Resolution modifying the General Provisions applicable to development agencies and development entities

DOF: 24/07/2017

RESOLUTION that modifies the General Provisions applicable to development agencies and development entities

At the margin, a seal with the National Coat of Arms, which says: United Mexican States.- Ministry of Finance and Public Credit.- National Banking and Securities Commission.

The National Banking and Securities Commission, based on the provisions of Articles 125, fifth paragraph of the Credit Institutions Law, 66, fraction II of the Law of the National Housing Fund Institute for Workers, and 177, third paragraph of the Law of the Institute of Security and Social Services for State Workers, as well as 4, fractions IV, XXXVI and XXXVIII and 16, fraction I of the National Banking and Securities Commission Law, and

CONSIDERING

That it is deemed convenient to adjust the accounting criteria applicable to the National Housing Fund Institute for Workers and the Housing Fund of the Institute of Security and Social Services for State Workers, regarding the classification of their investments in securities held to maturity, extending the period during which such securities may be sold or reclassified before their maturity, without affecting the ability to use said category, and

That, additionally, it is necessary to clarify the requirements for isolated events that are outside the control of the National Housing Fund Institute for Workers and the Housing Fund of the Institute of Security and Social Services for State Workers, so that when they are updated and these entities sell or reclassify the held-to-maturity securities, they can continue classifying them in this category, in order to achieve greater adherence and consistency with international standards established in International Financial Reporting Standards, has resolved to issue the following:

RESOLUTION THAT MODIFIES THE GENERAL PROVISIONS APPLICABLE TO DEVELOPMENT AGENCIES AND DEVELOPMENT ENTITIES

SINGLE.- Annex 38, Criterion B-2 "Investments in Securities" of the "General Provisions applicable to development agencies and development entities", published in the Official Gazette of the Federation on December 1, 2014 and, modified through resolutions published in the said Official Gazette on August 27, 2015 and January 25, 2016, is REFORMED, to read as follows:

TITLES FIRST to SIXTH . . .

Annexes 1 to 37

. . .

Annex 38

Accounting Criteria for Fovissste and Infonavit.

Annexes 39 to 44

. . .

TRANSITORY PROVISIONS

FIRST.- This Resolution will enter into force the day following its publication in the Official Gazette of the Federation.

SECOND.- The criterion B-2 "Investments in securities" of the "Series B Criteria relating to the concepts that integrate the financial statements", contained in Annex 38 which is modified by this Resolution, will be applied prospectively in terms of what is provided by Financial Information Standard B-1 "Accounting changes and corrections of errors" issued by the Mexican Council of Financial Information Standards A.C., so that the National Housing Fund Institute for Workers and the Housing Fund of the Institute of Security and Social Services for State Workers will not need to reevaluate the classifications of investments in securities previously recognized. Investments in securities classified prior to the entry into force of this instrument, must remain in the classification granted in accordance with the accounting criteria in force on the date of their celebration.

In any case, the National Housing Fund Institute for Workers and the Housing Fund of the Institute of Security and Social Services for State Workers must disclose in notes to the financial statements the main changes in accounting standards for investments in securities, which affected or could significantly affect their financial statements.

Respectfully

Mexico City, July 13, 2017.- The President of the National Banking and Securities Commission, Jaime González Aguadé.- Rubric.

B-2 INVESTMENTS IN SECURITIES

Objective and scope

This criterion aims to define the specific rules regarding the recognition, valuation, presentation and disclosure in the financial statements of operations with investments in securities carried out by Fovissste and Infonavit.

The following aspects are subject to this criterion:

a)

initial recognition and valuation of investments in securities;

b)

subsequent recognition of gains or losses derived from investments in

securities;

c)

recognition of impairment of investments in securities, and

d)

cancellation of investments in securities from the balance sheet of Fovissste and Infonavit.

The following topics are not subject to this criterion:

a)

investments derived from pension and retirement plans, and

b)

adjudicated assets.

