Mexico City April 3rd, 2024.
On March 26, 2024, a decree was published in the Federal Official Gazette amending the General Law of Negotiable Instruments and Credit Transactions (Ley General de Títulos y Operaciones de Crédito) (“LGTYOC”) and the General Law of Organizations and Auxiliary Credit Activities (Ley General de Organizaciones y Actividades Auxiliares del Crédito) (“LOAAC”), with the purpose of integrating the issuance of negotiable instruments through electronic means.
The main purposes of the amendment are to:
1. Incorporate that negotiable instruments, including warehouse receipts, may be issued by electronic or optical means or by any other technology, and shall have the same validity as physical instruments.
2. Implement the electronic issuance of warehouse receipts by the Public Bonded Warehouses, making it the only way the receipts are issued.
3. Create the Single Registry of Receipts, Warehouses and Merchandise (Registro único de Certificados, Almacenes y Mercancías) (“RUCAM”), where the Public Bond Warehouses[1] must electronically register the receipts they issue.
Regarding the LGTYOC, the most important amendments include:
I. Issuance of negotiable instruments by electronic means.
• Incorporates into the definition of negotiable instruments the possibility of such instruments being issued in written or electronic, optical, or any other type of technological means, utilizing the information system used to generate, transfer, receive, deliver, or otherwise process data messages, in accordance with Article 89 of the Commercial Code. This article stipulates that data messages include information generated, received, or processed by electronic, optical, or any other technological means.
• For purposes of the foregoing, negotiable instruments issued in electronic, optical or any other technology shall be deemed as data messages, and the legal effects, validity, and enforceability of the rights outlined in such instruments shall not be disregarded solely because they are contained in a data message.
• When the signature of an individual is required, this requirement will be considered fulfilled for negotiable instruments issued in electronic or optical means, or by any other technology, provided that it can be attributed to such person in accordance with Article 93 of the Commercial Code. This article stipulates that to the extent that the information in the data message is complete and accessible for subsequent consultation, regardless of the format in which it is found or represented, the signature requirement will be deemed fulfilled.
II. Endorsement and third-party guarantee (Aval) by electronic means.
• When negotiable instruments are issued by electronic means, the endorsement shall be made through the information system that will be used to generate, transmit, receive, deliver or process the data messages.
• If any subsequent transfer is improperly carried out by the transferor of instrument, through the system that generated it, it will be subject to the civil and criminal liabilities applicable to the specific case.
• Transfer by endorsement must be made in an undeniable manner with the negotiable instrument being endorsed, and the identity of the persons presenting the security as the last holder and the continuity of the endorsements must be verified in the aforementioned information system.
• Additionally, it incorporates that the granting of a guarantee over the credit instrument may be made by electronic means, which will be carried out through the aforementioned information system.
III. Electronic issuance of warehouse receipt by the Public Bonded Warehouses.
The requirement for warehouse receipts to be issued in physical form is eliminated, and it is incorporated that they may only be issued through electronic, optical, or any other technology, utilizing cryptographic systems determined by the Public Bonded Warehouses issuing the certificate.
In addition, the amendment includes that, in case there is a plurality of cryptographic systems, they must be interconnected and comply with the fundamentals and specifications mentioned therein.
For purposes of the foregoing, new requirements for issuing a warehouse receipt are incorporated, which are as follows:
i. Designation and use of the advanced electronic signature in terms of the Advanced Electronic Signature Law of the legal representative of the Public Bonded Warehouses issuing it. The use of digital signatures will not be allowed.
ii. Order Number;
iii. Name, the single population registry identity number (“Clave Unica de Registro de Población” or “CURP”), or the federal taxpayers registry (“Registro Federal de Contribuyentes” or “RFC”) of the depositor in the case of a natural person. In case the depositor is a legal entity, its name or corporate name, Federal Taxpayers Registry and name, and the CURP or RFC of the legal representative.
iv. A legend stating that the personal property is deposited in warehouses owned, licensed, leased or received on loan, or that the personal property are in transit to the warehouse.
v. A legend stating that the warehouse receipt is Negotiable or Non-Negotiable.
vi. Name, the single population registry identity number (“CURP” or “Clave Unica de Registro de Población”), or the federal taxpayers registry (“Registro Federal de Contribuyentes” or “RFC”) of the beneficiary in the case of a natural person. In case the beneficiary is a legal entity, its name or corporate name, Federal Taxpayers Registry and name, CURP and RFC of the legal representative.
vii. The representation of the depositor as to whether the merchandise or personal property described in the warehouse receipt guarantee any other obligation previously agreed upon.
