The National Banking Commission And Securities Law

Original Language Title: Ley de la Comisión Nacional Bancaria y de Valores

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Law of the National Banking and Securities Commission

NATIONAL BANKING AND SECURITIES COMMISSION LAW

Official Journal of the Federation on April 28, 1995

Latest Reform Published in the DOF January 10, 2014

On the sidelines a seal with the National Shield, which reads: United Mexican States.-Presidency of the Republic.

ERNESTO ZEDILLO PONCE DE LEÓN, Constitutional President of the United Mexican States, to its inhabitants known:

That the H. Congress of the Union has served to address the following

DECREE

" THE CONGRESS OF THE MEXICAN UNITED STATES, DECREE:

NATIONAL BANKING AND SECURITIES COMMISSION LAW

TITLE FIRST

NATURE, OBJECT, AND FACULTIES

CHAPTER I

NATURE AND OBJECT

Article 1.- The National Banking and Securities Commission is created as an unconcentrated body of the Secretariat of Finance and Public Credit, with technical autonomy and executive powers in the terms of this Act.

Article 2.- The Commission will have the objective to monitor and regulate in the area of its competence the entities belonging to the Mexican financial system that is Law states, in order to ensure its stability and proper functioning, as well as to maintain and promote the healthy and balanced development of such a system as a whole, in the protection of the public's interests.

It shall also be its object to supervise and regulate natural persons and other moral persons, when carrying out activities provided for in the laws relating to the said system financial.

Article 3.- For the purposes of this Law:

I.- Commission, to the National Banking and Securities Commission;

II.- Board of Government or Board, to the Board of Government of the Commission;

III.- President, to the President of the Commission, and

IV.    Entities or financial institutions belonging to the Mexican Financial System:

a) To controlling societies of financial groups, credit institutions, houses stock exchange, stock exchange specialists, stock exchanges, investment companies, investment company operating companies, investment company distribution companies, general warehouse warehouses, credit unions, Financial leasing companies, factoring companies financial, savings and loan companies, exchange houses, limited-object financial corporations, regulated multiple-object financial corporations, popular financial corporations, securities deposit institutions, counterparties central banks, securities rating institutions, credit reporting companies, Community financial corporations, subject to the supervision of the Commission and the rural financial integration bodies, as well as other institutions and public trusts which carry out financial activities and with respect to which the Commission exercises supervisory powers, all of which are constituted under the commercial and financial laws.

b) To cooperative savings and loan companies, subject to supervision of the Commission, which refers to the Law to regulate the Activities of the Cooperative Societies of Savings and Loan, members of the social sector.

V.     Federations: to the federations referred to in the Law on People's Savings and Credit.

VI. Protection Fund: The protection fund referred to in the Law for Regular Activities of the Cooperative Savings and Loan Societies, as well as that referred to in the Law on People's Savings and Credit.

VII. Exchange Centers: to those referred to in Article 81-A of the General Law of Credit Organizations and Activities of Credit.

VIII.             Transmitters of money: to those referred to in article 81-A Bis of the General Law of Organizations and Auxiliary Activities of Credit.

CHAPTER II

OF THE FACULTIES

Article 4.- Corresponds to the Commission:

I.              Carry out the supervision of financial institutions; of the protection fund referred to in the Law to regulate the activities of the Cooperative Savings and Loan Societies; of the Federations and of the protection fund refers to the People's Savings and Credit Act, as well as to natural persons and other moral persons when carrying out activities provided for in the laws relating to the financial system.

-In the case of cooperative savings and loan companies, the Commission will only be responsible for the supervision of those with operational levels I to IV referred to in the Law to regulate the Activities of the Cooperative Savings and Loan Societies;

II.- Issue in the field of your competence the prudential regulation to which you hold the entities;

III.- Dictate operating registration rules applicable to entities;

IV.- Set rules for the estimation of assets and, where applicable, obligations and responsibilities of the entities, in terms of the laws;

V.- Exorder rules regarding the information to be provided periodically the entities;

VI.- Issue general provisions establishing the features and requirements to be met by the auditors of the entities, as well as their opinions;

VII.- Set the criteria referred to in Article 2o. of the Securities Market Act, as well as those of general application in the financial sector concerning acts and transactions which are considered to be contrary to the commercial, banking and stock market or sound practices of the financial markets and make the necessary measures to ensure that the entities adjust their activities and operations to the laws applicable to them, to the general provisions that derive from them and to the related uses and sound practices;

VIII.- Fungir as the Federal Government's consultative body on financial matters;

IX.- Procure through the procedures laid down in the laws regulating the financial system, which institutions are adequately and effectively complying with the operations and services, under the terms and conditions agreed upon, with the users of financial services;