Definitions

Amortized cost.- For the purposes of this criterion, it is the amount at which a financial asset is valued resulting from adjusting the value at which it is initially recognized by (i) principal payments, (ii) plus or minus accumulated amortization, using the effective interest method, of any difference between the value at which it is initially recognized and the value at its maturity and (iii) less any reduction in value due to impairment.

Transaction costs.- For the purposes of this criterion, these are those incremental costs directly attributable to the acquisition or disposal of a financial asset. A cost is incremental if it would not have been incurred had a financial instrument not been acquired or disposed of. For example, commissions paid to agents, consultants, brokers, as well as charges by stock exchanges, among others.

Transaction costs do not include discounts or premiums received or paid for debt securities, financing costs or internal administrative costs.

Impairment.- It is the existing condition when the book value of investments in securities exceeds the recoverable amount of said securities.

Equity instruments.- An asset represented through a title, certificate or right derived from a contract, among others, that represents a residual participation in the assets of an entity, after deducting all its liabilities, such as shares, partnership interests, residual interests, among others.

Investments in securities.- Those made in assets constituted by equity instruments, obligations, bonds, certificates and other credit instruments and documents that are issued in series or in mass and that Fovissste and Infonavit hold in their own position.

Effective interest method.-

It is that by which the amortized cost of a financial asset or financial liability (or group of them) and the recognition of financial income or expense over the relevant period are calculated. The foregoing, by applying the effective interest rate, that is, the discount rate that exactly equates the estimated future cash flows to be received or paid over the expected life of the financial asset or financial liability, or when appropriate, in a shorter period (for example, when there is the possibility of an early payment or redemption), with the net book value of said financial asset or financial liability.

Maturity price.- It is that right represented by the agreed price plus the premium,

agreed in the operation.

Agreed price.- It is that right to receive the securities against the delivery of cash, agreed at the

start of the operation.

Premium.- It represents, if applicable, the amount of compensation that the reported entity delivers to the

reporting entity

for the use of its money.

Reported entity.-

That entity that cedes the ownership of securities through a repo operation, in exchange for the agreed price, with the obligation to reacquire them at the end of the operation at the maturity price.

Reporting entity.- That entity that acquires ownership of securities at the agreed price through

a repo operation, with the obligation to return them at the end of the operation at the maturity price.

Credit risk.- It is that risk that one of the parties to a financial instrument causes a financial loss to the other party by failing to fulfill an obligation.

Market risk.- It is that risk that the fair value or future cash flows of a

financial instrument may fluctuate as a result of variations in market prices. Market risk comprises three types of risks: exchange rate risk

(originated by variations in the exchange rate), interest rate risk (coming from

variations in market interest rates) and other price risks (caused by factors

particular to the financial instrument in question or its issuer, or by factors that

affect all similar financial instruments traded in the market).

Effective interest rate.- Rate obtained through the estimation of cash flows considering

all contractual conditions of the financial instrument (for example commissions and

interests paid or received by the parties to the contract, transaction costs and any

other premium or discount), without considering future credit losses. When

extraordinarily the cash flows and the expected life of a group of substantially similar financial assets

cannot be estimated reliably, Fovissste and Infonavit

will use the contractual cash flows over the contractual period of each financial

asset.

Securities held to maturity.- These are debt securities, whose payments are fixed or

determinable and with a fixed maturity (which means that a contract defines the amounts and dates

of payments to the holding entity), with respect to which Fovissste and Infonavit have both the

intention and the capacity to hold them until maturity. A security cannot be classified as held to

maturity if during the current fiscal year or during the two previous fiscal years, Fovissste and Infonavit sold securities classified in the held-to-maturity category, or reclassified securities from the held-to-maturity category to the available-for-sale category, unless the amount sold or reclassified during the last 12 months

does not represent more than 15% of the total amount of securities held to maturity on the date

of the operation. The foregoing, regardless of whether the securities to be classified, the previously

sold or the reclassified have similar or different characteristics. In this regard, it

will be considered that both the intention and the capacity to hold the securities

until maturity have been maintained when sales or reclassifications have been previously made that

fall under any of the following circumstances:

a)

if they are carried out within the 90 natural days prior to their maturity or, if applicable, the

date of the issuer's call option;

b)

if they occur after Fovissste and Infonavit have accrued or, if applicable, collected more

than 85% of their original value in nominal terms, or

c)

if they are attributable to an isolated event that is outside the control of the entity, that is not

recurring and that could not have been reasonably foreseen by the entity.

