Circular 6/2001 of the Bank of Spain: Holders of Currency Exchange Establishments

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Circular 6/2001, of October 29, of the Bank of Spain. Holders of currency exchange establishments (BOE of November 15).

The Order of November 16, 2000, regulating certain aspects of the legal regime of currency exchange establishments and their agents (which develops Royal Decree 2660/1998, of December 14, on the exchange of foreign currency in establishments open to the public other than credit institutions), specifies the general conditions to which the exercise of said activity is subject and establishes certain publicity and transparency obligations for foreign currency exchange operations, with the aim of guaranteeing an adequate level of information and protection for customers.

With the same purpose, the Order of November 16, 2000, developing Law 9/1999, of April 12, which regulates the legal regime of transfers between Member States of the European Union as well as other provisions on the management of transfers in general, establishes additional transparency obligations for holders of currency exchange establishments that carry out transfer operations with the outside.

Both norms attribute to the Bank of Spain competencies for the general development and execution of their mandates and some specific ones regarding the transparency of operations.

In this Circular, the procedure to obtain the authorization that will allow the exercise of the activities provided for in Royal Decree 2660/1998, of December 14, is specified; the information that holders of foreign currency exchange establishments must provide to the Bank of Spain is established; and the content and scope of their obligations, and those of their agents, both to inform the public about the exchange rates and commissions applicable to the operations they carry out, and to adopt the organizational measures provided for in the cited norms, are specified.

Consequently, in exercise of the powers granted, the Bank of Spain has decided:

FIRST TITLE:

HOLDERS OF ESTABLISHMENTS THAT CARRY OUT EXCLUSIVELY OPERATIONS FOR THE PURCHASE OF FOREIGN BILLS OR TRAVELLER'S CHEQUES WITH PAYMENT IN EUROS

FIRST RULE.-

Authorization Requests

1. Natural and legal persons other than credit institutions that intend to carry out exclusively operations for the purchase of foreign bills or traveller's cheques with payment in euros in establishments open to the public must request the authorization provided for in Royal Decree 2660/1998, of December 14, from the Bank of Spain, directing their application, adjusted to the corresponding model from those listed in annexes 1.1 and 1.2 of this Circular, to the Financial Institutions Department of the Bank of Spain.

The application shall be accompanied by documentation accrediting compliance with the requirements provided for this purpose in the aforementioned Royal Decree, according to the indications included in the corresponding model. [ 1 ]

2. In the case where the activity will not have a complementary character to another main activity, it will be necessary to present, regarding the natural person holding the business or, in case the holder is a legal person, regarding each of its partners with a participation equal to or greater than 10% of the social capital, administrators and general managers or similar:

• The signed declaration referred to in paragraphs 1 and 2 of Article 5 of the indicated Royal Decree, according to the model shown in annex 2.1 of this Circular.

• Document of express authorization to consult the data about their person that may exist in the Central Risk Information Center (CIR) under the Bank of Spain, according to the model shown in annex 2.2.

3. In the case where the activity will have a complementary character to another main activity, it will only be necessary to present a photocopy of the latest settlement of the Economic Activities Tax that accredits the main activity of the applicant.

4. It will be necessary to obtain a new prior authorization, in the manner previously provided:

a) When a natural or legal person intends to carry out the activity mentioned in paragraph 1 by obtaining the ownership of some or all of the premises open to the public by a holder already authorized, either as a consequence of their acquisition through inter vivos operations (transfer or partial assignment of business) or through corporate operations (merger, spin-off, assignment of assets and liabilities) regarding said holder.

However, in the case where such corporate operations affect establishments where the activity is exercised on a complementary basis, the authorization must be requested, at the latest, within three months following the granting of the corresponding contract or public deed.

b) When the acquisition of said ownership occurs mortis causa and the currency exchange activity is exercised on a principal basis, for which purpose the authorization will be requested at the latest within three months following the death of the previous holder.

c) When an authorized holder to carry out the cited activity on a complementary basis to their main activity intends to exercise it on a principal basis.

In other cases of transmission mortis causa, that is, if the currency exchange activity is exercised on a complementary basis to another main activity, the identity of the new holder must be communicated to the Bank of Spain, directing such communication as provided for in paragraph 1 of the second rule within three months following the death of the previous holder.

5. Once the authorization is notified and registered in the Register of Holders of Currency Exchange Establishments under the Bank of Spain, the holder of the establishment may begin the currency purchase activity.

