What is a S.A.P.I.?

S.A.P.I. (Anonymous Investment Promotion Companies)

In December 2005, after four years of on and off efforts to create a statutory platform designed to govern private equity investments, including contemplation of a specific private equity law, the Federal congress of Mexico approved the amended and restated securities Market Law; (the LMV), which contains a specific chapter applicable to private equity transactions.

Specifically, the LMV contemplates a new type of corporation, the (Anonymous Investment Promotion Companies), or S.A.P.I., which is designed to accommodate private equity investments, and serve as a transition from a closely held corporation into a publicly traded company.

The S.A.P.I. is a limited liability stock corporation. Mexican stock corporations may be incorporated as a S.A.P.I., or may adopt the form pursuant to a transformation resolution adopted by its general extraordinary shareholders meeting.

Although S.A.P.I.'s are established in the LMV, they are not subject to the regulation or supervision of the Mexican Banking and Securities Commission (Comisión Nacional Bancaria y de Valores). S.A.P.I.'s are closely held corporations so their shares need not be registered before the National Securities Registry ( Registro Nacional de Valores) or listed on any stock exchange.