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Amendments to the Securities Market Law and the Investment Funds Law

Patricia

By: Andrea Mendoza Molina / Paola Salomón del Arenal

On December 28, 2023, the Decree amending, adding and repealing several provisions of the Securities Market Law and the Investment Funds Law was published in the Federal Official Gazette. The decree became effective the following day. One of the objectives of this reform is to facilitate the registration of securities in order to encourage the existence of issuers and investment funds in the country, as well as to encourage SMEs to become part of the stock market through the offering of securities. It also seeks to reduce operating, monetary and regulatory costs, and the public offering authorization period, among others.

The following are some of the most important points of the reform.

A new simplified securities registration procedure was created to allow SMEs to participate in the stock market through public offerings of debt or equity securities. In addition, the CNBV was empowered to establish the requirements with which companies must comply in order to be part of this procedure. It is now up to the brokerage firms to collaborate in structuring the operations of those companies that wish to become simplified issuers.

On the other hand, regarding the Investment Funds Law, the reform seeks to extend the investment mechanisms. To this end, hedge investment funds were incorporated. These may operate with any Investment Object Asset as long as they establish it in their information prospectus for potential investors, incorporating investment strategies that may change according to market circumstances or the fund's needs. Except as stipulated in Article 5, the shares representing the capital of these funds may only be offered to qualified and institutional investors. In addition, the investments made by these funds are subject to the regime of the CNBV through general provisions.

It is important to mention that the article establishing the requirements for legal entities to obtain and maintain the simplified registration of their securities in the Registry was added. As well as an article that mentions the cases in which the Commission will cancel the simplified registration of securities in the Registry, either at the request of the simplified issuer or the corresponding stock exchange. And finally, the article that establishes the obligations for brokerage firms that participate in the placement of securities subject to simplified registration was added.

References

https://www.dof.gob.mx/nota_detalle.php?codigo=5712731&fecha=28/12/2023#gsc.tab=0

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