In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree in the Residence of the Federal Executive Power, in the City of Mexico, Federal District, on the thirty-first day of the month of May of two thousand five.- Vicente Fox Quesada.- Rubric.- The Secretary of Governor, Santiago Creel Miranda.- Rubric. TRANSITIONAL PROVISIONS (Decree by which various Federal Laws are reformed, with the object of updating all those articles that make reference to the Secretariats of State whose denomination was modified and to the Government of the Federal District in what is pertinent; as well as to eliminate the mention of administrative departments that no longer have validity, published in the Official Gazette of the Federation on April 9, 2012) First. This decree shall enter into force the day following its publication in the Official Gazette of the Federation. Second. From the date on which this Decree enters into force, the provisions that contravene or oppose the same are rendered without effect. Mexico, D.F., on February 21, 2012.- Dip. Guadalupe Acosta Naranjo, President.- Sen. José González Morfín, President.- Dip. Laura Arizmendi Campos, Secretary.- Sen. Renán Cleominio Zoreda Novelo, Secretary.- Rubrics." In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its due publication and observance, I issue this Decree in the Residence of the Federal Executive Power, in the City of Mexico, Federal District, on thirty of March of two thousand twelve.- Felipe de Jesús Calderón Hinojosa.- Rubric.- The Secretary of Governor, Alejandro Alfonso Poiré Romero.- Rubric. Disposiciones Transitorias (Decree by which various provisions in financial matters are reformed, added, and repealed and the Law to Regulate Financial Groups is issued, published in the Official Gazette of the Federation on January 10, 2014)
ARTICLE TWENTY-FIRST.- With regard to the modifications referred to in Articles
Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth, and Twentieth of this Decree, the following shall apply:

I. The Congress of the Union, when issuing the regulatory laws referred to in the second paragraph of the second transitory article of the Decree by which various provisions of the Organic Law of the Federal Public Administration are reformed, added to, and repealed, published in the Official Gazette of the Federation on January 2, 2013, will provide for a special control and evaluation system for development banking institutions that is consistent with their nature and functions, avoids duplication of supervision and monitoring mechanisms, and contributes to the efficiency of said institutions.

II. From the entry into force of this Decree, the trust workers of development banking institutions will be excluded from the application of the general working conditions of the respective institution. Without prejudice to the foregoing, the acquired rights of trust workers who are working in a development banking institution on the date of entry into force of this Decree must be respected, with the appropriate provisions being made in the remuneration and retirement manuals referred to in Article 43 Bis of the Credit Institutions Law, reformed in the terms of this Decree.

III. Within a period of sixty natural days following the entry into force of this Decree, national credit societies must extinguish the trust constituted in terms of Article 55 Bis of the Credit Institutions Law.

IV. The social banking functions provided for in the reform to Article 3 of the Organic Law of the National Savings Bank and Financial Services must be implemented by the institution starting from January 1, 2014; therefore, in the FEDERAL EXPENDITURE BUDGET FOR THE FISCAL YEAR 2014, the allocation of resources to strengthen the equity of the National Savings Bank and Financial Services must be provided for, so that it can fulfill its purpose as Social Banking.

V. Within a period of ninety natural days, the Ministry of Finance and Public Credit will carry out an evaluation of the subsidies, support, programs, funds, and trusts granted and administered by entities of the Federal Public Administration, with the purpose of diagnosing the feasibility of channeling them through a new unique system of agricultural and rural financing and promotion.

VI. When this or other decrees, codes, laws, regulations, or legal provisions issued prior to this Decree, as well as all contracts, agreements, and other legal acts celebrated by the institution, refer to Rural Financial Institution, it shall be understood that they refer to the National Financial Institution for Agricultural, Rural, Forestry, and Fisheries Development.

TRANSITORY PROVISIONS OF THE DECREE
(Decree by which various provisions in financial matters are reformed, added to, and repealed, and the Law to Regulate Financial Groups is issued, published in the Official Gazette of the Federation on January 10, 2014)

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

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

In compliance with what is provided in fraction I of Article 89 of the Political Constitution of the United Mexican States, and for its proper publication and observance, I issue this Decree at the Residence of the Federal Executive Power, in Mexico City, Federal District, on January 9, two thousand fourteen.- Enrique Peña Nieto.- Signature.- The Secretary of the Interior, Miguel Ángel Osorio Chong.- Signature.

STATEMENT OF REASONS
(Decree of January 20, 1986)

The Regulatory Law of the Public Service of Banking and Credit ordered the transformation of national credit institutions into national credit societies, development banking institutions, and on that basis, the corresponding decree and the organic regulation of the National Bank of Foreign Trade, National Credit Society, development banking institution, were issued, in compliance with what is provided by the ninth transitory article of the aforementioned law, in July 1985; this latter provision will take effect until the Organic Law of the National Bank of Foreign Trade, National Credit Society is issued, and the consequent organic regulation to which the Regulatory Law refers.

With the ordinary normative order established, it is indispensable that national credit societies have their own regulation reflecting the new philosophy of financing. I therefore submit to your sovereignty this initiative for the Organic Law of the National Bank of Foreign Trade, National Credit Society, development banking institution, which is part of the effort to have more adequate and modern legislation regulating the national financial system, and in which the conception that the Mexican state had of development banking is redefined in its nature and objectives.

This initiative tends to provide the institution with a modern structure, and efficient and accessible operation, avoiding rigid requirements and devices that are easily surpassed by the constant and variable economic conditions of the country, which could render nugatory the social financial action of the bank.

It was during the Government of President Lázaro Cárdenas del Río, on June 8, 1937, that the National Bank of Foreign Trade, S.A. was founded. It was the time when the oil expropriation was beginning to take shape, the reform received a decided impulse, and the Mexican Revolution consolidated its constructive stage.

Its creation was motivated by the country's need to have a credit institution that specialized in granting support that would impact the promotion of exports, to obtain the necessary leveling in the balance of payments.

Since its creation, the National Bank of Foreign Trade has lacked an Organic Law that embodied the objectives for which it was constituted, having the need to adjust predominantly to the concession granted by the Ministry of Finance and Public Credit, to special authorizations emanating from competent authorities, to its corporate bylaws, and to commercial and banking legislation.

At the beginning of its activities, the bank, to achieve its fundamental objective, required in the first instance, to carry out an organizing activity for small producers, which allowed them, from then on, joint action for the protection of their interests, both for the unification of supply, and for the union of credits or other types of economic cooperation. In this way, the supply of credit they required was facilitated.

The contribution of the National Bank of Foreign Trade to the national economy can be seen not only through financing granted to productive activities of export and import. (sic) throughout almost half a century of existence, it has actively participated in the creation and strengthening of independent institutions, which currently contemplate objectives and functions directed at the promotion of exportable production and external commercialization.

During the forties, the institution promoted the organization of commercializing companies, which allowed them to act as regulators of supply, and consequently of prices in the national market.

