Circular 2/2015 of the National Securities Market Commission modifying Circular 3/1999 on transparency of operations in official securities markets

OFFICIAL STATE GAZETTE No. 190 Monday, August 10, 2015 Sec. I. Page 71734 I. GENERAL PROVISIONS NATIONAL SECURITIES MARKET COMMISSION 8942 Circular 2/2015, of June 23, of the National Securities Market Commission, amending Circular 3/1999, of September 22, on transparency of operations in official securities markets.

STATEMENT OF MOTIVES Circular 3/1999, issued by the National Securities Market Commission on September 22, 1999, regarding transparency of operations in official securities markets, aims to regulate the public information that Stock Exchanges, Official Futures and Options Markets, and AIAF Fixed Income Market, S.A., must disseminate regarding market operations, whether ordinary or extraordinary, as well as, where applicable, orders placed therein.

In this regard, it should be noted that Circular 3/1999, of September 22, predates the current wording of Article 43 of Law 24/1988, of July 28, on the Securities Market, which was modified by Article 16 of Law 47/2007, of December 19, whose purpose was to incorporate various European Directives into the Spanish legal system, including Directive 2004/39/EC of the European Parliament and of the Council of April 21, 2004, on markets in financial instruments (MiFID).

The aforementioned Article 43, in paragraph 3, stipulates the information that official secondary markets must make public regarding concluded operations, which includes: the price, volume, and time of execution. Consequently, Law 24/1988, of July 28, on the Securities Market, does not establish as a post-trade transparency requirement the identity of the buying and selling market member.

Additionally, neither Directive 2004/39/EC nor its implementing regulations contemplate as part of the post-transparency information to be disseminated by markets the identity of the buying and selling member. Nor does the new Regulation on markets in financial instruments (MiFIR), which will apply from January 3, 2017, as it does not include within the post-transparency information requirements the publication of the buying and selling member.

As a consequence of the foregoing, the purpose of this modification is to suppress the obligation established in Circular 3/1999, of September 22, which requires Stock Exchanges to disseminate information regarding the identity of the buying and selling member in operations executed in the SIBE during the session and in special stock operations carried out under Royal Decree 1416/1991, of December 27, on special stock operations. This is, therefore, a specific modification of a strictly technical nature.

On the other hand, the introduced modification must be understood within the framework of the significant changes that have occurred in securities markets in recent years, characterized by the growing interrelationship and increased competition among different trading centers for financial instruments. In this sense, the trading of Spanish shares may take place not only in Spanish Stock Exchanges but also in foreign securities markets, both regulated markets and multilateral trading facilities. In this context, the requirement to publicize the identity of the buying and selling market member could be translating into a competitive disadvantage for Spanish Stock Exchanges in their relations with these other trading centers for Spanish shares, as it imposes obligations on Spanish market members that are higher than those fixed by other markets.

This circumstance could distort decisions to trade Spanish shares in one market or another, with the consequent artificial impact on liquidity and the formation of prices of Spanish shares. The same circumstance would translate into an unjustified inconvenience for the adequate development and proper functioning of the Spanish market and could imply harm to its participants, which would include, among others, the loss of attractiveness of our markets as a means to channel investor savings and as a financing mechanism for securities issuers, reducing dynamism in the overall economy.

Paragraph fourteen of the single article of Royal Decree 358/2015, of May 8, amending Royal Decree 217/2008, of February 15, on the legal regime of investment service companies and other entities providing investment services, and partially amending the Regulation of Law 35/2003, of November 4, on Collective Investment Institutions, approved by Royal Decree 1309/2005, of November 4, empowers the National Securities Market Commission to issue the necessary provisions to develop, specify, and detail the information that official secondary markets are obliged to disseminate regarding shares admitted to trading therein, both in relation to existing buy and sell positions at any given time, and in relation to concluded operations, in accordance with Article 43 of Law 24/1988, of July 28, on the Securities Market, and in conformity with the requirements established in this regard by Community legislation. Therefore, in exercise of this empowerment, this Circular is issued.

By virtue thereof, the Council of the National Securities Market Commission, in its session held on June 23, 2015, following the report of its Advisory Committee, has ordered the following:

Single Provision. Modification of letter A and letter B of paragraph three of Circular 3/1999, of the National Securities Market Commission, of September 22, 1999, on transparency of operations in official securities markets.

Letters A. "Ordinary Operations", second paragraph "Executed Operations" and B. "Operations carried out under Royal Decree 1416/1991, of December 27, on special stock operations" of paragraph "Third. Information to be disseminated by the Governing Bodies of Stock Exchanges" of Circular 3/1999 of the National Securities Market Commission, of September 22, 1999, on transparency of operations in official securities markets, shall be drafted in the following terms:

"Third. Information to be disseminated by the Governing Bodies of Stock Exchanges. Stock Exchanges shall disseminate the following information: A. Ordinary Operations: Transactions executed in the SIBE: … • Executed Operations. In real time, and for each security, all operations executed during the session shall be disseminated, indicating: price, volume, and time of execution. For those operations that are not executed in the order market (principal and fixing), their public dissemination may be delayed up to the opening of trading on the following day. …

B. Operations carried out under Royal Decree 1416/1991, of December 27, on special stock operations. • The following shall be published: identity of the security, amount, price, time of perfection of the operation. The information for each of them shall be disseminated before the opening of the next trading session, and otherwise, the provisions of said Royal Decree and its implementing regulations shall be observed. …".

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

Madrid, June 23, 2015.–The President of the National Securities Market Commission, María Elvira Rodríguez Herrer.

cve: BOE-A-2015-8942 Verifiable at http://www.boe.es

OFFICIAL STATE GAZETTE No. 190 Monday, August 10, 2015 Sec. I. Page 71735

cve: BOE-A-2015-8942 Verifiable at http://www.boe.es

OFFICIAL STATE GAZETTE No. 190 Monday, August 10, 2015 Sec. I. Page 71736

cve: BOE-A-2015-8942 Verifiable at http://www.boe.es http://www.boe.es OFFICIAL STATE GAZETTE D. L.: M-1/1958 - ISSN: 0212-033X