1. Regulation
The directors of AMIB, in close collaboration with the specialists who sit on its committees and work groups, organized activities to analyze, research and draft proposals for reforms, additions and adjustments to the regulations and rules that govern various aspects of the securities market. The most important of these were the following:
Brokerage Firms
Modifications to the Unified Brokerage Firm Bulletin
On December 22, 2006, the Official Gazette of the Federation published a decree entitled "Resolution to modify general provisions applicable to brokerage firms." The resolution addresses the following matters:
- Updates the basic definitions of brokerage activity in terms of the new Securities Market Act.
- Eliminates issues included in the Act itself or which do not apply under the new provisions.
- Establishes requirements for authorization and start of trading by brokerage firms.
- Specifies the transactions that brokerage firms may perform in the various forms covered by the Act (equity trading, arbitrage and debt transactions) and provisions regarding the duties of compliance officers
- Establishes criteria for early alerts (defining categories of brokerage firm according to their capitalization, definition of the capital consumption index, etc.)
- Sets new capital requirements according to market risk (MR-7 Group: Transactions in pesos with rate of yield pegged to growth in general minimum wage).
Each of these provisions was analyzed within the respective Technical Committees and observations were discussed with the authorities.
During the year, as a result of steps taken by AMIB, the CNBV's Department of Regulatory Affairs agreed that the issue of minimum capital requirements for each type of brokerage firm had considerable importance and implications for the industry, and would thus be analyzed during the course of 2008.
Broker/dealers and Traders
AMIB committee members analyzed the second paragraph of Article 8 of the Unified Brokerage Firm Bulletin, which says brokerage firms must inform board members, chief executive officers, compliance officers, executives reporting directly to the chief executive officer, statutory auditors and external auditors, of the circumstances under which such individuals might fail comply with the requirements of the general provisions issued by the Commission, and which would prevent them from continuing to carry out their duties.
A rule was thus established that a record of the above matter should be kept and at least once a year brokerage firms must verify that they are in compliance with the requirements, and that there is no impediment for those individuals to continue with the performance of their duties.
The results of this verification, along with the information mentioned in those provisions, must be submitted to regulatory institutions that keep a list of broker/dealers authorized to provide securities advice, promotion, or brokerage, as well as authorized traders, so that they can make the appropriate changes and notify the Commission of this situation.
The last paragraph of Article 7 of the Bulletin stipulates that broker/dealers and traders must notify the self-regulatory organization of any legal actions that result in convictions, if irregularities were detected, so that the self-regulatory organization can make the corresponding notes in its records. It was also concluded that information not stipulated in the law itself should not be disclosed to AMIB. >>
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