In the fifties, the creation and management of the compensated exchange operations system stand out; the organization of poultry, goat, coffee, banana, cotton, and citrus production; as well as the establishment of the Impulsora y Exportadora Nacional, S. de R.L. de C.V. (IMPEXNAL), which arose as a response to the need to promote and support the commercialization of Mexican products abroad, with the object of increasing exports and rationalizing imports.

Given the growth of the Mexican economy and the greater complications of the international market during the sixties, which led to the creation of various organisms in which the National Bank of Foreign Trade has actively participated, among them stand out: the Commission for the Protection of Foreign Trade, the public sector imports committee, the coordinating committee of the activities of commercial counselors abroad, the national center for information on foreign trade, and the Mexican Institute of Technological Research (IMIT), created jointly with the Bank of Mexico, S.A., and Nacional Financiera, S.A.

It was at this time when the Federal Government, attentive to the circumstance that commercial policy, essentially of protection of the industrial apparatus, did not adjust to the changing conditions of the economy, promoting that export costs had a significant increase, which discouraged them, while at the same time fostering imports, causing growing current account deficits and greater dependence on the outside, considered that a new strategy was required to give impetus to the foreign trade of our country and serve as a support instrument for a global economic policy; this was, that the promotion of exports could not be isolated from the stimulus to industrial production, and above all, that it had (sic) to be complemented with a rationalization of that protection that had been adopted.

In order to achieve the above, the Federal Government deemed it appropriate to create an organism that would provide financial support and guarantees for the exports of manufactured products, which until then, had not been adequately attended.

In this way, on May 14, 1962, the trust known as, Fund for the Promotion of Exports of Manufactured Products (FOMEX), was instituted in the Bank of Mexico, S.A. This development fund would have as its objective to promote the increase of employment; the increase of income; the growth and development of the manufacturing and services sector, and the strengthening of the country's balance of payments, through the granting of credits and guarantees for the export of manufactured products and services, the substitution of imports of capital goods and services, and the substitution of imports of consumer goods and services in the border strips and free zones of the country.

Over time, some of the institution's activities, indispensable in its early stages, were attended by other newly created organisms, among which stand out the National Company of Popular Subsistence (CONASUPO), the Mexican Coffee Institute (INMECAFE), the National Union of Producers and Exporters of Lemon Oil (UNPAL), the National Union of Producers and Exporters of Chickpeas (UNPEG), the Agricultural Bank currently integrated into the BANRURAL system, and the Mexican Institute of Foreign Trade (IMCE).

Almost half a century later, the philosophy of those who created it has not lost its relevance, but rather highlighted the vision they had, since the external sector of the Mexican economy continues to have preponderance, especially taking into account the constant world transformation; however, the bank, due to the character given to it as a Mexican institution, now requires an Organic Law that regulates its objectives to fully comply with its functions and adjust to the desired dynamics, to the new prevailing needs in international trade, and to the internal structural changes that official guidelines have considered convenient, to optimize the support of national exports, facilitate imports; in addition to the fact that the Regulatory Law of the Public Service of Banking and Credit, in its article 9th, second paragraph, establishes that national credit societies that operate as development banking institutions must have their respective organic laws.

Under which administration, the reactivation of the national economy has been a fundamental concern, based predominantly on the priority impulse of our foreign trade, to this end, actions and measures have been cited tending to promote and support it.

In this context, the National Development Plan 1983-1988 was implemented; it establishes as one of the objectives to ensure the efficient channeling of financial resources, according to development priorities, the one relative to the fact that financial funds and trusts should be linked, in most cases, the development bank more to the end of its purposes.

With these bases, the Federal Government deemed it convenient that the Fund for the Promotion of Exports of Manufactured Products be administered by the National Bank of Foreign Trade, S.A., who would assume the coordinating function of the financial support programs for exports, according to instructions from the Ministry of Finance and Public Credit. This fund was incorporated into the bank starting from August 1, 1983. With this, a fundamental step was taken in the integration of financial support of guarantees and insurance to foreign trade, improving coordination and avoiding duplication of functions.

Likewise, regarding the guidelines emanating from the National Development Plan and to simplify functions and avoid duplication, the Initiative contemplates the transfer to the National Bank of Foreign Trade of some objectives and functions that the Mexican Institute of Foreign Trade has been developing.

The institution, to achieve the objectives within the strategies indicated in the National Development Plan, and especially in the Sectoral Programs for Industrial Promotion and Foreign Trade and Financing for Development, requires an Organic Law that allows it to:

Act as a development banking institution for foreign trade, coordinating the financial and guarantee support of the Federal Government that is destined for this activity, in accordance with the guidelines of the Ministries of Finance and Public Credit and of Commerce and Industrial Promotion, in accordance with their attributions;

Continue to act as a first-tier institution, with wholesale operations and of the public sector, and supporting those of the private sector that, being viable, cannot be attended by multiple banking institutions due to their degree of risk and long maturity period;

Perform second-tier bank functions, fundamentally through the rediscount of financing operations, of exports and imports presented to it by national credit societies;

Participate in the restoration of financial and commercial flows with countries buying Mexican products or providers of goods and services;

Act as a consultative body on foreign trade matters;

Promote the association of producers, merchants, distributors, and exporters, in order to stimulate and promote the increase of foreign trade.

Act as a financial agent of the Federal Government regarding the negotiation, contracting, and management of credits; Participate in the social capital of foreign trade companies; Promote foreign trade of the country in all its aspects; based on the above reasoning, an initiative for the Organic Law of the National Bank of Foreign Trade, National Credit Society was structured, which contemplates, in 5 chapters, the various legal guidelines that must regulate the activity of the institution.

Chapter One deals with the denomination of the Society, its object, domicile, and duration: in general terms, it specifies the new character of the Bank as a National Credit Society and development banking institution.

The imperative to link to the National System of Democratic Planning and especially to the National Development Plan, and in particular, to the National Programs for Industrial Promotion and Foreign Trade and of Financing for Development is recorded. As a Fundamental Objective of the Bank, the promotion and financing of foreign trade is established.

In Chapter Two, titled of the objectives and operations, the new structure and conception of the Society as development banking is really inscribed. In this regard, it is convenient to recall that the Regulatory Law of the Public Service of Banking and Credit in its article 3rd provides that the organic laws of development banking institutions will consign the specific objectives that imprint their distinctive, promotional, and development nature.

Likewise, with the purpose of empowering the Ministry of Finance and Public Credit to set interest rates, commissions, premiums, discounts, and other analogous concepts, terms, and other characteristics of the active operations that the society carries out in compliance with its purpose as development banking, an express exception is established to what is provided by articles 14 of the Organic Law of the Bank of Mexico, and 32 of the Regulatory Law of the Public Service of Banking and Credit. In Chapter Three, the social and net capital are regulated, the social capital is integrated with import certificates of patrimonial nature of two series, "A" and "B"; the first of which presents 66% of the total capital, and only (sic) can be subscribed by the Federal Government. The "B" series, which will represent the remaining 34%, can be subscribed by the Federal Government, and by Mexican natural and legal persons.

