On Dec. 21, MEX CB published updated derivatives transaction rules.
MEX CB published Circular 19/2023 in the official gazette to modify Circular 4/2012.
Pertains to requirements for entities that intend to carry out derivatives operations.
Applicability
Circular 19 applies to credit institutions, brokerage houses and investment funds.
Also, multiple purpose financial companies with ties to a multiple banking institution, deposit warehouses, MEX financing agency for agricultural, rural, forestry, fisheries.
Requirement Highlights
Provides requirements for corporate oversight and management of derivatives activity.
Established that the general management must establish and the board of directors or the board of directors, as appropriate, must specifically approve the listed operations.
Including approve objectives, goals, policies, general procedures for client operations and other intermediaries in the market; global limits of exposure to market, credit risk.
Board of directors, as appropriate, must approve a comprehensive risk management unit (UAIR), different from risk-taking areas, reporting directly to the risk committee.
Circular also provides operational requirements, for instance, derivatives transactions trading desks will be made up of a person in charge, with recognized experience.
Also at least two operators, who must have a current certification related to execution of derivatives transactions, issued by an exchange, or recognized association or entity.
Effectiveness
Certain requirements enter to force Dec. 27, 2024; others on June 27, 2025.
