Amendment to the General Law on Credit Instruments and Transactions and to the General Law on Auxiliary Credit Organizations and Activities

The amendment reinforces the transition toward the digitalization of credit instruments, promoting the efficiency, security, and traceability of these transactions, while modernizing the legal framework to align it with the current needs of the financial market and commercial practices. Among the most notable modifications, the following stand out: • The incorporation of electronic, optical, or any other technological means for the issuance of credit instruments. Now, credit instruments may be issued, transferred, and endorsed through these means by way of an information system that allows data messages to be generated, transmitted, received, delivered, or processed, in the terms of Article 89 of the Commercial Code (the “CCom”). It will also be possible to grant guarantees (avales) and carry out protests through an information system. • This amendment underscores that credit instruments issued through electronic means will be considered a “data message,” pursuant to Title Two of Book Two of the CCom, guaranteeing their legal effects, validity, and the enforceability of the rights recorded in such instruments. • In addition, it specifies that when the law or any other legal provision requires that transactions be recorded in writing, this requirement will be deemed fulfilled with respect to a credit instrument issued through electronic means when the law expressly permits it, provided that it is kept intact and available. • Article 5 Bis is introduced into the LGTOC, establishing that the integrity of an electronic credit instrument is presumed when it can be consulted in the aforementioned information system, and that a person’s signature on these instruments will be deemed satisfied provided that it is attributable to such person in accordance with the CCom. • It also emphasizes the obligation to present the credit instrument in order to exercise the right recorded therein, adapting this provision for instruments issued through electronic means, where the holder must present the instrument through the appropriate information system. • The treatment of deposit certificates is reformed, noting that they will now be issued solely through electronic, optical, or any other technological means, by way of cryptographic systems selected by the issuing General Deposit Warehouses themselves, and must be registered in the Single Registry of Certificates, Warehouses, and Merchandise, in the terms of the LGOAAC. At the time of the amendment, these certificates are the only credit instruments that, under the law, may and must be issued through electronic means. • The decree establishes that deposit certificates will evidence ownership of the merchandise deposited in a warehouse and the constitution of a pledge over it, and therefore pledge bonds (bonos de prenda) are eliminated. The prior law will continue to apply to deposit certificates and pledge bonds issued before the decree’s entry into force, but they may be replaced by credit instruments issued through electronic means. • The possibility is introduced for General Deposit Warehouses to opt for the cryptographic system they prefer, provided that it complies with the general rules to be issued by the National Banking and Securities Commission; as a result, the need for interconnection among cryptographic systems is established, in the event of a plurality, in order to guarantee that interested parties have access to the information relating to any instrument, without generating additional costs for the issuing General Deposit Warehouses. For more information on this matter, please contact: Alberto Córdoba, Partner:+52 (55) 5258-1016 | acordoba@vwys.com.mx Luis Burgueño, Partner:+52 (55) 5258-1003 | lburgueno@vwys.com.mx