The Fintech Law regulates two types of FTI that could be authorized by the National Banking and Securities Commission (“CNBV”):
- crowdfunding platforms (“Crowdfunding”), and
- electronic money institutions (“Wallets”).
Crowdfunding
They allow people from the general public to connect with each other, and grant funding in a regular and professional manner, in terms of any of the operations provided for in article 16 of the Fintech Law, through the electronic and digital media platform established as Crowdfunding.
Wallets
They provide services to the general public in a regular and professional manner, consisting of the issuance, administration, redemption and transmission of electronic money, in accordance with article 22 of the Fintech Law, and through an electronic or digital media platform enabled as Wallets.
The procedure to incorporate an FTI is as follows:
- Step 1. Application for authorization before the CNBV.
The application to request authorization to incorporate an FTI must include, among other things, the following: (i) the powers of attorney of the individuals submitting the application; (ii) the draft or amendment to the by-laws; (iii) the business plan for the operation of the FTI; (iv) the account policies to separate customer bank accounts; (v) the applicable procedures for customer’s identification; (vi) the applicable policies for the resolution of conflicts of interest; (vii) the policies to prevent fraud, laundering and financing of terrorism, and (viii) agreements or contracts entered into with another FTI or technology service providers that are required for the execution of key business procedures, database administration and technological infrastructure for the fulfilment of its activities, among others.
Likewise, the Provisions require additional information to be submitted with the application, such as: (i) proof of having sufficient financial resources for the first three years of operation; (ii) the intended corporate name and trademark; (iii) drafts of the operations, internal control and risk management manuals, and (iv) the organization and internal control plan for the FTI.
- Step 2. Approval of the Interinstitutional Committee.
To obtain authorization from the CNBV, the prior approval of the Interinstitutional Committee will be required. The Interinstitutional Committee is made up of six proprietary members, as follows: two representatives of the Ministry of Finance and Public Credit (“SHCP”); two representatives from Banxico and two representatives from the CNBV. The favourable vote of at least one representative of each of these financial authorities is required to obtain authorization.
- Step 3. Resolution of the CNBV.
The CNBV has a period of 180 calendar days to decide on the authorization that starts the business day after the application. Such period may be extended by request to the authority, but in no case will it exceed half the period originally contemplated.
The authorization granted by the authority must specify the type of FTI that is authorized and the operations that it may perform. A new authorization must be requested in the event that the FTI subsequently intends to perform additional or other operations.
The authorization of the CNBV will be published in the Official Federal Gazette. Given that the Fintech Law does not contemplate the absence of an answer as an affirmative answer, if the period granted to the authority to issue the resolution expires, the applicant will understand that the authorization was not granted.
- Step 4. Start of operations.
To start operations, applicants must demonstrate to the authority compliance with the following matters at least 30 business days from the date scheduled for the start of operations: (i) the due incorporation of the FTI and its registration with the Public Registry of Commerce; (ii) that the minimum share capital is subscribed and paid; (iii) that the directors and executives comply with the legal requirements established in the Fintech Law, and those issued by the CNBV; (iv) that the technological infrastructure to operate the FTI has been put in place; (v) the internal controls necessary to perform its activities and provide the intended services, and (vi) the policies, procedures, manuals and all the documentation required by the Fintech Law and its regulations. The authorization to start operations may not be granted if the applicants do not meet the aforementioned requirements.
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