MEMORANDUM OF UNDERSTANDING 

atSTR/^A 

\ — 

COMISION NACIONAL 

^ J975 * BANCAR1A Y DE VALORES 

United States Commodity Futures Trading 

Commission 

Comision Nacional Bancaria y de Valores 

BANCODE MEXICO 

Banco de Mexico 

COOPERATION AND THE EXCHANGE OF INFORMATION 

RELATED TO THE SUPERVISION OF CROSS-BORDER 

CENTRAL COUNTERPARTIES AND TRADE REPOSITORIES 

August 31, 2016 
MEMORANDUM OF UNDERSTANDING 

BETWEEN THE U.S. COMMODITY FUTURES TRADING COMMISSION 

AND THE COMISION NACIONAL BANCARIA Y DE VALORES AND 

THE BANCO DE MEXICO CONCERNING COOPERATION 

AND THE EXCHANGE OF INFORMATION 

RELATED TO THE SUPERVISION OF CROSS-BORDER COVERED ENTITIES 

In view of the growing globalization of the world's financial markets and the increase in crossborder operations and activities of regulated entities, the U.S. Commodity Futures Trading 

Commission and the Comision Nacional Bancaria y de Valores of the United Mexican States and 

the Banco de Mexico (collectively, the "Authorities") have reached this Memorandum of 

Understanding ("MOU") regarding cooperation and the exchange of information in the supervision 

and oversight of central counterparties and trade repositories that operate on a cross-border basis in 

both the United States of America and the United Mexican States. The Authorities express, through 

this MOU, their willingness to cooperate with each other in the interest of fulfilling their respective 

regulatory mandates. 

CLAUSE ONE: DEFINITIONS 

For purposes of this MOU: 

1. "Authority" means: 

a. In the United States of America, the Commodity Futures Trading Commission 

("CFTC"); or 

b. In the United Mexican States, the Comision Nacional Bancaria y de Valores 

(National Banking and Securities Commission, "CNBV") or the Banco de Mexico 

(Central Bank, "BDM") (individually, a "Mexican Authority", or jointly, the 

"Mexican Authorities"), which share supervisory authority over central 

counterparties and trade repositories organized in the United Mexican States. 

2. "Requesting Authority" means the Authority making a request under this MOU. 

3. "Requested Authority" means: 

a. The Mexican Authority to which a request is made under this MOU, where the 

Requesting Authority is the CFTC; or 

b. The CFTC, where the Requesting Authority is a Mexican Authority. 

4. "Laws and Regulations" means: 

a. For the CFTC, the Commodity Exchange Act, Dodd-Frank Wall Street Reform and 

Consumer Protection Act, CFTC regulations, and other relevant requirements in the 

United States of America; and 

b. For the Mexican Authorities, the Credit Institutions Law, Securities Market Law, 

National Banking and Securities Commission Law, Banco de Mexico Law, Rules 
Applicable to Participants in the Derivatives Contract Markets issued by the 

Secretaria de Hacienda y Credito Publico (Ministry of Finance and Public Debt, 

"SHCP") and the Mexican Authorities, CNBV regulations, BDM regulations, and 

other relevant requirements in the United Mexican States. 

5. "Person" means a natural person, unincorporated association, partnership, trust, 

investment company, or corporation, and may be a Covered Entity or Cross-Border 

Covered Entity. 

6. "Covered Entity" means a Person that is, or that has applied to be, authorized, 

recognized, registered, supervised, or overseen by one or more of the Authorities 

pursuant to Laws and Regulations and includes central counterparties or trade 

repositories. 

7. "Cross-Border Covered Entity" means: 

a. A Covered Entity of both the CFTC and the Mexican Authorities; 

b. A Covered Entity in one jurisdiction that has been exempted from authorization or 

registration by an Authority in the other jurisdiction; 

c. A Covered Entity in one jurisdiction that controls or is controlled by a Covered 

-:"C Entity located in the other jurisdiction; or 

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d. A Covered Entity in one jurisdiction that is physically located in the other 

jurisdiction. 

For purposes of this MOU, references to jurisdiction will be determined as either the 

jurisdiction of the CFTC or the jurisdiction of the Mexican Authorities. 

