Amendment to the Anti-Money Laundering Regulations applicable to Investment Advisors and Credit Unions, for the remote onboarding of their customers

On January 20, 2023, the Ministry of Finance and Public Credit issued resolutions that amend the Anti-Money Laundering ("AML") General Provisions (the "Amendments") applicable to Investment Advisors, and Credit Unions, (jointly the "Entities") highlighting the incorporation of a new regulatory report, and the update of the remote process for the identification of their customers through technological solutions ("Digital Onboarding").

I. New regulatory report

• The Entities must file with the National Banking and Securities Commission ("CNBV"), within the last ten business days of April of each year, quantitative information of the prior calendar year on their transactions, distribution channels, type of customers, type of products and services, as well as the geographic areas in which they operate.
• The format of the report is pending to be issued by the competent authorities.

II. Digital onboarding

• Since 2019, the Entities could request from the CNBV authorization for Digital Onboarding of Mexican individuals, through a real-time interview.

• The Amendments updated the Digital Onboarding process as follow: 
  • Applicable for Mexican individuals and Mexican companies;In lieu of a real-time interview, the Entities may retrieve an audio-visual recording of the customer, along with verifying their identification data and documentation; and
  • Entities must carry out a technological proof-of-life of the customer (or its legal representative).

III. Authorization application and thresholds

• Investment Advisors

The authorization of the CNBV is required to perform Digital Onboarding regarding:

1. Agreements in which the aggregate amount of transactions does not exceed ~USD$11,000 in a calendar month; and

2. Agreements without a transactional limit, if biometric information is verified against the records of the National Electoral Institute ("INE").

No authorization is required when investment advisors enter into agreements with a transaction limit of ~USD$11,000 and biometrics are verified against the INE, which allows investment advisors to use Digital Onboarding for these type of accounts in a simple manner.

• Credit Unions

The authorization of the CNBV is required to perform Digital Onboarding regarding:

1. Credits for a principal amount not exceeding ~USD$11,000; and

2. Credits for a principal amount not exceeding ~USD$22,000, if biometric information is verified against the INE.

No authorization is required for credits up to ~USD$11,000 and if biometrics are verified against the INE, which allows Credit Unions to use Digital Onboarding for these type of accounts in a simple manner.

IV. Transitory provisions

• The Amendments became effective on January 21, 2023.

• Entities must update their AML policies and procedures, and AML systems, pursuant to the resolutions, by no later than the following deadlines:
  • AML Manual: May 21, 2023;
  • Risk Based Methodology: October 21, 2023; and
  • AML Automated System: July 21, 2024.
• Entities with a valid authorization to perform Digital Onboarding shall submit a new request of authorization considering the new regulatory requirements, by no later than January 21, 2024.

_{White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.}

_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

_{© 2023 White & Case LLP}