The “Simplified” Path to the Mexican Securities Market

By: Alejandro Sobarzo Hadad (asobarzo@ksa.mx). Corporate and Finance Attorney. Law Professor of Banking and Financial Law at Universidad Panamericana.

In December 2023, an amendment to the Mexican Securities Market Law was enacted to “democratize” access to financing for small and medium-sized enterprises (SMEs) through the securities market. The enabling regulations are expected to be released soon.

A new registration and listing modality is being introduced: the “Simplified Registration” (SR). This framework will allow the offering of various securities, including equity, debt, and structured securities (such as asset-backed securitizations).

Three types of simplified issuers will be recognized:

  1. Level I Issuers: Allowed to issue debt securities with a maximum limit of approximately US$31.05 million per issuance.

  2. Level II Issuers: Permitted to issue both debt securities and asset-backed securities, with a maximum cap of about US$517.5 million.

  3. Equity Issuers: Authorized to issue equity-type securities, also subject to a maximum of approximately US$517.5 million.

Each type of issuer will operate under distinct regulatory, supervisory, and reporting frameworks.

Securities offered under this modality can only be acquired by institutional and qualified investors.

Authorized broker-dealers will be responsible for reviewing and approving all documentation related to the SR, following the guidelines established in their operational manuals.

Additionally, stock exchanges will review this documentation according to their own procedures, all under a framework of self-regulation.

Once the broker-dealer has validated the necessary documentation and the relevant stock exchange has provided its favorable opinion, both the broker-dealer and the issuer will submit a registration request to the Mexican Banking and Securities Commission (CNBV). The CNBV will grant the SR without further documentation review. Issuers with securities listed under SR will not be subject to CNBV supervision.

This reform represents a transformative opportunity to enhance financing access for a significant number of businesses, especially those that have historically encountered barriers.

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