On March 27th, 2024, an amendment to the General Law of Negotiable Instruments and Operations and the General Law of Credit Ancillary Activities and Organizations was published in the Official Gazette (the “Reform”). The main purpose of this Reform is to acknowledge the validity, legal effects and enforcement of negotiable instruments issued through electronic means, to streamline the transactions carried out through new technologies.
This Reform strengthens the legal basis of a situation that already existed for some years, the validity of which was not in doubt: electronic promissory notes. Formerly, the legal basis for issuing electronic promissory notes were the provisions of the Commerce Code regarding digital documents, upon the Reform, the specific provisions regarding promissory notes (and other negotiable instruments) in the General Law of Negotiable Instruments and Operations are expressly modified. With regards to certificates of deposit, which have a significant relevance particularly for the customs and guarantee sector, it implies an important modernization, thus making transactions involving the circulation of this type of certificates more efficient.
The most important aspects of the Reform are the following:
- Information System
The Reform provides the possibility of issuing negotiable instruments through electronical, optical or by any other technology through an Information System (a system used to generate, send, receive, archive or process, in any other way, a negotiable instrument). It is important to consider that the Reform does not provide additional requirements in connection with the Information Systems other that those provided in the Commerce Code.
The Reform provides that any act related to the electronic negotiable instrument, including its delivery, transmission (endorsement) and the signature of a guarantor (aval) must be made exclusively through an Information System.
Furthermore, regarding the execution of the electronic negotiable instruments, the Reform defers to the rules set forth in the Commerce Code, to attribute the signature to the signatory.
- Integrity and Availability
The Reform provides that when the Law requires for the transactions to be in writing, such requirement will be deemed as complied by the electronic negotiable instruments, when its integrity and availability can be maintained, referring to the functional equivalence principle of Article 89 of the Commerce Code.
Pursuant to the Reform, it can be presumed that an electronic negotiable instrument has maintained its integrity and availability when it can be consulted in the same Information System.
- Filing before Courts
The Reform provides that when an electronic negotiable instrument is filed before a Court in an executive action (via ejecutiva) to claim its payment, the judge must consult the existence and chain of title of the negotiable instrument in the Information System.
- Deposit Certificates
The reform provides that the Deposit Certificates must be issued exclusively through electronic, optical or any other technology means, through the cryptographic system deposit certificates determined by the General Depository Warehouses (Almacenes Generales de Depósito) issuing the corresponding certificate.
The National Banking and Securities Commission (“CNBV”) must issue within 180 business days from the date in which the Reform becomes effective, the general rules to determine the requirements that the systems used by the General Depository Warehouses to issue the certificates.
If you have any questions about the content of this Alert, please contact:
Fernando Eraña
Partner
Eduardo Montenegro
Associate