[1]

Paragraph 1 drafted according to Circular 3/2009, of December 18, first rule.

SECOND RULE.-

Information to be sent to the Bank of Spain

1. Holders of authorized exchange establishments to carry out operations for the purchase of foreign bills or traveller's cheques will send the information indicated below to the Financial Institutions Department of the Bank of Spain, within a maximum period of one month from when the events to which it refers occur: [ 2 ]

a) Changes in the holder's address or, in the case of legal persons, in their name or registered address; in this case, the communication will include a reference to the public deed of modification of statutes corresponding and its date of registration in the Mercantile Register.

b) The modification of the character of currency exchange operations from a main activity to a complementary activity, providing in this regard a photocopy of the settlement of the Economic Activities Tax that accredits the new main activity of the applicant.

c) The opening of premises where they carry out the authorized activity, indicating their full address and whether their character is permanent or seasonal, with details of the periods of activity, as well as the closure or any other variation of the previously provided data of any of them. [ 2 ]

d) The cessation in the exercise of the foreign currency exchange activity and, if applicable, waiver of the granted authorization. [ 2 ]

2. Holders in whom the circumstances indicated in letters a) or b) below concur must present a quarterly or annual summary statement to the Financial Information and Central Risk Department of the Bank of Spain, depending on the amount of operations carried out by the holder in all their premises, using the OEC-3 form included in annex 3.3 of this Circular, completed in accordance with what is provided therein and with the following instructions:

a) Quarterly declarations. They must be made when any of the following circumstances occur:

That in the year prior to the declaration the total sum of the countervalue of the purchases of foreign bills and traveller's cheques has reached the figure of two million euros. In this case, the four quarterly declarations of the year will be presented, regardless of the amount of purchases made in the quarter.

That the total sum of the euro countervalues of the purchases of foreign bills and traveller's cheques carried out in any of the quarters of the natural year reaches or exceeds the sum of five hundred thousand euros. If this were to occur in the first quarter of the year, the entity must continue to complete the OEC-3 model in the remaining quarters of that year, regardless of the amount purchased in them; when it happens in any of the remaining quarters, the entity must, in addition, send the OEC-3 of all previous quarters of that year at the same time.

b) Annual declaration. It must be made when, not being obliged to present the quarterly declarations indicated in letter a) above of this same paragraph, the total sum of the euro countervalues of the purchases of foreign bills and traveller's cheques carried out during the natural year has reached the figure of five hundred thousand euros.

The presentation of the statements will be made within the natural month following the end of the period to which the data refer by telematic transmission in accordance with the technical specifications communicated for this purpose.

Without prejudice to the competencies corresponding to the Commission for the Prevention of Money Laundering and Monetary Offenses and its Executive Service (SEPBLAC) to request information from any exchange establishments, whether or not they are obliged to make the declarations provided for in the previous paragraphs, the Bank of Spain may require at any time the holders who have not made said declarations to confirm to it, through an express declaration, that they have not reached the business thresholds established for this purpose. [ 2 ]

[2]

The first paragraph and letters c) and d) of paragraph 1 and paragraph 2 drafted according to Circular 3/2009, of December 18, first rule.

THIRD RULE.-

Record of Operations

1. All operations carried out by holders of currency exchange establishments must be registered daily according to the OEC-1 registration model, included in annex 3 of this Circular. Said register may be kept by electronic means provided that the holder has adequate technical systems, both for its correct conservation and to allow the necessary access for the inspection that competent authorities may carry out.

2. Without prejudice to what applicable commercial norms require, holders of currency exchange establishments must conserve the daily record of the operations they carry out for six years.

FOURTH RULE.-

Transparency and Protection of Customers

1. Regarding the information to the public on exchange rates, commissions, and expenses referred to in Article 6.1 of the Order of the Ministry of Economy of November 16, 2000, on the regulation of certain aspects of the legal regime of currency exchange establishments and their agents, and without prejudice to what competent national, autonomous, or local authorities in consumer protection matters may provide, holders of currency exchange establishments that carry out operations for the purchase of foreign bills or traveller's cheques against euros with their customers must publish, in a perfectly visible place within the premises where they carry them out, the minimum purchase rates they will apply for amounts not exceeding 3,000 euros.