Debt securities.- These are instruments that, in addition to constituting a right for one party and an obligation for the other, have a known term and generate for the holder of the

securities, cash flows during or at the maturity of the term of the same.

Securities available for sale.- These are debt securities and equity instruments

whose intention is not oriented to obtain gains derived from price differences resulting from

short-term buy-sell operations and, in the case of debt securities, there is also no intention nor capacity to hold them until maturity, therefore

it represents a residual category, that is, they are acquired with an intention different from that of

securities for trading or held to maturity, respectively.

Securities for trading.-

These are securities that Fovissste and Infonavit acquire with the intention

of disposing of them, obtaining gains derived from price differences resulting from

buy-sell operations in the short term, which they carry out as participants

of the market.

Book value.- It is the balance of an investment in a security, including adjustments for

valuation results, interest, accrued dividends not collected, impairment loss or any other adjustment that corresponds to it, as the case may be, as determined in accordance with

this criterion.

Fair value.- Amount by which an asset can be exchanged or a liability settled between

informed, interested and equally willing parties in a free competition transaction.

Classification

At the time of their acquisition, investments in securities must be classified as securities for

trading, securities available for sale, securities held to maturity, or securities received in repo. Each of these categories has specific rules regarding

recognition, valuation and presentation standards in the financial statements.

The classification between the categories of securities for trading and securities available for sale, will

be made by the administration of Fovissste and Infonavit, taking as a basis the intention at the time

of acquiring a specific instrument with respect to it. To classify an instrument

in the category of securities held to maturity, it must:

i.

have the intention and capacity to hold them until maturity, and

ii.

not be unable to classify them as held to maturity in accordance with what

stated in paragraph 18.

Securities for trading, securities available for sale and securities held to maturity

Recognition standards

At the time of their acquisition, investments in securities will be initially recognized at their fair

value (which includes, if applicable, the discount or premium), in accordance with what

established for such purposes in criterion C-1 "Transfer of financial assets".

Transaction costs for the acquisition of securities will be recognized, depending on the category in which they are classified, as follows:

a)

Securities for trading.- In the results of the fiscal year on the date of acquisition.

b)

Securities available for sale and held to maturity.- Initially as part of

the investment.

For the cancellation from the balance sheet of investments in securities, the guidelines

provided for such purposes in criterion C-1 must be followed, as well as what is stated in paragraph

35.

Valuation standards

General valuation standards

Securities for trading and securities available for sale will be valued at their fair value.

Securities held to maturity will be valued at their amortized cost, which implies that the

amortization of the premium or discount (included, if applicable, in the fair value at which they were

initially recognized), as well as transaction costs, will form part of accrued interest.

Accrued interest

Accrued interest on debt securities will be determined in accordance with the effective interest

method and will be recognized in the corresponding category within the investments in

securities item against the results of the fiscal year (including in the case of securities available for sale). At the moment when accrued interest is collected, the item of

investments in securities must be reduced against the item of cash and cash equivalents.

Dividends

Dividends from equity instruments will be recognized in the corresponding category

within the investments in securities item against the results of the fiscal year

(including in the case of securities available for sale), at the moment when the right to receive payment of the same is generated. When dividends are collected, the item of

investments in securities must be reduced against the item of cash and cash equivalents.

Valuation result of securities for trading and available for sale

The valuation result of securities for trading will be recognized in the results of the

fiscal year.

The valuation result of securities available for sale will be recognized in other items

of comprehensive income within equity. In the case of an inflationary environment, the

monetary position result corresponding to the valuation result of securities

available for sale, must be recognized in other items of comprehensive income within

equity.

The valuation result of securities for trading that are disposed of, which has been

previously recognized in the results of the fiscal year, must be reclassified as part of the

buy-sell result on the date of sale. Likewise, the accumulated valuation result

of securities available for sale that are disposed of, which has been recognized in

other items of comprehensive income within equity, must be reclassified as

part of the buy-sell result on the date of sale.

