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17 January 2006
The new Securities Market Law has been passed by the Mexican Congress (for further details please see "New Securities Market Law Drafted But Delayed"). The Chamber of Deputies made several amendments to the Securities Market Bill and returned it to the Senate where it was approved.
Discussion in the chamber focused on the following:
However, some of the matters discussed were not amended (eg, the provisions on the integration of the audit committee).
The chamber excluded members of the board of directors from the definition of 'relevant directors'.
In addition, the chamber added the qualification 'habitual' to the term 'qualified investors' and broadened the scope of the term 'relevant information'.
With regard to the right of shareholders to provide non-compete obligations with respect to the issuer's line of business, the chamber established a maximum term of three years (although it remains uncertain whether this term can be renewed).
The chamber excluded retirement mutual funds from the information disclosure regime provided by the bill, as these are already subject to their own regime.
The chamber provided the National Banking and Securities Commission with the ability to challenge the independence of board members upon the occurrence of certain events following their appointment.
The chamber expanded the scope of the definition of 'crimes' to include the actions of not only intermediaries, but also (i) any other person who will benefit an intermediary, and (ii) any intermediary in favour of any third party.
In addition, the chamber introduced the concept of a reduction in penalties when the offender has indemnified the victim(s).
The modifications introduced by the Chamber of Deputies, while not substantive, increased the level of uncertainty that surrounded the bill. Now that the bill has been approved, this uncertainty continues to surround the new Securities Market Law.
For further information on this topic please contact Agustín Berdeja or Stephan Tribukait at Berdeja y Asociados SC by telephone (+52 55 2591 1100) or by fax (+52 55 2591 1106) or by email (firstname.lastname@example.org or email@example.com).
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Agustín Berdeja Prieto