Mexico’s financial regulator has for the first time published a blacklist naming and shaming violators of its securities and investment laws in a move that will make markets more transparent and bring them in line with practices in the US and Europe.
The tough new stance of the National Banking and Securities Commission (CNBV) is designed to strengthen market discipline and assuage fears of foreign investors in particular that breaking laws in Mexico goes unpunished.
The largest single fine, for 6.7m pesos ($620,000), was dealt for market manipulation by Mexico’s largest bank, BBVA Bancomer. The Spanish-owned bank declined to comment.
Banco Santander Mexicano, also Spanish-owned, was penalised 1.6m pesos ($150,000), again for market manipulation. Others sanctioned include brokerages owned by HSBC, Deutsche Bank, JPMorgan and Merrill Lynch, as well as Mexico’s second largest company, Wal-Mart de Mexico.
The disclosure of the names was made possible by the introduction of a new securities law in 2001, although violators can only be identified after they have accepted the charge and no possibilities of appeal remain. This can often be a protracted process.
As such, Mexico’s second largest broadcaster, TV Azteca, was noticeably absent from the list, after the CNBV initiated proceedings against it in April this year. This followed accusations by the US Securities and Exchange Commission that chairman Ricardo Salinas Pliego had engaged in insider trading.
“We believe that by making more information public we will be able to encourage greater market discipline,” said Miguel Angel Garza Castañeda, the CNBV spokesman, who emphasised that all sanctions are made public, no matter how trivial the offence. Most of the fines were for amounts of less than $10,000.
Authorities hope that such actions will help to broaden investment in Mexico’s stock exchange, which remains dominated by a handful of large international companies, just four of which account for about half of its value.
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