X.             Certify independent external auditors and other professionals, in order to provide their services to the entities and persons subject to the supervision of the Commission for the verification of compliance with the laws financial and the provisions emanating from them in the field of prevention, detection and reporting of acts, omissions or operations which may be placed in the cases of Articles 139, 148 Bis or 400 Bis of the Federal Criminal Code, by the entities and persons obliged to the scheme, as well as the compliance officers, in terms of the provisions of a general nature to be issued by the Commission for such purposes. Such certification, in terms of those provisions, shall be renewed every five years;

X Bis.        Certify the auditors and other professionals to the effect that they assist the Commission when it is engaged, in order to verify compliance with the financial laws and the provisions emanating from them in the field of prevention, detection and reporting of acts, omissions or operations which may be located in the cases referred to in Articles 139, 148 Bis or 400 Bis of the Federal Criminal Code, in terms of the general provisions issued by the Commission for such effects. Such certification, in terms of those provisions, shall be renewed every five years;

XI.            Authorize the constitution and operation of those entities that point to the laws and, where appropriate, agree on the revocation of such authorizations, as well as determine the minimum capital and the capitalization requirements to which they must be subject to compliance with the laws;

XII.- Authorizing individuals to conduct operations with the public, advice, promotion, purchase and sale of securities, as proxy for securities market intermediaries, in terms of the laws applicable to securities;

XIII.- Determine or recommend that the admonition, suspension or removal be made and, where appropriate, disqualification of directors, directors, commissioners, fiduciary delegates, proxies, officials, independent external auditors and other persons liable to bind the entities in accordance with the provisions of the laws that govern them;

XIV.- Order the suspension of operations of the entities according to the provisions of this Act;

XV.- Intervening administratively or gerentially to entities, with object of suspend, normalise or resolve transactions which endanger their solvency, stability or liquidity, or those which violate the laws governing them or the general provisions which result from them, in terms of establish the laws themselves;

XVI.- Investigate those acts of physical persons as well as moral persons who do not being entities in the financial sector, make it possible to carry out violations of the laws that govern the aforementioned entities, which may have the effect of ordering inspection visits to the presumed responsible;

XVII.- Order the suspension of operations, as well as administrative intervention or gertially, as provided for in the laws, negotiations, undertakings or establishments of natural persons or moral persons who, without the corresponding authorization, carry out activities which require it in terms of the provisions which (a) to the financial sector entities, or to proceed to the closing of their offices;

XVIII.- Investigate acts or facts that contravene the provisions of the Law of the Market Values, for which you can practice visits that deal with such acts or acts, as well as to employ, require information or request the appearance of suspected offenders and other persons who can contribute to the proper development of the research;

XIX.- Impose administrative sanctions for violations of the laws regulating the activities, entities and persons subject to their supervision, as well as to the provisions emanating from them and, where appropriate, to assist with the public ministry in relation to the offences provided for in the laws relating to the financial system;

XIX Bis.    Make, at the request of the Secretariat of Finance and Public Credit and the Federal Public Ministry, as an intervener of these dependencies, research activities in financial institutions and other persons subject to its supervision, with purposes of detection of resources and obtaining information for the purposes of the provisions of the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Provenance, as well as for the pursuit of the conduct that may encourage, assist, assist or cooperate in any kind, for the purposes of commission of the offence referred to in Articles 139 and 148 Bis of the Federal Criminal Code or which may be placed in the cases of Article 400 Bis of the same Code.

The investigative powers to which this fraction refers shall be exercised in the terms of Article 5 of this Law. The Commission will report the results of its investigations to the Secretariat of Finance and Public Credit and to the Federal Public Ministry for the purposes that are applicable.

The research activities and presentation of the report will not involve transgression of the financial secrets referred to in the laws relating to the Mexican financial system;

XX.- Know and resolve on the revocation facility that is interposed against the penalties applied, as well as total or partial condoning of the fines imposed;

XXI.- Intervening in the settlement procedures of entities in terms of law;

XXII.- Determine the days when the entities will close their doors and suspend their operations;

XXIII.       Develop and publish statistics on financial institutions and markets, solvency, stability and liquidity indicators, as well as carry out and disseminate studies and estimates of market scenarios that allow for comparability of information.

The Commission may also publish representative samples of databases relating to the operations and services of institutions or segments of financial system markets, provided that the relevant information does not contain confidential or confidential information;

XXIV.- Celebrate conventions with national and international agencies with functions of monitoring and regulation similar to those of the Commission, as well as participating in consultation forums and financial regulatory and supervisory bodies at national and international level;

XXIV Bis. To conclude agreements for the exchange of information that is not reserved or confidential in terms of the applicable legal provisions, with public or private research or teaching institutions, for academic and dissemination purposes. Mexican financial system;

XXV.- Provide the assistance requested by the supervisory institutions and (a) regulatory authorities in other countries, for which in the exercise of their powers of inspection and surveillance, the information and documentation that is the subject of the application may be collected from any person;

XXVI.- Intercoming in the issue, sweepstakes and cancellation of titles or securities of the entities, in the terms of the law, taking care that the circulation of the same does not exceed the legal limits;