The administration and supervision of the society are treated in the fourth chapter, in which it is reiterated that the administration of the society corresponds to the Board of Directors, a Committee for the Promotion and Support of Foreign Trade, and the General Director, in their respective scopes of competence. The former is integrated by 13 councilors; nine representatives of the "A" series. Regarding the councilors of the "B" series, in the (sic) Organic Regulation, the norms for their designation will be determined.

In articles 21, 22, and 23, the existence of the Committee for the Promotion and Support of Foreign Trade is provided for, whose faculties consist of evaluating and proposing policies on the granting of credits and guarantees to support the country's foreign trade, recommending the maximum risks of credit responsibility of the country, in export operations; recommending the maximum risks of responsibility for insurance and Credit Guarantee of the country; suggesting when an export operation should be considered of national interest; considering those operations that by their own characteristics do not correspond to the common international practice of other exporting countries, suggesting participation in the activities inherent to the promotion of foreign trade, such as dissemination, study of exportable products and services, sales systems, support for commercialization and organization of products, merchants, distributors, and exporters.

In the fifth chapter, it is provided that to allow the agile application of the law, the Ministry of Finance and Public Credit is empowered to interpret it and issue the provisions that its adequate application requires, hearing the opinion of the Ministry of Commerce and Industrial Promotion.

In the same way, it is established that the Ministry of Finance itself will dictate the guidelines according to which the programs, budgets, and estimates of the society are formulated. A specific attribution is granted to said dependency to authorize the allocation of resources within the philosophy of flexibility and management autonomy, indispensable for the effective functioning of the bank.

In virtue of the foregoing, in exercise of the faculty conferred upon me by fraction I of article 71 of the Political Constitution of the United Mexican States, in relation to what is prescribed by articles 28, fifth paragraph, and 73, fraction X of the same Supreme Order, through the worthy channel of you, I submit to the consideration of the Honorable Congress of the Union the following initiative of

STATEMENT OF REASONS
(Decree of June 24, 2002)

Development banking institutions have the object of attending to those persons who, due to market imperfections, are not attended by private financial intermediaries. In most cases, these are sectors and individuals who are not subjects of credit for financial intermediaries, due to cost reasons, by level of risk, lack or insufficiency of guarantees, geographic reasons, adverse selection due to lack of experience, lack of credit history, among others.

These institutions are integrated in the coordination of a medium and long-term development policy directed by the Federal Government itself, oriented towards the channeling of financial resources to specific sectors and projects.

To fulfill this mandate and given the current environment, highly dynamic and competitive, it is necessary to increase the operational capacity of development banking, as well as the efficiency in the services they offer, foster and strengthen financial intermediaries, and expand the coverage of

these. To achieve the above, some modifications to various legal frameworks are required as indicated below:

In the administrative sphere, the modernization and efficiency in the use of resources is sought. In this sense, it will correspond to the board of directors of each institution to approve the general budgets without the need to go through various instances to obtain authorization, as long as they remain within the parameters of programmed spending, considering that national credit societies do not use fiscal resources for their expenses and investments, and must observe the general rules in matters of budgets applicable to the specific case.

With the aim of having greater capacity to act in response to the requirements of the different sectors served by the development banking system in the country and to face competition in the global environment in which they operate, it is necessary to direct the efforts of the development banking system to their substantive activities. To this end, it requires adopting agile actions that allow it to make acquisitions, contract services, leases, and works in a timely manner both in the country and abroad, for the proper functioning of these institutions; therefore, they will not be subject to the Law on Acquisitions, Leases, and Services of the Public Sector nor to the Law on Public Works and Related Services.

Notwithstanding the above, this Decree records the need to establish the guidelines under which such activities will be carried out in compliance with Article 134 of the Constitution.

The board of directors will have additional powers regarding budgets for expenses and investment, acquisitions, leases, services, public works, salaries, and benefits, in order to make the reform consistent with administrative modernization. At all times, constitutional principles will be observed, where generally the obligation to assign through public bidding will prevail, in transparent processes that allow each institution to obtain the best market conditions in terms of price, quality, financing, and timeliness. Likewise, it will be sought to ensure economy, efficiency, honesty, and impartiality in the respective processes.

Only in those cases where public bidding is not suitable, proceedings will be carried out through restricted invitation procedures or direct award, for which the board of directors itself, without departing from constitutional principles, will establish the bases, policies, and procedures that will regulate the contracts, agreements, orders, or arrangements concluded by the development banking system for its acquisitions, leases, services, and public works.

The administrative body of the societies is granted the power to create salary and benefits committees and the comprehensive risk management committee. The first of these, as an advisory body, will advise and propose to the board of directors of each institution the terms and conditions under which the relationships between the development banking institutions and their workers will be developed, in accordance with market conditions and the possibilities of each development banking institution, consistent with the sector, eliminating discretionary powers and providing greater legal certainty.

In terms of risk management, the board of directors is authorized to create such committees, with the objective of diversifying these risks and limiting the maximum limits of direct and contingent liabilities, in congruence with various prudential provisions.

The Ministry of Finance and Public Credit will establish global maximums for each institution to meet their needs for current spending, physical investment, net debt levels (internal and external), net financing, and financial intermediation, with the objective of controlling the impact of aggregate demand in accordance with the established macroeconomic policy.

With the purpose of clearly establishing the jurisdiction of the Ministry of Finance and Public Credit to determine the characteristics of active, passive, and service operations, and that of the Bank of Mexico, in cases of passive operations involving the collection of resources from the public, trusts, mandates, commissions, money market operations, as well as financial operations known as derivatives, a reform is incorporated into each organic law of the national credit societies to this effect, which seeks to clearly establish the jurisdiction of each of the two institutions.

With the intention that development banking institutions only serve the sectors corresponding to their purpose and do not divert resources to specific sectors or persons belonging to groups with common interests, different from financial intermediaries, the board of directors of each institution will establish the limits for credit operations in this case.

With the purpose of avoiding the use of fiscal resources by development banking institutions to meet the guarantee granted to them by the Federal Government by virtue of law, an obligation is incorporated for national credit societies to contribute resources to a trust that will have among its purposes supporting the fulfillment of their obligations derived from the collection they carry out from the general public, as well as to contribute to the strengthening of the capital of these societies, in order to ensure their permanence in the medium and long term.

Better corporate practices are incorporated into the administrative bodies of the development banking system, which aim to strengthen these decision-making bodies, since by granting greater powers to the board of directors, it is necessary at the same time to develop some measures that allow for better performance of its members.

In this sense, the figure of the independent director is incorporated, an appointment that must fall on persons who, due to their knowledge, experience, and professional prestige, are widely recognized; these directors will represent series "B" of capital contribution certificates.

With the purpose that independent directors assume their responsibility, they will have no substitutes and, in certain matters, their vote will be decisive, as some decisions must be qualified majorities determined by the vote of these directors.

It is important to note that independent directors must not have any link with the society that represents a conflict of interest, in addition to the confidentiality they must maintain in matters discussed within the respective collegiate body.

The reform also seeks to reaffirm the participation of development banking institutions through private financial institutions that assume all or part of the risk of recovery of support, notwithstanding that there are some exceptions in operations that, given their nature or special circumstances, must be addressed directly.

