As dictated by the old and well-known saying: "there is no date that is not met, a deadline that does not expire, nor a debt that won't be paid." As we had anticipated in a previous article, the Law to Regulate Financial Technology Institutions (FTI), better known as the Fintech Law, was finally published in the Mexican Official Gazette of the Federation.
With 145 articles, this new law is the first step of the Mexican government to regulate this type of companies, and we believe that it is not only the right thing to do, but also very convenient.
The obligations that stand out are:
- Have an authorization from the National Banking and Securities Commission (NBSC), to operate as a Financial Technology Institution (FTI).
- To get this authorization, it's necessary to comply with a series of requirements, as well as submit certificates and documents that range from the draft of the bylaws, to the conflict of interest resolution policies.
- Be crystal-clear on websites, advertising and contracts, that the federal government will not be responsible for or guarantee the resources used in operations with FTIs.
- The bank statements of the transactions made with the FTIs must be certified by a public accountant authorized by the FTI, and must be executive titles, meaning they will be paired with their execution.
- It defines 'Virtual Asset' as "the representation of value electronically registered and used among the public as a means of payment for all types of legal acts and whose transfer can only be made through electronic devices."
- The supervision of compliance with the obligations imposed on the FTIs will be the responsibility of the NBSC through ordinary, special and investigative inspection visits.
Likewise, it should be mentioned that this law will be very strict to combat terrorism and money laundering, imposing the obligation for the FTIs to establish measures and procedures to prevent and detect those illicit activities, as well as submit reports to the NBSC on this matter.
In case an FTI doesn't comply with this law, the sanctions will be sever, ranging from imposing heavy penalties, to revoking the authorization to operate as an FTI; that's in addition to typifying some specific crimes that contemplate penalties going from three to 15 years in prison.
It's important to underline that much of what is contemplated in this law is subject to the general provisions issued by the Ministry of Finance and Public Credit, the National Banking and Securities Commission, the National Commission for the Protection and Defense of Users of Financial Services, the National Commission of the Retirement Savings System, the National Insurance and Bonding Commission, and the Bank of Mexico.
To issue these provisions, the law grants the aforementioned authorities and institutions terms ranging from six to 24 months, from the issuance of the law: March 9, 2018.
Finally, we think it's very important to highlight that the issuance of this law implies the recognition by the Mexican government of the importance of financial technology companies and their operations.
By Jorge Espinosa
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