Securities Law in Mexico

Introduction

Mexican securities law is primarily governed by the Securities Market Law (Ley del Mercado de Valores, LMV), enacted in 2006 and substantially reformed in 2014. The National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, CNBV) is the principal regulatory authority for securities markets and intermediaries. The Mexican Stock Exchange (Bolsa Mexicana de Valores, BMV) and the Institutional Stock Exchange (Bolsa Institucional de Valores, BIVA) operate the country’s securities exchanges.

Regulatory Framework

The LMV establishes the legal framework for the offering, trading, and registration of securities; the regulation of securities intermediaries and exchanges; corporate governance for publicly traded companies; and insider trading and market manipulation prohibitions. The CNBV has broad rulemaking, supervisory, and enforcement authority, including the power to investigate violations, impose sanctions, and suspend trading. The law aligns with international securities regulation standards, including IOSCO principles.

Securities Offerings

Public offerings of securities in Mexico must be registered with the CNBV and listed on a securities exchange. The registration process requires a prospectus containing comprehensive information about the issuer, the securities, and associated risks. The LMV distinguishes between primary offerings (new securities) and secondary offerings (existing securities). Private placements are exempt from registration requirements but are subject to restrictions on resale and investor qualifications.

Corporate Governance for Public Companies

The LMV imposes enhanced corporate governance requirements on publicly traded companies, including: independent directors comprising at least 25% of the board; audit, corporate governance, and compensation committees; duty of loyalty and care for directors and officers; and mandatory disclosure of related-party transactions. The Code of Best Corporate Practices (Código de Mejores Prácticas Corporativas) provides additional guidance.

Insider Trading and Market Abuse

The LMV prohibits insider trading (uso de información privilegiada), market manipulation, and other fraudulent practices. Insiders (directors, officers, and significant shareholders) must disclose their transactions and are subject to trading blackout periods. The CNBV may impose fines of up to 10% of the value of the transaction and may refer cases for criminal prosecution.

Conclusion

Mexican securities law provides a comprehensive regulatory framework aligned with international standards, governing public offerings, securities intermediaries, exchanges, corporate governance, and market integrity. The CNBV exercises robust supervisory authority, supported by criminal enforcement for serious market abuses.