Release

Decree amending, adding and repealing several provisions of the Credit Instruments and Operations General Law ("LGTOC") and the Credit Entities and Auxiliary Activities General Law ("LGOAAC")


On March 26, 2024, the Decree amending, adding and repealing several provisions of the Credit Instruments and Operations General Law and the Credit Entities and Auxiliary Activities General Law (the "Amendment Decree" or the "Decree") was published in the evening edition of the Official Gazette of the Federation.
The main purpose of the Decree is the legal implementation of the general principles applicable to electronic negotiable instruments, as well as to endorse their use and recognize the validity of the acts and transactions carried out using them.
In this regard, the most important aspects of the Amendment Initiatives are the following:

A. Credit Instruments and Operations General Law.

1. The same validity is recognized for negotiable instruments issued by electronic means as for those issued by written means. In this regard, it is established that in cases where any law or provision expressly states that the transactions regulated by the LGTOC must be in writing, this requirement will be deemed to be met with respect to any instrument of credit that has been issued by electronic or optical means or by any other technology, when not expressly prohibited by law and if such instrument is kept in its entirety and available.

2. It is expressly recognized that all negotiable instruments issued in electronic, optical or any other technology through an information system to be used to generate, transmit, receive, deliver, or otherwise process data messages are valid.

3. Likewise, it is established that the holder of a digital credit instrument to be able to exercise the rights set forth therein, it may exhibit it through the digital information system that was used to generate or transmit the instrument.

4. It is prescribed that the transfer and endorsement of negotiable credit instruments issued in electronic, optical or any other technology shall be made through the information system used to generate, transfer, receive and deliver data messages. In this sense, the endorsement or transmission of the instrument may be verified based on the information system that was used for the transmission and endorsement of said instrument.

5. It is established that the last holder of a credit instrument issued in electronic, optical or any other technology may prove the possession of such instrument before any person or authority based on the information system that was used for the transmission and circulation of such instrument.

6. The Decree expressly provides that the certificates of deposit will be issued in electronic, optical or any other technology, through the cryptographic system or systems of certificates of deposit determined by the warehouses issuing the certificate of deposit.

7. In relation to the above, the delivery of the certificate of deposit, renewal of validity, notice with protest effects of a pledgee and transmission of the certificate to the pledgee, may be made through the cryptographic system, by means of which the certificate in question was issued.

8. The Decree expressly prohibits the issuance of multiple certificates covering identical goods or merchandise.

9. In addition, new rules are established for the exercise of actions by pledgees and in favor of any legitimate holder of the certificates of deposit.


B. Credit Entities and Auxiliary Activities General Law.

10. In relation with the amended provisions of the LGTOC, it is established that the general deposit warehouses will exclusively issue certificates of deposit through the cryptographic system of their choice.

11. Moreover, with the aforementioned cryptographic system, the general deposit warehouses must guarantee to the legitimate holders, pledgees, supervisory authorities and other parties involved in the transactions with such certificates of deposit, efficient access to the cryptographic system used.

12. It is established that the cryptographic systems used by the warehouses must comply with the general rules issued by the National Banking and Securities Commission, which will establish the minimum security standards that guarantee the confidentiality, availability and integrity of the information and the prevention of fraud and cyber-attacks.

13. The Decree also provides that the National Banking and Securities Commission will establish by means of general provisions the minimum guidelines to be followed by the general deposit warehouses for the control of the stock, quality, conservation conditions and other characteristics of the goods or merchandise delivered in deposit in warehouses, leased, on loan or authorized, in order to provide greater certainty and legal security to its depositors.

14. The Decree establishes that the Mexican Presidency will have 180 business days from the entry into force of the Decre to adjust the regulations, or any other normative provision that requires updating in accordance with the content of the Decree.

15. In addition to the foregoing, the National Banking and Securities Commission will have a term of 180 business days from the entry into force of the Decree to adjust any regulatory provision that requires updating and to issue the relevant Rules pursuant to the Decree.

16. Likewise, the general deposit warehouses are required to adjust their operations for the issuance of electronic certificates of deposit no later than 18 months after the date of entry into force of the Decree.

17. Finally, certificates of deposit and pledge bonds issued prior to the entry into force of the Decree will continue to be in force until they are cancelled. The legislation in force at the time of their last negotiation will be applicable to such instrumetns. Such certificates of deposit may be substituted by electronic certificates or instruments under the terms of the LGTOC.


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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