Mexico City, March 20th, 2020.
On March 10, 2020, the Mexican Central Bank (Banco de México) (“Banxico“) published in the Federal Official Gazette (Diario Oficial de la Federación) (“DOF“, by its Spanish acronym) Circular 2/2020 where the first secondary provisions of the open banking model (“Open Banking”) were issued, as contemplated in the Law to Regulate Financial Technology Institutions (Ley para Regular las Instituciones de Tecnología Financiera) (“Fintech Law“).
Consequently, different financial market entities may share information through Computer Application Programming Interfaces (“API”).
So far, the secondary provisions issued in the DOF will only apply to Credit Information Companies (Sociedades de Información Crediticia) (“SIC“, by its Spanish acronym) and clearing houses, and therefore it will be necessary to issue such provisions for financial institutions, such as banks, popular finance companies and savings and loans cooperatives, among others.
The Open Banking model is contemplated in Article 76 of the Fintech Law, which establishes the obligation of different financial market players to establish APIs, so they can share information among themselves.
In this regard, Article 76 provides that the information that may be shared by financial institutions, money transmitters, SICs, clearing houses, financial technology institutions, are:
- Open data; being those of products and services offered to the general public;
- Aggregated data; being those related to any type of statistical information related to operations carried out by or through the mentioned institutions; and
- Transactional data; those related to the use of a product or service, including deposit accounts, credits and means of disposal contracted in the name of the customers of financial institutions.
In accordance with the above, Circular 2/2020 states that both SICs and clearing houses must obtain authorization from Banxico for the use of the APIs intended to be used. In turn, SICs and clearing houses must enter into agreements with entities authorized by Banxico for the exchange of information. Additionally, the issuance of fees to be charged between institutions that exchange information is also defined.
Finally, Circular 2/2020 states that in case of non-compliance with the provisions of Circular 2/2020, SICs and clearing houses may be sanctioned by Banxico.
Lawyers from the banking and financial practice of our Firm will be delighted to provide you with further information on the Draft Resolution modifying the General Provisions applicable to Financial Technology Institutions.
Miguel Angel Peralta