Without a doubt, this reform implies greater freedom for development banking institutions, which will result in the optimization of resources. However, it is necessary to have information on the goals set, expenditure execution, program compliance, information that will be delivered to the Federal Executive, through the Ministry of Finance and Public Credit, which will also be sent to the Congress of the Union in an annex together with the Reports on the Economic Situation, Public Finances, and Public Debt.

For the reasons stated above, the Federal Executive under my charge, in the exercise of the power conferred by Article 71, Fraction I, of the Political Constitution of the United Mexican States, through this Honorable Chamber of Deputies, submits to the consideration of the Honorable Congress of the Union the following initiative:

STATEMENT OF MOTIVES
(Decree of August 1, 2005)

On August 14 of last year, the Official Gazette of the Federation published the Decree of reform and additions to the Political Constitution of the United Mexican States in its articles 1, 2, 4, 18, and 115. From that date, the new legal framework for the protection, exercise, and respect for the rights and cultures of indigenous peoples of our country entered into force.

With this reform, the Permanent Constituent gave (sic) a historic, unprecedented step by recognizing indigenous communities with their own legal personality, explicit social, economic, and cultural rights, and granting the highest legal value to their rights to self-determination and autonomy; as well as by defining inescapable tasks for the Mexican State in favor of indigenous peoples and communities.

Conscious of the need to create favorable conditions to ensure the full application of the constitutional reform, in the Second Transitory Article of said Decree, the Legislator ordered the Congress of the Union and the various Legislatures of the federative entities, "to make the adjustments to federal laws and local constitutions that apply and regulate what is stipulated here."

This responds to the initiative now presented, with the aim of also inscribing Development Banking in the effort that different national institutions must make to contribute, from their respective areas of competence, to making the constitutional mandate a reality.

Inclusive, among the tasks and actions that the new Article 2 of the Constitution in its Section "B" orders to the State and that the various institutions of the Development Banking System can support, are the following:

"Promote the regional development of indigenous zones with the purpose of strengthening local economies and improving the living conditions of their peoples..." (Fraction I)

"Improve the conditions of indigenous communities and their spaces for coexistence and recreation, through actions that facilitate access to public and private financing for the construction and improvement of housing, as well as expand the coverage of basic social services." (Fraction IV)

"Extend the communication network that allows the integration of communities, through the construction and expansion of communication and telecommunications infrastructure..." (Fraction VI) and,

"Support productive activities and the sustainable development of indigenous communities through actions that allow them to achieve sufficiency of their economic income, the application of incentives for public and private investments that promote the creation of jobs, the incorporation of technologies to increase their own productive capacity, as well as to ensure equitable access to supply and marketing systems." (Fraction VII)

To this end, it is proposed to reform or add the respective organic laws of the BANRURAL System; of the National Bank of Public Works and Services; of Nacional Financiera and of the National Bank of Foreign Trade, such that, collectively, they facilitate access to sources of financing for indigenous communities and, no less important, to the advisory, training, and commercial promotion systems offered by these banking institutions.

For the above and with the purpose of giving due compliance to what is provided in the new text of Article 2 of the Constitution, and in accordance with what is established in the Second Transitory Article of the respective Constitutional Reform Decree, we submit to the consideration of this Honorable Senate Chamber, the following:

STATEMENT OF MOTIVES
(Decree of April 9, 2012)

In our country, in the federal sphere, there is, in accordance with what Article 80 of the Constitution of the Political Constitution of the United Mexican States provides, a Supreme Executive Power of the Union, which is vested in a single individual called the President of the United Mexican States.

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

In this way, the Organic Law of the Federal Public Administration establishes the basis for the organization of the Federal Public Administration, centralized and para-statal.

According to this Law, the President of the Republic assists, in the exercise of his attributes and for the management of administrative affairs assigned to each of the State Secretariats and para-statal entities.

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

On the other hand, decentralized agencies, state participation companies, national credit institutions, national auxiliary credit organizations, national insurance and surety institutions, and trusts make up the para-statal public administration.

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

Currently, the Organic Law of the Federal Public Administration provides, in its article 26, that for the management of administrative affairs, the Executive Power has the following Administrative Dependencies:

• Ministry of the Interior.
• Ministry of Foreign Affairs.
• Ministry of National Defense.
• Ministry of the Navy.
• Ministry of Public Security.
• Ministry of Finance and Public Credit.
• Ministry of Social Development.
• Ministry of Environment and Natural Resources.
• Ministry of Energy.
• Ministry of Economy.
• Ministry of Agriculture, Livestock, Rural Development, Fisheries, and Food.
• Ministry of Communications and Transportation.
• Ministry of the Public Function.
• Ministry of Public Education.
• Ministry of Health.
• Ministry of Labor and Social Welfare.
• Ministry of Agrarian Reform.
• Ministry of Tourism.
• Legal Counsel of the Federal Executive.

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

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

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

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

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

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

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

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

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

a. Jurisprudence Thesis P./J 10/94 of the Plenary Court of the Supreme Court of Justice of the Nation, published in the Gazette of the Judicial Seminar of the Federation, Number 77, May 1994, page 12 of rubric: "Competence, its justification is an essential requirement of the authority's act":

".... the guarantee of justification enshrined in Article 16 of the Political Constitution of the United Mexican States, implies the idea of exactness and precision in the citation of legal norms, which empower the administrative authority to issue the act of annoyance in question, attending to the legally protected value by the constitutional requirement, which is the possibility of granting certainty and legal security to the individual against the acts of authorities that affect or infringe their legal interest and, therefore, ensure the prerogative of their defense, against an act that does not meet the necessary legal requirements...".

b. Contradiction of theses 94/2000-SS. Between those sustained by the Third Collegiate Court in Administrative Matters of the Sixth Circuit and the First and Fourth Collegiate Courts in Administrative Matters, both of the First Circuit. October 26, 2001. Unanimity of four votes. Absent: Juan Díaz Romero. Reporter: Guillermo I. Ortiz Mayagoitia. Secretariat: Lourdes Margarita García Galicia. Jurisprudence Thesis 57/2001. Approved by the Second Chamber of this High Court, in private session of the thirty