XXVII.      Repeals

XXVIII.- Take the National Registry of Securities and Intermediaries and certify registrations which are contained in the same;

XXIX.- Authorize, suspend, or cancel the enrollment of values and specialists stock in the National Registry of Securities and Intermediaries, as well as suspend the said registration for what it does to the exchange houses;

XXX.- Monitor the issuers of securities entered in the National Securities Register and Intermediaries, in respect of the obligations imposed on them by the Securities Market Act;

XXXI.- Dictate general provisions regarding the form and terms in which the issuing companies which have inside information shall have an obligation to make it known to the public;

XXXII.- Exorder rules that set minimum disclosure requirements to the public the securities rating institutions shall satisfy the credit quality of the emissions they have issued and on other aspects that are aimed at improving the services that they provide to users;

XXXIII.- Issue rules to which bag houses should be held when performing operations with its shareholders, directors, directors and employees;

XXXIV.- Authorizing and monitoring systems of compensation, of centralized information, rating of securities and other mechanisms to facilitate operations or to improve the stock market;

XXXV.- Order the suspension of stock quotes, when in their market they exist disordered conditions or operations not in accordance with healthy uses or practices;

XXXVI.- Issue the necessary provisions for the exercise of the powers that this Law and other laws give it and for the effective fulfilment of the same and the provisions which are issued on the basis of them;

XXXVII.    Carry out the registration of currency centers and money transmitters and, where appropriate, modify or cancel the registrations or annotations that are contained in that registry, in the terms established by the laws themselves, as well as to issue the the basis for their organisation and operation and for obtaining the corresponding entries, and

XXXVIII.- The other powers that are attributed to you by this Law, by the Law Regulation of Fraction XIII Bis of Paragraph B, of Article 123 of the Political Constitution of the United Mexican States and other laws.

Article 5.- The supervision carried out by the Commission shall be subject to the regulation issued by the Federal Executive and shall include the exercise of the powers of inspection, surveillance, prevention and correction conferred on the Commission by this Law. as other applicable laws and provisions.

The supervision of financial institutions shall be aimed at assessing the risks to which they are subject, their control systems and the quality of their administration, to ensure that they maintain adequate liquidity, are sound and stable and, in general, comply with the rules governing them and the practical and healthy practices of the financial markets. In addition, the risks of financial institutions grouped together or having property links, as well as in general the proper functioning of the financial system, shall be assessed on a consolidated basis.

The inspection shall be carried out through visits, verification of operations and audit of registers and systems, in the automated installations or equipment of the financial entities, to check the status of the financial entities.

The surveillance will be carried out through the analysis of economic and financial information, in order to measure possible effects on financial institutions and on the system financial as a whole.

The surveillance shall also include the analysis of the information of the establishment of preventive controls to verify compliance with the financial and the provisions emanating from them regarding the prevention, detection and reporting of acts, omissions or operations that may be placed in the cases of Articles 139, 148 Bis or 400 Bis of the Federal Criminal Code, with the same purpose of measuring possible effects on financial institutions and the financial system as a whole, as well as for, inter alia, programming the exercise of the powers of inspection.

In any event, arising from the exercise of the powers of surveillance, the Commission shall notify the institutions of the deficiencies detected in relation to the information which they have either referred to the appropriate recommendations and, where appropriate, shall impose the appropriate penalties.

Prevention and correction will be carried out through the establishment of programs, enforced compliance for financial institutions, aimed at eliminating irregularities. Such programmes shall also be established when institutions present financial imbalances that may affect their liquidity, solvency or stability, and may in any case be instrumentalised by means of the institutions themselves. Failure to comply with the programmes may give rise to the exercise of the power contained in Article 4 (XV) of this Law, without prejudice to the penalties provided for in Article 108 of the Law on Credit Institutions.

The supervision by the Commission in respect of natural persons and other moral persons, when carrying out activities provided for in the laws relating to the system financial, shall be such as to ensure that such persons duly observe these laws, as well as the provisions emanating from them.

The Commission shall be empowered to require entities, exchange centres, money transmitters and any other persons subject to their supervision, all classes of information and documents in respect of the operations to be carried out by the persons or companies subject to the supervision of the Commission itself, as well as its shareholders and related persons, in the latter case, in relation to the activities of supervised entities and persons. The above, provided that such a request is duly substantiated and reasoned, and that it is directly related to acts subject to the supervision of the Commission. Such institutions, exchange centres, money transmitters and any other person subject to such supervision shall provide the information referred to in this paragraph, without this entailing any breach of the duties of confidentiality. established in the laws relating to the financial system.

Article 5 Bis.- The National Insurance and Bonding Commissions, the Retirement Savings System and for the Protection and Defense of Service Users Financial, as well as the Bank of Mexico and the Institute for the Protection of Bank Savings, at the request of the Commission and, in order to seek coordination in the practice of ordinary visits, which in the exercise of the powers of (a) to be carried out by the Member State of the European Union; November of each year, those financial institutions to which they intend to carry out such visits the following year and, within 30 days of the date referred to above, shall agree on visits which may be carried out in a manner together with some of the other authorities.