8. "Books and Records" means documents, electronic media, and books and records 

within the possession, custody, or control of, and other information about, a CrossBorder Covered Entity. 

9. "Emergency Situation" means the occurrence of an event that could materially impair 

the financial or operational condition of a Cross-Border Covered Entity. 

10. "On-Site Visit" means any regulatory visit to the premises of a Cross-Border Covered 

Entity for the purposes of ongoing supervision and oversight, including the inspection 

of Books and Records. 

11. "Local Authority" means the Authority or Authorities in whose jurisdiction a CrossBorder Covered Entity that is the subject of an On-Site Visit is physically located. £ 

12. "Visiting Authority" means the Authority conducting an On-Site Visit. 

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13. "Governmental Entity" means: 

a. If the Requesting Authority is the CFTC, the U.S. Department of the Treasury or 

the U.S. Board of Governors of the Federal Reserve System; and 

b. If the Requesting Authority is the CNBV or BDM, the SF1CP. 

CLAUSE TWO: GENERAL PROVISIONS 

14. This MOU is a statement of intent to consult, cooperate and exchange information in 

connection with the supervision and oversight of Cross-Border Covered Entities. The 

cooperation and information sharing arrangements under this MOU should be 

interpreted and implemented in a manner that is permitted by, and consistent with, the 

laws and other legal or regulatory requirements applicable to each Authority. With 

respect to cooperation pursuant to this MOU, no domestic secrecy or blocking laws or 

regulations should prevent an Authority from providing assistance to the other 

Authority. The Authorities anticipate that cooperation primarily will be achieved 

through ongoing informal consultations, supplemented as needed by more formal 

cooperation, including through mutual assistance in obtaining information related to 

Cross-Border Covered Entities. The provisions of this MOU are intended to support 

both informal consultations and formal cooperation, as well as to facilitate the written 

exchange of non-public information in accordance with applicable laws. 

15. This MOU does not create any legally binding obligations, confer any rights, or 

supersede domestic laws. This MOU does not confer upon any Person the right or 

ability directly or indirectly to obtain, suppress, or exclude any information or to 

challenge the execution of a request for assistance under this MOU. 

16. This MOU is not intended to limit or condition the discretion of an Authority in any 

way in the discharge of its regulatory responsibilities or to prejudice the individual 

responsibilities or autonomy of any Authority. This MOU does not limit an Authority 

to taking solely those measures described herein in fulfillment of its supervisory 

functions, or preclude Authorities from sharing information or documents with 

respect to Persons that are not Cross-Border Covered Entities but may be subject to 

regulatory requirements in the United States of America or in the United Mexican 

States. In particular, this MOU does not affect any right of any Authority to 

communicate with, conduct an On-Site Visit of (subject to the procedures described 

in Clause Five), or obtain information or documents from any Person subject to its 

jurisdiction that is physically located in the jurisdiction of the other Authority. 

17. This MOU is intended to complement, but does not alter, the terms and conditions of 

the following existing arrangements: 

a. The Memorandum of Understanding on Consultation, Technical Assistance, and 

Mutual Assistance for the Exchange of Information between the CFTC and 

CNBV (May 11, 1995). 
b. The IOSCO Multilateral Memorandum of Understanding Concerning 

Consultation and Cooperation and the Exchange of Information (revised May 

2012) ("IOSCO MMOU") to which the CFTC and CNBV are signatories, which 

covers primarily information sharing in the context of enforcement matters. 

18. To facilitate cooperation under this MOU, the Authorities hereby designate contact 

persons as set forth in Appendix A, which may be amended from time to time by an 

Authority transmitting revised contact information to the other Authority. 

CLAUSE THREE: SCOPE OF SUPERVISORY CONSULTATION, 

COOPERATION, AND EXCHANGE OF INFORMATION 

General 

19. The Authorities recognize the importance of close communication concerning CrossBorder Covered Entities and intend to consult regularly, as appropriate, regarding: 

a. General supervisory issues, including regulatory, oversight, or other related 

developments; 

b. Issues relevant to the operations, activities, and regulation of Cross-Border 

Covered Entities; and 

c. Any other areas of mutual supervisory interest. 

