Business World

Thursday 21 September 2017

Mexico financial watchdog at war with antitrust body

'The dispute highlights rising tensions between two agencies locked in a turf war over a high-profile investigation that threatens to upend Mexico's $400bn market for local sovereign bonds.' (stock image)
'The dispute highlights rising tensions between two agencies locked in a turf war over a high-profile investigation that threatens to upend Mexico's $400bn market for local sovereign bonds.' (stock image)

Isabella Cota and Michelle Davis

Mexico's financial regulator is advising banks to limit the information they provide to antitrust authorities as the two agencies undertake separate investigations into possible bond-market manipulation, according to three people with knowledge of the matter.

The conflicting instructions could obstruct or delay the probe, which focuses on whether so-called market makers and other players who buy government notes at auctions colluded to suppress prices. Any wrongdoing may have cost the government millions in higher borrowing costs.

The dispute highlights rising tensions between two agencies locked in a turf war over a high-profile investigation that threatens to upend Mexico's $400bn market for local sovereign bonds. People close to both organisations have dismissed the ability of the other regulator to effectively conduct the probe.

Press officials at the antitrust agency, known as Cofece, declined to comment on any dispute surrounding the investigations.

The banking regulator, known as the CNBV, didn't reply to a request for comment.

Cofece began its investigation in October, marking the first time the entity had ventured into examining financial transactions, and in April made its probe public in an effort to elicit tips. Three months after that, the CNBV said it would also look into the matter.

One area of disagreement is the reach of banking secrecy laws that protect the identity of clients,.

The CNBV is arguing that the laws limit the information organisations can provide to the antitrust regulator, according to two people familiar with the argument who asked not to be identified because they're not authorised to speak about the matter.

Cofece's position, the people said, is that the Federal Economic Competition Law compels entities including financial organisations to provide all needed information to determine if collusion occurred.

Bloomberg

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