Compliance Report ISSA Recommendations 2000

ISSA - International Securtities Services Association

Compliance to the ISSA Recommendations 2000

Market: Mexico

Status: October 3, 2001

Recommendation 1
Recommendation 2
Recommendation 3
Recommendation 4

Recommendation 5
Recommendation 6
Recommendation 7
Recommendation 8

Market selection

Recommendation 6

Convergence of Securities Systems, both within countries and across borders, should be encouraged where this eliminates operational risk, reduces cost and enhances market efficiency.

1. Is the depository linked electronically and in real time with other segments of the core market infrastructure (e.g. trading platforms, netting systems, matching platforms, payment systems)? Yes, Indeval is linked electronically and in real time with the BMV, the trading platform, and Banxico, the payment system.

2. Is there one or more depository or settlement system in the market? While Indeval is the only depository in the Mexican market, it maintains two systems SCO and SIDV as described previously.

3. If there are several, has a consolidation been considered? If yes, by when? Indeval is in the process of integrating broker to custodian settlements into the SCO system, however the SIDV system will still be used for fixed income settlements.

4. Does (do) the securities system(s) allow other domestic or foreign systems to establish direct links on an equal basis to local members? Indeval allows all authorized domestic entities to establish direct links with the depository on an equal basis. All authorized domestic entities have the option of becoming a member, requiring the purchase of one share of the depository, or simply being a participant, who are subject to different fees than members. Authorized domestic entities are outlined in the Securities Market Law. Foreign institutions are not allowed to establish links with the depository.

5. Does (do) the securities system(s) allow foreign market participants to become direct participants? Indeval does not allow foreign market participants to become direct participants, as they are not authorized by the Securities Market Law.

Foreign entities must use the services of a member or participant in order to use the services of Indeval.

1.	Is the depository linked electronically and in real time with other segments of the core market infrastructure (e.g. trading platforms, netting systems, matching platforms, payment systems)?	Yes, Indeval is linked electronically and in real time with the BMV, the trading platform, and Banxico, the payment system.
2.	Is there one or more depository or settlement system in the market?	While Indeval is the only depository in the Mexican market, it maintains two systems SCO and SIDV as described previously.
3.	If there are several, has a consolidation been considered? If yes, by when?	Indeval is in the process of integrating broker to custodian settlements into the SCO system, however the SIDV system will still be used for fixed income settlements.
4.	Does (do) the securities system(s) allow other domestic or foreign systems to establish direct links on an equal basis to local members?	Indeval allows all authorized domestic entities to establish direct links with the depository on an equal basis. All authorized domestic entities have the option of becoming a member, requiring the purchase of one share of the depository, or simply being a participant, who are subject to different fees than members. Authorized domestic entities are outlined in the Securities Market Law. Foreign institutions are not allowed to establish links with the depository.
5.	Does (do) the securities system(s) allow foreign market participants to become direct participants?	Indeval does not allow foreign market participants to become direct participants, as they are not authorized by the Securities Market Law. Foreign entities must use the services of a member or participant in order to use the services of Indeval.