Many loans involve the transfer of assets to a collateral or payment-source trust, especially (but not exclusively) when dealing with cash-generating assets, such as long-term contracts or receivables. A 2016 federal collegiate circuit court decision could jeopardise these structures in the context of insolvency proceedings. However, new judicial guidance was recently issued to reinforce traditional considerations regarding trusts.
Andrés Manuel López Obrador was elected president on 1 July 2018 and will take office on 1 December 2018. Not only did López Obrador obtain more than 50% of the votes (approximately 30 million), his party and coalition also won an absolute majority in both the House of Representatives and the Senate. This is the first time in 20 years that a president will govern with this level of power. But what will this mean for the banking sector?
The funds of some participants of the Interbank Electronic Payments System (SPEI) were recently affected by a series of unprecedented cyberattacks. The Mexican Central Bank revealed that approximately $15 million (Ps300 million) had been involved in diverse irregular transfers, subject to investigation. The cybercriminals had identified a flaw in the system that permitted receivers of SPEI transfers to withdraw cash almost immediately after receiving the transfer so that the money could not be traced.
The president recently enacted the Financial Technology Institutions Law. The Senate had unanimously approved the bill on the law in December 2017 and sent it to Congress, which made no changes. The law seeks to build a regulatory framework that will encourage the development of innovative financial services, increase the level of competition and financial inclusion and place Mexico at the forefront of the industry.
There were a number of court precedents in 2017 concerning financial transactions. For example, a recent non-binding collegiate court precedent broadened the scope and source of information that judges should use to analyse and determine the existence of usury, while another validated judges' authority to use the annual interest rate published by companies that engage in vehicle financing. Further, a binding Supreme Court precedent dealt with the maturity date of promissory notes.
A member of the House of Representatives recently introduced a legislative proposal that seeks to amend the Organic Law of the Federal Public Administration. The proposed reform aims to grant the central government significantly more control over the public administration, including with regard to the energy sector. Essentially, the National Hydrocarbons Commission and the Energy Regulatory Commission will no longer be independent from a technical and operational standpoint.
The 2013 energy reform significantly opened up the energy sector to private participation, thus ending the state's decades-long monopoly. However, the newly elected administration has pledged to revisit the reform and grant the state greater control of the sector. Although there have been mixed messages in this regard, the new administration has confirmed that the third bidding round for granting exploration and production licences and share production agreements will be suspended indefinitely.
Throughout his campaign, and now as president elect, Andrés Manuel López Obrador has sent mixed messages with respect to various core reforms implemented by the outgoing administration, including the energy reform adopted in late 2013. Although the incoming administration has publicly stated that it will reverse the reform where possible, it is likely to adopt a more central position once it takes office and faces the actual challenges that must be overcome.
President Elect Andrés Manuel López Obrador has already published his environmental agenda, which sets out the objectives to be met and the strategies to be implemented during his six-year term. Under the agenda, a number of regulatory changes regarding air emissions, environmental impact assessments and coastal and marine zones will be introduced. In addition, Mexico will keep working towards its goals under the Paris Agreement and its administrative offices will undergo significant changes.
In recent years, Mexico has seen the significant deterioration of its forest resources, making it one of the 10 worst countries in terms of deforestation. To combat this issue, the New General Law for Sustainable Forest Development was recently published in the Federal Official Gazette. The law is an attempt to focus Mexico's forestry regulation on better management of resources, while also safeguarding human rights and social involvement.
The Ministry of Environment and Natural Resources recently published a decree granting administrative benefits for the issuance of new concession titles for exploiting national waters to persons that hold a title which expired after January 1 2004. Notably, the decree allows for the issuance of new concession titles even if the zone or specific aquifer from which the original concession title was authorised to extract water is now considered a restricted or banned zone or aquifer.