Gain or loss on exchange

The gain or loss on exchange arising from investments in securities denominated in

foreign currency will be recognized in the results of the fiscal year.

Reclassifications

Reclassifications from the category of securities held to maturity to

available for sale may be made, provided that there is no intention or capacity to

hold them until maturity. Reclassifications to the category of securities held to

maturity, or from securities for trading to available for sale, may be made in

extraordinary circumstances (for example, lack of liquidity in the market, that there is no active market for it, among others), which will be evaluated and, if applicable, validated

through express authorization of the CNBV.

Sales of securities classified as held to maturity may satisfy the conditions

established in paragraph 18(c) and, therefore, do not raise doubts about the

intention of the entity to hold other investments until maturity, provided they are

attributable to any of the following circumstances:

a)

Significant deterioration in the credit rating of the issuer.

b)

A change in tax laws affecting the tax treatment of the instrument's yields

and, therefore, its value.

c)

A business combination or a restructuring involving the sale of a segment

of business including the financial instrument held to maturity.

d)

The modification of regulations to which an entity may be subject and that affect the

relationship of assets and equity.

The valuation result corresponding to the date of reclassification, in the event of carrying out the

reclassification from the category of securities held to maturity to available for

sale, must be recognized in other items of comprehensive income within equity.

Valuation result will be understood as the difference resulting from comparing the book

value with the fair value on the date on which the aforementioned reclassification is carried out.

Those debt securities that had been authorized to carry out the reclassification from the

category of securities available for sale to that of held to maturity, the valuation result corresponding to the date of the transfer will continue to be reported in the equity

of Fovissste and Infonavit, and must be amortized based on the remaining life of

said security.

In the case of reclassifications that may have been authorized from the category of

securities for trading to any other, the valuation result on the date of the reclassification

must have been previously recognized in the statement of results.

Clearing accounts

Securities acquired that are agreed to be settled on a date subsequent to the agreement of the

buy-sell operation and that have been assigned, that is, identified, will be recognized

as restricted securities (to be received) at the time of the agreement, while, the securities

sold will be recognized as an outflow of investments in securities (to be delivered). The

counterpart must be a clearing account, creditor or debtor, as appropriate, in accordance with what is established in criterion A-3 "Application of general standards".

Impairment in the value of a security

Fovissste and Infonavit must evaluate whether at the balance sheet date there is objective evidence

that a security is impaired.

It is considered that a security is impaired and, therefore, an impairment loss is incurred,

if and only if, there is objective evidence of impairment as a result of one or more events that

occurred subsequent to the initial recognition of the security, which had an impact

on their estimated future cash flows that can be determined reliably. It is

unlikely to identify a single event that individually is the cause of the impairment, being

more likely that the combined effect of various events could have caused the impairment.

Objective evidence that a security is impaired includes observable information, among

others, regarding the following events:

a)

significant financial difficulties of the issuer of the security;

b)

it is likely that the issuer of the security will be declared bankrupt or another

financial reorganization;

c)

breach of contractual clauses, such as failure to pay interest or principal;

d)

the disappearance of an active market for the security in question due to financial

difficulties, or

e)

that there is a measurable decrease in the estimated future cash flows of a group

of securities since the initial recognition of said assets, although the decrease

cannot be identified with the individual values of the group, including:

i.

adverse changes in the payment status of the issuers in the group, or

ii.

local or national economic conditions that correlate with

defaults in the securities of the group.

In addition to the events mentioned above, objective evidence of impairment for

an equity instrument includes information about significant adverse changes that have occurred in the technological, market, economic, or legal environment in which the issuer operates, and indicates that it is likely that the cost of the investment in the equity instrument will not be recoverable.

The disappearance of an active market because a security is no longer publicly traded is not necessarily evidence of impairment. A decrease in the credit rating of an entity is not in itself evidence of impairment; however, it could be so when considered in combination with additional information. A decrease in the fair value of a security below its amortized cost is not necessarily evidence of impairment (for example, a decrease in the fair value of a debt security resulting from an increase in the risk-free interest rate, such as the interest rate relative to Treasury bills issued by the Federal Government).

