Mexico City, February 4th 2025.
On January 21, 2025, the General Provisions applicable to Simplified Issuers and Securities subject to Simplified Registration (Disposiciones de Carácter General aplicables a las Emisoras Simplificadas y los Valores objeto de Inscripción Simplificada) (the “Provisions”) of the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores), were published in the Official Gazette of the Federation.
The Provisions complement the amendments to the Securities Market Law (Ley del Mercado de Valores) (“SML”) and the Investment Funds Law (Ley de Fondos de Inversión), published on December 28th, 2023 (https://www.dof.gob.mx/nota_detalle.php?codigo=5712731&fecha=28/12/2023#gsc.tab=0 ), with the purpose of facilitating access to financing for small and medium-sized enterprises (SMEs), through the incorporation of a “simplified” procedure for the registration of securities.
Therefore, to broaden the participation of companies in this simplified procedure, three types of simplified issuers are established based on the type of instruments they can register:
- 1.- Simplified Issuers Level I (Basic Debt).
- Maximum amount per offering: 75 million investment units (“IUs”) (MXN$627,000,000.00 pesos or US$30,484,692.00 dollars approximately).
- Cumulative annual limit: 900 million IUs (MXN$7.5 billion pesos or US$3,646,494,260.00 dollars approximately).
- Financial statements audited by an external auditor for the last fiscal year.
- Quarterly Financial statements not older than the penultimate quarter ended prior to the placement date.
- 2.- Simplified Issuers Level II (Advanced Debt).
- Maximum amount per offering and cumulative amount per fiscal year: 1,250 million Ius (MXN$10,460 million pesos or USD$508,564,399.00 dollars approximately).
- Scope: Traditional debt instruments and asset-backed securities.
- Financial statements audited by an external auditor for the last two fiscal years.
- Quarterly internal financial statements not older than the penultimate quarter ended prior to the placement date.
- Submit to the placement intermediary a credit quality report issued by a rating agency.
- For asset-backed securities: additional specific documentation.
- 3.- Simplified Stock Issuers (Capital):
- Scope: shares, ordinary participation certificates or securities representing the capital stock of foreign companies.
- Maximum amount per offering and accumulated amount per fiscal year: 1,250 million IUs (MXN$10,460 million pesos or USD$508,564,399.00 dollars approximately).
- Adoption of the modality of a stock Exchange investment promotion corporation.
- Financial statements audited by an external auditor for the last two fiscal years.
- Quarterly internal financial statements not older tan the penultimate quarter ended prior the placement date.
- Adopt the modality of a stock exchange investment promotion corporation according to the SML.
The simplified offering is aimed exclusively to (i) institutional investors such as insurance companies and investment funds, and (ii) qualified investors with average annual investments of 1.5 million IUs (MXN$12.5 million pesos or USD$607,749.00 dollars approximately) and annual gross income greater than or equal to 500 thousand IUs (MXN$4.1 million pesos or USD$199,341.00 dollars approximately ) in the last two years.
In addition, the Provisions address, among other issues, the regulation applicable to simplified issuers, detailing their registration process, applicable requirements, oversight, listing and maintenance, as well as the procedure for the cancellation of their securities registration.
The Provisions represent a significant advance in the modernization of the Mexican securities market, establishing a differentiated regulatory framework that seeks to facilitate the inclusion of small and medium-sized enterprises (SMEs) in the Mexican securities market by simplifying the registration procedure and the requirements that allow them to access financing through the stock market more efficiently, while maintaining adequate safeguards for investors.
The lawyers of the Banking and Finance area are at your service to resolve any doubts you may have regarding the above.
Sincerely,
Miguel Angel Peralta
peralta@basham.com.mx
Pedro Said Nader
psaid@basham.com.mx
Valeria Couttolenc Riba
vcouttolenc@basham.com.mx
Remedios Martinez Rodriguez
mrmartinez@basham.com.mx
