New Stock Exchange Regulations for Simplified Issuers

Executive Summary:

• Update of the internal regulations of the Mexican Stock Exchange (SAB de CV) and the Institutional Stock Exchange (SA de CV) regarding simplified issuers.
• Applicable Regulatory Framework and Characteristics of Simplified Issuers;
• Listing and Placement Procedure; and
• Relevance of the Reformation.

Regulatory Framework for Simplified Broadcasters

In order to complete the issuance of the regulations applicable to simplified issuers that began in 2024, and after the publication on January 28, 2025, in the Official Gazette of the Federation ("DOF”) of the modifications to the General Provisions applicable to issuers of securities of the National Banking and Securities Commission (“CNBV”) approved a reform to the Internal Regulations of the Mexican Stock Exchange, SAB de CV (“BMW”) and the Institutional Stock Exchange, S:A. de CV (“BIVA”) in order to establish a specific, simplified regime for so-called “Simplified Issuers.” The updated version of both regulations can be consulted on the website of each of the Stock Exchanges.

Simplified Issuers are legal entities that register their securities under a simplified process in the National Securities Registry. This also includes certain fiduciary institutions, provided that the trust assets are not derived from traditional issuers. The reform clearly distinguishes these issuers from traditional issuers by creating a specific regulatory framework for the former. This is evident in the prohibition on using the proceeds from their placements to fulfill securities obligations of companies in the same group, as well as in the establishment of a separate listing process without the possibility of preventive registration, in order to prevent potential misuse or financial risks.

Likewise, Simplified Issuers can list different types of securities, such as equity, debt instruments, asset-backed securities, and structured securities. Financial reporting requirements for listing vary by issuer level. For example, Level I Simplified Issuers must submit audited financial statements for the last fiscal year and quarterly internal statements, while Level II and those issuing equity must submit audited financial statements for the last two fiscal years, as well as quarterly financial statements. For certain instruments, a credit quality opinion issued by an authorized institution is mandatory.

Listing and Placement Procedure

The listing process is carried out by submitting an application to the corresponding Stock Exchange (either the BMV or BIVA) through the corresponding Stock Exchange's electronic platform (either "Emisnet" for the BMV or "DIV" for BIVA), along with the specific documentation required for Simplified Issuers detailed in each of the corresponding regulations, differentiating between Simplified Issuers that comply with Article 10 of the General Provisions Applicable to Simplified Issuers and the securities subject to simplified registration, and those that do not, in collaboration with a placement intermediary. The corresponding Stock Exchange evaluates and rates the documentation, issuing a favorable opinion when the requirements are met. A novel aspect of this reform is the elimination of the obligation to conduct a public offering for securities registered and listed as a result of mergers or spin-offs of Simplified Issuers. Additionally, you may request that the application and documentation not be made available to the public, unless the information is already public through other means, thus balancing transparency with confidentiality.

Relevance of the Reform

This reform significantly complements the regulatory framework for stock market access by companies with less complex or growing structures, which previously faced significant regulatory barriers to listing their securities. By creating a clear and specific regulatory framework for Simplified Issuers, it provides legal certainty to issuers, investors, and market participants regarding their rights, obligations, and procedures. It also protects investors through rigorous financial reporting requirements and a prohibition on the misuse of resources, which contributes to strengthening transparency and confidence in the market.

Additionally, the reform promotes the modernization of the Mexican securities market, allowing for a greater diversity of instruments and more streamlined processes, such as the authorization of mergers and spin-offs without the need for a public offering, adapting to the needs of a constantly evolving financial market. This not only opens up new opportunities for companies seeking financing, but also positions the Mexican Stock Exchange (BMV) and BIVA as more inclusive and dynamic markets.