Circular 7/2013, of 25 September, of the National Securities Market Commission, regulating the procedure for resolving complaints and inquiries against investment service providers in the securities market

OFFICIAL STATE GAZETTE No. 262 Friday, 1 November 2013 Sec. I. Page 88331 I. GENERAL PROVISIONS NATIONAL SECURITIES MARKET COMMISSION 11464 Circular 7/2013, of 25 September, of the National Securities Market Commission, regulating the procedure for resolving complaints and grievances against companies providing investment services and handling inquiries in the securities market. Law 24/1988, of 28 July, on the Securities Market, entrusts the National Securities Market Commission, among other functions, with safeguarding investor protection. To fulfill this mandate, it is endowed with administrative powers of supervision and inspection of securities markets and the activities of all natural and legal persons involved in their trading. In relation to this objective, Law 2/2011, of 4 March, on the Sustainable Economy, has modified the system for handling complaints, grievances, and inquiries in the financial sector by establishing a specific procedure for addressing complaints, grievances, and inquiries. To this end, the National Securities Market Commission is expressly assigned the function of handling and resolving complaints, grievances, and inquiries that users of financial services may submit within its specific material scope of competence, indicating that this action must be governed by the principles of independence, transparency, contradiction, efficiency, legality, freedom, and representation. In development of the aforementioned legal provisions, Order ECC/2502/2012, of 16 November, regulating the procedure for submitting complaints to the complaint services of the Bank of Spain, the National Securities Market Commission, and the Directorate General of Insurance and Pension Funds, establishes, generally and for the entire financial sector, the administrative channel through which the function of handling and resolving such complaints, grievances, and inquiries must be carried out, additionally empowering the National Securities Market Commission to issue the necessary rules, within its competence, for the development and execution of said Order. This Circular concretizes the procedure foreseen for handling complaints, grievances, and inquiries in the financial sector, adapting it to the organizational and operational regime of the Complaint Service of the National Securities Market Commission as well as to the regulatory framework of the securities market. The Circular, structured in chapters and sections, consists of eighteen rules, one additional provision, one transitional provision, and two final provisions. Chapter I establishes a series of provisions common to the functions of handling complaints, grievances, and inquiries, which form the core subject of the rule, the functions of the complaint service, and various concepts that must be defined in accordance with the sectoral regulations of the securities market. Chapter II refers to the procedure to which the function of handling, processing, and resolving complaints and grievances submitted against entities providing investment services and managers of collective investment institutions must be subject. Finally, Chapter III refers to the procedure to be followed in processing and resolving inquiries submitted by users of financial services, implemented through requests for advice and information, relating to matters of general interest regarding transparency and client protection rules, or regarding the legal channels for exercising such rights. Therefore, in exercise of the regulatory powers attributed to the National Securities Market Commission by Law 24/1988, of 28 July, and in accordance with the authorization contained in the second final provision of Order ECC/2502/2012, of 16 November, the Council of the National Securities Market Commission, after hearing the Advisory Committee, in its session of 25 September 2013, has ordered the following:

CHAPTER I General Provisions Rule One. Subject Matter. This Circular aims to develop and execute the provisions contained in Order ECC/2502/2012, of 16 November, regulating the procedure for submitting complaints to the complaint services of the Bank of Spain, the National Securities Market Commission, and the Directorate General of Insurance and Pension Funds, in order to adapt them to the organizational and operational regime of the Complaint Service of the National Securities Market Commission as well as to the regulatory framework of the securities market.

Rule Two. Complaint Service.

1. The Complaint Service of the National Securities Market Commission shall be organized and function in accordance with the principles of independence, transparency, contradiction, efficiency, legality, freedom, and representation.
2. The Complaint Service shall be attached to the Investors Department of the National Securities Market Commission.