The publication of exchange rates will be accompanied, where applicable, by the publication of commissions and expenses, even minimum ones, that they apply in currency purchase operations, explaining the concept to which they respond when it does not clearly derive from the denomination adopted in the commission itself. [ 3 ]

2. As proof of the purchase of foreign bills and traveller's cheques, a document of settlement of the operation will be delivered to the customers in which the monetary amount received from the customer, in units of the corresponding currency, the exchange rate, and, if applicable, the commissions applied, as well as the amount in euros delivered to the customer, are clearly and separately expressed.

3. In each premises where the currency purchase activity is carried out, in a perfectly visible place, in addition to the information referred to in paragraph 1 of this rule, a legible copy of the communication from the Bank of Spain will be displayed, in which the authorization obtained by virtue of the provisions of Royal Decree 2660/1998, of December 14, and the registration number in the corresponding Register are recorded.

4. When the holders of establishments referred to in this title carry out the currency purchase activity on a complementary basis to their main activity or in the same premises where other economic activities are developed, they must have the necessary organizational measures to ensure that customers clearly identify the provider of said service and can relate it to the information mentioned in the preceding paragraphs.

[3]

Paragraph 1 drafted according to Circular 3/2009, of December 18, first rule.

SECOND TITLE:

HOLDERS OF ESTABLISHMENTS THAT CARRY OUT OPERATIONS FOR THE PURCHASE-SELLING OF FOREIGN BILLS OR TRAVELLER'S CHEQUES AND/OR MANAGEMENT OF TRANSFERS WITH THE OUTSIDE

FIFTH RULE.-

Authorization Requests

1. Natural and legal persons other than credit institutions that intend to carry out the activity of purchase-selling of foreign bills and traveller's cheques and/or management of transfers with the outside in establishments open to the public must request the authorization provided for in Royal Decree 2660/1998, of December 14, from the Bank of Spain. Said application must be directed to the Financial Institutions Department [ 4 ] in Madrid.

The application shall be accompanied by the documentation provided for in the aforementioned Royal Decree accrediting compliance with the requirements established for this purpose to obtain the authorization.

2. The list of partners that must constitute the society, in which the participation of each in the social capital will be indicated, must be accompanied, when such participation is equal to or greater than 10%, by the forms that, distinguishing between shareholder natural person and shareholder legal person, are included in annex 4. In the case where the shareholder is a legal person, this obligation will extend to the controlling or majority shareholders of said legal person. Regarding all of them, the most relevant economic-financial data of their last two fiscal years and the composition of their administrative bodies will also be provided.

3. The list of administrators and general managers or similar must be accompanied by the corresponding forms, the model of which is collected in annex 4.1 of this Circular, duly completed. In said forms, the administrative or directorship positions of the interested party in other commercial societies or cooperatives must also be declared.

For these purposes, it is understood that they hold administrative positions the persons referred to in paragraph 4 of Article 1 of Law 26/1988, of July 29, on the discipline and intervention of credit institutions.

4. It must also be presented, regarding each of the administrators, general managers or similar and shareholders with a participation equal to or greater than 10% of the social capital of the holder, a document of express authorization to consult the data about their person that may exist in the Central Risk Information Center (CIR), according to the model shown in annex 2.2. In the case where the shareholder is a legal person, this obligation will extend to the controlling or majority shareholders of said legal person.

5. Once the authorization is obtained and after the corresponding registration in the Mercantile Register, the authorized holder will be registered in the Register of Holders of Foreign Currency Purchase-Sale Establishments and/or Transfer Management under the Bank of Spain; for this, they must accredit the corresponding registration in the Mercantile Register, and provide, in the case of exercising the activity of management of transfers with the outside, the civil liability policy provided for in Article 4.2.d) of Royal Decree 2660/1998, of December 14, definitively subscribed, with justification of payment of the corresponding premium.

6. Once the registration in the Register under the Bank of Spain is notified, the holder of the establishment may begin their activities.

7. It will be necessary to obtain a new prior authorization when an authorized holder to exercise any of the activities provided for in this title or the previous title intends to exercise another of those provided for in this title or expand the concept object of their transfers with the outside.

[4]

Reference to the "Office of Financial Institutions" replaced by "Financial Institutions Department", according to Circular 3/2009, of December 18, first rule.