In the event that a pledge secured loan is created on the merchandise or personal property indicated in the warehouse receipt, the creditor must integrate in the corresponding warehouse receipt the data of incorporation of the pledge credit on merchandise covered by a warehouse receipt, through the cryptographic system in which it is issued, no later than the business day following the date on which said credit was incorporated, being responsible for the damages caused by the omissions or inaccuracies in which it incurs.
Additionally, the obligation to register the incorporation of the pledge loan in the RUCAM is included.
Finally, it is worth mentioning that the Pledge Bond disappears as an independent security and the information of the pledge credit is incorporated directly in the electronic warehouse receipt.
General Law of Organizations and Auxiliary Credit Activities
The main amendments include the guidelines and characteristics for the issuance of electronic warehouse receipts, along with the obligations of the Public Bonded Warehouse, in accordance with the following:
a) Public Bonded Warehouses shall be exclusively responsible for issuing warehouse receipts, which must be carried out through the cryptographic systems established in the LGTYOC, and some security and access requirements for these systems are specified.
b) The liability of the Public Bonded Warehouses for the existence, quality and quantity of the personal property stored, even when they are in transit or in authorized warehouses, is reinforced.
c) The warehouses options that may be used by the General Warehouses are expanded, including warehouses owned, leased, on bailment or authorized, both in national territory and abroad.
d) Incorporates in the auction process of stored merchandise, such as the publication of sale notices in the RUCAM and the possibility for the lienholder and the Warehouse to agree on an alternative auction procedure.
e) In the RUCAM the Public Bonded Warehouses must include:
i. The issuance of the warehouse receipt, as well as their cancellations, the merchandise or stored personal property covered by the warehouse receipt issued, the notices of sale at public auction of personal property or merchandise deposited in warehouses and other applicable notes.
ii. The omission or defect in the registration of securities in the RUCAM by the Public Bonded Warehouses will not affect their validity or the rights of the holders.
iii. The RUCAM will be in charge of the Ministry of Economy, will be public, will be kept by digital means, in a computer program established by the Ministry itself in a national database, and may allow its interconnection with the cryptographic system or systems through which warehouse receipts are issued. Its operation will be governed by the general rules issued for such purpose by the Ministry of Economy.
iv. Preventive notices, judicial or administrative resolutions, and public certifications issued in connection with the deposit or merchandise or personal property in Public Bonded Warehouses may be recorded in the RUCAM.
For purposes of the foregoing, the Decree became effective on the day following its publication in the Federal Official Gazette, that is, on March 27, 2024.
The Federal Executive will have a term of 180 business days from the enactment of the Decree to adjust the regulations, or any other provisions that requires updating, in accordance with the content of the Decree.
On the other hand, the National Banking and Securities Commission will have 180 business days from the enactment of the amendment to adjust any regulatory provisions that require updating and to issue the relevant rules.
In addition, the Public Bonded Warehouses must adjust their operation for the issuance of electronic warehouse receipts no later than 18 months after the date of entry into force of the Decree, until the term indicated above is met, or the issuance of electronic warehouse receipt is adopted prior to such term, the Public Bonded Warehouses may continue issuing the warehouse receipt documented in physical media.
Finally, warehouse receipt and pledge bonds issued prior to the entry into force of the Decree Will continue to be in force until they are cancelled and the legislation in force at the time of their last negotiation Will be applicable to such bonds. It is worth mentioning that such warehouse receipt may be substituted by electronic securities under the terms indicated in the LGTYOC.
The lawyers of the corporate practice group of the Firm will be pleased to respond to any doubts or questions in relation to this Newsletter,
S I N C E R E LY,
CDMX
Juan José López de Silanes
lopez_de_silanes@basham.com.mx
Miguel Ángel Peralta
peralta@basham.com.mx
Amilcar Peredo
peredo@basham.com.mx
Juan Carlos Serra
serra@basham.com.mx
Jesús Colunga
jcolunga@basham.com.mx
Pedro Said
psaid@basham.com.mx
Amilcar García
amgarcia@basham.com.mx
Gerson Vaca
gvaca@basham.com.mx
Monterrey
Carlos Velázquez de León
carlosv@basham.com.mx
Rodrigo Gardner
rgardner@basham.com.mx
Querétaro y León
Luis Luján
lujan@basham.com.mx
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[1] Public Bond Warehouses have the purpose of storing, safeguarding, handling, controlling, distributing, or commercializing goods or merchandise under their custody or in transit, covered by warehouse receipts. Additionally, they provide financing using the same goods or merchandise as collateral. Public Bond Warehouses are the only entities in Mexico authorized to issue warehouse receipts and are responsible for the goods covered by such documents. Warehouse receipts can be used as collateral for loans granted by credit institutions.
