This technical note provides an overview of Mexico’s derivatives markets, and describes concisely the derivatives regulatory framework and risk management practices in financial institutions active in these markets. The most important derivatives market in Mexico is the over-the-counter (OTC) derivatives market, which is fully integrated with the global derivatives market. The origin of the OTC derivatives market can be traced back to the 1994 Mexican crisis that forced Mexico to abandon its fixed exchange rate regime.
de equilibrio or TIIE, which is determined from a daily survey among banks conducted by the BOM. The 28-day TIIE serves as the benchmark rate for corporate issuance. Periodic payments on the TIIE swap are based on a 28-day period. Hence, a one year swap is quoted as 13 by l (13 x l) since there are 13 payments during the life of the contract. While TIIE swaps are available for maturities from 3 months to 30 years, the most liquid tenors are in the range from 2 to 10 years.
18. The TIIEswapmarket facilitates the funding operations of Mexican corporates but it