Traded Certificates (CBs)
06 March 2023
To print this article, all you need is to be registered or login on Mondaq.com.
In the evolving Mexican capital markets, traded certificates or
Certificados Bursátiles (“CBs”) have become the
most versatile security existing in the catalog provided under
Mexican law.1 CBs may be issued by Mexican or foreign
companies, whether private or public. Understood in their pure
expression and in their original purpose,2 CBs are debt
instruments that represent the individual participation of their
holders in a collective credit held by a legal entity or in a trust
In this Legal Update, we analyze the main characteristics of CBs
used as direct debt instruments (i.e., debt instruments issued by a
legal entity and reflected on its balance sheet).
CBs, as debt instruments, may be rated by Securities Rating
Institutions (i.e., credit rating agencies) in order to provide
potential investors with an independent evaluation of the
issuer’s creditworthiness and of the risk level of the
investment. The terms of the CBs vary according to the issuer, so
they may have different payment terms, be subject to fixed or
variable interest rates, have a specific guarantee or be unsecured.
Once acquired by investors, CBs may be traded in the secondary debt
Some of the advantages provided by CBs are:
- They allow the issuer to obtain financing on considerably more
favorable and flexible terms than those that a banking institution
would be willing to grant (due to the fact that interest rates
available in securities markets are generally lower than those
accepted by banking institutions in traditional lending).
- They are relatively safe financial instruments for investors
since they are debt instruments and do not represent a
participation in the issuer’s equity.
- They allow investors to obtain an additional source of cash
flow, to the extent that the issuer makes the corresponding
interest coupon payments.
- They can be denominated in Mexican pesos or in investment units
or indexed to the exchange rate.
1. Currently, CBs are used to document rights different
from the collection of principal plus interest. For example,
development or real estate trust certificates (typically issued by
CKDs and/or FIBRAs, respectively) are a type of trust certificate
that document the equity participation of their holders in the
returns generated by the assets underlying the respective issuing
2. Initially, CBs were designed and introduced in Mexican
law to meet the financing needs of legal entities to be met through
the placement of debt on a collective basis. In other words,
initially, CBs were created to document the individual
participation of their holders in a collective credit in charge of
the respective issuing company.
Visit us at
Mayer Brown is a global legal services provider
comprising legal practices that are separate entities (the
“Mayer Brown Practices”). The Mayer Brown Practices are:
Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited
liability partnerships established in Illinois USA; Mayer Brown
International LLP, a limited liability partnership incorporated in
England and Wales (authorized and regulated by the Solicitors
Regulation Authority and registered in England and Wales number OC
303359); Mayer Brown, a SELAS established in France; Mayer Brown
JSM, a Hong Kong partnership and its associated entities in Asia;
and Tauil & Chequer Advogados, a Brazilian law partnership with
which Mayer Brown is associated. “Mayer Brown” and the
Mayer Brown logo are the trademarks of the Mayer Brown Practices in
their respective jurisdictions.
© Copyright 2020. The Mayer Brown Practices. All rights
Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
POPULAR ARTICLES ON: Finance and Banking from Mexico
Baker McKenzie Argentina
Banking Regulation Comparative Guide for the jurisdiction of Argentina, check out our comparative guides section to compare across multiple countries
Walter Stuber Consultoria Jurídica
On April 20, 2011, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) enacted CVM Instruction No. 494 (Instr. 494/2011), which amended and updated the existing regulation that governs the incorporation, administration, operation, information disclosure and distribution of units (cotas) of Brazilian Investment Clubs (Clubs) , and CVM Instruction No. 495, dealing specifically with the preparation and disclosure of financial statements by the Clubs.
Middle East Legal Services
In this article we shall attempt to outline the definition of interest, so called( Riba) under the Sharia or Islamic law , followed by a short survey of the laws of some Arab countries which have prohibited or permitted charging interest.