The provisions of the preceding paragraph shall be without prejudice to visits which the authorities concerned may practice in an extraordinary manner or in any time, in accordance with the provisions applicable to them.

Article 5 Bis 1.- When any of the financial authorities referred to in Article 5 Bis above, in exercise of their supervisory powers, detect any possible non-compliance with the provisions issued by another financial authority shall make it known to the financial authority.

Article 5 Bis 2.- To protect the exercise of the right of access to government public information, the Commission is in line with the guidelines approved by the Commission. The Governing Board shall make known to the general public, through its Internet portal, the penalties that the effect imposes for violations of the laws governing the entities and persons subject to its supervision, or to the provisions that emanate from them, for which they must point out:

I. The name, name, or social reason for the offender;

II. The legal precept infringed, the type of sanction imposed, amount or time limit, according to corresponds, the offending conduct, and

III. The state that saves the resolution, indicating whether it is firm or, if is liable to be contested and in the latter case if any means of defence and its type have been brought, where such circumstances are known to have been duly notified by competent authority.

In any event, if the sanction imposed is left without effects by any competent authority, then such a circumstance should be published.

The above information will not be considered as reserved or confidential.

Article 6.- For the purposes of Article 4, Part II, the Commission shall, in accordance with the provisions of the laws relating to the financial system, issue prudential rules aimed at preserving the liquidity, solvency and stability of financial institutions.

Article 6 Bis.- The Commission in use of the powers referred to in Article 4 (II), (III), (IV) and (XI) of this Law may issue measures corrective, consistent in ordering corrections or modifications to the following:

I. The policies and guidelines that have been adopted in prudential matters entities, as well as the proper segregation of functions between the business units and the other entities of the organic structure of the entities;

II. The accounting records and financial statements of the entities, and

III. The calculation of indices or levels of capitalization, liquidity and other financial reasons.

For the above, the Commission must first listen to the affected entity and resolve within a period of no more than three working days. It shall also be empowered to instruct the institutions to publish the corrections and amendments which it has ordered on the basis of this provision.

Article 7.- The Commission in use of the power referred to in Article 4 (XIV) may order the temporary suspension of all or some of the operations of financial institutions when they are in serious or repeated breach of the law applicable to them, as well as the provisions deriving from it. Such power shall not include the suspension of operations which, in accordance with the laws, may be ordered by the Bank of Mexico.

Article 8.- The Commission for the purpose of carrying out inspection visits in the terms of Article 4 (XVI), as well as effectively complying with the Closing resolutions, administrative or managerial intervention that he or she issues in exercise of his or her faculties, may request the assistance of the public force.

Article 9.- The Commission, in the field of its competence, shall be empowered to provide the financial authorities with all kinds of information necessary to meet the requirements of the Commission, such as documents, constances, records, statements and other evidence which the Commission has in its possession for obtaining it in the exercise of its powers, acting in coordination with other entities, persons or authorities, or directly from other authorities. The Commission may provide confidential or confidential information in terms of the applicable legal provisions.

For the purposes of the preceding paragraph, the Commission shall have an agreement to exchange information with the financial authorities of the outside world. in the case in question, in which the principle of reciprocity is envisaged.

In any event, the Commission may refrain from providing information which is reserved or confidential in accordance with the legal provisions applicable, where the use intended to give the same is different from that for which it has been applied for, contrary to public order, national security or the terms agreed in the information exchange agreement respective.

The Commission should establish coordination mechanisms with the Secretariat of Finance and Public Credit, the Institute for the Protection of Bank Savings, the Bank of Mexico and the National Commission for the Protection and Defense of Users of Financial Services for the purpose of the delivery of the information referred to in this article to the financial authorities of the outside, in terms of the provisions applicable legal.

The delivery of information pursuant to this Article shall not imply any breach of the reservation, confidentiality, secrecy or otherwise similar to be observed in accordance with applicable legal provisions.

Article 9 Bis.- The Commission, at the request of the authorities referred to in Article 9 above and, on the basis of the principle of reciprocity, may make visits (a) to be inspected by the issuing of securities entered in the National Register of Securities as regards its obligations as a broadcaster or to the subsidiaries of the institutions. At the discretion of the latter, the visits may be carried out through the pipeline or, in cooperation with the external financial authority concerned, may permit the latter to carry out the visits.

The application referred to in the preceding paragraph must be made in writing, at least 30 calendar days in advance and must be accompanied by next:

I. Description of the object of the visit.

II.            Legal provisions applicable to the object of the request.

The Commission should ask the external financial authorities to make visits in terms of this article a report of the results obtained.

