Financial Transactions of Multiple Purpose Financial Entities

April 23, 2007
Financial Transactions of Multiple Purpose Financial Entities

In conformity with the General Law of Credit Institutions and Auxiliary Activities (Ley General de Organizaciones yActividades Auxiliares de Crédito), Multiple Purpose Financial Entities (“SOFOMES”) are those business associationswhose bylaws expressly provide that the principal corporate purpose of the company is the frequent and professionalengagement in one or more of the following activities: providing loans; financial leasing; or financial factoring, activitieswhich, in conformity with the law, may be carried out frequently and professionally by any party without the necessity ofobtaining authorization from the federal government for same. SOFOMES may be of two types, a regulated SOFOM and anunregulated SOFOM, the first being one that by law forms part of a regulated financial group which must attach to theirnames the words “Multiple Purpose Financial Entity” or its acronym SOFOM and “Regulated Entity” or its abbreviation ER,and the second being those companies that must follow their names with “Multiple Purpose Financial Entity” or its acronymSOFOM, as well as “Unregulated Entity” or its abbreviation “ENR”. Multiple purpose financial entities that are regulatedare subject to various provisions of the Mexican Law of Lending Institutions (Ley de Instituciones de Credito), as well as theLaw of the National Banking and Securities Commission (Ley de la Comisión Nacional Bancaria y de Valores). It is worthnoting that, according to the terms of the Law of Protection and Defense of Financial Services Consumers (Ley de Proteccióny Defensa al Usuario de Servicios Financieros), the protection and defense of the rights and interests of general publicfinancial services consumers is the responsibility of the National Commission for the Protection and Defense of FinancialServices Consumers (“CONDUSEF”).

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