Banxico publishes rules related to Indirect Participation Services
Today, the Bank of Mexico (““Banxico”) published in the Federal Register (“DOF”“): (i) the RULE 1/2022, addressed to the participants of the Interbank Electronic Payment System and other interested parties in acting as such, regarding the amendments to Rule 14/2017 (extended SPEI, indirect participation in SPEI and Miscellaneous Topics) (“Rule 1/2022”), here you can consult the official publication of the aforementioned rule; as well as (ii) RULE 3/2022, addressed to Credit Institutions and other companies that professionally provide fund transfer services, regarding the Modifications to Rule 13/2017 (Indirect Participation and Miscellaneous Topics) (“Rule 3/2022”), here you can consult the official publication of such rule.
In this sense, in general terms, Rule 1/2022, has the purpose of regulating the indirect participation of financial entities in the Interbank Electronic Payment System ("SPEI"), since in recent years the number of transfers processed in such system has been increasing. Likewise, Banxico considered it relevant to establish new measures in favor of SPEI user clients, as well as participants so that such system continues to be efficient, through operational continuity schemes and improvement of the Cobro Digital ("CoDi") platform and finally, the strengthening of remittance processing.
On the other hand, Rule 3/2022, orders the requirements to expand the SPEI infrastructure to maintain service standards, despite the growth in transfers. Likewise, through such rule, Banxico establishes the conditions that SPEI participants must comply with in the event of offering their clients transfer services from other accounts opened in the same institutions through collection messages, as well as the schemes that allow them to send transfer of funds whose instructions identify beneficiary accounts with the 10-digit mobile telephone number.
Now, the objective of this Alert is to present the most relevant changes in Rule 1/2022 and Rule 3/2022 (the “Rules”) regarding indirect participation.
I. Rule 1/2022
A. Indirect Participation Services
a. What are they?
Indirect Participation Services are understood as: those services that a Participant agrees to provide to its Client so that the latter acquires the character of Indirect Participant and that Participant carries out: (a) the reception and processing of Transfer Orders and CoDi Transfer Orders addressed to Indirect Beneficiary Clients, and (b), where appropriate, the sending and compensation of Transfer Orders generated at the request of said Client at the instruction of its Indirect Issuing Clients , as well as CoDi Transfer Orders generated as a result of the acceptance, by the respective Indirect Issuing Clients , of Collection Messages, in addition to the settlement, conciliation and other services related to said orders. The services that the Bank of Mexico, in its capacity as Participant, lends to its Clients.
In other words, the Indirect Participation Services are those services that a SPEI Participant provides to its Clients -by virtue of such Indirect Participation Services Agreement- acquire the character of Indirect Clients, so that they:
(a) carry out the reception and processing of Transfer Orders and CoDi Transfer Orders to Indirect Beneficial Clients;
(b) send and clear Transfer Orders generated at the request of the Client by instruction of their Indirect Issuing Clients and CoDi Transfer Orders, in addition to the settlement, reconciliation and other services related to such orders.
b. Who can be Indirect Participants and what entities are excluded?
Now, in accordance with Rule 9 Bis 1 of Rule 1/2022, any interested party in providing such services must obtain prior authorization from Banxico to operate as a clearinghouse for transfers of indirect participation funds in terms of the provisions issued by Banxico. It is important to mention that these services can only be provided to Clients who:
(a) are financial entities regulated and supervised by a national financial authority (i.e. National Banking and Securities Commission); andv.gr. Comisión Nacional Bancaria y de Valores); y
(a) that they are duly authorized to provide the services of sending or receiving fund transfers in a regular and professional manner to their respective clients or users.
In addition to the foregoing, Banxico excluded certain financial entities to which Indirect Participation Services may be provided, which are: (i) entities that are credit institutions considered to be of systemic importance in terms of the applicable General Provisions to credit institutions, as well as securities depository institutions, clearinghouses and central counterparties for securities and derivatives; and (ii) those entities that exceed the limits of volume or amount of fund transfers or Indirect Client Accounts .