Article 9 Bis 1.- The entities through its director-general or equivalent and with the opinion of the audit committee or who exercises the functions of the institution's own supervision may subject to the authorization of the Commission a self-correction programme where the institution concerned, in carrying out its activities, or the audit committee or equivalent body as a result of the functions which it has conferred, detect irregularities or non-compliance with the provided for in this Law or the laws governing the entities and other applicable provisions.

shall not be subject to a self-correction programme in the terms of this Article:

I. Irregularities or non-compliance detected by the Commission in exercise of their inspection and surveillance powers prior to the submission by the entity of the respective self-correction programme.

The irregularity was deemed to have been previously detected by the Commission in the (a) the case of the surveillance authority, where the irregularity has been notified to the institution; in the case of the inspection powers, where it has been detected during the inspection visit, or corrected after the inspection has been carried out; has been required to do so in the course of the visit;

II. When the violation of the rule in question corresponds to one of the offences referred to in the laws, or

III. When dealing with any of the violations considered as serious in terms of the laws governing entities.

Article 9 Bis 2.- The self-correction programs referred to in Article 9 Bis 1 of this Law shall be subject to the general provisions of this Law. the Commission. In addition, they shall be signed by the chairman of the audit committee of the institution or who exercises the oversight functions, and shall be submitted to the administrative board or equivalent body in the immediate post-application session. of the authorisation submitted to the Commission. It shall also contain any irregularities or non-compliance with the provisions which have been considered to be contrary to the effect; the circumstances which gave rise to the irregularity or non-compliance with which it was committed; actions taken or intended to be taken by the institution to correct the irregularity or non-compliance that prompted the programme.

Where the institution requires a time limit to remedy the irregularity or non-compliance committed, the self-correction programme shall include a calendar detailed activities to be performed for that purpose.

If the Commission does not order the entity to amend or amend the self-correction programme within 20 working days of its submission, the program will be authorized in all its terms.

Where the Commission orders the entity to amend or amend the programme in order to ensure that the programme is consistent with the provisions of this Article and other applicable provisions, the entity shall have a period of five working days counted from the respective notification to address such deficiencies. That period may be extended for only five additional working days, subject to the authorisation of the Commission.

If the deficiencies referred to in the preceding paragraph are not remedied, the self-correction programme shall be for failure to be submitted and, consequently, the Irregularities or non-compliances committed may not be the subject of another self-correction programme.

Article 9 Bis 3.- For the duration of the self-correction programmes authorised by the Commission in terms of Articles 9 Bis 1 and 9 Bis 2 The Commission shall, in accordance with Article 1 (2) of Regulation (EEC) No No 2 of the Council of the Council of the European Community, of the European Community and of the Council of the European Community, In addition, the time limit for imposing the penalties shall be interrupted for such a period, resuming until it is determined that the irregularities or non-compliance of the self-correction programme have not been remedied.

The audit committee or the person exercising the oversight functions in the entities shall be obliged to follow up the implementation of the self-correction programme (a) to inform the Commission of its progress both to the Management Board and to the Director-General or equivalent bodies or persons of the institution, and to the Commission, in the form and terms which it lays down in the general provisions of the referred to in Article 9 Bis 2 of this Law. The above, irrespective of the power of the Commission to monitor, at any time, the degree of progress and compliance with the self-correction programme.

If as a result of the audit committee reports or of those who exercise the oversight functions in the entities or arising from the inspection tasks and The Commission's monitoring, which determines that the irregularities or non-compliances which are the subject of the self-correction programme will not be remedied within the prescribed period, will impose the corresponding penalty by increasing the amount of the scheme up to 40%. one hundred; being updatable said amount in terms of the tax provisions applicable.

Article 9 Bis 4.- Natural persons and other moral persons subject to the supervision of the Commission may subject to the authorization of the same self-correction where in the performance of their activities they detect irregularities or non-compliance with the provisions of this Law or the laws governing such persons and other applicable provisions, subject to the provisions of Articles 9 Bis 1 to 9 Bis 3 of this Act, as applicable.

TITLE SECOND

OF THE ORGANIZATION

CHAPTER I

OF THE ORGANIZATION BASES

Article 10.- The Commission for the achievement of its object and the exercise of its powers shall have:

I.- Governing Board;

II.- Presidency;

III.- Vice Presidencies;

IV.- Internal Comptroller;

V.- Directorates General, and

VI.- Other required administrative units.

CHAPTER II

OF THE GOVERNING BOARD

Article 11.- The Governing Board will be composed of ten vowels, plus the President of the Commission, who will also be from the Board, and two Vice-Presidents of the Commission to be appointed by the Commission. The Secretariat of Finance and Public Credit will appoint five vowels; the Bank of Mexico three vowels and the National Insurance and Bonding Commissions and the Savings System for the Retreat one vowel each.

For each vowel owner, an alternate will be appointed. Vowels shall, at least, occupy the position of Director-General of the Federal Public Administration or its equivalent.