and one of October two thousand one, with the heading: "Administrative Authorities. They are obliged to cite the legal provisions that ground their competence":
"Article 16 of the Federal Constitution prescribes that acts of molestation, to be legal, must come from a competent authority and comply with the essential formalities that give them legal efficacy, which means that every act of authority must be issued by who is legitimized for it, expressing in the act itself of the molestation, the device, agreement or Decree that grants such legitimization, since if not, the governed is left in a state of defenselessness by not being able to examine if the action of the issuing authority is within the respective competence scope."
c. Appendix to the Judicial Weekly of the Federation 1917-1995, Volume VI, Common Matter, page 111, thesis 165 with the heading: "Competence. Its justification is an essential requirement of the act of authority." Subjects:
Constitutional- Administrative, Type: Jurisprudence by repetition of criteria.
"...It is indispensable that both the attributions of the authority, as well as its competence and its name or identification as a moral entity remain clear and expressly contemplated in the norms that give it life and legal attributions for greater security and certainty of the governed..."
However, there are still gaps in the articles of many federal laws, in which citation, validity and responsibility are still given to dependencies and institutions that no longer exist; or to institutions that have changed their name and even their functions.
The first-level legal framework must be adapted to the social and political conditions of the country and it is a task of our legislative work, to give certainty and legal security to the citizen through the updating of current legislation.
In addition, on November 13, 2007, the Decree by which articles 29, 73, 90, 92, 93, 95 110 and 111 of the Political Constitution of the United Mexican States are reformed was published in the Official Journal of the Federation, through which the names of some State Secretariats were updated and Administrative Departments, which were mentioned in our Magna Carta, were eliminated. The second transitory article of said Decree provided as follows: "The Congress of the Union at the beginning of the validity of this Decree will make the corresponding updates to federal legislation, in accordance with what is stipulated in this Decree. The states and the Federal District must adapt their laws in accordance with the provisions of this Decree no later than six months after its publication in the Official Journal of the Federation." Thus, the purpose of this initiative is to follow up and continue the task of the Mexican Congress, to update in all Federal Laws the current names of all State Secretariats cited in them. Finally, it is important that the technological advances of our time become part of the tools that allow us to improve legislative work and therefore, in order that in the future any change in the name of state secretariats can be reflected in the respective laws, it is attached with this initiative in an electronic device, a database of federal laws in which its articles refer to various institutions and dependencies, updated their names including the changes included in this initiative. This database will allow the respective laws to be updated when for some reason it is decided to change the name of the State Secretariats, thus giving the legal certainty that is required to have in all laws. For all the above and founded, it is submitted to the consideration of this Sovereignty the following:
EXPLANATION OF MOTIVES
(Decree of January 10, 2014)
Development Banking over the years has been a promoter of savings and investment in the development of the financial system, the growth of the industrial plant and projects of great regional impact, as well as large infrastructure works, companies and key sectors for national development. However, it is necessary that Development Banking has better tools to expand access to credit for those who have financing needs since, even having the ability to pay, they are not given the facilities to obtain the resources that allow them to acquire the necessary support to raise their economic development. Development Banking has been a complementary alternative to the private financial sector. The promotion system has as one of its functions, completing markets seeking to promote the participation of the private sector without competing with said sector. The resources of the federal government are not sufficient to finance the total development of the country, hence the need to potentiate them and use them as inducers of the participation of the private sector, efficiently. In addition, regarding control mechanisms, there are professional administrations that adhere to sound banking practices and observe a regulation similar to that of commercial banking. However, Development Banking must achieve a greater impact on the economy, consolidate the capabilities it has to resolve the problems of the sectors it attends and advance in the promotion of financing for small and medium-sized enterprises, support Mexican exporting companies and the opening of new markets, allowing, in turn, the importation of capital goods to make the country more productive. For this reason, it is necessary to support Development Banking with a regulatory framework that, taking into account the strength of its balance sheet, allows it at the same time to implement policies that add to both the creation and preservation of jobs and investments, and that also contributes, in an effective and efficient manner, to the productive activity of the country, the creation of value and growth of the countryside and that, in turn, allows and supports popular savings for the benefit of the well-being of Mexican families. The main objective of this initiative is to flexibilize the regulatory framework governing Development Banking, in order to contribute to the development of the financial system and strengthen the institutions themselves. The strength of Development Banking comes mainly from the support it is given by the Federal Government, which allows it to trigger credit in productive and strategic activities that would not otherwise receive it. For this purpose, it is required: (i) that its mandate be clearly defined in the legal framework, (ii) that unnecessary restrictions are not imposed on it and (iii) that it allows it to obtain the indispensable elements for its compliance, in order to manage its resources effectively for the benefit of the country. In this sense, this initiative
strengthens Development Banking by clarifying its mandate, in which it is specified that this is the promotion of the economy through the attention of strategic sectors that face limitations to having access to financing alternatives; likewise, unnecessary restrictions for its development are eliminated; and thirdly, the regulatory framework is modified to ensure that Development Banking can obtain the resources it requires for the fulfillment of its mandate, mainly human capital, necessary for good management, granting it flexibility to manage them appropriately. With these elements, clear and solid bases are laid for good management. The success of Development Banking will be determined by the capacity of its administrators and governing bodies, to carry out adequate diagnoses of the sectors set as objectives that must be attended, as well as their capacity to generate programs and products, complementary to public policies that adequately resolve the specific problem that afflicts at each moment the strategic sectors. The proposed regulatory framework lays the foundations for this management to be successful and productive, but it does not replace the effort that must accompany it, which must be demanded from Development Banking at all times. In order for Development Banking to be able to fulfill its object more efficiently and agilely, its operation must be modernized, so it is considered necessary to make modifications to various legal instruments, in order to strengthen its action and operation, endowing it with greater management autonomy, facilitating the granting of credit by its institutions, flexibilizing its investments and freeing it from additional restrictions to those of multiple banking.

