Mexico’s securities regulator approved draft rules for a law designed to boost debt and equity listings by smaller companies, Deputy Finance Minister Gabriel Yorio said on Thursday, September 5.
According to Bloomberg, the regulations will be posted for public comment after being approved by the board of Mexico’s Banking and Securities Commission (CNBV), Yorio said in a post on X.
“This will allow access to financing of up to 70 billion pesos ($1.4 billion) annually for small and medium enterprises, strengthening the financial inclusion of smaller companies,” Yorio said.
The draft rules follow months of discussions between regulators and market participants. Mexican lawmakers approved the new law late last year in an effort to revive Mexican capital markets. It’s been more than six years since the last major initial public offering by a company in Mexico, with discount retailer BBB Foods Inc. opting for an IPO in the US earlier this year in a bid to tap higher valuations in a more liquid market.
Maria Ariza, chief executive officer of the Mexican stock exchange Bolsa Institucional de Valores, or Biva, said there was a pipeline of companies ready to raise funds under the new framework, though it could take time to see deals emerge amid current political and market volatility.
“We are working with investors so that there is more appetite for smaller companies that have big growth projects,” Ariza said in a video interview after hosting an event in New York City on Wednesday.
The main plank of the new law is to provide a faster process for smaller companies to list debt and shares that sidesteps a cumbersome CNBV approval process.
Companies issuing less than around $500 million a year in debt could avoid CNBV approval, according to a draft of the rules seen by Bloomberg News. Real estate investment trusts and other asset-backed securities would be excluded from the regulatory exemption.
The reform also created a new framework for hedge funds aimed at increasing the number of market participants trading Mexican securities. Mexico’s central bank this week published draft rules for public consultation that cover short-selling and derivatives trading by hedge funds.
Ariza said the continuity promised by President-elect Claudia Sheinbaum, who is keeping current Finance Minister Rogelio Ramirez de la O in place in her incoming administration, boded well for further efforts to boost liquidity in Mexico’s capital markets. However, she said new listings are on hold as investors and companies try to gauge the impact of a sweeping overhaul of the judicial system that will replace judges with elected officials.
“It’s wait-and-see a bit,” she said. “Once we have gone through this volatility, which is natural and is in the works both in Mexico, but also with the US elections, then I think we can see some opportunity in Mexico.”
With information from Bloomberg
TYT Newsroom
