A reform that will allow small and medium-sized companies to access tens of billions of pesos in annual financing on Mexico’s stock exchanges is one step closer to becoming a reality.

Deputy Finance Minister Gabriel Yorio announced Thursday that the board of the National Banking and Securities Commission (CNBV), a financial sector regulator, had approved secondary regulations related to the Security Markets Law that was approved by Congress in 2023.

“This will allow access to financing of up to 70 billion pesos [US $3.5 billion] annually for small and medium-sized enterprises, strengthening financial inclusion of smaller companies and facilitating new financing dynamics in the stock market,” Yorio, a leading proponent of the reform, wrote on X.

He said that the regulations approved by the CNBV would immediately be sent to the National Commission for Regulatory Improvement.

The reform aims to boost trading on Mexico’s stock exchanges after a number of delistings in recent years.

Reuters reported that it will “loosen regulations for companies to go public, speed up the process and reduce the costs involved.”

Mexico has two stock exchanges: the Mexican Stock Exchange, or BMV, and the Institutional Stock Exchange, or BIVA.

Large companies including Aeroméxico, dairy producer Lala and retailer Sanborns have all exited the BMV in recent years in favor of going private.

The BMV is the second-largest stock exchange in Latin America, after the B3 in Brazil, with a total market capitalization of over US $530 billion, according to the BMV website.

However, there are only around 140 companies listed on the stock exchange, and in late 2023, the BMV had gone six years without a new listing, with the exception of spin-offs, Reuters reported.

In BMV’s 2023 annual report, the chairman of the Mexican Stock Exchange’s board, Marcos Martínez Gavica, said that “great opportunities await us,” highlighting that regulatory changes “will open doors to new companies.”

“… At BMV Group we will continue to support our current and potential clients with products and services that anticipate market trends and needs,” he added.

With reports from Reuters