Mexico's Bill to Strengthen Electronic Financial Transactions Nears Approval

Holland & Knight LLP

Holland & Knight LLP

The Mexican Senate voted on May 6, 2021, to approve a bill to reform various provisions of the General of Negotiable Instruments and Credit Transactions (Ley General de Títulos y Operaciones de Crédito or LGTOC), the Federal Code of Civil Procedure (Código Federal de Procedimientos Civiles or CFPC), the Law of Credit Institutions (Ley de Instituciones de Crédito or LIC) and the Commerce Code (Código de Comercio or CC), regarding electronic promissory notes and other credit transactions. The bill was submitted to the lower house (Cámara de Diputados) for discussion and subsequent approval.

The validity and enforceability of legal acts created by electronic means and the use of electronic signatures have been well established under Mexican law for several years. (See Holland & Knight's previous alert, "Mexican Businesses May Consider Electronic Signatures for Signing Legal Documents Amid COVID-19," March 27, 2020.) However, lawyers and courts have held different positions with respect to the validity of electronic negotiable instruments (and securities) in general and in particular regarding promissory notes (pagarés) and endorsements, mainly due to the lack of binding precedent ruling on the issue.

With the bill, most of these discrepancies among lawyers seem to have been resolved in favor of the validity of electronic promissory notes and electronic endorsements as a legal way of transferring them. We think there is room for improvement in the final wording and drafting of the bill. The lower house will have the opportunity to refine aspects that remain somewhat ambiguous. In any case, we find it important to highlight that electronic signature, whether advanced or not, and electronic means, in general, are valid and enforceable in the execution of legal acts.

If approved, the bill will represent an excellent opportunity to reopen a needed discussion among legal and financing experts regarding basic concepts, risks and evidentiary duties inherent to the use of any technology and the closing of a transaction using electronic means.

Key Aspects of the Bill

The following is a breakdown of the relevant aspects of the bill.


  • The bill includes express reference to the CC's application with respect to negotiable instruments and credit transactions.
  • Negotiable instruments are now expressly acknowledged in electronic form.
  • Endorsements, the legal act necessary to transfer securities and negotiable instruments, are valid when documented electronically. The electronic means used in endorsements must guarantee its "continuity." The current discussion on the use of blockchain technology and non-fungible tokens (NFTs) when documenting credit transactions has proved to be interesting.
  • In the chapter regulating promissory notes, electronic promissory notes are expressly acknowledged.
  • In the chapters regulating credit transactions (apertura de crédito), financial leases and factoring, electronic promissory notes are expressly acknowledged as valid instruments to document such transactions.


  • Regarding evidence production, the bill states that courts may use any electronic document to produce evidence and have no technological or scientific limit when ordering the litigant parties to produce evidence.
  • It expressly recognizes public documents in electronic form.
  • When producing evidence on trial, parties challenging the validity or existence of electronic documents may request to confirm their existence in storage or safekeeping sites or locations, including documents in data rooms.
  • If a party refuses to ratify or confirm the existence of an electronic document, a presumption of authenticity applies.
  • Electronic signatures documented before notary publics or other public officers authorized to certify documents may not be challenged to confirm authenticity.
  • In general, the bill updates the terms used in the evidentiary rules' provisions regarding the use of "any technological advancement" and the use biometric and anthropometric data.
  • The bill includes financial institutions as eligible to act as expert witnesses (peritos).


  • In general, the bill updates the terms used in the evidentiary rules' provisions regarding the use of "any technological advancement" and biometric and anthropometric data.
  • The bill includes financial institutions as eligible to act as expert witnesses (peritos).
  • Litigants who are required to produce original private documents on trial, when offering electronic documents as evidence, may identify the server's location where an underlying data message is stored.


  • The bill includes a proposed amendment to Article 100 to expressly establish that credit institutions may document their licensed/authorized transactions electronically. This proposal is relevant to foster the digitalization process of complex financial transactions by commercial and development banks.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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