In some cases, the observable information required to estimate the amount of the impairment loss on a security may be limited or cease to be relevant in certain circumstances, so Fovissste and Infonavit will use their judgment based on their experience to determine such impairment loss.

Securities for Trading

Because securities for trading are valued at fair value, recognizing the valuation result immediately in the results of the period, the impairment loss that, if any, is generated with respect to said securities is already implicit in the aforementioned valuation result, so it is not necessary to perform the impairment assessment referred to in this section.

Available-for-Sale Securities

When a decrease in the fair value of an available-for-sale security has been recognized directly in other comprehensive income items within equity, and there is objective evidence that the security is impaired, the valuation result recognized there will be reclassified to the results of the period. The amount to be reclassified will be determined as follows:

a)

the difference between (i) the value at which the security was initially recognized, net of any principal payments and amortization, and (ii) the current fair value of the security, less

b)

any impairment loss on the aforementioned security previously recognized in the results of the period.

The impairment loss recognized in the results of the period of an equity instrument classified as available for sale shall not be reversed.

If, in a subsequent period, the fair value of a debt security classified as available for sale increases and such effect from the reversal of impairment can be objectively related to an event that occurs after the impairment was recognized in the results of the period, the impairment loss shall be reversed in the results of the period.

Held-to-Maturity Securities

If there is objective evidence that an impairment loss has been incurred with respect to a held-to-maturity security, the amount of the loss will be determined by the difference between the book value of the security and the present value of estimated future cash flows, discounted at the original effective interest rate of the security (for example, the effective interest rate calculated at initial recognition). The book value of the security shall be reduced, recognizing the impairment loss in the results of the period.

If, in a subsequent period, the amount of the impairment loss decreases and such decrease can be objectively related to an event that occurs after the impairment was recognized, the previously recognized impairment loss shall be reversed. The effect from the reversal of impairment shall not exceed the amortized cost that the security would have had on that date, had the impairment not been recognized. Such effect shall be recognized in the results of the period.

Securities Received in Repurchase Agreements

This section applies to securities received in repurchase agreements that Fovissste or Infonavit acquire in order to invest their liquidity surpluses, that is, acting as the lender (reportadora).

Recognition Standards

On the date of contracting the securities received in repurchase agreements, Fovissste and Infonavit will recognize within investments in securities the entry of the securities subject to the operation at acquisition cost, as well as the corresponding cash outflow.

Valuation Standards

The recognition of the premium will be based on the present value of the price at maturity of the operation, affecting the valuation of the securities subject to it, as well as the results of the period. The present value of the price at maturity is obtained by discounting said price at the yield rate obtained considering the fair value corresponding to securities of the same kind as those subject to the repurchase agreement, whose term is equivalent to the remaining term of the same operation.

Cancellation of Securities

Fovissste and Infonavit shall carry out the partial or total cancellation of their securities in the balance sheet when:

a)

they exercise in part or in full the rights or benefits inherent to them;

b)

the rights expire, or

c)

they deliver or lose ownership of said assets under the terms of criterion C-1 "Transfer of Financial Assets".

Presentation Standards

Balance Sheet

Investments classified as securities for trading, available-for-sale securities, held-to-maturity securities, and securities received in repurchase agreements will be presented separately in the investments in securities item, maintaining that same order.

The valuation result of available-for-sale securities, as well as the valuation monetary position result corresponding to such valuation, in case of an inflationary environment, will be presented in the item of valuation result of available-for-sale securities as part of other comprehensive income items within equity.

Income Statement

Accrued interest and yields and gains or losses from changes in investments in securities, dividends from equity instruments, as well as the recognition of the premium derived from securities received in repurchase agreements will be presented in the item of interest income or interest expense, as applicable.

The fair value valuation result of securities for trading, the result from the sale and purchase of investments in securities, the amount of the impairment loss of available-for-sale and held-to-maturity securities, or the effect from the reversal of impairment of debt securities classified as available-for-sale or held-to-maturity whose value was previously adjusted for impairment, as well as the transaction costs of securities for trading, will be included within the item of intermediation result.

