1. Mexico’s Movable Property Collateral Registry Jan R. Boker General Director of National Commercial Regulation Ministry of Economy Financial Infrastructure Week Rio de Janeiro, March 2011

2. Index 2 1.The Registry 2.Achieved Benefits (before and after) 3.Best practices adopted by the Registry 4.Challenges faced during its implementation 5.Impact (statistics) 6.The Future: Opportunities for improvement

3. The Registry Main purpose - financial inclusion The Registry was designed by the Mexican Government to stimulate the use of movable property as security interest in order to increase SMEs´ access to credit. It started operations on October 2010. Concept - www.rug.gob.mxwww.rug.gob.mx 24/7 online registry where all security interests and liens over movable property are registered to gain publicity and legal effects before third parties. Basic Transactions Creditors register (modify, rectify, etc.) and cancel the security interests created for their benefit, obtaining -immediately- a certificate with electronic signatures and time stamp. Registrations can be searched and certified online by anyone. 3

4. Achieved Benefits 4 Before After Oct-10 Proceeding Paper based Subject to approval by State officials Over 260 different registration offices Online registration and searching Immediate registration Single national database for all security interets Fees Different rates by State Fees based on a percentage of registered amount (avg. 2%) No registration fee required TimeAverage registration time over 17 days Minutes

5. Best practices adopted by the Registry 1. Rule-based decisions Mandatory and optional fields according to the legal framework. Advanced search engine with diverse criteria. 2. Simplicity Intuitive and simple data registration («copy-paste» method). 3. Add-only politic Registrations must be made with the registrant’s electronic signature. Each registration gets a file number with time stamp. All registrations are all shown cronologically. Corrections or modifications must be made via a «rectification registration». 4. Certificate Identification Code Special search engine for certifications issed by the Registry. 5. Full Connectivity Aproximately 32 M internet users. 5

6. Challenges faced during its implementation (1/2) A. Operation and Legal Challenges Receive stakeholders’ input during the drafting of the Ruling. o Banks & notaries-at-law: Definition of types of security interests to be registered: 1.Pledges and similar security interests where grantor remains in possession of the secuted assets. 2.Retention rights and special creditor’s privileges set forth in the Law. o Special Registries: avoidance of double registry. Resistance to change from local registry offices. 6

7. Challenges faced during its implementation (2/2) B. Information Technology (IT) Challenges Translation of operation and legal requirements into IT requirements. Meeting maximum security requirements. Legacy data conversion. 7

8. Impact (1/4) 8 The numer of registrations has increased x 2.18 times over the same period of the preceeding year (and x 4.25 times in Feb-11).

9. Impact (2/4) 9

10. Impact (3/4) 10 * Notaries-at-law, federal and state officials and the judiciary branch

11. Impact (4/4) 11 Amounts in M USD.

12. The Future: Opportunities for Improvement 1. Clarification of security interests that can be registered vs those that cannot (for purposes of priority). 2. Public awareness building and training, especially among judges (for purposes of foreclosure proceedings). 3. Provide for a brief proceeding to resolve unlawful registrations in favor of the grantor of the security interest. 12

13. Mexico’s Movable Property Collateral Registry Jan R. Boker General Director of National Commercial Regulation Ministry of Economy Financial Infrastructure Week Rio de Janeiro, March 2011