Background on the Intermediary Brokerage Sector in Mexico
The intermediary brokerage sector in Mexico is regulated by the National Banking and Securities Commission (CNBV). One of the key indicators used to assess the financial health of these institutions is the Capitalization Index (Icap). The Icap measures the resources available to support unexpected losses.
Icap Trends in June
In June, the Icaps for brokerage firms Vector, Finamex, and Value reached their lowest levels in the Mexican intermediary brokerage sector. According to the CNBV, the general Icap for brokerages closed at 32.42% in June, up from 31.42% in the previous month—an increase of one percentage point.
Vector Casa de Bolsa
Vector Casa de Bolsa’s Icap dropped to 11.94% by the end of June, a decrease of 3.1 percentage points from 14.97% observed in March of the current year. This is the lowest level since November 2018, when it stood at 11.08%.
The decline in Vector’s capitalization level comes after the US sanctioned the firm, along with Mexican banks CIbanco and Intercam, for alleged money laundering.
Finamex and Value Group
Finamex also registered one of the lowest Icaps, at 12.45% in June, despite a four-percentage point increase from the previous month. The Value Group showed an Icap level of 13.44% during the reference month.
Highest Icaps
In contrast, UBS Securities leads with the highest Icap at 1,287.67%, followed by JP Morgan with 957.73%, as reported by the CNBV.
Key Questions and Answers
- What is the Capitalization Index (Icap)? The Icap is a measure used by the CNBV to assess the financial health of intermediary brokerage firms in Mexico. It reflects the resources available to cover unexpected losses.
- Why did Vector, Finamex, and Value experience low Icaps in June? These firms faced various challenges. Vector was sanctioned by the US for alleged money laundering, while Finamex and Value saw lower capitalization levels compared to industry leaders.
- Which firms have the highest Icaps? UBS Securities and JP Morgan lead with the highest Icaps at 1,287.67% and 957.73%, respectively.
