Investor Protections

Six layers of legal protection

Every Covest investment is structured as a Fideicomiso bank trust administered by Banco Covalto, S.A., Institución de Banca Múltiple — a CNBV-regulated institution. Each trust creates a patrimonio separado, legally isolating assets from all other entities. Banco Covalto’s infrastructure enables Covest to deliver bank-level safeguards that are constitutionally authorized, publicly recorded, and enforced by Mexican federal law.

50+

years of Fideicomiso legal precedent

99.8%

Fideicomiso success rate in Mexico

50-year

renewable trust terms

10%

minimum reserve fund requirement

Legal Safeguards

Built on constitutional bedrock

These six protections are not contractual promises — they are legal structures mandated by Mexican federal law and enforced by sovereign government institutions. Banco Covalto’s infrastructure enables Covest to make them operational for every investor.

PILLAR 01

Constitutional Authorization

The Fideicomiso derives its legal authority directly from Article 27 of the Mexican Constitution, not from any private contract or corporate structure.

  • Article 27 grants constitutional standing to Fideicomiso beneficiaries, making your ownership interest a matter of supreme law
  • Beneficial rights cannot be voided by private agreement, platform failure, or operator insolvency
  • Constitutional grounding pre-dates any digital marketplace by 50+ years, ensuring stability regardless of technology changes
  • Mexican courts have upheld Fideicomiso beneficiary rights in over 99.8% of contested cases

PILLAR 02

Patrimonio Separado

Each Fideicomiso creates a legally separate patrimony — the trust’s assets are ring-fenced from all other legal entities by operation of law.

  • Trust assets are held as patrimonio separado: legally isolated from Covest’s corporate assets, Banco Covalto’s balance sheet, and other trusts
  • If Covest ceases operations, the patrimonio separado remains fully intact under Banco Covalto’s continuing administration
  • Creditors of Covest or any service provider have no legal claim against trust-held property
  • Each property has its own independent trust — no cross-collateralization between investments

PILLAR 03

CNBV-Regulated Fiduciary

Banco Covalto acts as the institutional fiduciary trustee under direct CNBV (Comisión Nacional Bancaria y de Valores) supervision — Mexico’s federal banking regulator.

  • Banco Covalto maintains a full banking license issued by the CNBV, Mexico’s highest financial regulatory authority
  • Fiduciary obligations are legally binding: Banco Covalto must act exclusively in beneficiaries’ interests as defined in the trust deed
  • CNBV conducts regular audits of fiduciary operations, providing independent regulatory oversight
  • All investor capital flows exclusively through Banco Covalto’s regulated banking infrastructure — never through Covest

PILLAR 04

Reserve Fund Mandate

Every Fideicomiso is required to maintain a minimum 10% reserve, funded from investor assessments, to cover capital expenditures without emergency capital calls.

  • 10% minimum reserve established from day one, held in trust as part of the patrimonio separado
  • Reserve covers major capital expenditures — roof replacement, structural repairs, HVAC — without requiring additional investor contributions
  • Reserve balance and allocations reported quarterly to all beneficiaries through Banco Covalto’s infrastructure
  • Reserve contributions are mandatory under the trust deed; no trustee discretion to waive them

PILLAR 05

Public Registry Recording

Beneficial ownership interests are recorded in Mexico’s Registro Público de la Propiedad — a sovereign government record that exists independently of any private platform.

  • Your ownership stake is recorded in the Registro Público de la Propiedad, a government record that pre-dates and outlasts any private company
  • Registry entries are immutable: your rights cannot be altered without your consent as a beneficiary
  • Public recording provides third-party notice: no fraudulent encumbrance or competing claim can be registered against a recorded Fideicomiso
  • Banco Covalto’s infrastructure enables Covest to complete digital notarization and registry filing without requiring in-person attendance

PILLAR 06

Investor Governance Rights

Beneficiaries hold legally enforceable voting rights under the trust deed, with supermajority thresholds protecting minority investors.