The National Waters Commission recently submitted to the Federal Regulatory Betterment Commission its draft revision of the Mexican official standard which establishes the maximum permissible levels of pollutants in wastewaters discharged into national waters or properties. The draft aims to modernise the standard by including additional terms and definitions, pollutants and parameters regarding wastewater discharges into federal waters, as well as new sampling and reporting frequency obligations.
The National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently filed a draft emergency Mexican official standard before the Federal Regulatory Betterment Commission. The draft establishes the criteria for classifying types of special and hazardous waste derived from the hydrocarbons sector, determines which types of waste are subject to a waste management plan and details the procedures for formulating such a plan.
The National Insurance and Bonds Commission recently amended the Sole Provisions on Insurance and Bonds, removing the obligation for insurers and bonding companies to inform the commission when their users' sensitive information is altered, extracted, lost, deleted or suspected of having been accessed without authorisation or compromised. Now, insurers and bonding companies must immediately conduct an investigation and notify affected users of a data breach within three working days.
The recently elected government administration has publicly announced that it intends to eliminate the private medical insurance currently granted to public officials as part of their benefits. This measure aims to encourage public officials to use state medical services and reduce government expenditure. If the cancellation of this benefit is confirmed, a significant number of officials are likely to seek major medical expenses insurance, which will present an opportunity for various companies in the sector.
A recent amendment to the Insurance Law has mandated medical expenses insurers to offer insurance products that cover risks which can cause disabilities in individuals. The amendment decree also revised the General Law for the Inclusion of Disabled Individuals, which prohibits any type of discrimination against individuals with any type of disability.
The National Commission for the Protection and Defence of Users of Financial Services (CONDUSEF) recently amended the General Provisions for the Registry of Insurance Adhesion Contracts in order to specify which additional documents must be included in the contractual documentation of such contracts and registered before the National Insurance and Bonds Commission and CONDUSEF.
The National Commission for the Protection and Defence of Users of Financial Services (CONDUSEF) recently amended the General Rules on Good Practices, Transparency and Advertising applicable to Insurance Companies. The amendments have added additional documents to the contractual documentation required for insurance adhesion contracts and provided the form on which insurers must include the registry numbers granted by the National Insurance and Bonds Commission and CONDUSEF.
In 2017 the Federal Telecommunications Institute published the General Guidelines for the Accessibility of Broadcast Television Services, which will take effect in December 2018. The guidelines establish requirements regarding the inclusion of Mexican sign language or hidden subtitles in certain programmes, which apply to concessionaires that use a signal to commercially transmit broadcast TV to more than 50% of the Mexican territory and federal public entities that are concessionaires of public broadcast TV.
The Ministry of the Interior recently issued the Guidelines for the Audiovisual Content Classification of Broadcasting Transmissions and Pay Television and Audio Services. The 2015 guidelines dramatically increased the hours during which a programme or ad can be broadcast depending on its rating, leading to legal disputes to protect child audiences. While the 2018 guidelines maintain the same broadcast times as the 2015 guidelines, they have increased the duration of the parental warning.
Telecomunicaciones de México recently issued a call inviting applicants to compete in the bidding for the Red Troncal project (ie, the National Backbone Network), which has been in the works since the 2013 constitutional telecoms reform. The winning party will enter into a public-private partnership for the design, financing, installation, deployment, operation, strengthening, maintenance and development of the network and the provision of wholesale telecoms services.
The president recently launched the Red Compartida (or Shared Network), which is one of the most important projects being undertaken in the Mexican telecoms sector. The project involves a new mobile broadband network in the 700 MHz band, which will provide wholesale services under a public-private partnership structure between Altán Redes and the government. The project aims to provide mobile broadband coverage to 92.2% of the Mexican population by 2024.
The Federal Institute of Telecommunications recently approved the final programme for the functional separation of Mexico's fixed incumbent companies as a consequence of the asymmetric regulation imposed on the América Movil Group (AMX). However, AMX has informed the Mexican Stock Exchange that it will challenge the approval of the programme and there has been some scepticism as to the results and practical consequences of the separation.