- Requirements for the provision of Indirect Participation Services
c.1. Technical and operational capacity
As mentioned above, the interested SPEI Participant who intends to provide Indirect Participation Services must -at least 10 business days before the start of the provision of such services- submit to Banxico, through the Operation and Continuity of Payment Systems and Market Infrastructures Direction, an express statement by its representative stating that the board of directors or an equivalent body is aware of the intention to provide such services. However, the interested party must declare that it has the operational and technical capacity to provide the Indirect Participation Services.
By virtue of the foregoing, proving operational capacity implies:
(a) Implement all connection schemes to SPEI in case of contingency;
(b) Maintain its connection with SPEI during the applicable hours and with the availability rates established in Appendix AN of the Manual ;[7];
(c) Process the operations object of the Indirect Participation Services that it intends to provide.
On the other hand, proving technical and operational capacity entails the following:
(a) Contar con conexiones al SPEI y con su Cliente que permitan hacer frente al volumen de procesamiento que se espera tener al prestar los servicios;
(b) (Keep encrypted, at all times, the communications and the communication channel with their Client;
(c) Monitor the information that comes from its Client and identify the alteration of such information made by third parties or by the Indirect Participant itself on the information that comes from the Indirect Client;
(d) Maintain and verify compliance with policies for the identification of vulnerabilities in the computing and telecommunications infrastructure, the measurement and management of operational risks, and
(e) Maintain adequate infrastructure to ensure the traceability of information during the operational process corresponding to fund transfers.
c.2. Indirect Participation Service Agreement Model
Likewise, the interested party must enter into an Indirect Participation Services Agreement with the client, that complies with the minimum content established in Rule 9 Bis 4 of Rule 1/2022, which in general terms must include: (i) the services, as well as guidelines and characteristics that the Indirect Participant must comply with for the connection to the systems through which it will provide the services; (ii) rights and obligations of the parties; (iii) the ways in which the Indirect Participant will credit the clients' accounts; (iv) minimum number of operators for the correct operation of the services; (v) fees and commissions; (vi) schemes in case of contingencies; (vii) payment of compensation for delay, etc. In addition to the foregoing, the Participants will be responsible for verifying compliance with the terms and conditions established in said agreement by their Indirect Participants.
II. Rule 3/2022
Rule 3/2022 establishes and elaborates on the requirements that those interested in being SPEI Participants must observe, in addition to those previously established in Rule 13/2017 General provisions applicable to Participants in Payment Systems Managed by Banco de Mexico and the other Interested Parties in acting with such character.
In this sense, the Operation and Continuity of Payment Systems and Market Infrastructures Direction is created, and through which the request for authorization to act as a SPEI Participant, must be submitted.
Additionally, through such Direction, the SPEI Participant or the interested party, in relation to the agreements that can be entered into with third parties that provide an interface that allows them to connect with SPEI, must obtain prior authorization from Banxico to make any modification to the agreement or legal instrument that they have entered into with the third party.
Finally, Rule 3/2022 through Rule 15, adds obligations for SPEI Participants, in terms of indirect participation, which broadly are the following:
(i) Make sure that the clients to whom they provide services have control measures that allow certifying and validating the identity of their respective clients;
(ii) Supervise compliance, by clients acting as indirect participants, with the terms and conditions established for the provision of indirect participation services, as well as the agreement they enter into with their clients for the provision of such services;
(iii) Assign sets of "Standardized Basic Key" to its clients who are Indirect Participants, as well as assign the digits that will identify each of the Indirect Participants in each of said CLABEs;
(iv) Receive payment confirmations from their clients to whom they provide indirect participation services in SPEI to report that the resources subject to an Accepted Transfer Order were credited to the accounts of the latter's clients.
II. Transitorios
In relation to Rule 1/2022, it will enter into force the day after its publication, that is, on March 24, 2022, however, there are some exceptions to said entry into force, regarding the following scenarios:
(i) In accordance with the Fourth Transitory, the Participants that, upon the entry into force of the modifications provided for in the preceding paragraph, materially provide or offer Indirect Participation Services to their Clients, will have until December 15, 2022 to adjust the allocation of the CLABE to the Client Accounts open at the time of the aforementioned publication and of which the Clients to whom they provide said services are the holders, in accordance with the provisions of the third, fourth and fifth paragraphs of the 9th. of the SPEI Rules, so that these Clients, in turn, assign each of these CLABEs to the accounts that said Clients have.
