The main purpose of the Decree is, primarily, to harmonize and reform eleven regulations to provide legal certainty to financial institutions, external auditors, and any subject to the financial regulations regarding the rules by which the competent administrative authority will develop its surveillance and sanctioning powers, among other issues:
- Determines the terms and characteristics of the administrative sanctioning procedures in i) Bank of Mexico (Banco de México); ii) National Commission for the Protection and Defense of Financial Services Users (Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros); y, iii) National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores).
- In this regard, the authority has five years to initiate the corresponding administrative sanctioning procedure, starting from the date of the infringement.
- Once the administrative sanctioning procedure has been initiated and the authority has notified the infringing entity, the entity will have ten business days to offer evidence, which may be extended once. After this period, the authority will have 60 business days to admit or reject the evidence offered in the procedure.
- Once the authority decides on the admission or rejection of evidence, it shall notify the alleged infringer that it has five business days to submit its allegations.
- Following the allegations period, the authority will have 180 business days to issue the final resolution of the administrative sanctioning procedure and notify the infringing entity.
It is important to consider that the proposed reform is a result of various jurisprudential criteria in which several companies challenged the constitutionality of such laws, since they did not establish a specific term for the imposition of a penalty. Our firm successfully represented several companies with such argument.
In this sense, according to the Decree, the legislative initiative aims to provide legal certainty to companies or individuals subject to the laws regulating the Mexican financial system and subject to an administrative sanctioning procedure.
Laws that are the subject of the Decree
The Decree proposes to amend the following laws:
- Law for the Transparency and Regulation of Financial Services
- Law for the Protection and Defense of Financial Services Users
- Law on Credit Institutions
- Securities Market Law
- Law to Regulate Financial Groups
- General Law on Credit Organizations and Auxiliary Activities
- Law to Regulate Credit Information Companies
- Investment Funds Law
- Law on Popular Savings and Credit
- Law to Regulate the Activities of Savings and Loan Cooperative Societies
- Law on Credit Unions
- Law to Regulate Financial Technology Institutions
- Law on Insurance and Bonding Institutions
- Law on Retirement Savings Systems
Hogan Lovells is ready to advise you about the legal implications that the Decree may have if it is approved and published. We will keep you informed of the progress of the legislative process.
Authored by Arturo Tiburcio, Giovanni Sosa, and César Reyes.
