Asset servicing - Mexico

10.09.2019

Income collection

Debt securities

Service offeredRemarks
Notification to customers

Standard Asset Servicing reporting via SWIFT MT56x, Xact Web Portal, CreationOnline and Xact File Transfer.

See Section 8 “Asset servicing” of the Customer Handbook.

See Connectivity manuals on the Clearstream website.

Payment of proceeds

Proceeds are calculated based on the positions recorded at the close of business on the record date and paid to the customer's account upon successful receipt and reconciliation of funds. Proceeds will be paid  with the value with which they are received. Payments are credited in the denomination currency of each security, unless:

- A currency option exists and such option has been exercised by the customer; or
- The issue's terms and conditions state that income proceeds are payable in a currency other than the denomination currency. 

Funds under the Available for Cash Loan (ACL) concept, when applicable, are paid with good value.  

The payment method to be applied is reported via MT564 IPAR and Xact Web Portal IPAR.

Interest payments on debt instruments are calculated on the basis of the exact number of days per month and 360 days per year. 

For further details on entries qualified as ACL, please refer to the section “5.6 Financing: availability of funds” of the Customer Handbook.

Equities

Service offeredRemarks
Notification to customersNo specific deviations from standard reporting provided by CBL apply to the Mexican market.
Standard reporting.
Payment of proceeds

Proceeds are calculated based on the positions recorded at the close of business on the record date and paid to the customer's account upon successful receipt and reconciliation of funds. Proceeds will be paid with the value with which they are received. 

Tax 

The Mexican tax authorities published in the Miscelanea Fiscal of the 30 December 2013 some changes applicable to the equities market and effective as of 2 January 2014. 

Cash dividends representing Mexican issuers’ profits generated in 2014 and onwards, paid to Mexican individuals and non-resident investors are subject to a 10% withholding tax. This tax will be withheld by the financial intermediary executing the dividend payment. 

All cash dividends that represent the issuers’ 2013 profits or before, regardless of the payment date will continue to have a withholding tax rate of 0%. 

No relief at source and no tax reclaim services available through Clearstream Banking.

Corporate actions

Service offeredRemarks
Notification to customersNo specific deviations from standard reporting provided by CBL apply to the Mexican market.
Standard reporting.
Instruction to CBL

Customers can instruct CBL to carry out conversions and to exercise warrants, options and other rights that are included in the terms and conditions of the securities held at CBL. Stock splits, reverse splits, tender offers and subscription rights are the most common securities events in Mexico.

According to the terms and conditions of Tesobonos (which are USD-denominated), proceeds are paid in MXN after conversion at the free market rate. Holders of Tesobonos are entitled to exercise a currency option and to claim payment in USD (the denomination currency).

Processing of tender offers with de-listing events

When an issuer includes in the event announcement their intention to cancel the registration and listing of the securities in the stock exchanges, the default action for tender offers that include a de-listing of securities will be CASH.

Customers that are entitled to participate in the tender offer event must send a NOAC instruction if they do not want to be allocated in the CASH default allocation. However, that choice will have the following consequences and implications:

  • Once the corporate event has been finalised and in the event that the issuer establishes a trust to purchase the securities that were not tendered, customers can sell their shares to the trust. It is important to note that since this sale is considered an over the counter (OTC) sale, it will be subject to a capital gains tax of either 25% of gross proceeds or 35% of the net gain.
  • Once the central securities depository begins the process to request information to materialise the securities from each local custodian, customers will be requested to instruct the breakdown of the beneficiaries for the issuance of the physical certificates and the address where these must be sent. This is for customers that did not sell their position either during the event or to the trust.
  • Once the certificates are sent to customers, the position will be withdrawn from their custody account via deliver free transaction.

Proxy Voting procedures

Proxy voting services are available in CBL for this market. For details about the proxy voting services offered by CBL, please refer to the CBL Customer Handbook and, for the market specific practices, please refer to the Market Profile - Mexico.

Entitlement compensation rules

Please refer to the Entitlement Compensation Rules - Mexico.