C reel Insights on COVID-19 for Mexico: Issuers Reports

Creel, Garcia-Cuellar, Aiza y Enríquez, S.C.®

In light of the emergency situation in Mexico related to COVID-19, and the social distancing measures dictated by the Mexican Government, the National Banking and Securities Commission (the “CNBV”) issued a resolution (the “Resolution”) to grant temporary administrative easing measures to issuers of securities in the Mexican market[1] (the “Easing Measures”).

The Easing Measures mostly consist of an extension of terms to file operational, financial and legal reports. Below please find a summary of the Easing Measures set forth in the Resolution:

Issuer Document Original Date New Date

Public Companies (“SABs”)

Investment Promotion Public Companies (“SAPIBs”)

Corporations

Report from the audit and corporate practices committees

Report from the CEO

Report from Board of Directors

3 business days after the annual shareholders’ meeting (within the first 4 months of every year)

July 8, 2020

SABs

SAPIBs

Report from the Secretary of the Board, about the state of the corporate records

3 business days after the annual shareholders’ meeting (within the first 4 months of every year)

July 8, 2020

SABs

SAPIBs

Debt Issuers

FIBRAs

FIBRA E

CDKs*

CERPIs*

ETFs

Warrant Issuers

Audited financial statements

Independence letter from external auditor

Reports and representations from the external auditor, including observations and opinions issued by the auditor, representation of compliance with technical, independence and quality assurance system requirements.

3 business days after the annual shareholders’ meeting (within the first 4 months of every year)

July 8, 2020

SABs

SAPIBs

Debt Issuers

FIBRAs

FIBRA E

CDKs*

CERPIs*

ETFs

Warrant Issuers

Annual Report**,***

External auditor consent to include audit report in annual report**

Quarterly Report

April 30, 2020

July 3, 2020

SABs

SAPIBs

Letter to board members and relevant directors requesting information about their shareholding

Letter to broker dealers requesting the list of shareholders they represent

April 30, 2020

July 3, 2020

Board members and relevant directors holding 1% of the capital stock of a SAB or SAPIB

Shareholders with 5% or more of the capital stock of a SAB or SAPIB

Information about their holdings in Exhibit V of the Issuers’ Regulations.

May 15, 2020

July 19, 2020

SABs

SAPIBs

Report about the following shareholders:

Board members and relevant directors holding 1% or more of the capital stock

Shareholders with 5% of the capital stock

10 main shareholders

June 30, 2020

September 1, 2020

Funds of Funds

Audited financial statements

Independence letter from external auditor

Reports and representations from the external auditor, including observations and opinions issued by the auditor, representation of compliance with technical, independence and quality assurance system requirements

Annual Report

External auditor consent to include audit report in annual report

June 30, 2020

September 1, 2020

SABs

SAPIBs

Debt Issuers

FIBRAs

FIBRA E

CDKs

CERPIs

ETFs

Warrant Issuers

Restatement of current by-laws.

June 30, 2020

September 1, 2020

* Does not include CKDs or CERPIs which invest at least 70% of their funds to invest in collective investment mechanisms that are not listed in any exchange (the “Funds of Funds”).

** Not applicable to issuers of short-term debt securities.

*** Includes foreign issuers with securities registered with the National Securities Registry.

It is important to note that while the Resolution sets forth Easing Measures regarding compliance with obligations before CNBV and, in some cases, the securities market, it does not waive the compliance by issuers of their corporate obligations (either in by-laws or in law). Therefore, every issuer must evaluate the manner to comply with such obligations considering the social distancing and suspension of activities measures.

The CNBV has made clear in the Resolution that, regardless of the Easing Measures, it could request information from the issuers at any moment and order certain measures in use of its authority. It is advisable that the issuers that use the Easing Measures, inform the market in a timely manner.

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[1] The Easing Measures are granted pursuant to the “RESOLUTION whereby temporary and extraordinary measures are ordered and some terms are suspended for financial entities and entities subject to the supervision of the National Banking and Securities Commission, due to the coronavirus denominates “COVID-19””, published in the Federal Official Gazette on March 26, 2020.

*This article or news brief does not constitute legal advice and is protected by copyright.