03 Apr Amendment to Regulate Electronic Negotiable Instruments: Key points.
On March 26, a historic amendment regarding electronic negotiable instruments was published in the Official Gazette of the Federation (the “Amendment”). To this end, certain changes were made to the General Law of Negotiable Instruments and Credit Transactions (“LGTOC” by its acronym in Spanish) and the General Law of Credit Organizations and Auxiliary Activities.
Some relevant points of this Amendment are:
- The admission and validity of electronic negotiable instruments and endorsements generated through data messages, equating the electronic signature generated in accordance with the guidelines established in the Commercial Code, with the handwritten signature of the signer.
- The functional equivalence between negotiable instruments now generated electronically and negotiable instruments issued in traditional (paper) form, as each case is expressly provided by law.
- The Federal District Civil Code is no longer supplementary for the interpretation of the LGTOC; instead, the Amendment provided for federal legislation as supplementary legislation to the statutory rules relating to the negotiable instruments, which is a success in eliminating the suppleness of local law with respect to federal law.
- Changes in the regulation of General Deposit Warehouses and the issuance of electronic deposit certificates (the “Electronic Deposit Certificates”) among others, the most relevant being:
i) General Deposit Warehouses may only issue Electronic Deposit Certificates. These will be issued through cryptographic systems that must comply with the general rules and provisions issued by the National Banking and Securities Commission to guarantee security, preventing fraud and cyber-attacks on such systems;
ii) General Deposit Warehouses will register Electronic Deposit Certificates with the Sole Registry of Certificates, Warehouses, and Goods, which will be supervised by the Ministry of Economy; and
iii) The provisions applicable to pledge bonds were abrogated, so that based on the Amendment, pledges over the goods under the Electronic Deposit Certificates may be incorporated into such Electronic Deposit Certificate, respectively.
This Amendment came into effect on March 27, 2024.
Mexican legislation has gradually adapted to regulate the validity and formalization of legal acts performed through data messages, electronic, optical, or any other technology. This Amendment is no exception and aims, among other purposes, to provide legal certainty to those who interact with electronically generated negotiable instruments by establishing specific guidelines for their generation and equating them to those issued in a traditional manner or even reinforcing their legitimacy by establishing form requirements consistently with the Commercial Code.
This materializes the use of new tools that will streamline commercial transactions within and outside our country and will also strengthen financial services to the public.
At Cuesta Campos, we have extensive experience to provide you with more information and advice. We are at your disposal through any of the following contacts:
Contact
Azucena Marín
Mauricio Castillo
Héctor Valladares
Fionna Folino
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