On January 21st, 2025, the National Banking and Securities Commission (CNBV) published the “General Provisions Applicable to Simplified Issuers and Securities Subject to Simplified Registration” (the “General Provisions”) in the Federal Official Gazette. This landmark regulation introduces a streamlined framework to facilitate access to the securities market, particularly for small and medium-sized enterprises (“SMEs”). By reducing regulatory complexity and establishing clear requirements, these provisions aim to democratize financial opportunities, foster transparency, and encourage innovation within the financial system.
Main Objectives of the General Provisions
Enable SMEs to access financing through the stock market by lowering barriers such as high costs and excessive requirements. This aims to broaden the base of issuers and promote economic growth.
II. What securities may be subject to simplified registration?
- Shares, ordinary participation certificates, or securities representing the equity capital of foreign entities.
- Debt instruments.
- Asset-backed securities (ABS).
- Structured securities.
III. Differentiated regulation.
Introduce three levels of simplified issuers (Level I, Level II, and stock issuers) with proportional requirements based on size, experience, and the type of securities issued. This includes issuance limits and tailored financial reporting obligations.
Simplified Issuer Level I
“Article 1.-
…
Simplified Issuer Level I refers to the simplified issuer that applies for, obtains, and maintains the simplified registration of securities in the form of debt instruments, subject to a maximum issuance amount of up to 75’000,000 [1] investment units (UDIs) per issuance and a cumulative annual limit of up to 900’000,000 [2] investment units (UDIs).
…”.
Simplified Issuer Level II
“Article 1.-
…
Simplified Issuer Level II refers to the simplified issuer that applies for, obtains, and maintains the simplified registration of securities in the form of debt instruments or asset-backed securities, subject to a maximum issuance amount and an annual cumulative limit of up to 1,250’000,000 [3] investment units (UDIs [4] ).
…”.
Simplified Stock Issuers
“Article 1.-
…
Simplified Stock Issuer refers to the simplified issuer that applies for, obtains, and maintains the simplified registration of securities in the form of stocks, ordinary participation certificates representing such stocks, or securities representing the equity capital of foreign companies, subject to a maximum issuance amount and an annual cumulative limit of up to 1,250’000,000 investment units (UDIs).
…”.
IV. Transparency and supervision.
Require clear, timely, and verifiable disclosure of financial information, such as audited financial statements, annual reports, and material facts, to ensure market trust and investor protection.
V. Encourage institutional participation.
Restrict the placement of simplified securities to qualified and institutional investors who have the expertise and resources to assess risks, safeguarding retail investors from potential exposure.
VI. Administrative simplification.
Reduce costs and administrative burdens by eliminating complex procedures, high fees, and bureaucratic obstacles, encouraging more companies to participate in the stock market under this simplified framework.
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[1] Approximately MXN$ 627,637,350 or USD$ 30,320,352.
[2] Approximately MXN$ 7,531,648,200 o USD$ 363,844,224.
[3] Approximately MXN$ 10,460,622,500 o USD$ 505,339,200.
[4] Investment Units (UDIs) are a measurement unit created by the Mexican Central Bank (Banco de México) to protect investors from inflationary fluctuations. They are updated daily based on the National Consumer Price Index (INPC for its Spanish acronym) and are commonly used in long-term investments to preserve the purchasing power of money.