Rule Three. Definitions. For the purposes of this Circular, the following shall be considered:

1. Financial service users: Users of investment services, activities prior to such services, and auxiliary services referred to in Law 24/1988, of 28 July, on the Securities Market, provided that those are provided on financial instruments covered in Article 2 of said Law.
2. Transparency and client protection rules: Those provisions that meet the content, characteristics, and purpose established in Order ECC/2502/2012, of 16 November, and, in particular, those configured as conduct rules in Law 24/1988, of 28 July, on the Securities Market, and in Law 35/2003, of 4 November, on Collective Investment Institutions, and in the regulatory rules developing them.

CHAPTER II Procedure for Handling, Processing, and Resolving Complaints and Grievances Section 1. Common Provisions to the Procedure for Handling and Resolving Complaints and Grievances

Rule Four. Subjective Requirements. To submit complaints or grievances, in addition to the standing requirements established in the regulations governing the procedure for submitting complaints by financial service users, within the securities market scope, it shall be required that:

1. The users, natural or legal persons, of financial services, have the status of retail clients in accordance with Law 24/1988, of 28 July.
2. In the case of persons or entities that, in their capacity as financial service users, act in defense of their clients' particular interests, those clients must have the status of retail clients.

Rule Five. Submission of Complaints and Grievances. Forms.

1. The National Securities Market Commission shall enable the mechanism for submitting grievances or complaints electronically, through its Electronic Office and Registry. In the case of collective grievances or complaints, contemplated in Article 8 of this Circular, they must obligatorily be submitted as standardized electronic documents, through the CIFRADOC/CNMV service of the Electronic Registry, for which the representative must be previously registered in said service. Likewise, the exchange of documentation in the processing of complaint or grievance files between the National Securities Market Commission and the entity against which the complaint is filed must obligatorily be carried out through the CIFRADOC/CNMV service. In the case of individual complainants, the electronic submission of the grievance or complaint shall be voluntary, but the status of the processing of their files will only be made available electronically to those who have accepted this communication channel. Other complainants must contact the Complaint Service through any of the means provided for in Article 38.4 of Law 30/1992, of 26 November, on the Legal Regime of Public Administrations and Common Administrative Procedure.
2. The forms for submitting complaints and grievances to the National Securities Market Commission shall conform to the models contained in Annexes 1, 2, and 3 of this Circular.
3. These forms shall be available to the public at the National Securities Market Commission, both at its offices and through its website. Likewise, the entities against which complaints are filed must make them available to their clients ex officio at the moment such complaints or grievances are submitted by the clients to the customer service department or, where applicable, the client ombudsman of the entity against which the complaint is filed.

Rule Six. Minimum Content of Complaints and Grievances.

1. The content of complaints and grievances shall be that established generally in the regulations governing the procedure for submitting complaints by financial service users.
2. In the case of complaints submitted by two or more subjects, it shall be necessary to identify all complainants listed as such in the complaints or grievances, without prejudice to the fact that communications derived from the procedure shall be carried out with only one of them.
3. The reason for the complaint or grievance shall be stated precisely, concretely, and understandably. It must also expressly and clearly indicate the date on which the facts subject to the complaint occurred.

Rule Seven. Accumulation of Files.

1. The accumulation of files for joint processing may be decided by the Complaint Service at any phase of the procedure, prior to its resolution.
2. In such case, the entity against which the complaint is filed may communicate its arguments regarding the complained facts or manifested problems in a single instance, without prejudice to the fact that, if the Complaint Service deems it appropriate, it may request arguments in an individualized manner.

Rule Eight. Collective Complaints and Grievances.

1. The submission of a single joint complaint or grievance by different complainants must incorporate the form included in Annex 2 of this Circular. In particular, collective complaints or grievances must contain the identification of all complainants who submit or adhere to them, who will additionally be required to be duly authorized to file them. Any defect in identification or authorization will result in their non-recognition as complainants, without prejudice to the processing of the complaint or grievance regarding the remaining complainants.
2. All actions carried out by the Complaint Service for the processing of collective complaints or grievances shall be conducted through the representative who submits them.

Rule Nine. Inadmissibility of Complaints and Grievances.

