Repositories
Central Clearing Requirements
Central Clearing Requirements Information Repository
Notes (Mexico-Comisión Nacional Bancaria y de Valores)
(Last Updated: 19 November 2020)
Authority: | Mexico-Comisión Nacional Bancaria y de Valores |
Jurisdiction: | Mexico |
Note 1 | Mexico
Recognition Banco de México may recognize foreign institutions that act as central counterparties, for the transactions carried out in foreign derivatives stock exchanges and over-the-counter markets considering the following elements: a) That the foreign institutions are authorized by the financial authorities of the jurisdiction in which they act as central counterparties and are subject to effective supervision and oversight that ensure their compliance with the applicable regulation, performed either by the authorities of said jurisdiction or by Banco de México or the CNBV in cooperation with the respective local authorities; b) That the regulatory framework applicable to said foreign institutions ensures similar or equivalent results to those achieved by the provisions issued by the Mexican authorities applicable to entities that provide clearing house services for Derivative Transactions in Mexico and that said framework is compliant with the Principles for Financial Market Infrastructures issued by the Committee on Payment and Settlement Systems of the Bank for International Settlements and the International Organization of Securities Commissions in 2012 or those that may substitute them, including but not limited to the principles related to i) effectively measuring monitoring, and managing credit, liquidity, business, legal, and operative risks; ii) effective and clearly defined rules and procedures to manage a default by a a participant, also known as a clearing members of the clearing house; iii) governance arrangements that are clear and transparent; iv) access and participation requirements, and v) efficiency and transparency, and c) That Banco de México or the CNBV has signed a memorandum of understanding with the foreign financial authorities that regulate and supervise said foreign institution, pursuant to the applicable provisions. Exemptions to central clearing requirements According to the Rules for Derivatives Transactions, exemptions to central clearing requirements include intragroup transactions: "7.5 [...] Entities that enter into Standardized Derivative Transactions on their own account with another Entity that is part of the same financial group in Mexico or with a Foreign Financial Entity that is part of the same financial group may request an exemption from the requirements provided in section 5.2 and the preceding paragraph, provided they present to Banco de México and the latter approves that: i) they are subject to adequate and centralized procedures to assess, measure, and control risks; ii) they are included in a consolidation scheme at the level of the financial group in Mexico or the financial consortium and iii) whenever applicable, Banco de México has determined that the jurisdiction where the Foreign Financial Entity belonging to the same consortium is located has an equivalent regulatory regime regarding the negotiation and settlement of Derivative Transactions. For effects of these Rules, it shall be understood that a Foreign Financial Entity belongs to a financial consortium when it forms part of a group of financial entities in which the one legal entity exercises control, in similar terms to those indicated in article 2, subsection III of the Securities Market Law.” "7.5 Bis Entities may enter into Standardized Derivative Transactions without being subject to the trading requirements established in section 5.2 and the clearing requirements established in the first paragraph of section 7.5, provided that the notional amount of all their Standardized Derivative Transactions is, for a period of at least three consecutive months within a period of six months, prior to enter into such Standardized Derivative Transaction, less than or equal to the equivalent of 10 billion UDIS (2.93 billion USD, aprox.) [...]" |
Authority: | Mexico-Comisión Nacional Bancaria y de Valores |
Jurisdiction: | Mexico |
Note 2 | Mexico
Exemptions to central clearing requirements According to the Rules for Derivatives Transactions, exemptions to central clearing requirements include intragroup transactions: "7.5 [...] Entities that enter into Standardized Derivative Transactions on their own account with another Entity that is part of the same financial group in Mexico or with a Foreign Financial Entity that is part of the same financial group may request an exemption from the requirements provided in section 5.2 and the preceding paragraph, provided they present to Banco de México and the latter approves that: i) they are subject to adequate and centralized procedures to assess, measure, and control risks; ii) they are included in a consolidation scheme at the level of the financial group in Mexico or the financial consortium and iii) whenever applicable, Banco de México has determined that the jurisdiction where the Foreign Financial Entity belonging to the same consortium is located has an equivalent regulatory regime regarding the negotiation and settlement of Derivative Transactions. For effects of these Rules, it shall be understood that a Foreign Financial Entity belongs to a financial consortium when it forms part of a group of financial entities in which the one legal entity exercises control, in similar terms to those indicated in article 2, subsection III of the Securities Market Law.” "7.5 Bis Entities may enter into Standardized Derivative Transactions without being subject to the trading requirements established in section 5.2 and the clearing requirements established in the first paragraph of section 7.5, provided that the notional amount of all their Standardized Derivative Transactions is, for a period of at least three consecutive months within a period of six months, prior to enter into such Standardized Derivative Transaction, less than or equal to the equivalent of 10 billion UDIS (2.93 billion USD, aprox.) [...]" |
Authority: | Mexico-Comisión Nacional Bancaria y de Valores |
Jurisdiction: | Mexico |
Note 3 | Mexico
Clearing requirements The Rules for Derivatives Transacions establish: “7.5 Standardized Derivative Transactions between Entities, or between an Entity and a Foreign Financial Entity that in its respective jurisdiction provides services of the same kind as any of the Entities, as well as between an Entity and a national or foreign Institutional Investor, must be settled through: i) clearing houses incorporated in terms of the “Rules that the Participants of the Derivative Contract Market must comply with”, issued jointly by Banco de México, the SHCP , and the CNBV or ii) foreign institutions acting as central counterparties in derivatives exchanges and/or foreign over-the-counter markets, and that have been recognized by Banco de México in this capacity, pursuant to section 7.6 of these rules and adhering to the internal regulations that said clearing houses or foreign institutions have in place for acceptance, clearing, and settlement of Standardized Derivatives Transactions.[…]” |
Authority: | Mexico-Comisión Nacional Bancaria y de Valores |
Jurisdiction: | Mexico |
Note 4 | Mexico
Recognition Banco de México may recognize foreign institutions that act as central counterparties, for the transactions carried out in foreign derivatives stock exchanges and over-the-counter markets considering the following elements: a) That the foreign institutions are authorized by the financial authorities of the jurisdiction in which they act as central counterparties and are subject to effective supervision and oversight that ensure their compliance with the applicable regulation, performed either by the authorities of said jurisdiction or by Banco de México or the CNBV in cooperation with the respective local authorities; b) That the regulatory framework applicable to said foreign institutions ensures similar or equivalent results to those achieved by the provisions issued by the Mexican authorities applicable to entities that provide clearing house services for Derivative Transactions in Mexico and that said framework is compliant with the Principles for Financial Market Infrastructures issued by the Committee on Payment and Settlement Systems of the Bank for International Settlements and the International Organization of Securities Commissions in 2012 or those that may substitute them, including but not limited to the principles related to i) effectively measuring monitoring, and managing credit, liquidity, business, legal, and operative risks; ii) effective and clearly defined rules and procedures to manage a default by a a participant, also known as a clearing members of the clearing house; iii) governance arrangements that are clear and transparent; iv) access and participation requirements, and v) efficiency and transparency, and c) That Banco de México or the CNBV has signed a memorandum of understanding with the foreign financial authorities that regulate and supervise said foreign institution, pursuant to the applicable provisions." |