20. The Authorities recognize in particular the importance of close cooperation in the 

event that a Cross-Border Covered Entity, particularly one whose failure likely would 

be systemically important to an Authority, experiences, or is threatened by, a 

potential financial crisis or other Emergency Situation. 

21. Cooperation will be most useful in, but is not limited to, the following circumstances 

where issues of common regulatory concern may arise: 

a. The initial application for authorization, recognition, or registration, or exemption 

therefrom, by a Covered Entity that is authorized, recognized, or registered in the 

other jurisdiction; 

b. The ongoing supervision and oversight of a Cross-Border Covered Entity, 

including compliance with statutory and regulatory requirements in either 

jurisdiction or with international standards; 

c. Regulatory or supervisory actions or approvals taken in relation to a Cross-Border 

Covered Entity that may impact the operations of the entity in the jurisdiction of 

the other Authority or Authorities; and 

d. The provision and maintenance of direct access to information and data stored in 

Covered Entities that are trade repositories, where such information and data is 

provided by a Covered Entity and maintained pursuant to Laws and Regulations. 
Event-Triggered Notification 

22. As appropriate in the particular circumstances, the CFTC and the Mexican Authorities 

will endeavor to inform, respectively, the Mexican Authorities or the CFTC promptly, 

and where practicable in advance, of: 

a. Pending regulatory changes that may have a significant impact on the operations, 

activities, or reputation of a Cross-Border Covered Entity, including those that 

may affect the rules or procedures of a Cross-Border Covered Entity; 

b. Any material event of which the Authority is aware that could adversely impact 

the financial or operational stability of a Cross-Border Covered Entity. Such 

events include, but are not limited to, any known adverse material change in the 

ownership, operating environment, operations, financial resources, management, 

or systems and controls of a Cross-Border Covered Entity; the failure of a CrossBorder Covered Entity to satisfy any of its requirements for continued 

authorization, recognition, or registration, or exemption therefrom, where that 

failure could have a material adverse effect in the jurisdiction of the other 

Authority; or any action taken within a resolution procedure or the 

implementation of a recovery plan by a Cross-Border Covered Entity. For a 

Cross-Border Covered Entity that is a central counterparty, such events also 

include a default or potential default of a clearing member firm or participant or 

market or settlement bank difficulties that might adversely affect the central 

counterparty; 

c. The status of efforts to address any material financial or operational difficulties 

experienced by a Cross-Border Covered Entity as described in Subparagraph b; 

and 

d. Enforcement actions or sanctions or significant regulatory actions, including the 

revocation, suspension, or modification of relevant authorization, recognition, or 

registration, or exemption therefrom, concerning a Cross-Border Covered Entity. 

23. The determination of what constitutes "significant impact", "material event", 

"adversely impact", "adverse material change", "material adverse effect", "market or 

settlement bank difficulties", "adversely affect", "material financial or operating 

difficulties", or "significant regulatory actions" for the purposes of Paragraph 22 shall 

be left to the reasonable discretion of the relevant Authority that determines to notify 

the other Authority or Authorities. 

Request-Based Information Sharing 

24. To the extent appropriate to supplement informal consultations, upon written request, 

the Requested Authority intends to provide to the Requesting Authority the fullest 

possible cooperation subject to the terms in this MOU in assisting the Requesting 

Authority's supervision and oversight of a Cross-Border Covered Entity, including 

assistance in obtaining and explaining information that is relevant to ensuring 

compliance with the Laws and Regulations of the Requesting Authority and that is 

not otherwise readily available to the Requesting Authority. Such requests shall be 
made pursuant to Clause Four of this MOU, and the Authorities anticipate that such 

requests will be made in a manner that is consistent with the goal of minimizing 

administrative burdens. 

25. The cooperation covered by Paragraph 24 includes, but is not limited to: 

a. Information relevant to the financial and operational condition of a Cross-Border 

Covered Entity including, for example, financial resources, risk management, and 

internal control procedures; 

b. Relevant regulatory information and filings that a Cross-Border Covered Entity is 

required to submit to an Authority including, for example, interim and annual 

financial statements and event-specific notices; and 

c. Regulatory reports prepared by an Authority, including, for example, examination 

reports, findings, or information contained in such reports regarding Cross-Border 

Covered Entities. 