1.- Mandate of Development Banking Institutions: Inclusion, Promotion of Innovation and Gender Perspective.
Currently, the mandate of Development Banking establishes that in the development of its functions, its capital must be preserved and maintained, which has led to the inhibition of the granting of credit by confusing a restriction that must be imposed on the fulfillment of its mandate to seek a prudent management of the entrusted public resources; with the very object of Development Banking. In this regard, it is proposed that institutions have as their fundamental mandate to facilitate access to credit and financial services, determining rates, terms, risks of operations and types of business. It is privileged as an objective, to strengthen Development Banking to expand credit with special emphasis on priority areas for national development, in accordance with what is provided in commitment 62 of the Agreements for economic growth, employment and competitiveness of the Pact for Mexico. The expansion of access to financing and financial services will generate the conditions for greater economic activity and, therefore, an economic growth, generating a virtuous circle of investment and growth. Without prejudice to the foregoing, the importance is recognized that institutions guarantee their sustainability through the efficient, prudent and transparent channeling of resources. In this way, it will be allowed to the officials and Boards of Directors of Development Banking to formulate programs of attention to their target sectors that imply incurring in measurable and foreseeable risks, as well as in projects with a longer maturation period, without affecting sustainability in the medium term. Additionally, it is proposed to add a section IX Ter to article 42 of the Law of Credit Institutions, through which the faculty is granted to determine rates, terms, risks of operations and types of business, among others, which will allow them to adjust their strategic plans to make the most efficient use of resources and support the sectors that in terms of said policies require financing. Additionally, in accordance with what is provided in numeral 2.7 of the Pact for Mexico "Transform banking and credit into a lever for the development of households and companies", and aware of the importance that it represents for human development that, access to financing is generalized for men and women and the generation of new ideas is promoted; it is established that Development Banking must create programs for the attention of the priority areas of national development that promote financial inclusion. Likewise, it is foreseen that Development Banking offers financial services that promote innovation, the creation of patents, the generation of other industrial property rights and provides technical assistance and training in the matter. Consequently, it is proposed to establish specific programs and products to address the gender perspective and promote equality between men and women. 2.- Human Resources In addition to the explicit and implicit capital and support
that the Government provides to Development Banking that allows it to absorb risks and thus boost economic activity, the main element with which these institutions have is their human capital. Quality human resources are what will allow Development Banking to attend its mandate effectively and agilely. A limitation to expand the financing of Development Banking to new sectors and operations, has been the capacity to recruit and, above all, organize in an agile and effective manner the human resources that have the necessary profile to be able to create new tools, programs or make in-depth credit analysis since for this it is required of experience in various specialized sectors. Likewise, difficulties have been found to retain the talent developed within the institutions themselves, since when this matures, in many cases it is recruited by institutions of the private sector that offer career opportunities against which Development Banking is impossible to compete. In this regard, it is considered necessary that development banking institutions grant remunerations that have as their purpose to recognize the labor effort and the contribution to the achievement of the objectives of the institution in which one works, establishing for this a manual of remunerations, retirements, rights and obligations specific for the workers of confidence in the proposal for reform to article 43 Bis of the Law of Credit Institutions and to article 3 of the Regulatory Law of the Section XIII Bis of Section B, of Article 123 of the Political Constitution of the United Mexican States; since these perform qualified technical work and with specialization in their various functions that aligned with the objectives of the institution, will allow to deliver better results to society. Thus, development banking institutions will have high-level professional workers whose incentive is the various benefits in order to deliver high-level results, remaining in the institution itself. Additionally, as a measure of transparency, it is established the obligation for development banking institutions to include their approved pay scales in their respective budget projects and to report on the amounts destined for the payment of remunerations, retirements, pensions and other benefits when rendering the Public Account. 2.1.- Human Resources and Institutional Development Committees. It is proposed to have human resources committees that can propose adequate structures and remunerations and that take into account the situation of the labor market in the Mexican financial system in accordance with the criteria determined by the Secretariat of Finance and Public Credit who will preside and have a casting vote; this will allow banks to have greater autonomy to organize their internal structures while the participation of government dependencies will be in the context of their participation in governing bodies, thus achieving that their decisions are always oriented to ensure the best
functioning of the bank. Likewise, it is intended that the General Director of the Society abstains from participating in the sessions of the Committee that have as their purpose to issue opinions or recommendations with respect to his salary, economic and social security benefits. This Committee will advise and propose in terms of the general working conditions, salary and benefit scales, salary policy and the granting of extraordinary perceptions for the fulfillment of goals subject to performance evaluation; promotion policies, promotions and retirements; selection, recruitment and training guidelines; separation criteria; and other economic and social security benefits established for the benefit of public servants who work in each Society. The Secretariat of Finance and Public Credit will establish criteria in matters of occupational structure, salary movements, extraordinary perceptions and benefits, which must be observed by the Committee, likewise, the Society will provide the indicated Secretariat with the information it requests. It is proposed that in order to homologate the legal framework of Development Banking, the Undersecretary of Finance and Public Credit, be the one who presides the Committee, having a casting vote in case of tie; in the absence of the Undersecretary in citation, the Committee will be presided over and the casting vote will be exercised by the Head of the Development Banking Unit. 2.2.- Faculty of the Board of Directors to Approve the General Conditions of Work of the Institution and the Manual of Remunerations, Retirements, Rights and Obligations. In the current text, section XVIII of article 42 of the Law of Credit Institutions establishes as a faculty of the Board of Directors the approval of the General Conditions of Work, while in accordance with section XIX of said article, said governing body can only issue an opinion on the matter. In this sense, it is proposed to reform the aforementioned sections, in effect that the Board of Directors approves the General Conditions of Work at the proposal of the Human Resources and Institutional Development Committee, taking into account the opinion of the union in cases where applicable, which will give legal certainty to the public servants who work in the institutions of Development Banking. Likewise, it is incorporated in section XIX Bis of article 42 of the Law of Credit Institutions as a faculty of the Board of Directors, to approve the manual of remunerations, retirements, rights and obligations of the workers of confidence at the proposal also of the Human Resources and Institutional Development Committee. 3.- Flexibilization of the operation of development banks. 3.1.- In matters of human resources. It is proposed to reform section XVIII of article 42 of the Law of Credit Institutions in effect to establish that the Board of Directors approves, without requiring additional authorizations from any dependency of the Federal Public Administration, the organic
structure, salary policy, salary and benefit scales, as well as the granting of extraordinary perceptions for the fulfillment of goals subject to performance evaluation and other actions that it has, attending to the proposals of the Human Resources and Institutional Development Committee; which will allow the Board of Directors to focus its decisions on strategic issues of operation of the institution. In order to make the modification to the Law of Credit Institutions extensible and congruent, this attribution is embodied in each of the corresponding organic laws. 3.2.- Restrictions of Multiple Banking unnecessarily extensible to Development Banking. The restrictions contained in article 106, sections XVI and XVII, of the Law of Credit Institutions, were established in effect to avoid that the resources destined to capitalize banks originated in the institution itself or well, that said resources remained in the same group since this discourages the contribution of resources, seeking with this to ensure a better capitalization of credit institutions. However, the prohibitions contained in the aforementioned sections, by providing that they apply to credit institutions, have an impact on Development Banking preventing them from taking shares of financial institutions as collateral or acquiring certain titles or securities issued by them. Derived from the above, it is proposed to add a paragraph in article 47 establishing that said restrictions are not applicable to Development Banking, and that there will be no concentration of capital whatsoever, except by the Federal Government since they are public entities and by virtue of being capital of the Government itself. With this reform, the financing options offered by Development Banking will be expanded to facilitate the extension of credit to companies in which it may be necessary to take control in unfortunate events such as the collection of a guarantee, in order to safeguard the payment of the credit. The prohibition to acquire shares of other credit institutions or receive them as collateral has as its objective to avoid that said institutions artificially increase their capital with cross operations; however, in the case of Development Banking there is no motivation to carry out said operations. Maintaining the prohibition would imply that Development Banking could not support financial entities in case they required capitalization, as it has been necessary in other countries. 3.3.- Of the investments of Development Banking. Articles 75, 88 and 89 of the Law of Credit Institutions provide that Development Banking institutions may make investments in the social capital of various types of societies if they are authorized to do so in their respective legislation. The above, constitutes an additional unnecessary regulation to which Development Banking is subject compared to multiple banking and that affects its operation, due to the fact that private banking can carry out said investments by
provision of the Law of Credit Institutions itself.

Therefore, it is considered necessary to reform Articles 75, 88, and the first paragraph of Article 89 of the Credit Institutions Law to establish that credit institutions, including both multiple banking institutions and development banking institutions, may make investments in the companies referred to in said legal provisions.

Regarding the investments of Development Banking in the companies provided for in Article 75 of the Credit Institutions Law, fraction III of the same article provides that in the case of investments representing percentages greater than 15% of the company's capital and for terms greater than three years, "when it concerns companies that develop new long-maturing projects or carry out activities susceptible to promotion," authorization from the National Banking and Securities Commission is required; however, the second paragraph of the same article establishes that when the investments of Development Banking institutions are made with respect to companies carrying out "activities susceptible to promotion," the authorization shall correspond to the Ministry of Finance and Public Credit, and for this purpose, this agency will determine which activities are promotional.

