Circular 8/2012 of 21 December from the Bank of Spain on Databases of Assets Transferable to Companies under Chapter II of Law 8/2012 on Financial Sector Real Estate Assets

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Circular 8/2012, of 21 December, from the Bank of Spain to credit institutions, on databases of assets transferable to the companies provided for in Chapter II of Law 8/2012, of 30 October, on the restructuring and sale of real estate assets of the financial sector. (BOE of 27)

Law 8/2012, of 30 October, on the restructuring and sale of real estate assets of the financial sector, provides in its Article 3 that credit institutions must contribute the assets adjudicated or received in payment of debts referred to in Article 1.1 of Royal Decree-Law 2/2012, of 3 February, on the restructuring of the financial sector, to a company for the management of said assets. Likewise, its Article 6 provides that credit institutions must maintain databases with the necessary information for the management of the assets they must contribute to said companies, and that it is for the Bank of Spain to determine the requirements these databases must meet.

For its part, Royal Decree 1559/2012, of 15 November, establishing the legal regime of asset management companies, provides in its Article 48.2 that entities obliged pursuant to the ninth additional provision of Law 9/2012, of 14 November, on the restructuring and resolution of credit institutions, together with the assets they must transfer to the Asset Management Company Arising from Banking Restructuring (Sareb), must transmit databases with the necessary information for their management. Said databases must meet the requirements established by the Bank of Spain for those provided for in Article 6 of Law 8/2012, cited above.

To comply with that mandate, the Bank of Spain has not only taken into account its supervisory experience, which has allowed it to draw references from best practices in the matter, but, in addition to the suggestions received from credit institution associations, it has analyzed the best practices observed by experts in asset management. Furthermore, particularly regarding real estate assets, it has considered the scope and nature of the information that valuation companies provide to credit institutions in their appraisal reports.

Thus, the Circular first establishes the content of the subject databases, covering both real estate assets and the appropriate content for financing. Given that obliged entities may contribute assets of different nature, this Circular also addresses the possibility that the databases to be transmitted to asset management companies adapt their design to the nature of the assets being transferred and that, since the Circular does not exhaustively establish contents for all potentially transferable asset classes, at least the content structures included therein shall be taken as references for said design, consulting the Bank of Spain in advance regarding the adequacy of the design.

Additionally, the Circular provides guidance to ensure the compatibility of the technological medium of the databases with the management systems that the asset management companies currently have or will have, as well as for the case where several entities contribute assets to the same company.

Consequently, in exercise of the powers granted, the Board of Governors of the Bank of Spain, upon proposal of the Executive Committee, and in agreement with the Council of State, has approved this Circular, which contains the following rules:

Single Rule.

1. Credit institutions that, themselves or through their subsidiaries, contribute assets to the companies referred to in Chapter II of Law 8/2012, of 30 October, on the restructuring and sale of real estate assets of the financial sector, must maintain databases on those assets, with the content that, according to their nature, is detailed in the Annex to this Circular.

Likewise, and in accordance with what is provided in Article 48.2 of Royal Decree 1559/2012, of 15 November, establishing the legal regime of asset management companies, those entities that must contribute assets to the Asset Management Company Arising from Banking Restructuring (Sareb) must adjust the content of the databases for said assets to what is provided in this Circular.

In the event that, due to the nature of the assets contributed to said companies, the information on them cannot conform to the contents established in the Annex, the entities shall design the necessary databases taking as reference the structures contemplated in said Annex and shall consult the Bank of Spain in advance regarding the adequacy of the designed structures.

For the purposes of this section, the design of the databases must contemplate the grouping of assets by their different classes, so that they can be easily transferred to the different companies that may be created for the management of homogeneous classes of assets.

2. The databases referred to in the preceding section must be transferable on a technological medium compatible with the management systems of the aforementioned asset management companies.

In the event that several credit institutions, themselves or through their subsidiaries, contribute assets to the same asset management company, they must previously agree on the technological medium of the databases they must transfer to said company, avoiding the proliferation of different formats or media.

Final Provision. Entry into Force.

This Circular shall enter into force the day following its publication in the "Official State Gazette".

ANNEX

ANNEX-C-8-2012.PDF (487 KB)

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