Periodic Meetings 

26. Representatives of the Authorities intend to meet periodically, as appropriate, to 

update each other on their respective functions and regulatory oversight programs and 

to discuss issues of common interest relating to the regulation and supervision of 

Cross-Border Covered Entities, including: contingency planning and crisis 

management, systemic risk concerns, default procedures, the adequacy of existing 

cooperative arrangements, and the possible improvement of cooperation and 

coordination among the Authorities. Such meetings may be conducted by conference 

call or on a face-to-face basis, as appropriate. 

CLAUSE FOUR: EXECUTION OF REQUESTS FOR INFORMATION 

27. To the extent possible, a request for information pursuant to Clause Three should be 

made in writing (which may be transmitted electronically), and addressed to the 

relevant contact person(s) in Appendix A. A request generally should specify the 

following: 

a. The information sought by the Requesting Authority; 

b. A general description of the matter that is the subject of the request; 

c. The general puipose for which the information is sought; and 

d. The desired time period for reply and, where appropriate, the urgency thereof. 

Information responsive to the request, as well as any subsequent communication 

among the Authorities, may be transmitted electronically. Any electronic 

transmission should use means that are appropriately secure in light of the 

confidentiality of the information being transmitted. 
28. The Authorities expect each other to mark all non-public information provided under 

this MOU: "Confidential -Provided under Memorandum of Understanding between 

the CFTC and the CNBV and BDM". 

29. In an Emergency Situation, the CFTC and the relevant Mexican Authority or 

Authorities will endeavor to notify the other(s) as soon as possible of the Emergency 

Situation and communicate information as appropriate in the particular 

circumstances, taking into account all relevant factors, including the status of efforts 

to address the Emergency Situation. During an Emergency Situation, requests for 

information may be made in any form, including orally, provided such 

communication is confirmed in writing as promptly as possible following such 

notification. 

CLAUSE FIVE: ON-SITE VISITS 

30. In fulfilling its supervision and oversight responsibilities pursuant to, and to ensure 

compliance with, its Laws and Regulations, an Authority may need to conduct OnSite Visits to a Cross-Border Covered Entity physically located in the jurisdiction of 

the other Authority(ies). The Authorities will consult and work collaboratively in 

conducting an On-Site Visit. 

31. An On-Site Visit by an Authority will be conducted in accordance with the following 

procedure: 

a. The Visiting Authority intends to provide advance notice to the Local Authority 

of its intent to conduct an On-Site Visit and the intended timeframe for, and the 

purpose and scope of, the On-Site Visit. Other than in exceptional circumstances, 

the Visiting Authority will notify the Local Authority prior to notifying the CrossBorder Covered Entity and, in such exceptional circumstances, the notification to 

the Local Authority will be made as promptly as possible. 

b. The Authorities will endeavor to share any relevant reports, or information 

contained therein, related to examinations it may have undertaken of the CrossBorder Covered Entity. 

c. The Authorities intend to assist each other regarding On-Site Visits, including 

providing information that the Visiting Authority may request and that is 

available prior to the On-Site Visit; cooperating and consulting in reviewing, 

explaining, and analyzing the contents of public and non-public Books and 

Records; and obtaining information from directors and senior management of a 

Cross-Border Covered Entity. 

d. The Authorities will consult with each other, and the Local Authority may in its 

discretion accompany or assist the Visiting Authority during the On-Site Visit, or 

the Authorities may conduct joint visits where appropriate. 

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CLAUSE SIX: PERMISSIBLE USES OF INFORMATION 

32. The Requesting Authority may use non-public information obtained under this MOU 

solely for the supervision and oversight of Cross-Border Covered Entities pursuant to, 

and to ensure compliance with, the Laws and Regulations of the Requesting 

Authority. 

33. The Authorities recognize that, while this MOU is not intended to gather information 

for enforcement purposes, a Requesting Authority subsequently may want to use the 

non-public information provided pursuant to this MOU for enforcement purposes. 

With respect to information shared between the CFTC and CNBV, use of non-public 

information obtained pursuant to this MOU for enforcement puiposes, including in 

conducting investigations or taking enforcement action, will be in accordance with 

the use and confidentiality provisions of the IOSCO MMOU. With respect to 

information shared between the CFTC and BDM, Paragraph 34 applies to such use. 