Disclosure Standards

Fovissste and Infonavit shall disclose in the notes to the financial statements the following information regarding investments in securities:

a)

The book value of investments in securities for each category of securities.

b)

In case Fovissste and Infonavit have sold held-to-maturity securities, they must disclose in their financial statements and inform the CNBV, the amount and type of securities sold, the remaining time for which the held-to-maturity category cannot be used in the classification of securities, as well as an explanation of the reasons for such situation.

c)

If Fovissste or Infonavit have reclassified a security from the held-to-maturity category to the available-for-sale category, they must disclose the amount and type of securities reclassified, the reason for such reclassification, the remaining time for which the held-to-maturity category of securities cannot be used in the classification of securities, as well as an explanation of the reasons for such situation.

d)

In case Fovissste and Infonavit, in accordance with what is established in the Reclassifications section of this criterion, have obtained authorization from the CNBV to reclassify securities, the disclosure of this fact is required, specifically indicating the category from and to which the reclassification was made, as well as the characteristics of the reclassified securities in terms of: their number, weighted average rate, and type of issuer. Likewise, the book value and fair value of the securities on the date of the financial statements must be disclosed, when these have been transferred to the held-to-maturity securities category, or the effect of the fair value valuation on that date if the transfer has been from the securities for trading category to the available-for-sale category.

e)

The fair value of investments in securities that have been granted as collateral, including those that had been reclassified as restricted in accordance with what is established in criterion C-1.

f)

The terms and conditions related to the collateral.

g)

Net gains or losses on:

i.

securities for trading;

ii.

available-for-sale securities, showing separately the valuation result recognized in other comprehensive income items within equity during the period and the amount reclassified to the results of the period, and

iii.

held-to-maturity securities.

h)

The total interest income and the total interest expense of securities.

i)

Income and expenses from commissions generated by securities.

j)

Interest income accrued on impaired securities.

k)

The amount of impairment for each category of available-for-sale and held-to-maturity securities.

l)

The amount and origin of the effect from the reversal of impairment of available-for-sale and held-to-maturity securities.

m)

Accounting policies regarding the valuation bases used in investments in securities.

n)

Any extraordinary event that affects the valuation of investments in securities.

o)

Information that allows users of the financial statements of Fovissste and Infonavit to evaluate the nature and degree of risks arising from investments in securities (for example, the type of risk and its characteristics, as well as to what extent they affect Fovissste and Infonavit), including but not limited to credit and market risk, to which Fovissste and Infonavit are exposed at the end of the period, as well as the way in which such risks are managed (for example, the establishment of a monitoring group whose function is the supervision and determination of risks, as well as the degree of compliance with the policies established for such purposes).

p)

Qualitative disclosure.

For each type of risk arising from investments in securities:

i.

the risk exposures and how they arise;

ii.

their objectives, policies, and processes for managing risk and the methods used to measure them, and

iii.

any change in (i) or (ii), with respect to the previous period.

q)

Quantitative disclosure.

For each type of risk arising from investments in securities:

i.

a summary of the quantitative information about their risk exposures at the end of the period, which will be based on information internally provided to the key management personnel of Fovissste and Infonavit;

ii.

the quantitative disclosure for each type of risk (credit and market) detailed in paragraphs r) and s), to the extent that it has not been provided in accordance with paragraph (i) above, unless the risk is not material, and

iii.

risk concentrations, if not evident in accordance with paragraphs (i) and (ii) above.

If the quantitative information disclosed at the end of the period is not representative of the exposure of Fovissste and Infonavit to risk during the period, additional information that is representative must be provided.

r)

With respect to credit risk:

For each category of securities:

i.

the amount that best represents the maximum exposure to credit risk at the end of the period;

ii.

with respect to the amount disclosed in paragraph (i) above, a description of the type of credit enhancements;

iii.

information on the credit quality of investments in securities that are not impaired;

iv.

the book value of investments in securities, whose terms have been renegotiated, and which would otherwise be impaired;

v.

an analysis of investments in securities that have been individually impaired at the end of the period, including the factors that Fovissste and Infonavit considered for such purposes, and

vi.

with respect to the amounts disclosed in paragraph (v) above, a description of other credit enhancements and, unless it is impracticable, an estimate of their fair value.

