MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Mariana Santillán Trejo and Rebeca Sanchez, Aziz & Kaye Abogados, S.C.
5.5 Disclosure by Shareholders in Publicly Traded Companies Certain acquisitions of publicly listed securities trigger a disclosure obligation. A person or group of people who acquire, directly or indirectly, in one or several simultaneous or successive trans - actions of any nature, the common shares of a publicly listed company, resulting in a sharehold - ing equal to or greater than 10% and less than 30% of such shares, will be obliged to disclose such circumstance. If the acquisition was carried out by a group of people, they must disclose the individual hold - ings of each of the members of the group. Like - wise, the acquirers must disclose whether they intend to acquire significant influence in the company. If any related party (as defined by the Securi - ties Market Law) of the publicly listed company increases or reduces its ownership stake in the company’s capital stock by 5%, whether directly or indirectly, in one or several simultaneous or successive transactions of any nature, it must disclose such information to the public. Furthermore, any person or group of people who directly or indirectly hold 10% or more of the shares representing the capital stock of publicly listed companies, as well as the members of the board of directors and relevant officers of such companies, must inform the National Bank - ing and Securities Commission and, in certain cases, disclose to the public the acquisitions or transfers of such securities. Likewise, shareholders are required to inform the publicly listed company of the execution of any shareholders’ agreement so that the company can disclose it to the public. These agreements are not binding on the company, and their vio -
lation does not invalidate votes at sharehold- ers’ meetings. However, they are enforceable between the parties only after public disclosure. Publicly listed companies are obligated to submit a report upon the initial registration of their securities and annually thereafter detailing the name and shareholding of several parties, including the companies and individuals that are beneficiaries, whether directly or indirectly, of 5% or more of the company’s capital stock. Disclosure must be made through the relevant stock exchange and under the terms and condi - tions established by such stock exchange. 6. Corporate Reporting and Other Disclosures 6.1 Financial Reporting Companies must hold an annual general share - holders’ meeting that must review and, if appli - cable, approve the following: • a report by the board of managers on the company’s performance during the preceding fiscal year, the policies followed by the direc - tors, and the main existing projects, if any; • a report stating and explaining the main accounting and information policies and criteria followed in the preparation of financial information; • the company’s annual financial statements; and • a report prepared by the statutory auditor on the truthfulness and adequacy of the informa - tion submitted by the board of directors. Failure to submit the annual report on a timely basis will be grounds for the general sharehold - ers’ meeting to remove the sole manager or the
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