As a result of the ongoing COVID-19 international outbreak (the “Outbreak”) and the measures adopted by the Mexican authorities to contain it, the Mexican National Banking and Securities Commission (“CNBV”, for its acronym in Spanish) issued two resolutions to establish certain measures and grant relief to its supervised entities.

I. Resolution on accounting measures applicable to Mexican financial institutions. On March 25, 2020, the CNBV issued a decree that introduce special accounting criteria applicable to Mexican banking institutions on a temporary basis, with respect to consumer, housing and commercial loans -such as mortgage-secured loans, revolving and non-revolving loans aimed to individuals such as car loans, personal loans, payroll loans, credit card and microcredit; as well as commercial loans aimed at legal entities or individuals with business activity in its different forms, including agriculture and livestock- in order for such institutions to be able to grant relief for clients whose source of revenue is affected by the measures adopted by the authorities to contain the Outbreak.

The measures consist on deferring, either partially or in whole, the principal and/or interest payments of loans that were effective and in force as of February 28, 2020, for up to 4 months, with the possibility of extending it to an additional 2 months, with respect to the total outstanding amount payable, including ancillary payments, in the understanding that the balances may be frozen without causing interest. In addition, the CNBV informed that it is working on the issuance of similar accounting measures for other sectors of the financial system, such as “Sofipos”, “Socaps” and Credit Unions. We will let you know once such measures are issued. II. Resolution on relief granted to certain obligations of Mexican financial institutions and entities supervised by the CNBV. On March 26, 2020, the CNBV issued a decree (i) suspending the terms for certain audiences and proceedings that are carried out before the CNBV and (ii) providing for online alternatives to comply with reporting obligations that require to be physically filed before the CNBV, in order to temporarily provide regulatory relief to Mexican financial institutions and entities supervised by the CNBV (including securities issuers).

In accordance with the decree, the Chairman of the CNBV (i) will identify critical processes that would not be suspended in order to assure the stability and due operation of the financial entities, (ii) may modify or temporally suspend the application of legal provisions applicable to financial entities and entities supervised by the CNBV in order to provide them with administrative efficiencies and (iii) will determine authorizations that may be granted in an expedite or conditional manner. The decree will be in effect from March 23, 2020 to April 19, 2020. III. General recommendations for issuers Given the fact that the decrees described in Section I and II above did not provide for the deferral of specific obligations or any other relief or flexibility to comply with other obligations provided in the securities regulations, issuers must consider the following: Reporting obligations: The CNBV did not grant alternatives or deferrals for the submission of annual 2019 and first quarter 2020 reports to the CNBV and the corresponding Stock Exchange pursuant to article 104 of the Securities Market Law (“LMV”, for its acronym in Spanish) and article 33 of the General Provisions applicable to Securities Issuers and other Market Participants (“CUE”, for its acronym in Spanish). Therefore, issuers should consider the preparation and submission of such reports in the manner and timing provided for in the securities regulations. Shareholders Meetings: The decrees did not provide for any measures or exceptions to hold annual shareholders’ meetings within the first four months of the year or to hold such meetings without a physical assistance. Pursuant to article 181 of the Commercial Companies Act (“LGSM”, for its acronym in Spanish) stock issuers are required to hold its annual shareholders meeting within the first four months of the year and pursuant to article 179 of the LGSM all shareholders’ meetings must be held at the corporate domicile of the company and, therefore require the physical presence of the shareholders or its representatives. In addition, all stock issuers are required to hold their annual shareholders meetings in compliance with the LGSM. However, it is important to note that such meetings must comply with the precautionary measures established by the Health Ministry effective on the date of the meeting, which may be more restrictive than those that are in effect as of today, depending on the evolution of the Outbreak in Mexico in the coming days and could result in the cancellation of shareholders’ meetings if the concentration and/or mobility of people becomes more restricted.