Release

AMENDMENTS TO INTERNAL REGULATIONS AND OPERATING MANUAL OF THE CENTRAL SECURITIES COUNTERPARTY TO REDUCE THE ORDINARY SETTLEMENT PERIOD (“T+1 AMENDMENTS”)

On April 12, 2024, the National Banking and Securities Commission and Mexico’s Central Bank authorized amendments to the Internal Regulation and Operating Manual of the Central Counterparty for Securities (“CCV”) in order to provide a reduction in the settlement cycle for capital market securities.

The T+1 Amendments provide for the reduction in the ordinary settlement period for certain domestic securities and securities listed on the International Quotation System (“SIC”) from two business days (“T+2”) to one business day (“T+1”). The CCV will further determine which securities shall be subject to the T+1 regular settlement period.

The changes to the settlement cycle are made in conjunction with the U.S. Securities and Exchange Commission (“SEC”) and the Canadian Capital Markets Association (“CCMA”), which in turn have also issued regulation for the reduction of their securities settlement cycles from T+2 to T+1.

The T+1 Amendments provide, as a general rule, for the migration in the local market of all domestic securities to the T+1 settlement cycle, with the exception of debt-related Exchange Traded Funds (ETF’s) or those instruments that have T+2 settlement securities and will not forgo changes in their settlement cycle.

In the case of securities listed on the SIC, securities whose settlement locations are in the United States of America or Canada or issuers classified as dually listed that can be settled through the Depositary Trust & Clearing Corporation (“DTCC”) will be susceptible for migration to the T+1 cycle.

In this regard, under the T+1 settlement, the ex-right date and the registration date, which under the T+2 settlement were performed on two subsequent days, will be performed under the T+1 settlement on the same day, thus moving the payment date to one day earlier than under the T+2 settlement. It should be hereby noted that, in order for issuers to be able to use the new T+1 settlement option, the corresponding issuance documents must provide for the change of the settlement cycle from T+2 to T+1.

The T+1 Amendments also provide that in case of outstanding obligations that are not extinguished during the ordinary settlement period, known as obligations in default, the term for the extraordinary settlement period will be extended from 3 to 4 business days following the day on which the ordinary settlement period ends for domestic securities and from 4 to 5 business days following the day on which the ordinary settlement period ends for securities listed on the SIC.

As of Monday, May 27, the T+1 Amendments issued by the CCV became effective, in conjunction with the U.S. and Canadian markets.

This press release is provided for informational purposes only and does not constitute legal advice applicable to any particular case or situation.

Should you have any questions regarding this press release,
please contact Mauricio Basila, mbasila@basila.mx or Karime Jassen, kjassen@basila.mx 
(5255)5520-3063

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