On March 26, 2024, the decree amending, adding and repealing provisions of the General Law of Credit Instruments and Credit Transactions (LGTOC, by its acronym in Spanish) and the General Law of Credit Organizations and Auxiliary Activities (LGOAC, by its acronym in Spanish) was published in the Official Gazette of the Federation (DOF, by its acronym in Spanish).

These amendments cover a wide range of issues related to the regulation of credit instruments and depository receipts in the context of technological developments and the increasing digitalization of financial processes.

The decree became effective on March 27, 2024, and both the Federal Government and the National Banking and Securities Commission (CNBV, by its acronym in Spanish) have 180 business days from that date to adjust their regulations and any regulatory provisions.

On the other hand, the general deposit warehouses must adjust their operations for the issuance of electronic certificates of deposit within the next 18 months following the entry into force. 

In this regard, the main aspects of the reform are as follows:

  • Possibility of issuance and transmission of credit instruments by electronic, optical or any other technology
  • Establishment of full legal effects, validity and enforceability for electronically issued credit instruments as they are considered “data messages” pursuant to article 89 of the Commerce Code
  • The signature of the person who subscribes the credit instrument or the guarantor, can be done by electronic, optical or any other technology
  • The certificates of deposit will only be issued in electronic, optical or any other technology, through the cryptographic system of certificates of deposit determined by the general deposit warehouses issuing the security
  • For the creation of the single registry of certificates, warehouses and merchandise (Rucam, by its acronym in Spanish), the certificates of deposit issued and their cancellations must be registered
  • The Ministry of Economy shall determine, by means of general provisions, the technical and security requirements necessary for the cryptographic systems of the general deposit warehouses to interconnect with the Rucam

Furthermore, it is specified that when the LGTOC requires written operations, this requirement will be considered met in respect of the credit instruments issued by electronic, optical or any other technology if they remain integrated and available.

Finally, specific rules are laid down for the resolution of disputes and the carrying out of legal proceedings concerning credit instruments and deposit certificates issued electronically.

In this context, and by virtue of the entry into force of the reform in question, companies can take advantage of the current regulation of new technologies to promote efficiency, transparency, and security in their commercial and financial operations.

As always, the staff of KPMG's Tax and Legal practice in Mexico is at your service to analyze in detail the effects that the application of these provisions may have on your company.

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