34. Before using non-public information furnished under this MOU for any puipose other 

than those stated in Paragraph 32 and, for the CFTC and CNBV, Paragraph 33, the 

Requesting Authority must first consult with and obtain the written consent of the 

Requested Authority for the intended use. If consent is denied by the Requested 

Authority, the Authorities will consult to discuss the reasons for withholding approval 

of such use and the circumstances, if any, under which the intended use by the 

Requesting Authority might be allowed. 

35. If an Authority ("Receiving Authority") receives, via a party that is not a signatory to 

this MOU, non-public information, originally provided by another Authority 

("Disclosing Authority") that is related to the Disclosing Authority's supervision and 

oversight of a Cross-Border Covered Entity, that the Receiving Authority is aware 

was obtained by the third party from the Disclosing Authority on a confidential basis, 

the Receiving Authority will use and treat the information in accordance with the 

terms of this MOU. 

36. The restrictions in this Clause do not apply to an Authority's use of information it 

obtains directly from a Cross-Border Covered Entity, as a result of the discharge of 

the Authority's responsibilities pursuant to Laws and Regulations, whether during an 

On-Site Visit or otherwise. However, where non-public information is provided to 

the Requesting Authority pursuant to an information-sharing request pursuant to 

Clause Four of this MOU, the restrictions in this MOU apply to the use of the 

information by that Requesting Authority. 

CLAUSE SEVEN: CONFIDENTIALITY OF INFORMATION AND ONWARD 

SHARING 

37. Except as provided in Paragraphs 38 and 39, each Authority will keep confidential, to 

the extent permitted by law, non-public information shared under this MOU, requests 

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made under this MOU, the contents of such requests, and any other matters arising 

under this MOU. 

38. Each Mexican Authority may share non-public information obtained from the CFTC 

under this MOU with the other Mexican Authority so long as that other Mexican 

Authority uses and treats the information in accordance with the terms of this MOU. 

39. As required by law, it may become necessary for a Requesting Authority to share 

non-public information obtained under this MOU with a Governmental Entity in its 

jurisdiction. In such circumstances and to the extent permitted by law: 

a. The Requesting Authority intends to notify the Requested Authority; and 

b. Prior to the Requesting Authority sharing the non-public information, the 

Requesting Authority will provide adequate assurances to the Requested 

Authority concerning the Governmental Entity's use and confidential treatment of 

the information, including, as necessary, assurances that: 

i. The Governmental Entity has confirmed that it requires the information 

for a purpose within the scope of its jurisdiction; and 

ii. The information will not be shared by the Governmental Entity with other 

parties without getting the prior written consent of the Requested 

Authority. 

40. Except as provided in Paragraphs 38 and 39, the Requesting Authority must obtain 

the prior written consent of the Requested Authority before disclosing non-public 

information received under this MOU to any non-signatory to this MOU. The 

Requested Authority will take into account the level of urgency of the request and 

respond in a timely manner. During an Emergency Situation, consent may be 

obtained in any form, including orally, provided such communication is confirmed in 

writing as promptly as possible following such notification. If consent is denied by 

the Requested Authority, the Requesting and Requested Authorities will consult to 

discuss the reasons for withholding approval of such disclosure and the 

circumstances, if any, under which the intended disclosure by the Requesting 

Authority might be allowed. 

41. To the extent possible, the Requesting Authority intends to notify the Requested 

Authority of any legally enforceable demand for non-public information furnished 

under this MOU. When complying with the demand, the Requesting Authority shall 

assist in preserving the confidentiality of such information by taking all appropriate 

measures, including asserting all appropriate legal exemptions or privileges with 

respect to such information as may be available. 

42. The Authorities intend that the sharing or the disclosure of non-public information, 

including deliberative and consultative materials, such as written analysis, opinions, 

or recommendations relating to non-public information that is prepared by or on 

behalf of an Authority, pursuant to the terms of this MOU, will not constitute a 

waiver of privilege or confidentiality of such information. 
CLAUSE EIGHT: AMENDMENTS 

43. The Authorities will periodically review the functioning and effectiveness of 

cooperation arrangements between the CFTC and the CNBY and/or BDM with a 

view, inter alia, to expanding or altering the scope or operation of this MOU should 

that be judged necessary. This MOU may be amended with the written consent of all 

of the Authorities referred to in Paragraph 1. 