Article 12.- Corresponds to the Governing Board:

I.- (Repeals).

II.- Determine or recommend that the admonition, suspension, or removal be made and, where appropriate, disqualification of directors, officers, commissioners, fiduciary delegates, proxies, officials, independent external auditors and other persons liable to bind the entities in accordance with the provisions of the laws that govern them;

III.- Agreed to the administrative or managerial intervention of the entities with object to suspend, normalize or resolve transactions that endanger their solvency, stability or liquidity, or those violations of the laws that govern them or of the general provisions that result from them, in terms of establish the laws themselves;

IV.- Impose administrative sanctions for violations of the laws regulating the activities, entities and persons subject to the supervision of the Commission, as well as the provisions emanating from them. This power may be delegated to the President, as well as to other public servants of the Commission, considering the nature of the infringement or the amount of the fines. On a proposal from the President of the Commission, administrative fines may be partially or wholly waived by the Governing Board;

V.             Authorize the constitution and operation of those entities that point to the laws and, where appropriate, agree to revoke such authorizations, except for investment companies;

VI.- Authorize enrollment in the special section of the National Registry of Securities e Intermediaries, securities issued in Mexico or by Mexican moral persons, to be offered abroad;

VII.- Browse and, if applicable, approve the general and special reports that you must subject to their consideration the President of the Commission, on the work of the Commission itself, the situation of the entities, system and financial markets, as well as the exercise of the powers referred to in section VIII of the Article 16 of this Act;

VIII.- Approve annual revenue and revenue budgets, as well as reports on the exercise of the budget;

IX.- Approve the appointment and removal of the Vice-Presidents and Internal Comptroller the Commission on a proposal from the President;

X.- Approve provisions related to the organization of the Commission and to the the privileges of its administrative units;

XI.- Approve the general working conditions to be observed between the Commission and its staff;

XI Bis.      Approve the programs for the granting of economic stimulus to the officials of the Commission annually, for the fulfillment of goals that are subject to the evaluation of the performance, taking into account the conditions of the prevailing labor market in the Mexican financial system.

The economic stimulus will aim to recognize the labor effort and the the contribution of officials to the achievement of the objectives of the Commission, subject to the limits and erogations to be adopted for these concepts in the Federation's Budget of Eglances;

XII.- Constituting committees for specific purposes;

XIII.- Name and remove your Secretary, as well as your alternate, who must be public servants of the Commission;

XIV.- Resolver on other matters that the President submits to his consideration, and

XV.- The other powers that give you other laws.

Article 13.- The Governing Board will hold sessions whenever it is convened by its President and at least it will meet once every two months.

There will be a quorum with the presence of at least seven members of the Board. Resolutions shall be taken by a majority of votes of the present and the President shall have a vote of quality in the event of a tie.

CHAPTER III

OF THE PRESIDENCY

Article 14.- The President is the highest administrative authority of the Commission and will be appointed by the Secretary of Finance and Public Credit.

Article 15.- The appointment of the President of the Commission shall be in person who meets the following requirements:

I.- Being a Mexican citizen by birth who does not acquire another nationality and be in full enjoyment of their civil and political rights;

II.- Haber busy, at least for five years, high level posts in the the Mexican financial system or the agencies, bodies or institutions carrying out functions of financial authority;

III.- Do not hold posts of popular choice, nor be a shareholder, counselor, official, commissary, agent, or agent of the entities.

This requirement will not be missed when investments are made in terms of provided by Article 16 Bis 7 of the Securities Market Act;

IV.- Do not have pending litigation with the Commission, and

V.- Not having been convicted of an irrevocable sentence for intentional offence impose more than one year's imprisonment, and if it is a property offence, intentionally committed, whatever the penalty has been, not disabled for the purpose of exercising trade or to carry out a job, office or commission in the public service or in the Mexican financial system.

To the members of the Governing Board, Vice-Presidents, Internal Controller and Directors-General, it shall be applicable to the members of the Board of Directors of the Board of Directors, Article.

Article 16.- Corresponds to the President of the Commission:

I.- Take the legal representation of the Commission and the exercise of its powers, without prejudice to those assigned by this Act or other laws to the Governing Board;

II.- Declare, with the agreement of the Governing Board on your case, the intervention administrative or managerial entities with a view to suspending, normalizing or resolving transactions that endanger their solvency, stability or liquidity, or those breaches of the laws governing them or of the provisions of a character general which they derive from;

III.- Designate financial controller in the cases provided for in the laws governing the entities;

IV.- Impose the appropriate sanctions according to the powers delegated to you the Governing Board, as well as know and resolve on the appeal of revocation, in the terms of the applicable laws and the provisions emanating from them, as well as propose to the Board the full or partial remission of the fines;

V.- Authorize, suspend, or cancel the enrollment of values in the Securities of the National Registry of Securities and Intermediaries;

VI.- Run the Government Board agreements;