In terms of the Ninth Transitory, the rules related to Indirect Participation Services developed in this alert in relation to the assumptions for the provision of said services, the entities excluded from the provision of indirect participation services, the requirements for the provision of indirect provision services and the requirements of the agrement model, will enter into force on December 15, 2022.
(iii) Pursuant to the Twenty-Second Transitory, the Participants will have until December 15, 2022 to identify their Clients that offer transfer services through SPEI and notify them that, within said period, they must sign an Indirect Participation Services Agreement as provided in the 9th. Bis 4. of Rule 1/2022.
(iv) In accordance with the Twenty-Third Transitory, the Participants referred to in 9a. Bis 1., first paragraph, must obtain authorization from Banxico to operate as a clearing house for transfers of indirect participation funds within a period of 180 (one hundred and eighty) calendar days from the entry into force of the provisions of an indirect nature. general referred to in the aforementioned 9a. Bis 1 of Rule 1/2022, that is, September 24
In relation to Rule 3/2022, this will also enter into force the day after its publication, however, there are exceptions to said entry into force according to the following:
(i) In terms of the Second Transitory, the Participant must send, process and receive, in terms of the Internal Rules[8], the Transfer Orders in the instances of the SPEI referred to in the "Rules of the Interbank Electronic Payment System", contained in Rule 14/2017 issued by Banxico;
(ii) In accordance with the Fourth Transitory, the additional obligations established in rule 15 and mentioned above, will enter into force on December 15, 2022.
Campa & Mendoza
contacto@campaymendoza.com
[1] Refers to interested parties who meet the requirements to be a SPEI participant in terms of Rule 1/2022.
[2] It refers to the Issuer Clients and Beneficiary Clients, jointly or indistinctly.
[3] See item b) of this section.
[4] It refers to the holder of an Indirect Client Account, opened in the corresponding Indirect Participant, indicated in the Transfer Order that is addressed to the latter or is received by him, through the Participant with whom he has entered into a Indirect Participation Service Agreement, as well as the account in which the resources of said Transfer Order must be paid, as final destination. The Indirect Beneficiary Client may be the person who owns the Indirect Client Account that generates Collection Messages so that the Indirect Participant pays into said account the amounts of the CoDi Transfer Orders that the latter receives, in turn, from the Participant with whom he or she has entered into the Indirect Participation Services Agreement.
[5] It refers to the person who owns the Indirect Client Account, opened in the Indirect Participant with whom he has agreed to process, by virtue of the Indirect Participation Services that the latter has agreed with the Participant in question, his instructions to send transfers of funds charged to said account.
Likewise, the Indirect Issuing Client will be the holder of the aforementioned Indirect Client Account who instructs the sending of fund transfers derived from the acceptance of Collection Messages by said person, through the systems that are made available. disposal of the Indirect Participant by the Participant with whom it has entered into the corresponding Indirect Participation Services Agreement.
[6] (a) more than one hundred thousand Indirect Client Accounts corresponding to deposits of money at sight, accounts of electronic payment funds or any other of the financial products established in Appendix D of the Manual, which have registered positive balances, in any time, or that a transfer of funds had been sent to such accounts in the last 12 calendar months; (b) in a maximum period of 12 consecutive calendar months send or receive one million two hundred thousand or more fund transfers, or (c) in a maximum period of 12 consecutive calendar months send or receive fund transfers, through the SPEI or of any other system, including those between accounts opened in the same Indirect Participant, for an aggregate amount greater than the equivalent of three million six hundred thousand UDIS, calculated according to the value of said unit of account on the last calendar day of the calendar month prior to the first month of the twelve-month period for which said amount is calculated.
[7] It refers to the document called “SPEI Operation Manual”, which the Administrator -Banxico- prepares and makes available to the Participants, to describe in it the operational processes and the requirements and technical conditions that the Participants need to observe to carry out the actions related to the operation in the SPEI, as well as in terms of the modifications that, if applicable, the Administrator makes to said document and makes them known to the Participants.
[8] For the purposes of the provisions of article 6o. of the Payment Systems Law, the Rules (Rule14/2017) and the Manual constitute the internal regulations of SPEI.
