Oscar Franco, President of the Mexican Association of Afores (Amafore), has announced that as financial reforms move ahead, the fines and sanctions applied by Mexico's National Commission for Retirement Savings (Consar) to the Mexican Pension Funds Managers (Afores) not compliant with its protocols, as well as in other areas of the financial sector, will increase. He qualified this statement by saying that the reforms will not have a negative impact on the Afores.
In an interview with the newspaper El Economista, the official mentioned that the Retirement Savings System Law (SAR) would be modified by paragraph 11 of the financial reform, allowing the regulatory body overseeing the Afores to apply heavier fines and sanctions to the pension funds managers.
Under the new regulation – subject to the approval from the Chamber of Deputies – in the cases where the Specialized Retirement Fund Investment Companies (Siefores) do not comply with the investment procedures, the maximum fine amount goes from 5,000 to 20,000 days of salary, whilst fines for non-compliance on employee record procedures increase from 500 to 5,000 days of salary. The sanction for the Afores that do not update their information adequately or publish disclosure documents for employees, is doubled from 5,000 to 10,000 days of minimum salary and in the case of Afores that do not register their operations in time at the Mexican Stock Exchange (BMV), instead of 1,000 days of minimum salary, they must pay up to 10,000 days.
These adjustments, according to Franco, “will not cause a negative impact on the fund managers.” He added, “the revision of norms and sanctions frameworks is a very current theme in all the segments of the financial sector, and not exclusive to the SAR.”
The fines owed by Afores from 2012 until the current date reach 46 million pesos, or 3,64 million US dollars. The 11th paragraph of the financial reform, that refers to foreign sanctions and investments, is available at this link.