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.
The Federal Institute of Telecommunications recently announced the auction of the 2.5 GHz band. The auction's purpose is to assign the commercial use and exploitation of 120 MHz of the 2,500 to 2,690 MHz band for the provision of wireless services. Four companies and one consortium are interested in formally participating in the auction process, which is expected to be completed by November 2018.
The National Insurance and Bonds Commission recently added two new articles to the Insurance and Bonding Sole Provisions which set out new surety insurance contract requirements. Contracts must now include, among other things, confirmation that the insurer is authorised to pay the indemnity for damages without prior notice or consent of the policyholder and that the indemnity may be paid as compensation or as a penalty for the damages suffered.
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.
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.
In order to prevent the misuse of customer information, the National Insurance and Bonds Commission recently amended the Insurance and Bonding Sole Provisions with regard to information gathered electronically. Among other things, the amendments require insurers to implement security measures and mechanisms for the transfer, storage and processing of information generated electronically when contracting insurance and bonds and rendering other services to customers.
The Ministry of Finance and Public Credit recently circulated a substantially amended draft of the Financial Technology Bill, which has been renamed the Financial Technology Institutions (FTIs) Law. The law aims to regulate the financial services provided by FTIs – including those which are bound to specific regulations and offered or rendered through innovative means – as well as the organisation of such institutions and their operations.
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 has issued a temporary measure to enable insureds and their beneficiaries to be immediately compensated for damages suffered as a consequence of the recent earthquakes that affected several areas of Mexico. The temporary measure applies to Mexican insurers that have ceded risks to reinsurers and allows them to use funds to meet assumed risks and recover compensation from reinsurers at a later date.
In recent years, Mexico has been rated as having one of the highest rates of credit card fraud in the world. The National Banking and Securities Commission recently published the Resolutions that Modify the General Rules Applicable to Credit Institutions, which require credit institutions to verify information and documentation filed by users and customers with different government bodies in order to assure the identity of each prospective customer.
The National Insurance and Bonds Commission recently amended the Sole Provisions on Insurance and Bonds in order to increase legal certainty with regard to the regulatory framework that applies to actuarial, financial and investment functions. These amendments aim to ensure that the commission has the information required to take necessary regulatory action in the event that irregularities are detected and prompt intervention is needed.
The recently published draft Financial Technology Law will regulate the organisation, operation, function and authorisation of companies that offer alternative means of access to finance and investment, the issuance and management of electronic payment funds and the exchange of virtual assets or cryptocurrencies. Among other things, the initative aims to take advantage of the opportunity to expand the financial market to include segments not covered by traditional banking institutions.
Following the expansion of shale oil extraction projects and the discovery of unconventional hydrocarbon deposits, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently commenced a public consultation process to enact applicable water protection guidelines. The draft guidelines provide a glimpse of the authorities' preliminary approach to shale oil projects with regard to water resources and environmental protection.
The National Insurance and Bonds Commission recently amended the Sole Provisions on Insurance and Bonds to provide the value of the investment unit that insurers and bonding companies must consider when calculating their required minimum paid-in capital. Insurers and bonding companies must comply with the required minimum paid-in capital each year to ensure that they can meet their financial obligations and responsibilities in the exercise of their activities.
As part of its expansion of operational safety and environmental protection guidelines and administrative provisions, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector turned its attention to oil, gas and petrochemical pipeline transportation activities. Recently issued guidelines complement the environmental legal framework so that both environmental and personal safety are guaranteed during the lifetime of a pipeline project.
Two years after the Insurance and Bonding Companies Law was enacted, surety insurance is finally starting to take effect in Mexico. In essence, surety insurance is easier to collect and enforce than traditional bonds. The federal government is expected to start requesting surety insurance from its contractors, rather than traditional bonds. This shift in policy will encourage development in the surety insurance market.
The National Commission for the Protection and Defence of Users of Financial Services recently issued the General Provisions for the Registration of Insurance Adhesion Contracts, which regulate the organisation and operation of the Registry of Adhesion Insurance Contracts. Insurers can now comply with their obligation to register the non-negotiable contracts that they offer; failure to do so may result in a fine ranging from $758.31 to $3,791.56.
In light of its concerns regarding environmental and operational accidents arising from hydrocarbons projects, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector recently published the Guidelines to Carry Out the Root Cause Investigation for Incidents and Accidents. The guidelines aim to identify the root cause of an incident and determine the maintenance and preventive mechanisms that must be implemented in order to prevent such events in future.
The Ministry of Finance and Public Credit recently issued a ruling interpreting the requirement to establish special funds under the Insurance and Bonding Companies Law. The ministry has clarified that special funds should be established to support compliance with obligations that stem only from insurance (and not reinsurance) contracts. This will ease some of the sector's concerns, as reinsurance-based contributions would have required insureds to contribute twice as much to the special funds.
Two important instruments were recently published which have generated a number of new environmental reporting obligations for companies involved in the hydrocarbons sector. In addition to these obligations, parties that cause an incident or spill during the execution of a project must undertake all applicable measures and actions to contain, mitigate and repair the environmental damage and contamination caused.