VII.- Report to the Governing Board, annually or when requested to do so the work of the offices in charge of the office and obtain its approval for all the provisions of a general nature which it creates relevant;

VIII.- Submit to the Governing Board reports on the situation of the entities, financial system and financial markets, as well as for the exercise of the powers mentioned in the sections IV and V of this precept, Articles 4, XIV, XV, XVII, XXIV and XXXV and 7 of this Law, 2., last paragraph and 16 of the Law of the Stock Market;

IX.- Report to the Secretariat of Finance and Public Credit regarding the cases You are asked to do so;

X.             Report to the Bank of Mexico on the liquidity and solvency of institutions, when requested;

XI.           Formulate annual revenue and expenditure budgets of the Commission, as well as economic stimulus programmes for Commission officials, which, once approved by the Governing Board, will be submitted to the Commission. authorisation from the Secretariat of Finance and Public Credit.

The Secretariat of Finance and Public Credit will establish criteria for economic stimulus to be observed by the President of the Commission in his proposal to the Governing Board. The Commission shall also provide the Secretariat with the information it requests;

XII.- Provide what is required for program compliance and the correct exercise of the discharge budget approved by the Board;

XIII.- Report to the Governing Board on the exercise of the discharge budget;

XIV.- Propose to the Governing Board the appointment and removal of the Vice-Presidents and Internal Controller of the Commission, as well as appoint and remove the Directors-General and Directors thereof;

XV.           Present to the Governing Board draft provisions relating to the organisation of the Commission and the powers of its administrative units;

XVI.          Authorize the organization and operation of investment companies, and

XVII.        The other powers that this Law, other laws, and their respective regulations will set you.

The President shall exercise his or her duties directly or, through a delegated agreement, through the Vice-Presidents, Directors-General and other public servants of the Commission. The arrangements for which powers are delegated shall be published in the Official Journal the Federation.

The President's indomitable powers are those mentioned in fractions II to IV, VII, IX to XII and XIV of this Article and, as appropriate in the field of his Article 4 of this Law is contained in fractions XXII and XXIV of this Law. Without prejudice to the foregoing, the President may delegate to other public servants of the Commission the task of notifying the agreements of the Governing Board.

In the temporary absences of the President, he will be replaced by the Vice President who designates the effect.

Article 17.- For the purposes of Article 16 (I), the President shall be vested with the most extensive powers required by law for this case, comprising those that require special clause according to them.

In judicial, administrative or work procedures in which the Commission is a party or may be affected, the President directly or through the public servants of the Commission itself which, for the purposes of the delegated agreements, shall exercise the actions, exceptions and defences, shall produce pleadings, provide evidence, make available appeals, and may submit withdrawal; and In general, it shall carry out all the procedural acts corresponding to the Commission or its organs, including in the trials of amparo the filing of the law reports.

The President and the Vice-Presidents shall only be required to acquit positions or to render a statement in judgment, on behalf of the Commission or under their functions, where positions and questions are formulated by means of trade issued by competent authority, which shall be in writing within the term established by that authority.

THIRD TITLE

OF GENERAL PROVISIONS

ONLY CHAPTER

Article 18.- Financial sector entities and issuing companies, as well as cooperative savings and loan companies with operating levels I to IV, and the the protection fund referred to in the Law to regulate the activities of the Cooperative Savings and Loan Societies; the federations and the protection fund referred to in the Law on People's Savings and Credit; as well as other persons physical or moral, subject to this and other Laws to the supervision of the Commission, shall cover the corresponding rights in the terms of the applicable legal provisions.

The rights referred to in this Article shall be used to cover the Commission's budget.

If at the end of the budget year, there is a balance from the revenue per concept of rights, the President will transfer the non-committed part of the budget for a special reserve, which shall be intended for the coverage of expenditure for subsequent financial years.

Article 18 Bis.- The Commission, after agreement of its Governing Board, may allocate resources from its annual budget to the Administration and Disposal Service Goods for the purpose of which that body carries out winding-up or competition procedures of entities subject to the supervision of the Commission, on the understanding that such resources may be used exclusively to cover the costs associated with the publications and other formalities relating to such procedures, where it is noted that they may not be faced with the assets of the institutions themselves due to lack of liquidity or insolvency.

Article 19.- Financial sector entities subject to the supervision of the Commission will be required to provide you with the data, reports, records, books of minutes, auxiliaries, documents, correspondence and in general, the information deemed necessary by the same in the form and terms which it points out to them, as well as to allow access to their offices, premises and other facilities.

Article 20.- Labour relations between the Commission and its employees shall be governed by the provisions of Article 123 (B) of the Political Constitution. of the United Mexican States and by the Federal Law of Workers to the State Service, Regulatory of Article 123 of the Constitutional Treaty.

Article 21.- The Commission shall provide the legal assistance and defence services to those who integrate or have integrated its Governing Board and the servers (a) public working or working in the Commission itself, in respect of acts which the persons referred to above carry out in the exercise of the functions which are entrusted to them by law.

