THE MINISTRY OF FINANCE (SECRETARIA DE HACIENDA Y CRÉDITO PÚBLICO) («SHCP») AND THE RETIREMENT FUND SYSTEM COMMISSION (COMISIÓN NACIONAL DEL SISTEMA DE AHORRO PARA EL RETIRO) («CONSAR») AMEND THE GENERAL PROVISIONS THAT ESTABLISH THE INVESTMENT REGIME TO WHICH SPECIALIZED INVESTMENT COMPANIES OF RETIREMENT FUNDS SHOULD BE SUBJECT.

On May 31, 2019, the Official Gazette of the Federation (Diario Oficial de la Federación) («DOF«) published the amendments to the General Provisions that establish the investment regime to which specialized retirement fund investment companies should be subject (Disposiciones de carácter general que establecen el régimen de inversión al que deberán sujetarse las sociedades de inversión especializadas de fondos para el retiro) (the «General Provisions for Retirement Funds«), issued by the SHCP and CONSAR, which are intended to modify the Investment Regime of Specialized Retirement Fund Companies (Régimen de Inversión delas Sociedades de Inversión Especializadas de Fondos para el Retiro) («SIEFOREs«).

In this sense, the scope of the modifications to the General Provisions for Retirement Funds consists on, among others:

• Offering legal certainty to the regulated parties; and
• Providing defense tools against market volatility and long-term investment design that is adapted to the risk.

Likewise, there are relevant changes to the investment regime authorized by the Board of Governors of the CONSAR, consisting on, among others:

• Extending investments in individual shares to the markets determined by the Risk Analysis Committee, which shall be subject to the following limits:
  • 4% with respect to the Variable Return limit pershare;
  • 30% with respect to the general equity limit for the investment; and
  • SIEFORE Basic Pensions will be authorized to receive individual shares, without being allowed the acquisition.

Previously, the investment regime of SIEFOREs contemplated a separation in the stock market instruments causing contradictions in the classification of assets, for this reason all issues will be classified as stock market instruments with their respective credit ratings.

Lawyers from the banking and financial practice of our Firm will be delighted to provide you with further information regarding the content of this informative note.

SINCERELY,

Mexico City, June 20th, 2019.