According to Fintech Radar Mexico, there are currently around 300 financial technology companies in operation in our country, which are attractive because they are related to the use of mobile devices, are innovative, flexible and do not require the physical presence of contractors to carry out various procedures.

Due to the growth that this sector has experienced in recent years in Mexico, on March 9, 2018, the Law to Regulate Financial Technology Institutions was published in the Federal Official Gazette, which seeks to regulate the organization, operation and operation of emerging company institutions that provide financial services through computer applications, websites or any other means of electronic or digital communication.

The figures contemplated for regulation in the Act are Collective Financing Institutions (crowfunding) and Electronic Payment Fund Institutions (electronic money),

Collective Financing Institutions (IFC). The activity of these institutions is to connect people from the general public so that they can grant funding through computer applications, interfaces, Internet pages or any other means of electronic or digital communication, they can only be carried out by legal persons authorized by the CNBV.

The transactions that may be carried out are Collective Debt Financing, Collective Equity Financing and Collective Co-Ownership or Royalty Financing.

Electronic Payment Fund Institutions (IFPE). The activities of

these institutions are, among others, for the issuance, administration, redemption and transmission of electronic payment funds through computer applications, interfaces, websites or any other means of electronic or digital communication.

Electronic payment funds will be considered to be those that are recorded in an electronic record of transactional accounts that carry an IFPE for this purpose and that are referred to a monetary value.

Common ITF Requirements.

1. Request authorization from the CNBV, subject to the agreement of the Inter-institutional Committee, which will be chaired by the CNBV and composed of the SHCP, Banxico and the CNBV.
2. Eligibility of shareholders and directors.
3. Present the trading notice to its shareholders and directors.
4. Have minimum capital for trading and for assets subject to risk.
5. They must be legally constituted as public limited companies (S.A.)

Operating Requirements:

1. Internal controls and risk management,
2. Information security and business continuity.
3. Trading limits per customer.

Consumer Protection.

1. Disclosure of risks and responsibilities.
2. Measures to avoid conflict of interest.
3. Segregation of own resources.
4. Confidentiality of information.

Operations with Virtual Assets. A virtual asset (cryptocurrency) is the representation of value, registered electronically and used by the public as a means of payment for all types of legal acts and whose transfer can only be carried out through electronic means.

You can only trade with virtual assets that are authorized by Banxico, but they are not recognized as legal tender and are not backed by the Federal Government, 'so ITFs that operate with cryptocurrencies must indicate at least that they are not legal tender and the transactions are not reversible once executed and their value is very volatile and there is no protection in case of loss.

Supervision. Monitoring compliance with the provisions of the Act

and the provisions that emanate from it correspond to the CNBV, Banxico and CONDUSEF within the scope of their respective competencies.

The Act also regulates administrative and criminal sanctions for cases in which the Act does not comply with the provisions of the Act or provisions that emanate from it.

Fiscal Framework. The Income Tax Act was not modified after the publication of this Act, so ITFs, when incorporated as public limited companies, will have to be taxed under Title II of the LISR and comply with all regulations and obligations established for legal persons.

‍