Regulatory Alerts2017-05-10
Circular 1/2017 of the National Securities Market Commission on Liquidity Contracts
The Spanish National Securities Market Commission (CNMV) issued Circular 1/2017 to replace Circular 3/2007, formally recognizing liquidity contracts as an accepted market practice under EU Regulation 596/2014. The regulation establishes strict requirements for financial intermediaries, including independence guarantees, specific resource limits based on market liquidity, and volume execution thresholds to prevent market manipulation. It also defines operational conditions for trading, order management during auctions, and procedures for account cancellation to ensure market integrity and transparency.
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