CLAUSE NINE: EXECUTION OF MOU 

44. Cooperation in accordance with this MOU will become effective on the date this 

MOU is signed by the Authorities. 

CLAUSE TEN: TERMINATION 

45. Cooperation in accordance with this MOU will continue until the expiration of 30 

days after any Authority gives written notice to the other Authorities of its intention 

to terminate the MOU. If an Authority gives such notice, the Authorities will consult 

concerning the disposition of any pending requests. If an agreement cannot be 

reached through consultation, cooperation will continue with respect to all requests 

for assistance that were made under the MOU before the expiration of the 30-day 

period until all requests are fulfilled or the Requesting Authority withdraws such 

request(s) for assistance. In the event of termination of this MOU, information 

obtained under this MOU will continue to be treated in the manner described under 

Clauses Six and Seven. 

46. If a Mexican Authority terminates the MOU in accordance with this Clause, the MOU 

shall remain effective between the CFTC and the remaining Mexican Authority. 

47. The text of the MOU will be executed in English. 

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This MOU is executed in triplicate, this 

—\

day of A Uq<u t" 2016. 

<J1 

Timothy G. Massad 

Chairman 

U.S. Commodity Futures Trading Commission 

Jaime Gonzalez Aguade 

President 

Comision Nacional Bancaria y de Valores 

This document is signed in accordance with articles 

1, 2, 4, section XXIV, 10, section II, 14 and 16, 

section I and penultimate paragraph of the National 

Banking and Securities Law (Ley de la Comision 

Nacional Bancaria y de Valores). 

Director General of Payment Systems and 

Corporate Services 

Banco de Mexico 

Luis Urratia Corral 

Legal Director General 

Banco de Mexico 

This MOU is signed in accordance with articles 4, 8, 

first and third paragraphs, 10, first paragraph, 14 Bis, 

15, 17 section VI, and 20, of the Bylaws of Banco de 

Mexico (Reglamento Interior del Banco de Mexico). 

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APPENDIX A 

CONTACT PERSONS 

In addition to the following contact information, the CFTC and the Mexican Authorities will 

exchange confidential emergency contact telephone information. 

CFTC 

Jeffrey M. Bandman 

Acting Director, Division of Clearing and Risk 

Commodity Futures Trading Commission 

1155 21st Street, N.W. 

Washington, DC 20581 

Phone:202-418-5044 

Fax: 202-418-5547 

Email: jbandman@cftc.gov 

Vince McGonagle 

Director, Division of Market Oversight 

Commodity Futures Trading Commission 

1155 21st Street, N.W. 

Washington, DC 20581 

Phone: 202-418-5387 

Fax: 202-418-5507 

Email: vmcgonagle@cftc.gov 

CNBV 

Jose Loyola 

General Director 

International Affairs 

Comision Nacional Bancaria y de Valores 

Insurgentes Sur 1971, Torre Sur Piso 11 

Col. Guadalupe Inn, Mexico City, Mexico 

Phone: +52 55 1454 6020 

Email: jloyola@cnbv.gob.mx 

Itzel Moreno 

General Director 

Supervision of Securities and Derivatives' Entities and Intermediaries 

Comision Nacional Bancaria y de Valores 

Insurgentes Sur 1971, Torre Norte Piso 8 

Col. Guadalupe Inn, Mexico City, Mexico 

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Phone: +52 55 1454 7572 

Email: imoreno@cnbv.gob.mx 

BDM 

Daniel Garrido Delgadillo 

Deputy Manager 

Central Counterparty and Securities Settlement Systems Subdivision 

Banco de Mexico 

Avenida 5 de Mayo 6 

Col. Centro, Mexico City, Mexico 

C.P. 06059 

Phone: +52 55 5227 8641 

Email: dgarrido@banxico.org.mx 

Maria Teresa Munoz Aramburu 

Manager 

International and Special Legal Affairs Division 

Banco de Mexico 

Avenida 5 de Mayo 2 

Col. Centro, Mexico City, Mexico 

C.P. 06059 

Phone:+52 55 52372318 

Email: tmunoz@banxico.org.mx 

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