1. The Complaint Service shall examine its own competence and shall ex officio assess the concurrence of the causes of inadmissibility provided for in the regulations governing the procedure for handling, processing, and resolving complaints, or any others that, in accordance with the regulations governing the securities market, prevent the admission of the complaint or grievance for processing.
2. For the inadmissibility of a complaint or grievance, due to a simultaneous administrative, judicial, or arbitral procedure being in progress, it shall be required that the subject matter be the same as that constituting the object of the complaint. If the object of the complaint is essentially divisible and perfectly separable, or if there are several matters subject to complaint, the inadmissibility shall only result in the archiving of the file regarding the part that is subject to simultaneous processing of an administrative, judicial, or arbitral procedure, continuing the complaint or grievance procedure regarding the remainder.
3. For the purposes of inadmissibility of a complaint or grievance, it shall be understood that the lack of specification of the reason for the complaint or grievance and the lack of determination of the date on which the complained facts occurred constitute an omission of essential data for the processing of the complaint or grievance.

Rule Ten. Procedure for Inadmissibility of Complaints and Grievances.

1. When complaints or grievances are not admissible for processing, this shall be made known to the interested party through a reasoned report, granting them a period of ten working days to submit arguments they deem appropriate or to rectify the pointed-out aspects, with the warning that if they fail to do so within said period, they shall be deemed to have withdrawn the complaint.
2. Failure to respond within the period shall result in the archiving of the complaint due to withdrawal by the complainant.
3. If the interested party had responded but the causes of inadmissibility persist, the final decision of inadmissibility of the complaint shall be communicated to them.

Rule Eleven. Suspension and Extension of the Resolution Period for Complaint and Grievance Procedures.

1. The resolution period shall be suspended for the time elapsed between the notification of any requests or requirements made to the entity or the complainant, with the exception of mandatory hearing procedures, until its fulfillment or, failing that, until the expiration of the period granted for completing the procedure.
2. In the event of shared competence between complaint services, the resolution period for complaints and grievances shall be suspended for the time elapsed between the request for a report to the competent complaint service and its receipt at the Complaint Service of the National Securities Market Commission.
3. When applicable, the resolution period may be extended in the forms and with the requirements established in Articles 42.6 and 49 of Law 30/1992, of 26 November.

Rule Twelve. Complaints and Grievances Involving Multiple Entities.

1. For complaints or grievances concerning facts involving multiple entities, it shall be sufficient for their admission to processing that the complainant has previously filed a complaint with the customer service or client ombudsman of one of the entities that intervened in said facts.
2. Once the complaint or grievance is admitted to processing, the Complaint Service shall contact the entity against which the client previously filed the complaint, without prejudice to the fact that if the file investigation reveals that another entity is responsible for the facts, the procedure shall continue with respect to that entity, following a reasoned notification issued by the Complaint Service.
3. In any case, the Complaint Service shall send an information request to both entities so that they explain their involvement in the facts subject to the complaint and submit the arguments they deem appropriate. The information request that the Complaint Service sends to the entity against which no prior complaint was filed by the client shall be considered as fulfilling the prior complaint requirement before the customer service department or, where applicable, the client ombudsman, for the effects of compliance with Article 7 of Order ECC/2502/2012, of 16 November.

Section 2. Processing of Complaints

Rule Thirteen. Processing of Complaints.

1. The processing of complaints shall comply with what is provided in the regulations governing the procedure for submitting complaints, grievances, and inquiries by financial service users, with the following additionally observed: a. In the communication addressed to the complainant informing them of the admission of the complaint, account shall also be given of the effects of the submission of the complaint, the period for resolving it, and the effects of the resolution. b. The arguments and documentation that the entities against which the complaint is filed deem appropriate to submit to the file shall be sent by the entities themselves to the address indicated by the complainant for notifications, simultaneously with their submission to the Complaint Service, notifying them thereof. The entities against which the complaint is filed shall inform and prove to the Complaint Service the sending to the complainant of the documentation referred to in the preceding paragraph, in order for said Service to calculate the elapsed period. In the communication that the entities send to the complainants, they must state the period they have to respond to the Complaint Service.
2. Without prejudice to the arguments and documentation submitted by the entities, the Complaint Service, if it deems it appropriate for the proper understanding of the submitted complaint, may directly request from the entities against which the complaint is filed the precise and necessary information and documentation for the most correct resolution of the complaint. All requirements made to the entity against which the complaint is filed must be complied with by said entity within fifteen working days, after which, if no response is received, the processing of the file shall continue.
3. In case disputes arise between the arguments of both parties in the file, the entity's failure to respond shall be considered a breach of the obligation contained in paragraph 3 of Article 11 of Order ECC/2502/2012, of 16 November, and shall determine, for the purposes of resolving the file, that the arguments formulated by this entity shall not be taken into account.
4. In any case, the Complaint Service may require the entities to provide the precise and necessary information and documentation to resolve the complaint, in accordance with Article 85 of Law 24/1988, of 28 July.

