Cofece’s Recommendations for the Fintech Sector, Subject to Secondary Legislation

With the disappearance of the Federal Economic Competition Commission (Cofece) and the creation of a new authority in charge of monitoring and sanctioning anti-competitive practices in all sectors of the country, the recommendations issued in October 2024 for the improvement of the fintech sector in Mexico will be subject to the powers that secondary legislation grants to this new body, according to what was indicated by Cofece itself.

Cofece to give way to a new entity

“The constitutional reform provides for the creation of an independent competition authority and secondary legislation must provide that said authority has the necessary tools and mechanisms to implement a robust competition policy for the benefit of the population, including various priority sectors such as the financial sector,” the Commission said in response to an interview request.

As background, on December 20th and 24th, the decrees on the reform of the organic simplification were published in the Official Gazette of the Federation, which establish the disappearance of Cofece to give way to a new entity.

Regarding its role in the fintech sector, since the drafting of the Law to Regulate Financial Technology Institutions (Fintech Law) in 2017, Cofece has issued opinions to promote innovation, consumer protection and the stability of the financial system.

The Fintech Law allowed the entry of new technology companies that offer alternatives to traditional banks. However, the fintech sector has faced barriers that hinder its growth and its ability to compete effectively. In response to these problems, Cofece carried out the “Study of competition and free competition in digital financial services.”

In it, the commission proposed 21 recommendations, including opening the payroll portability scheme, which seeks, among other objectives, to guarantee a “level playing field.”

The follow-up to these recommendations and current provisions of Cofece will be defined in secondary legislation, as occurred when the transition was made from the Federal Competition Commission (CFC) to Cofece.

“Cofece has expressed its willingness to collaborate with the Congress of the Union in defining secondary legislation, in order to ensure that the competition authority has sufficient tools to effectively combat anti-competitive practices,” Cofece stressed.

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First published in EL ECONOMISTA. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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