Circular 3/2009 of the Bank of Spain, of December 18, amending Circular 6/2001 on holders of currency exchange establishments

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Circular 3/2009, of December 18, of the Bank of Spain, addressed to holders of currency exchange establishments, amending Circular 6/2001, of October 29, on holders of currency exchange establishments. (BOE of the 31st)

The fundamental purpose of this Circular is to incorporate various technical improvements in the information required from exchange establishments and in the manner in which this information is received. The need to address these improvements stems from the experience accumulated in handling information submitted by holders of currency exchange establishments. Thus, it aims to rationalize the required information by eliminating data requirements without proven utility, so that the received data align with supervisory needs. At the same time, it aims, as far as possible, to provide a certain uniformity to this information in relation to that received from other supervised entities. Additionally, some of the statements or annexes previously received in paper format will now be processed through telematic channels, which will result in greater simplicity in the method of submission and greater ease of processing the information by the Bank of Spain.

Secondly, the Circular intends to take into account certain regulatory changes (whether material or merely formal, such as the introduction of the euro) that must be considered. This is particularly the case with the modification of the definition of honorability for holders of this type of establishment, or with the necessary adaptation of the balance sheet and profit and loss account formats reserved for accounting changes derived from the entry into force of Royal Decree 1514/2007, of November 16, approving the General Accounting Plan, and of Royal Decree 1515/2007, of November 16, approving the General Accounting Plan for Small and Medium-sized Enterprises and the specific accounting criteria for micro-enterprises.

Finally, the Circular, taking into account the organizational changes that have taken place in the territorial structure of the Bank of Spain, centralizes at the central offices the receipt of all documentation related to the holders.

Consequently, in exercise of the powers granted, the Board of Governors of the Bank of Spain, upon proposal of the Executive Committee, has approved this Circular, which shall be governed by the following rules:

FIRST RULE

The following modifications are introduced in Bank of Spain Circular 6/2001, of October 29, on Holders of Currency Exchange Establishments [1]:

1. New wording is given to section 1 of the First Rule. Authorization Requests, which shall read as follows:

«1. Natural and legal persons other than credit institutions that intend to exclusively carry out operations for the purchase of foreign banknotes or traveler's checks with payment in euros in establishments open to the public shall 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 certifying compliance with the requirements provided for this purpose in the aforementioned Royal Decree, according to the indications included in the corresponding model.»

2. New wording is given to the first paragraph of section 1 of the Second Rule. Information to be sent to the Bank of Spain, which shall read as follows:

«1. Holders of authorized establishments for carrying out operations for the purchase of foreign banknotes or traveler's checks shall send the following information to the Financial Institutions Department of the Bank of Spain, within a maximum period of one month from the occurrence of the events to which it refers:

3. New wording is given to letters c) and d) of section 1 of the Second Rule. Information to be sent to the Bank of Spain, which shall read as follows:

«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 for any of them.

d) The cessation of the exercise of the foreign currency exchange activity and, where applicable, waiver of the authorization granted.»

4. New wording is given to section 2 of the Second Rule. Information to be sent to the Bank of Spain, which shall read as follows:

«2. Holders meeting the circumstances indicated in letters a) or b) below shall submit 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 form OEC-3 included in annex 3.3 of this Circular, completed in accordance with its provisions and with the following instructions:

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

That in the year prior to the declaration, the total sum of the counter-value of the purchases of foreign banknotes and traveler's checks has reached the figure of two million euros. In this case, the four quarterly declarations of the year shall be submitted, regardless of the amount of purchases made in the quarter.

That the total sum of the counter-values in euros of the purchases of foreign banknotes and traveler's checks carried out in any of the quarters of the calendar year reaches or exceeds the sum of five hundred thousand euros. If this occurs in the first quarter of the year, the entity must continue to complete model OEC-3 in the remaining quarters of that year, regardless of the amount purchased in them; if it occurs in any of the remaining quarters, the entity must, in addition, simultaneously send the OEC-3 of all previous quarters of that year.

b) Annual declaration. This must be made when, not being obliged to submit the quarterly declarations indicated in letter a) above of this same section, the total sum of the counter-values in euros of the purchases of foreign banknotes and traveler's checks carried out during the calendar year has reached the figure of five hundred thousand euros.

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

Without prejudice to the competences 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 from holders who have not made the aforementioned declarations to confirm, by express declaration, that they have not reached the business thresholds established for this purpose.»