Rule Fourteen. Ordinary Termination of Complaint Files.

1. The file shall conclude with a report issued in the form, period, and conditions established in the regulations governing the procedure for submitting complaints and grievances by financial service users, and shall be notified to the parties within the term fixed by said regulations.
2. The final report of the Complaint Service shall not have a binding nature and shall not be considered a challengeable administrative act. In this regard, any writings submitted by complainants or entities against which the complaint is filed that seek to challenge the issued resolution shall be rejected outright, without prejudice to the obligation of the entities referred to in Article 16 of this Circular. The possibility of requesting clarifications on the content of the report or the rectification of eventual material errors remains reserved, under no circumstances may the modification of the resolution's meaning be sought through this channel.

Rule Fifteen. Withdrawal and Acquiescence.

1. Complainants may withdraw their complaints at any time. Withdrawal shall result in the immediate termination of the procedure regarding the complainant.
2. The complaint file shall also be considered terminated if, at any time during processing, the entity acquiesces to the complainant's claims or if conventional termination of the complaint is agreed upon. These points must be documented before the Complaint Service of the National Securities Market Commission.
3. Without prejudice to the foregoing, if a general interest in the matters raised is identified or if it is deemed appropriate to clarify or define actions manifested in the facts subject to the complaint, the Complaint Service may continue the procedure in light of the identified general interest. In these cases, without prejudice to disciplinary or other liabilities that may apply, the Complaint Service may issue to the entity the indications it deems appropriate.

Rule Sixteen. Complementary Actions and Sanctionable Conduct.

1. If the final report of the complaint is unfavorable to the entity against which the complaint is filed, said entity must expressly communicate, within one month from the notification of the report, its acceptance or non-acceptance of the premises and criteria expressed therein, as well as provide documentary justification of having rectified its situation with the complainant, where applicable. The Complaint Service may, if deemed pertinent, confirm this aspect with the complainant.
2. Notwithstanding the foregoing, if the processing of complaint files reveals data that may constitute indications of sanctionable conduct, particularly when a serious or repeated breach of transparency or client protection rules is deduced, the Complaint Service shall communicate the facts, or forward the files, to the competent department of the National Securities Market Commission.
3. Such communication shall also take place if indications of criminal conduct, or tax, consumer, competition, or other nature infringements are detected. In such cases, the complaint service shall inform the competent executive body at the National Securities Market Commission so that the facts are brought to the knowledge of the competent department or body in the matter, for appropriate purposes.

Section 3. Processing of Grievances

Rule Seventeen. Processing of Grievances. The processing procedure for grievances shall be subject in general to what is established in the regulations governing the procedure for submitting complaints by financial service users and in the preceding articles regarding the processing of complaints.

CHAPTER III Procedure for Handling, Processing, and Resolving Inquiries

Rule Eighteen. Submission of Inquiries. Deadlines.

1. The submission of inquiries may be made using the form included in Annex 3 of this Circular.
2. The deadlines established in the regulations governing the submission of inquiries by financial service users for the resolution of inquiries shall begin to run once they are received in the entry registry of the National Securities Market Commission.

Additional Provision One. Cooperation with the Ministry of Economy and Competitiveness. The Complaint Service shall inform, in the form and with the conten