The purpose of this note is to inform you about the decree published on December 28th, 2023, in the Federal Official Gazette, which amends, adds and repeals various provisions of the Securities Market Law and the Investment Funds Law. This reform introduces simplified registration procedures and regulates public offerings.
Publication and Current Content
The reform includes the creation of categories such as ‘Simplified Issuer’ and ‘Simplified Registration’, facilitating access to the securities market for new issuers. The process of registering securities is modified, eliminating the need for prior authorization by the National Banking and Securities Commission (“CNBV” for its Spanish acronym) and exempting certain provisions such as Articles 87, 88, and 89 of the Securities Market Law (“LMV” for its Spanish acronym). This represents a significant step towards a more accessible and efficient stock market.
The reforms provide small and medium-sized enterprises with greater opportunities for accessing financing through the securities market. Specific regulations are also established for simplified issuers, facilitating their participation in the stock market and promoting greater financial inclusion.
Simplified Issuers
The reform introduces the category of Simplified Issuers, aimed at streamlining access to the securities market for certain corporations. This category is tailored for entities distinct from those previously classified as issuers under the LMV, including trust institutions when acting in this capacity. Simplified Issuers may maintain simplified registration of their securities in the National Securities Registry (“RNV” for its Spanish acronym) following the general provisions issued by the CNBV. This category aims to facilitate the process for new market participants by reducing regulatory barriers for smaller companies.
Publicly Traded Stock Corporations (Sociedades Anónimas Bursátiles, “SABs”) and Stock Investment Promotion Corporations (Sociedades Anónimas Promotoras de Inversión Bursátiles, “SAPIBs”)
The recent legislative reform significantly transforms the landscape for SABs and SAPIBs, relaxing the rules for issuing shares and expanding investment opportunities. Now, these entities can issue a wider variety of shares, including those with limited voting rights and other restrictions. Furthermore, the reform simplifies the process of offering shares to institutional and qualified investors, providing greater agility and efficiency in the stock market. These changes, driven by the CNBV, open new paths for diversification and growth in Mexico’s financial sector.
Gender Equality and Sustainable Development
The reform also includes provisions to strengthen gender equality and sustainable development among publicly traded corporations and other market participants, marking a significant step towards more socially responsible and conscientious business practices.
The modifications will come into effect immediately, marking a significant change in the dynamics of the securities market and offering new opportunities for diversification and growth in Mexico’s financial sector.
Investment Funds Law
The reform of the Investment Funds Law introduces significant changes that ease the registration and management of funds, aiming to promote greater inclusion in the financial market. Processes for fund registration and updates are streamlined, allowing greater flexibility in their management. These changes mark a significant step towards modernizing the financial system, offering new investment opportunities, and fostering increased participation of diverse entities in Mexico’s investment fund market.