In this sense, the current text of this fraction does not clearly determine the investments that Development Banking can make to support with venture capital, since the phrase "activities susceptible to promotion" applies by definition to all activities in general carried out by Development Banking or promotion banking, as it is also called.

For the above reasons, it is proposed to add a fraction IV to the aforementioned Article 75 of the Credit Institutions Law to establish that in the case of development banking institutions, investments for percentages and terms greater than those previously stated may be made when it concerns companies carrying out activities related to their purpose. With this precision in the text of the law, greater legal certainty will be granted by indicating in which cases Development Banking may carry out this type of investment.

3.4.- Empower the Board of Directors to issue norms or general bases for the contracting of services, as well as for the assignment of assets and liabilities of the institution.

Currently, Article 42, second paragraph, of the Credit Institutions Law establishes that the Board of Directors, on behalf of the institution, may agree to carry out all operations inherent to its purpose.

In this sense, it is proposed to reform fraction X of Article 42 of the Credit Institutions Law, establishing as a faculty of the Board of Directors the approval of policies and general bases for the contracting of services that the institution requires to carry out its operations.

The above will allow the governing body to be expressly empowered to determine the most efficient way to carry them out, and if possible, contract some operations with third parties or consolidate the operation of areas among various development banks.

On the other hand, fraction XI Bis of Article 42 of the Credit Institutions Law establishes the faculty of the Board of Directors to approve the assignment of assets and liabilities of the institution, which obligates these operations to be conditioned to the consent of the governing body; therefore, it is proposed to reform said fraction, so that the Board approves the norms or general bases for the assignment of assets and liabilities of the institution, determining in its case the particular operations that must be submitted to the Board itself, thus avoiding having to authorize each of the operations.

4.- Transparency in the collection of fees from development banking institutions.

In Article 10, fifth paragraph, of the Federal Revenue Law 2013, it is established that when the Ministry of Finance and Public Credit establishes a fee due to the sovereign guarantee of the Federal Government or in the case of recoveries of capital from development banks, the resources obtained may be destined to their capitalization or to promote actions that allow compliance with the mandate of said banking.

To hear the institutions previously within the procedure for the collection of fees, it is proposed to include the faculty of the Board of Directors to propose to the Ministry of Finance and Public Credit the deadlines and dates for the payment of the fees that are incurred, for which it is proposed to add to Article 42 a fraction VIII, in which the proposal of deadlines and dates for the payment of the fees that are incurred due to the sovereign guarantee of the Federal Government will be agreed upon, which will be presented to the Ministry of Finance and Public Credit, as well as the capital requirements of the institution.

5.- Financial intermediation.

In Article 31 of the Credit Institutions Law, it is established that development banking institutions will formulate annually their operational and financial programs, their general budgets of expenses and investments, as well as income estimates.

Likewise, it is established that National Credit Societies must submit to the authorization of the Ministry of Finance and Public Credit the limits of net external and internal indebtedness; net financing and the limits of financial intermediation. For the purpose of the above, the Ministry of Finance and Public Credit must make known the concepts that integrate financial intermediation in the Report on the economic situation, public finances, and public debt, as applicable.

Regarding this, it is proposed that financial intermediation be defined in Article 31 of the Credit Institutions Law and contain at least the net constitution of preventive credit reserves plus the operational deficit of the development banking institutions.

6.- Functioning of Development Banking

6.1.- Control and Surveillance.

It is proposed to add an Article 44 Bis to the Credit Institutions Law, regarding the surveillance of development banking institutions, so that the Ministry of Public Function and internal control bodies only have competence to carry out control and surveillance of development banking institutions and Rural Finance, in the following matters:

• Budget and fiscal responsibility;
• Contracts derived from the Laws on Acquisitions, Leasing, and Services of the Public Sector and on Public Works and Related Services;
• Conservation, use, destination, encumbrance, alienation, and write-off of movable and immovable property;
• Administrative responsibilities of public servants, provided that this is not the competence of the National Banking and Securities Commission, and
• Transparency and access to public information.

This system of control and surveillance in banking matters, in accordance with best practices, will avoid duplication of functions and unnecessary administrative burdens. The National Banking and Securities Commission, the Bank of Mexico, and the Ministry of Finance and Public Credit would review the banking part within their competence, and the Ministry of Public Function through its internal bodies will have competence to carry out control, evaluation, and surveillance of the administrative provisions applicable to development banking institutions in the aforementioned administrative matters.

In congruence with the above, what relates to the surveillance of society in the various Organic Laws of development banks is reformed to provide that it will be carried out in accordance with the Credit Institutions Law and the provisions issued by the National Banking and Securities Commission.

Finally, it is established in the transitional regime that the Congress of the Union will provide a control system for development banking institutions in accordance with their nature and functions, when it issues the regulatory laws referred to in the second paragraph of the second transitional article of the Decree by which various provisions of the Organic Law of the Federal Public Administration are reformed, added, and repealed, published in the Official Gazette of the Federation on January 2, 2013.

6.2.- Sessions of the Board of Directors.

It is foreseen that the Board of Directors will focus on strategic issues, eliminating operational matters that it cannot currently delegate, and meeting in ordinary sessions at least six times a year.

In this sense, the proposal aims for the meetings of the Board of Directors to be once every two months, meeting validly with at least half of the number of directors who make up the Board of Directors in each of the banks and Rural Finance; this, provided that two-thirds of the directors are met among the directors, representing series "A".

6.3.- Powers of the General Director to remove fiduciary delegates of the institution and obligation to inform the Ministry of Finance and Public Credit about relevant operations.

At this point, it is proposed to reform Article 43, second paragraph of the Credit Institutions Law, adding the procedure for the designation of special fiduciary delegates of public trusts that are considered state-owned entities; these designations must be granted by the institution, without procedure before its respective Board of Directors and at the request of the public servants or competent bodies of the corresponding public trust, in accordance with federal or state legal provisions.

In this sense, to extend this faculty in the organic laws, the designation and removal of fiduciary delegates, the administration of personnel as a whole, and the establishment and organization of the offices of the institution are incorporated.

In addition to the above, it is intended that the General Director of the institution inform the Ministry of Finance and Public Credit prior to the holding of sessions of the governing body, about the operations in which potential jurisdictional conflicts may arise between the various development banking institutions, in order to determine the applicable policy.

6.4.- On legal assistance and defense.

In this regard, it is intended that National Credit Societies be empowered to provide legal assistance and defense services to the members of their Board of Directors, committees established by the same or provided for by regulatory provision, as well as to public servants who work or have worked in the institution itself; with respect to the acts that these persons carry out in the exercise of the functions entrusted to them by law and in accordance with the guidelines issued for this purpose by the Ministry of Finance and Public Credit.