  • Voting rights are proportional to ownership share and enforced by the trust deed — not a platform policy that can be changed unilaterally
  • Major decisions (property sale, capital renovation above threshold, change of fiduciary) require supermajority approval
  • Minority investors are protected: no single majority block can force a sale below independently appraised fair market value
  • Investors may appoint a replacement coordinator if Covest ceases operations, without Covest’s consent

Safeguard Protocol

Automated investor protection

Every Fideicomiso includes a legally mandated enforcement sequence. When a threshold breach is detected, Banco Covalto’s infrastructure triggers the safeguard protocol automatically — detecting, verifying, activating, and resolving without requiring investor intervention.

SAFEGUARD_LEDGER
Standby
DETECT ( threshold.breach === FLAGGED )
Waiting
VERIFY ( severity.assessment === CONFIRMED )
Waiting
ACTIVATE ( protection.clause === MATCHED )
Waiting
ENFORCE ( trustee.authority === EXERCISED )
Waiting
RESOLVE ( outcome.verified === SEALED )
Waiting
// SAFEGUARD ENFORCED — ALL PROTECTIONS ACTIVATED

Threshold Detection

Continuous monitoring against contractually defined risk thresholds. Any breach triggers immediate classification and escalation under the trust deed.

Trustee Enforcement

Banco Covalto exercises its fiduciary authority to invoke the applicable remedy clause — without requiring investor vote or court order for standard breaches.

Sovereign Resolution

Every enforcement outcome is recorded in the Registro Público de la Propiedad, creating an immutable sovereign record of the protection exercised.

Audit Protocol

Independent trust certification

Every Fideicomiso undergoes a structured audit cycle — inspection, validation, reconciliation, certification, and archival — conducted by independent auditors under CNBV guidelines. Banco Covalto’s infrastructure enables Covest to deliver quarterly audit reports to every beneficiary.

AUDIT_LEDGER
Standby
INSPECT ( audit.schedule === TRIGGERED )
Waiting
VALIDATE ( documents.integrity === CONFIRMED )
Waiting
RECONCILE ( accounts.balance === MATCHED )
Waiting
CERTIFY ( standards.iso_9001 === SATISFIED )
Waiting
ARCHIVE ( trail.immutable === RECORDED )
Waiting
// AUDIT COMPLETE — ALL STANDARDS CERTIFIED

GAAP Validation

All trust financial records are validated against Mexican GAAP standards by independent auditors, ensuring accounting integrity across income, expenses, and reserve balances.

ISO 9001 Standards

Fiduciary operations are assessed against ISO 9001 quality management standards, providing investors an internationally recognized certification of process quality.

Immutable Archival

Completed audit trails are sealed and recorded through Banco Covalto’s infrastructure, creating a tamper-proof historical record accessible to all beneficiaries.

Exit Mechanism

Structured Exit. Protected Transfer.

Every Fideicomiso includes three legally defined mechanisms — transfer your position, leave the platform entirely, or return to Covest’s coordination. Each pathway is structured to protect all parties.

Zero penalties

No early exit fees, no lock-up periods, no platform-imposed restrictions

CNBV-regulated appraisal

Accredited valuators ensure fair market pricing for all parties

90-day structured timeline

Maximum 90-day administrative sequence from declaration to completed transfer

Legal finality

Public Registry recording provides irrevocable proof of transfer

1

Marketplace Listing

Fraction is listed on the Covest marketplace at CNBV-accredited fair market value.

2

Priority Notification

Co-owners receive immediate notification with a priority window. The listing remains accessible to all qualified buyers simultaneously.

3

Buyer Matching

Once a qualified buyer commits, purchase funds are secured in escrow. Transfer is subject to buyer availability.

4

Notarized Transfer

Transfer is executed through the Fideicomiso, notarized, and recorded in the Public Registry of Property.

Position transferred — recorded in Public Registry of Property
EXIT_PROCESSOR
Standby
APPRAISE ( valuation.source === CNBV_ACCREDITED )
Pending
LIST ( fraction.status === MARKETPLACE_LIVE )
Pending
NOTIFY ( co_owners.alert === PRIORITY_SENT )
Pending
MATCH ( buyer.verified === QUALIFIED )
Pending
TRANSFER ( notary.verification === COMPLETE )
Pending
// EXIT COMPLETE — FRACTION TRANSFERRED & RECORDED