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MEXICO has embraced unregulated financial intermediation by creating the new Sociedad Finandera de Objeto Multiple [Financial Corporation of Limited Purpose] (SOFOM). Traditionally, the Mexican government has regulated entities dedicated to the provision of credit through financial leases or factoring agreements. On July 18, 2006, the Mexican Congress decided to grant favorable treatment to those entities that provide credit with capital that is not obtained from the general public.1
SOFOMs are entities whose main purpose is to provide financing through credit agreements, financial leases, or factoring agreements.2 SOFOMs may be formed without authorization regulators and, depending on the type of SOFOM, may be unsupervised by the Comisión Nacional Bancaria y de Valores [National Banking and Securities Commission] (CNBV).3
The Mexican Congress distinguished between SOFOMs that have an "economic relationship"4 with a banking institution or an entity that controls a financial group of which a banking institution is a part of (Regulated SOFOM) and SOFOMs that do no have such "economic relationship" (Unregulated SOFOM).5 The CNBV supervises Regulated SOFOMs.6 Conversely, Unregulated SOFOMs may operate freely without supervision from the CNBV.7 Furthermore, a Regulated SOFOM is also subject to the application of Mexican banking laws, rules, and guidelines while an Unregulated SOFOM is not.8
There are three very simple requirements to form a SOFOM. The first requirement is to incorporate a sociedad anonima pursuant to the terms of the Ley General de Sociedades Mercantiles [General Law of Business Entities].9 The sociedad anonima is the most popular form of business organization in Mexico and is similar to a U.S. corporation.10 The second requirement is that the bylaws of the sociedad anonima establish the granting of credit and the entering into financial leases or factoring agreements as the entity's main corporate purpose.11 The third and final requirement depends on the type of SOFOM. For Regulated SOFOMs, the sociedad anónima shall include the words sociedad financiera de objeto multiple, entidad regulada [financial corporation of...