2. TRADING
Instruments
Listing of unsecured structured securities
Because the authorities have so far refused to authorize the listing of some structured certificates to keep mutual fund managers that have not clearly defined this investment option in their prospectuses from investing in this type of instrument, information was requested as to the agent, issue, and general data on the rejected projects. Information was received on only two brokerage firms, however, which provided some practical background information.
In September, AMIB's Administration Committee and the BMV were asked for two examples in which the CNBV had rejected the listing of unsecured structured securities. The first of these was referenced to interest rates, and the second to equities.
In both examples, the invested capital had no collateral, even though the interest raid paid was consistent with the conditions established by the issuer (credit risk), and the securities were not eligible for listing in the International Quotations System. In effect, the SIC can only list debt and equity securities, while the issuer of the structured notes does not provide any payment guarantee, so the instruments are considered derivates and thus cannot be listed on the Global Market.
The AMIB area responsible for analyzing this matter, and which coordinates the Administration Committee, pointed out that both instruments are listed on unrecognized markets, so they are ineligible for trading in Mexico.
The Legal Affairs Committee remarked that a number of brokerage firms have sought to have the SIC list structured certificates from foreign issues whose yield depends on changes in the price of the underlying, and allow the issuer to settle them at expiration for less than the principal invested by the buyer.
All this notwithstanding, proposed changes to the bulletin are currently being prepared, which would allow the listing of derivatives, which would mean this type of unsecured structured note could in fact be traded in the SIC.
As for their listing in an unrecognized market, this would not be a problem as long as the instruments are distributed in a recognized market of a member country of IOSCO's Technical Committee ("European passport") to qualify.