Rules for the Ordering and Simplification of Additional Information Requirements for Credit Institutions

RULES FOR THE ORDERING AND SIMPLIFICATION OF ADDITIONAL INFORMATION REQUIREMENTS FOR CREDIT INSTITUTIONS Published in the Official Gazette of the Federation on May 20, 2004

The Secretariat of Finance and Public Credit, based on Articles 17 and 31, fraction VII of the Organic Law of the Federal Public Administration and Articles 1, 2, fraction I, 7, fraction II, 25, fraction XXIV, and 27, fraction XVIII of its Internal Regulations; the National Banking and Securities Commission, in accordance with Articles 4, fraction V, 16, fraction I, and 19 of its Law and Article 11, second paragraph of its Internal Regulations; and the Bank of Mexico, pursuant to Article 36 of its Law, as well as Articles 8, 10, 14, and 17 of its Internal Regulations, and based on the powers granted to them by Article 97 of the Credit Institutions Law, and

CONSIDERING

That in accordance with the National Development Plan 2001-2006, the Federal Government will promote, among other actions, a clear regulatory framework, sound public finances, and the strengthening of the virtuous savings-investment circle, applying necessary measures to provide legal certainty to credit institutions, so that they may adequately fulfill their function, and

That it is convenient to strengthen the policy of rationalization and simplification in information requirements, establishing mechanisms that regulate the authority of financial authorities to request accounting, economic, financial, administrative, and legal information from credit institutions, in addition to that required in the applicable secondary regulations, which will allow such institutions to fulfill such information requirements adequately, completely, and timely; have resolved to issue the following:

RULES FOR THE ORDERING AND SIMPLIFICATION OF ADDITIONAL INFORMATION REQUIREMENTS FOR CREDIT INSTITUTIONS

FIRST.- For the purposes of these Rules, the following shall be understood:

I. Authorities, singular or plural, the Secretariat of Finance and Public Credit, the National Banking and Securities Commission, and the Bank of Mexico, within the scope of their respective competencies.

II. Additional Information, the accounting, economic, financial, administrative, and legal information and documentation that the Authorities may request based on their powers and authorities, distinct from that expressly mentioned in the laws and other applicable financial regulations.

SECOND.- The Authorities, within the scope of their respective competencies, may only request Additional Information from the credit institutions they regulate or supervise, in the following cases:

I. Reports that credit institutions prepare in compliance with their own policies, to internally evaluate the progress of the entity.

Such information shall be submitted in the formats used by the respective credit institution.

II. Reports that allow verification of the origin of acts, data, entries, records, and schedules that serve as the basis for the preparation of financial statements, consolidated or not, as well as those related to the periodic information they provide to the Authorities.

III. Reports that allow tracking of alleged administrative irregularities or non-compliance with applicable regulations, or, in their case, obtaining information to assist the public ministry regarding crimes foreseen in laws related to the financial system.

IV. Reports necessary for:

a) The development of inspection visits, verification of operations, and audit of records and systems, in the facilities or automated equipment of credit institutions. b) Compliance with requirements of judicial, tax, or public ministry authorities. c) The supervision of programs in which credit institutions participate, involving federal public resources or the granting of guarantees or sureties by the Federal Government. d) The exercise of powers contained in Article 4, fraction XVIII, and Article 5, fifth paragraph, of the Law of the National Banking and Securities Commission, as well as Articles 36 and 62, fraction I, of the Law of the Bank of Mexico.

V. The information that the Authorities request for the adequate resolution of requests for the granting of authorizations referred to in the laws, regulations, and other applicable provisions for credit institutions.

The foregoing, without prejudice to the fact that credit institutions will continue to be obligated to provide accounting, economic, financial, administrative, and legal information and documentation expressly established by laws, regulations, and general administrative provisions.

Additional Information requirements made in accordance with the provisions of these Rules, as well as the delivery of such information and its handling, shall at all times be subject to the limitations and prohibitions established by applicable legal provisions.

THIRD.- Additional Information requirements must indicate the period they cover; justify and motivate the request; be signed by a public official authorized to do so; and specify the requirements that must be met for submission, indicating the deadline and means for doing so.

Authorities may not request Additional Information if it can be obtained from the databases of any of them. To this effect, Authorities will facilitate the reciprocal connection of their automated systems, with the purpose of allowing access to their respective databases.

FOURTH.- Additional Information requirements corresponding to any period with an age greater than six months counted from the date of the respective request, must be signed by public officials with at least the hierarchical level of Assistant General Director in the Federal Public Administration or equivalent. Regarding the Bank of Mexico, they must be signed by an official with at least the hierarchical level of Manager or equivalent.

Requirements that establish the obligation for credit institutions to provide Additional Information involving a period of six or more months must be signed by public officials authorized with at least the immediate higher hierarchical level indicated in the previous paragraph.
This requirement shall also apply to Additional Information requirements preceded by others on the same subject, which together imply obtaining information related to a period of six or more months.

In no case may the aforementioned requirements establish the obligation for credit institutions to provide Additional Information for an indefinite period.

FIFTH.- The Additional Information provided by credit institutions must meet the requirements established by the Authorities, otherwise, the obligation to deliver it shall be considered unfulfilled.

TRANSITORY PROVISIONS

FIRST.- These Rules shall enter into force the day following their publication in the Official Gazette of the Federation.

SECOND.- All letters establishing Additional Information requirements that oppose these Rules, and that have been issued by the Authorities before the entry into force of these Rules, shall be void.

Mexico City, April 13, 2004.- Secretariat of Finance and Public Credit: The Undersecretary of Finance and Public Credit, Alonso García Tamés.- Signature.- National Banking and Securities Commission: The President, Jonathan Davis Arzac.- Signature.- Bank of Mexico: The Director General of Financial System Analysis, José Quijano León.- Signature.- The Director of Central Bank Provisions, Fernando Corvera Caraza.- Signature.