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FATCA y QI – An update

FATCA y QI – An update. Gerardo Gamboa - Indeval. April, 2012. What does FATCA means to the BMV Global Market? International Quotation System.

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FATCA y QI – An update

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  1. FATCA y QI – An update Gerardo Gamboa - Indeval April, 2012

  2. What does FATCA means to the BMV Global Market?International Quotation System Investors can trade in the Mexican Stock Exchange international securities listed in The Global BMV Market under the International Quotation System (SIC) trading and regulatory scheme. Listing securities in this portion of the market is only possible if they belong to recognized foreign markets or are listed by issuers recognized by the Mexican Securities and Exchange Commission (CNBV). Recognition is granted by the Mexican Securities and Exchange Commission (CNBV)if there is compliance with the following criteria: • Listed securities can be acquired by Mexican investors. • The features and terms of listed securities are fair and consistent with local market regulation. • Issuers objectives are aligned with investors view and interests.

  3. Indeval Services Custody, Crossborder Settlement, Corporate Events Indeval acts as a custodian and settles abroad all the Global Market operations that are instructed by their clients including “Delivery versus payment model” which eliminates counterparty risk. In addition to, Indeval processes paymentsrelated with redemptions, interests and any type of dividends in a straight through processing environment (Deutsche Bank, J.P. Morgan, Euroclear y Clearstream) In just one platform Sistema (Dalí) are recorded both holding local and foreign securities, avoiding connections to different systems and facilitating the reconciliation of holding and oversight from regulators.

  4. Indeval Services Tax Relief Indeval makes all the processing with its Global Custodians and ICSD abroad, for obtaining tax benefit rate“0”for pension funds and 10% for other Mexican Investors on issues registered at The American Market. On January 2014, BMV Group will initiate the Certification Process to the Internal Revenue Service of The United States (IRS) in order to obtain the “Global Intermediary Identification Number (GIIN)”according to the FATCA regulation.

  5. Intergovernmental Agreement (IGA) México – E.U.A. FATCA (Foreign Account Tax Compliance Act) April, 2012

  6. Intergovernmental Agreement (IGA) México – U.S.A.for the implementation of FATCA On 19 November 2012, the Mexican government, through the Ministry of Finance signed an Agreement with the Treasury Department of the United States of America to improve the International Tax Compliance regarding FATCA.The Agreement model signed corresponds to Model I, "Intergovernmental model with Reciprocity" same as that was released by the U.S. government the past month of July 2012 and for which stand out the following characteristics: 1.- The Agreement parameters do not differ greatly from those set forth in the proposed regulations released by the U.S. Treasury in the month of February 2012. The obligations are now explained in greater detail and more clearly. 2.- The Mexican Financial Institutions are not subject to any retention, and are not obliged to carry out the Withholding on payments made to recalcitrant account holders (Owners who do not provide documentary evidence that they are not U.S.); it continues the obligation to carry out a process of due diligence and data collection and reporting. 3.- Each financial institution must identify the "U.S. Reportable Accounts "and accounts pertaining to" Non-Participating Financial Institutions. "

  7. Intergovernmental Agreement (IGA) México – U.S.A.for the implementation of FATCA Date of Implementation & Coverage Date of Implementation: The IGA l Acuerdo will come into force starting January 1, 2013. Coverage: The agreement covers all financial institutions who are residents of Mexico, as well as all branches of foreign financial institutions. In this regard if an entity is consider as a "Financial Institution of Mexico Subject to Report" under FATCA, will be obliged to register with the National Tax Authority and comply with all obligations of Identification, Obtaining Information and Report unless it can be identified as a "Financial Institution of Mexico No Subject to Report". In the event that a Financial Institution Subject to Report does not comply with the obligations under the IGA Agreement, the U.S. authorities will notify the Mexican authorities in order to apply the local laws. In the event that the Financial Institution continue without fulfilling their obligations after 18 months, will be considered a "Non-Participating Institution" and shall be subject to 30% withholding

  8. Intergovernmental Agreement (IGA) México – U.S.A.for the implementation of FATCA Implementationschedule January 1 September 30, 2015 January 1 Low Value Accounts High Value Accounts Start Date Reports Maximum dates foridentification

  9. 3. Obtain the certification as "QUALIFIED INTERMEDIARY (QI)“having as benefits, savings in operational processes, costs and co-participation with other international markets infrastructures FATCA Proyect in Grupo BMV Under this new panorama Grupo BMV during 2014 we will focus on: • 2. Review in conjunction with Mexican authorities who will report the operating cash flows of buying and selling securities issued and register in U.S. • S.D. INDEVAL , ó sus • DEPOSITORS • Indeval, CCV, Asigna and Bolsa Mexicana de Valores SAB de C.V. should continue with the FATCA project in order to progress and conclude with: • Application of Regulations and Implementation Planning. • Obtaining GIIN for each of the companies 4. Indeval must continue with the process of collection and delivery to their custodians in the U.S. and Europe, the "W" formats for obtaining the tax benefit on issues registered in the U.S. according to the no double taxation treaty.

  10. Benefits of FATCA and QI Certification for BMV Group Converting the BMV Group and in particular S.D. Indeval, in an institution compliance with FATCA regulation, allows it to maintain under the same conditions all international services provided to Mexican and Foreign Investors:

  11. Benefits of FATCA and QI Certification for BMV Group But, most importantly allows to give viability of growth to the Mexican stock market in new business lines, where the co-participation with other market infrastructures and foreign investors will be vital for the strategy of BMV Group, having as an example:

  12. Thank you! Gerardo Gamboa - Indeval Abril, 2012

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