These services will be provided even when the indicated persons cease to perform their functions or provide their services to the Society, provided that it concerns acts carried out in the performance of their functions or activities in service of the Society.

The mentioned services will be provided from the resources available to the Society for these purposes.

In the event that the competent authority issues a final resolution against the subject of the legal assistance that becomes final, such person must reimburse the Society for the expenses and any other disbursement that the Society may have made due to the legal assistance and defense.

Finally, it is proposed that the subjects benefited by these services will be obliged to provide reports when requested for this purpose, in accordance with applicable legal provisions and considering that these reports are contemplated as part of their functions.

6.5.- Credit analysis.

Development Banking has as its priority function to attend to sectors that do not have access to financing for various reasons, including risk levels; however, it is currently restricted by the measure provided for in Article 65 of the Credit Institutions Law, which provides that institutions must estimate the payment viability of credits by the accredited or counterparties through a quantitative and qualitative analysis, which allows establishing their credit solvency and payment capacity, which must be observed without prejudice to considering the monetary value of the guarantees offered.

With the reform, it is intended to add a fourth paragraph to the aforementioned article, in order to maintain the operation of the productive plant and that in those cases where immediate attention is required, they may be granted considering the viability of the credit against the guarantee, supporting the sectors of the economy that do not have access to financial services and especially, in extraordinary situations such as the current ones where immediate actions are required for the preservation of employment. Likewise, it is highlighted that the recovery of credits is secured with the guarantee exhibited and a prudent operation will be maintained based on current regulation.

6.6.- Constitution of trust to strengthen capital.

The Credit Institutions Law provides for the constitution of a trust in development banking institutions with resources captured by them and aimed at strengthening their capital.

Currently, Development Banking is regulatorily obligated to have high levels of capitalization adjusted to international standards, so it is unnecessary to have the aforementioned trusts. In this sense, the proposal is to repeal Article 55 Bis of the aforementioned Law.

7. Additional reforms to the Organic Laws of development banking institutions.

7.1.- From the National Bank of the Army, Air Force, and Navy, National Credit Society, Development Banking Institution.

Of loans

For the particular case of the National Bank of the Army, Air Force, and Navy, National Credit Society, Development Banking Institution, it is proposed to include medium-term loans, the terms and conditions for the granting of loans and other faculties of the Board of Directors; eliminate the maximum caps on short-term loans as well as the prohibition that prevented the granting of another loan while a previous one remained unsettled.

With this reform, the institution will be endowed with the faculty to administer the resources affected to the savings and work funds, which will be destined to the granting of loans in accordance with the terms and conditions authorized by the Board of Directors and the requirements provided for in this Law. The unused amounts will be invested, to promote and finance the activities that have been entrusted to the society in its capacity as a development bank.

7.2.- From the National Bank of Public Works and Services, National Credit Society, Development Banking Institution.

Of the purpose of the society

In the case of the National Bank of Public Works and Services, National Credit Society, Development Banking Institution, (BANOBRAS), the proposal is directed so that, in addition to financing and refinancing, support is given to projects related directly or indirectly to public or private investment.

In this sense, Article 3 of the Organic Law of the National Bank of Public Works and Services is reformed.

Of guarantees and sureties

So that BANOBRAS can grant guarantees and sureties without the need to obtain authorization from the Ministry of Finance and Public Credit on equal legal footing with the other entities of Development Banking, it is proposed to reform fraction VI of Article 7 of its organic law.

Trust contracts

It is proposed to empower BANOBRAS to act as trustee and beneficiary and to carry out operations with the society itself in compliance with trusts, this in accordance with what is established by Article 46, fraction XV of the Credit Institutions Law.

7.3.- From the Federal Mortgage Society, National Credit Society, Development Banking Institution

It is proposed to update the reference mentioned in Article 4, fraction VI of the Organic Law of the Federal Mortgage Society, National Credit Society, Development Banking Institution (SHF), since the current text refers to the fact that the society may carry out the celebration of contracts to cover, totally or partially, the risks assumed by the Society for the provision of consulting services, it should refer to the operations established in fractions V and V Bis of the same article.

Sovereign Guarantee

In accordance with the fourth paragraph of Article 2 of the transitional article of the Decree by which the Organic Law of the Federal Mortgage Society is issued, added on June 24, 2002 (errata of July 8, 2002), it was established that the obligations contracted by SHF from January 1, 2014, would not have the guarantee of the Federal Government.

Regarding this, it is considered that for SHF to fulfill its purpose, it will require continuing to be funded through the issuance of securities in financial markets, for which it must have the guarantee of the Federal Government, which will allow it to access better conditions (e.g., rates and terms).

For this, the Federal Government must respond for the passive operations contracted by the society, both with national natural and legal persons and with foreign private, governmental, and intergovernmental institutions. To this effect, it is proposed to add an Article 8 Bis to the Organic Law of the Federal Mortgage Society, whereby this case is provided for and thus it has the same guarantee as the other development banking institutions.

7.4.- From Rural Finance.

Vice President of the Board of Directors

It is proposed that in the absence of the Secretary of Finance and Public Credit, who will serve as president of the Board of Directors, it will be the Secretary of Agriculture, Livestock, Rural Development, Fisheries and Food; in the absence of the first two, the council would be presided over by the Undersecretary of Finance and Public Credit or the substitute of the Secretary of Finance and Public Credit and, in the absence of all the above, those designated by the present directors. The above makes it necessary to reform Article 30 of the Organic Law of Rural Finance.

8.- OTHER REFORMS.

8.1.- General Law of Negotiable Instruments and Credit Operations

Of appraisals

The General Law of Negotiable Instruments and Credit Operations is supplementary in the legal framework of development banking institutions, in accordance with the Credit Institutions Law.

Regarding this, it is proposed that the total nominal amount of an issuance of participation certificates will be fixed by a report formulated by a National Credit Society, prior to the appraisal carried out on the trust assets subject to that issuance.

The National Credit Society, when formulating its report and fixing the total nominal amount of an issuance, will take as a base the commercial value of the goods and if they are amortizable certificates, it will estimate on this a prudent margin of safety for the investment of the corresponding holders. The report formulated by these institutions will be definitive.

For the above reasons and in exercise of the faculty conferred upon me by Article 71, fraction I, of the Political Constitution of the United Mexican States, I submit to the consideration of the Honorable Congress of the Union, the following Initiative of:

REFERENCES

1) Reformed by Decree published in the Official Gazette of the Federation on June 24, 2002.
2) Added by Decree published in the Official Gazette of the Federation on June 24, 2002.
3) Repealed by Decree published in the Official Gazette of the Federation on June 24, 2002.
4) Added by Decree published in the Official Gazette of the Federation on August 1, 2005.
5) Reformed by Decree published in the Official Gazette of the Federation on April 9, 2012.
6) Reformed by Article Fourteen of the Decree published in the Official Gazette of the Federation on January 10, 2014.
7) Added by Article Fourteen of the Decree published in the Official Gazette of the Federation on January 10, 2014.
8) Repealed by Article Fourteen of the Decree published in the Official Gazette of the Federation on January 10, 2014.