Client Alert - Reporting obligations of Electronic Payment Fund Institutions (“IFPEs”) and Crowdfunding Institutions (“IFCs”)
June 24, 2021
The publication of several authorizations in the Federal Official Gazette in recent months allowing various companies to be organized and operate as Electronic Payment Fund Institutions (“IFPEs”) or as Crowdfunding Institutions (“IFCs”) has accelerated the Fintech environment in Mexico.
Pursuant to the Law that Regulates the Financial Technology Institutions (the “Fintech Law”) and the authorizations issued thereunder, both IFPEs and IFCs will be subject to the supervision of the Mexican National Banking and Securities Commission (the “CNBV”) and the Mexican Central Bank, as applicable, and to the supervision of other competent financial authorities under the terms provided by law.
The services consisting of the issuance, management, redemption and transmission of electronic payment funds that IFPEs provide, or services consisting of collective debt financing that the IFCs provide, as well as the operations that such institutions carry out and their organization and operation in general, will be subject, among others, to the Fintech Law, to the general rules and provisions applicable to Financial Technology Institutions issued by the CNBV, to the provisions issued by the Mexican Central Bank in connection with their operations, and to any other rules and provisions in effect and those issued in the future by any competent authority, including those related to transactions with resources of illicit origin and financing of terrorism, which by their nature are applicable (collectively, the “Fintech Regulation”).
The Fintech Regulation establishes annual, quarterly and monthly reporting obligations that both IFPEs and IFCs shall comply with, as well as reporting obligations when certain events occur or over certain periods of time. Failure to comply with such reporting obligations could give rise to the imposition of administrative fines.
Based on our long trajectory in financial and regulatory matters, we are very active in the Fintech market in Mexico, attentive to the needs of our clients. For additional information, please contact the members of our banking and finance team (see below).