SIXTH RULE.-

Minimum Capitalization Levels. Activities and Premises

1. The minimum amounts of social capital provided for in paragraph 2.c) of Article 4 of Royal Decree 2660/1998, of December 14, will only be understood as fulfilled if the net worth of the holder of the currency exchange establishment, calculated according to what commercial legislation determines for purposes of capital reduction or dissolution of societies, reaches, at all times, such minimum amounts.

2. Holders authorized to manage transfers with the outside for expenses of stay abroad and remittances of workers domiciled in Spain may make the payment of the transfers received from the outside for concepts similar to those included in their corporate object.

3. The opening of new premises in Spain by holders of currency exchange establishments authorized is free, without prejudice to the obligation to communicate it to the Bank of Spain, in accordance with what is provided for in paragraph 1.2.a) of the seventh rule of this Circular.

Without prejudice to respecting the local legislation that corresponds, the opening of branches abroad by holders of establishments authorized to exercise the activity of purchase-selling of foreign currency or management of transfers with the outside for concepts other than expenses of stay abroad and remittances of workers domiciled in Spain, must be communicated previously, with one month's advance, to the Bank of Spain (General Directorate of Supervision), being equally applicable to those premises what is established in paragraph 1.2.a) of the following rule.

SEVENTH RULE.-

Information to be sent to the Bank of Spain

Holders of currency exchange establishments authorized to carry out operations for the purchase-selling of foreign bills or traveller's cheques and/or management of transfers with the outside must send, in the manner and deadlines indicated for this purpose, the following information:

1. Information related to the requirements to conserve the authorization, to be sent within a maximum period of one month from when the events to which it refers occur [except for that provided for in letters b), c) and d) of point 1.2 below, in which the deadlines indicated there will be respected]: [ 5 ]

1.1 To the Financial Institutions Department:

a) Each time there is a modification of the Social Statutes, notarial testimony or photocopy with certification of authenticity issued by the administrator or secretary of the board of directors, of the public deed of modification duly registered in the Mercantile Register, for its record in the Bank of Spain's Statutes Register.

b) Declaration of administrators, of the persons who will exercise functions of general manager or similar, as well as of subsequent variations regarding those initially declared, detailing their positions in other Spanish or foreign societies, completing for this purpose the form included as an annex to Bank of Spain Circular 1/2009, of December 18, with the instructions contained therein. In the event that the Holder does not have a Board of Directors, the section of said form related to the "declaration" of the entity must be signed by its administrators.

c) The cessation in the carrying out of any type of operation, even accessory or complementary in the sense of Article 5.2 of the Order of the Ministry of Economy, of November 16, 2000, on the regulation of certain aspects of the legal regime of currency exchange establishments and their agents, or in all for which it was authorized, and, if applicable, the waiver of the granted authorization. [ 5 ]

1.2 To the Financial Information and Central Risk Department:

a) The opening of premises in Spain and abroad where they carry out their activity, indicating their full address and whether their character is permanent or seasonal, with details of the periods of activity, as well as the closure or any variation on the previously provided data of any of them, according to the state shown in annex 4.7.

b) As soon as they are known, and at most within a period of 10 business days from the annotation in the register book of registered shares, the holder of the exchange establishment will communicate the transmissions (acquisitions and assignments) of shares that determine that the percentage of participation or the voting rights that remain in the hands of a natural or legal person or group equal or exceed, directly or indirectly, the threshold of 10% of the social capital or of the voting rights of the establishment, or that, without reaching said percentage, allow them to exercise a notable influence in the said establishment. The loss of the possibility of exercising said notable influence will also be communicated.

This information will be updated each time there are net variations in the direct or indirect participation of the person or group representing at least 5% of the social capital or of the voting rights of the establishment.

These communications will be made using the model included in annex 4.4.

c) As soon as they are known, and at most within a period of 10 business days from the annotation in the register book of registered shares, the holder of the exchange establishment will communicate the transmissions of shares –to which the provisions of letter b) above do not apply– that imply the net acquisition by a natural or legal person, in one or several operations, of a direct percentage equal to or greater than 5% of the social capital of the establishment. These communications will be made by completing the part related to direct participations of the model included in annex 4.4.

d) Annually, within the first month of the year, they will send a list of shareholders who have shares registered in their name in a percentage equal to or greater than 5% of the social capital, according to the state shown in annex 4.5.

In relation to letter b) above, the definition of group contained in Article 4 of the Securities Market Law will be used, and for the purposes of determining the percentage