First-step analysis: fintech regulation in Mexico

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Financial regulation

Regulatory bodies

Which bodies regulate the provision of fintech products and services?

Regulators of fintech products and services include the Mexican Central Bank, the Ministry of Finance, the National Banking and Securities Commission and the National Commission for the Protection and Defence of Users of Financial Services.

Regulated activities

Which activities trigger a licensing requirement in your jurisdiction?

The following activities trigger licensing or authorisation requirements under Mexican law:

  • solicitation and receipt of deposits and depository account keeping services, and issuance of debit cards linked to such accounts;
  • investment advisory services;
  • issuance, management, redeeming and transfer of electronic payment funds;
  • crowdfunding;
  • money remittance; and
  • ordinarily carrying out the purchase, sale or exchange of currencies.

 

Other activities that do not trigger a licensing requirement but that are subject to the supervision of the National Banking and Securities Commission, the Mexican Central Bank, the National Commission for the Protection and Defence of Users of Financial Services and the Consumer Protection Agency include: providing acquiring and aggregation services; ordinarily granting loans to the public and issuing credit cards; as well as providing services to acquirers, aggregators and other participants of the payments network.

Consumer lending

Is consumer lending regulated in your jurisdiction?

Consumer lending is regulated under the Law for the Transparency and Order of the Financial Services, and its secondary regulations issued by:

  • The National Commission for the Protection and Defence of Users of Financial Services, which are applicable to financial entities, including commercial banks, non-regulated and regulated financial companies, savings and loan institutions, electronic payment funds institutions and crowdfunding institutions; and
  • the Consumer Protection Agency (applicable to non-financial entities that ordinarily offer loans to the public).

 

The Transparency and Order of the Financial Services and its regulations contain a set of obligations for entities engaged in consumer lending, generally consisting of disclosure and reporting obligations, as well as consumer protection provisions (eg, registration of joinder agreements with the National Commission for the Protection and Defence of Users of Financial Services or the Consumer Protection Agency, as applicable, and prohibition of abusive clauses).

Secondary market loan trading

Are there restrictions on trading loans in the secondary market in your jurisdiction?

There are no restrictions on trading loans under Mexican law.

Collective investment schemes

Describe the regulatory regime for collective investment schemes and whether fintech companies providing alternative finance products or services would fall within its scope.

Mexican retail funds are regulated under the Investment Funds Law, and are subject to the supervision of the National Banking and Securities Commission. Mexican retail funds are incorporated as a Mexican stock corporations that publicly issue and list their shares. The proceeds are used to purchase a previously determined portfolio of trading securities. Fintech companies, such as crowdfunding institutions, do not fall within the scope of the regulatory regime applicable to Mexican retail funds.

Alternative investment funds

Are managers of alternative investment funds regulated?

Managers of Mexican retail funds are statutorily regulated and subject to the supervision of the National Banking and Securities Commission.

Peer-to-peer and marketplace lending

Describe any specific regulation of peer-to-peer or marketplace lending in your jurisdiction.

Marketplace and peer-to-peer lending is specifically regulated in the Law to Regulate Financial Technology Institutions, and may only be carried out through a licensed crowdfunding institution.

Crowdfunding

Describe any specific regulation of crowdfunding in your jurisdiction.

The Law to Regulate Financial Technology Institutions regulates:

  • equity-based crowdfunding, which is defined as collective financing enabling investors to purchase shares of companies that apply for investments; and 
  • royalty or co-ownership crowdfunding, which is defined as collective financing enabling investors and applicants to enter into joint ventures, partnerships, or any other type of agreement pursuant to which investors acquire a pro-rata share of a present or future asset, or of the revenue, royalties or losses obtained as a result of the activities carried out by an applicant. Crowdfunding may only be carried out through a licensed crowdfunding institution.

Invoice trading

Describe any specific regulation of invoice trading in your jurisdiction.

There is no specific regulation of invoice trading in Mexico.

Payment services

Are payment services regulated in your jurisdiction?

Payment services are regulated under, among other things, the Law for the Transparency and Order of the Financial Services and the Regulations applicable to Means of Payment issued by the National Banking and Securities Commission and the Mexican Central Bank, which regulate:

  • acquirers; 
  • aggregators; 
  • issuers of credit and debit cards; and 
  • specialised entities that provide services to any of the foregoing necessary to carry out their activities.

Open banking

Are there any laws or regulations introduced to promote competition that require financial institutions to make customer or product data available to third parties?

The Law to Regulate Financial Technology Institutions includes obligations for financial entities, including commercial banks and electronic payment funds institutions to share information of their customers via application programming interfaces (APIs). The sharing of information must comply with the requirements set forth by the National Banking and Securities Commission, the Mexican Central Bank and the corresponding regulators of the relevant entities.

Information to be shared by financial entities via APIs is classified under the Law to Regulate Financial Technology Institutions as:

  • open data, including, among others, non-confidential financial information related to the services offered by the entities; 
  • aggregated data, consisting of statistical and dissociated information related to transactions made by or through authorised entities; and 
  • transactional data, defined as information related to the use of financial products and services by a customer, including deposit accounts and credits.

 

The National Banking and Securities Commission has issued regulations applicable to open data. However, regulations applicable to aggregated and transactional data is still to come.

Insurance products

Do fintech companies that sell or market insurance products in your jurisdiction need to be regulated?

Yes, pursuant to the Insurance and Bonding Institutions Law and the Sole Insurance and Bonding Circular, the sale and distribution of insurance products in Mexico that are carried out by entities that are not authorised in Mexico as an insurance institution must be made through: 

  • a regulated
    insurance broker; or
  • a specialised services provider engaged by insurance institutions for such purposes. 

 

Credit references

Are there any restrictions on providing credit references or credit information services in your jurisdiction?

The provision of services consisting of the compilation, management and delivery of information related to the credit history of individuals or companies is regulated, and may only be carried out with the prior authorisation of the Ministry of Finance, with the favourable opinion of the National Banking and Securities Commission, and the Mexican Central Bank.

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