5. New wording is given to section 1 of the Fourth Rule. Transparency and protection of the clientele:

«1. Regarding 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, regulating 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 with their clientele for the purchase of foreign banknotes or traveler's checks against euros shall 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 shall be accompanied, where appropriate, by the publication of commissions and expenses, even minimum ones, that they apply in currency purchase operations, explaining the concept to which they correspond when it does not clearly derive from the denomination adopted in the commission itself.»

6. New wording is given to points 1, 1.1, 1.2, and 2 of the Seventh Rule. Information to be sent to the Bank of Spain, and point 4 is added to it. These points shall read as follows:

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

1.1 To the Financial Institutions Department:

a) Whenever there is a modification of the Articles of Association, a notarial copy 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 Registry, for its record in the Bank of Spain's Registry of Articles of Association.

b) Declaration of administrators, of the persons who will exercise functions of general manager or equivalent, as well as of subsequent variations regarding those initially declared, detailing their positions in other Spanish or foreign companies, 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 regarding the "declaration" of the entity must be signed by its administrators.

c) The cessation in the performance 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, regulating certain aspects of the legal regime of currency exchange establishments and their agents, or in all for which it was authorized, and, where applicable, the waiver of the authorization granted.

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 for any of them, according to the statement shown in annex 4.7.

b) As soon as they are known, and at the latest within a period of 10 business days from the entry in the register of registered shares, the holder of the currency exchange establishment shall communicate the transfers (acquisitions and disposals) of shares that determine that the percentage of participation or voting rights remaining in the hands of a natural or legal person or group equal or exceed, directly or indirectly, the threshold of 10% of the share capital or voting rights of the establishment, or that, without reaching said percentage, allow them to exercise significant influence in said establishment. The loss of the possibility of exercising such significant influence shall also be communicated.

This information shall be updated whenever there are net variations in the direct or indirect participation of the person or group representing at least 5% of the share capital or voting rights of the establishment.

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

c) As soon as they are known, and at the latest within a period of 10 business days from the entry in the register of registered shares, the holder of the currency exchange establishment shall communicate the transfers 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 share capital of the establishment. These communications shall be made by completing the part regarding direct participations of the model included in annex 4.4.

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

Regarding letter b) above, the definition of group contained in Article 4 of the Securities Market Law shall be used, and for the purpose of determining the percentage of participation or voting rights, the provisions of Article 18 of Royal Decree 1245/1995, of July 14, on the creation of banks, cross-border activity, and other matters relating to the legal regime of credit institutions, shall apply. That same article shall be applicable for the purpose of determining what is understood by significant influence.»

«2. Financial and accounting information:

a) No later than February 28, they shall send the balance sheet and profit and loss account corresponding to the previous exercise, using for this purpose the models of reserved statements I and II shown in annex 5, applying for their preparation the principles and criteria of the General Accounting Plan, unless the annual accounts are formulated applying the General Accounting Plan for Small and Medium-sized Enterprises (SMEs) because the establishment meets the requirements established by Royal Decree 1515/2007, of November 16, approving said Plan, in which case they shall be prepared applying the principles and criteria of the General Accounting Plan for SMEs.

Holders of currency exchange establishments authorized to carry out the management of transfers abroad shall also send, no later than August 31, the aforementioned reserved statements I and II, referring to the previous June 30, applying in their preparation the same criteria they use for the formulation of the annual accounts.

b) Within fifteen days following the holding of the General Shareholders' Meeting that approves them, they shall send the annual accounts of the previous exercise, accompanied by the certification of the meeting's agreement regarding their approval and, where applicable, the corresponding audit report.

If the data contained in reserved statements I and II are modified in the annual accounts approved by the General Shareholders' Meeting, the corrected statements shall be sent at the same time as said annual accounts.

c) Quarterly, no later than the last day of the second month following the close of each natural quarter, they shall send a summary statement covering the operations carried out by the holder in all their premises, completed in accordance with what is provided for this purpose in form OEC-5 included in annex 3.5 of this Circular, and the complementary information provided for in the same annex.»

«4. The submission to the Bank of Spain of the information referred to in points 1.2, 1.3, and 2 of this Rule shall be made via telematic transmission, in accordance with the technical specifications communicated for this purpose for each of them.

The information referred to in letter b) of point 1.2 and letters a) and b) of point 2 of this Rule shall be electronically signed by the sole administrator, president, chief executive officer, or general manager.

Regardless of the obligation of electronic signature referred to in the previous paragraph, the entity shall be responsible, in any case, for ensuring that the documents sent via telematic means are a faithful copy of the originals, which must be available to the Bank of Spain at all times.