If Fovissste and Infonavit obtain financial or non-financial assets during the period, exercising collateral or requesting other types of credit enhancements, and said assets meet the recognition standards contained in the accounting criteria for Fovissste and Infonavit, the following will be disclosed:

i.

the nature and book value of the assets obtained, and

ii.

when the assets are not immediately convertible into cash, the policies to sell said assets, or to use them in operations.

s)

With regard to market risk, a sensitivity analysis for each type of market risk to which Fovissste and Infonavit are exposed at the end of the period, showing:

i.

the methods, main parameters, and assumptions used for the preparation of the analysis;

ii.

an explanation of the objective of the method used and of the limitations that could result in the information not fully reflecting the fair value of investments in securities, and

iii.

changes in the methods and assumptions used in the previous period, as well as the reasons for such changes.

t)

Investments in securities other than government securities, that are integrated by debt securities from the same issuer and that represent more than 5% of the equity of Fovissste and Infonavit, indicating the main characteristics of these (issuance, weighted average term to maturity, and weighted average rate).

u)

In case Fovissste and Infonavit acquire fiduciary rights issued by a trust and such issuance has been in series or in mass, the underlying asset of said fiduciary rights must be disclosed, as well as the amount, term, and other characteristics thereof.

v)

amount of premiums from repurchase operations recognized in the results of the period;

w)

Average terms in the contracting of repurchase operations.

x)

Type of securities subject to repurchase operations.

Appendix A is an integral part of criterion B-2. Its content illustrates the application of this criterion, with the purpose of clarifying its meaning.

APPENDIX A

APPLICATION GUIDELINES

Classification in the held-to-maturity securities category

Intention and capacity

For the purposes of the Reclassifications section, Fovissste and Infonavit do not have the intention to hold debt securities to maturity if at least one of the following assumptions is met:

a)

Fovissste and Infonavit have the intention to hold the security for an indefinite period;

b)

Fovissste and Infonavit are willing to sell the security (due to circumstances other than isolated events that are not subject to the control of Fovissste and Infonavit, are not recurrent, and could not have been reasonably anticipated by Fovissste and Infonavit) in response to changes in market interest rates or risks, liquidity needs, changes in the availability and profitability of alternative investments, changes in terms and sources of financing, or changes in foreign exchange risk, or

c)

the issuer has the right to liquidate a security for an amount significantly lower than its amortized cost.

GA1

For the purposes of the Reclassifications section, Fovissste and Infonavit do not have a demonstrated capacity to hold to maturity an investment in a security with a fixed maturity if:

a)

they do not have available financial resources to continue financing their investment until maturity, or

b)

it is subject to a legal or other type of restriction that may frustrate their intention to hold the investment until maturity.

Specific Cases

GA2

Debt securities with variable interest rates may meet the conditions to be classified as held-to-maturity securities.

GA3

Credit risk does not prevent a security from being classified as held-to-maturity, provided that contractual payments are fixed and determinable, and that the other conditions for such classification are met.

GA4

If the issuer of a security has a call option, it meets the conditions to be classified as held-to-maturity, if Fovissste and Infonavit have the intention and capacity to hold it until the date on which the issuer can call it or until its maturity, and these recover substantially their book value. The issuer's call option simply accelerates the maturity of the security.

GA5

A security with a put option cannot be classified as held-to-maturity, because the fact of paying a premium for such option is inconsistent with the intention to hold it to maturity.

GA6

Equity instruments cannot be classified as held-to-maturity because they have an indefinite life period (such as shares), or because the amounts that Fovissste and Infonavit might receive would vary in an unpredictable manner. Likewise, if the terms of a perpetual debt security contemplate interest payments for an indefinite time, the security cannot be classified as held-to-maturity.

GA7

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