Financial institutions that are appointed by the Commission in terms of applicable laws, as well as the provisions of this Law and the staff auxiliary to which the interveners themselves grant them powers because it is necessary for the performance of their functions, they will also be subjects of assistance and legal defense for acts that perform in the exercise of the faculties that the laws they are entrusted with the intervention, where the institution concerned does not count with sufficient liquid resources to address such legal assistance and advocacy.

Legal assistance and defence shall be provided from the resources for which the Commission is responsible for these purposes in accordance with the general guidelines to approve the Board of Government of the Commission itself, in which it shall be provided that if the competent authority gives the subject of the legal assistance final resolution which it causes to be enforceable against him, that subject shall be remolation to the Commission of expenditure and any other charges on which it has been incurred for the purpose of legal assistance and advocacy.

For such purposes, the Secretariat of Finance and Public Credit hearing the opinion of the Commission, will establish the necessary mechanisms to cover the expenses incurred of the legal assistance and defense provided for in this article.

TRANSIENT

FIRST.- This Law will take effect on 1o. May 1995.

SECOND.- Chapter I of Title Seventh of the Credit Institutions Act shall be repealed; Articles 40, 41 fractions I, II, III, IV, VI to VIII, XI to XXII and Last paragraph and 42 to 46 of the Securities Market Act, and the V fraction of Article 29 of the Investment Companies Act.

THIRD.- The National Banking Commission and the National Securities and Exchange Commission are transformed into the unconcentrated organ referred to in this Law.

The movable and immovable property owned by the Federal Government, which upon the entry into force of this Law are assigned to the National Banking Commission and the National Securities and Exchange Commission, shall be assigned to the National Banking and Securities Commission.

FOURTH.- The rights and obligations of the workers of the National Banking Commission and the National Securities and Exchange Commission, which under this Law transform the National Banking and Securities Commission, they will not suffer for that act any modification.

QUINTO.- References that other laws, regulations or provisions make regarding the National Banking Commission or the National Securities and Exchange Commission, understand what the National Banking and Securities Commission is doing.

Also, any reference to the holders or other public servants of the National Banking Commission or the National Securities and Exchange Commission shall be understood as President and other public servants of the National Banking and Securities Commission.

The references provided for in Article 47 of the Securities Market Act to fractions VII and VIII of Article 41 of the same order shall be construed as references to the Article 4 (XV) and (XVII) of this Law, respectively. In turn, the reference contained in Article 40 of the Investment Companies Act to section IV of article 45 of the Securities Market Act, shall be understood to be made up of section III of article 16 of this Act.

SIXTH.- The public servants of the National Banking Commission and the National Securities and Exchange Commission will continue to perform their duties and exercise their duties. respective privileges, as long as the corresponding appointments are issued.

SEVENTH.- Until the delegated agreements provided for in the last paragraph of Article 16 of this Law are issued, it will continue in force, in the conducting, the National Banking Commission's Rules of Procedure, published in the Official Journal of the Federation of August 4, 1993, as well as the delegated agreements issued by the governing bodies of the National Banking Commission and the National Securities and Exchange Commission.

EIGHTH.- The Regulation of the National Banking and Insurance Commission on Inspection, Surveillance and Accounting, published in the Official Journal the European Union Federation of 24 November 1988, shall continue in force until the Regulation referred to in Article 5 of this Law is issued.

NINTH.- As long as the National Banking and Securities Commission dictates the general provisions referred to in this Law, the issued shall continue to apply. by the National Banking Commission and the National Securities and Exchange Commission prior to the validity of the same in the relevant materials.

DECIMAL.- The authorizations granted and the other administrative acts performed on the basis of the laws relating to the financial system, which in accordance with the The provisions of this Law are applicable to the National Banking and Securities Commission, which shall remain in force until, where appropriate, they are expressly revoked or amended by the said Commission.

13TH.- Any procedure in the proceedings before the National Banking Commission and the National Securities and Exchange Commission, or in which such organs participate (a) Deconcentrated, whether judicial, administrative or labor, will be continued by the National Banking and Securities Commission, in the terms of this Law and other applicable laws and provisions.

Mexico, D.F., April 24, 1995.-Dip.   Sofia Valencia Abundis, President.-Sen. Martha Lara Alatorre, President.-Dip. José Antonio Hernández Fraguas, Secretary.-Sen. Antonio Manriquez Guluarti, Secretary.-Rubicas.

In compliance with the provisions of Part I of Article 89 of the Political Constitution of the United Mexican States, and for their due publication and observance, I request the present Decree in the residence of the Federal Executive Branch, in Mexico City, Federal District, at twenty-seven days of the month of April of a thousand nine hundred and ninety-five.- Ernesto Zedillo Ponce de Leon.-Heading.-The Secretary of Government, Esteban Moctezuma Barragan.-Heading.