The Bank of Spain may also request the paper confirmation of any information sent via telematic transmission.

Exceptionally, and only for duly justified causes, the Financial Information and Central Risk Department may authorize the submission of all or some of the information in paper format, using the forms prepared by the Bank of Spain, which shall be delivered dated, stamped, and initialed on all pages, and signed by the sole administrator, president, chief executive officer, or general manager.»

7. New wording is given to sections 1.1 and 1.2 of the Ninth Rule. Transparency and protection of the clientele, which shall read as follows:

«1.1 Regarding 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, regulating certain aspects of the legal regime of currency exchange establishments and their agents, holders of currency exchange establishments that carry out operations with their clientele for the purchase and/or sale of foreign banknotes or traveler's checks against euros shall publish the minimum purchase and maximum sale rates of the main currencies in which they operate, or, where applicable, the single rates they will apply for amounts not exceeding 3,000 euros.

These rates shall also apply to operations for the purchase and/or sale of currencies other than the euro derived from foreign exchange transfer orders for amounts not exceeding the amount indicated in the previous paragraph.

1.2 The publication of exchange rates shall be accompanied by the publication of commissions and expenses, even minimum ones, that they apply in the operations cited in the preceding section, explaining the concept to which they correspond when it does not clearly derive from the denomination adopted in the commission itself.»

8. New wording is given to sections 11 and 12 of the Twelfth Rule. Agents, which shall read as follows:

«11. In the premises where they carry out their activity, and provided they accept funds in currencies different from the currency of the transfer remittance, agents shall publish, in a perfectly visible place and separately from other information, the minimum purchase and maximum sale rates, or, where applicable, the single rates that their principal will apply in operations for the purchase and/or sale of said currencies derived from transfer orders with abroad for amounts not exceeding 3,000 euros.

The publication of exchange rates shall be accompanied by the publication of applicable commissions and expenses, explaining the concept to which they correspond when this does not clearly derive from the denomination adopted in the commission.

12. Holders of establishments shall communicate to the Bank of Spain, for registration in a public registry, as soon as they occur, and at the latest within a period of fifteen natural days from when they take place, the powers of attorney granted to their agents or any variation of the previously communicated data, as well as the effective cessation of the agents in the provision of services to the holder.

The communications referred to in this number shall be made via telematic transmission, in accordance with the technical specifications communicated for this purpose. However, exceptionally, for justified causes, the Bank of Spain may authorize the submission of the corresponding declarations in the form included in annex 4.6 of this Circular, in accordance with the specifications contained therein.»

9. A Third Additional Rule is added with the following text:

«Third Additional Rule.

The General Directorate of Regulation may develop technical applications to facilitate the preparation of the different information to be sent to the Bank of Spain and establish correlations within each statement and between each of them.»

10. The references made in the Circular to the "Office of Financial Institutions" shall be replaced by "Financial Institutions Department".

11. Annexes 2.1, 3.3, 3.5, 4.1, 4.2, 4.4, 4.5, 4.6, and 5.1 (which becomes annex 5) are replaced by those included in the annex of this Circular, annex 4.7 is added, and annex 5.2 is suppressed.

[1]

Texts incorporated in Bank of Spain Circular 6/2001, of October 29.

First Transitional Provision.

Holders of currency exchange establishments authorized to carry out operations for the purchase and sale of foreign banknotes or traveler's checks and/or management of transfers abroad shall send telematically to the Bank of Spain before July 16, 2010:

The reserved balance sheet and profit and loss account for December 31, 2008, and December 31, 2009, using for their preparation the formats and criteria of this Circular.

The OEC-5 statement and its complementary information for March 31, 2010, using for their preparation the formats and criteria of this Circular.

For all their premises open as of June 30, 2010, the data listed for registrations in annex 4.7.

The data listed in annex 4.4, for shareholdings in the capital that meet as of June 30, 2010, the criteria of point 1.2.b) of the Seventh Rule of Circular 6/2001, as amended by this Circular.

Second Transitional Provision.

Holders of establishments that exclusively carry out operations for the purchase of foreign banknotes or traveler's checks with payment in euros shall send telematically the OEC-3 statements corresponding to March 31, 2010, before July 16, 2010.

Sole Final Provision. Entry into force.

This Circular shall enter into force twenty days after its publication in the "Official State Gazette".

However, the new telematic declarations will begin to be made from those corresponding to June 30, 2010, inclusive, and the submission of previous declarations must be carried out according to the procedure prior to the entry into force of this Circular.

ANNEX-C-3-2009.PDF (269 KB)

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