Circular 3/2013 of the Bank of Spain on the reporting of transactions and balances in negotiable securities

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Circular 3/2013, of July 29, of the Bank of Spain, on the declaration of transactions and balances in negotiable securities. (BOE of August 2)

European Central Bank (ECB) Regulation (EU) No 1011/2012 of October 17, 2012, concerning statistics on securities holdings, establishes that, in order to carry out the functions of the European System of Central Banks (ESCB) and to monitor financial markets and activities within the euro area, the ECB, assisted by national central banks, must collect, on a security-by-security basis, information on the securities held by the institutional sectors of the euro area, as well as that of securities issued by residents of that area and held by institutional sectors not belonging to it. This Regulation includes, among the agents subject to the reporting obligation, monetary financial institutions, investment funds, special purpose vehicles, and depositary entities.

The Bank of Spain, in accordance with Article 14.3 of the Statutes of the European System of Central Banks and of the European Central Bank and with Article 1.3 of Law 13/1994, of June 1, on the Autonomy of the Bank of Spain, is obliged to comply with the guidelines and instructions of the ECB. In this regard, ECB Guideline ECB/2013/7 of March 22, 2013, on securities holdings statistics, obliges it to collect the information detailed in the aforementioned Regulation (EU) No 1011/2012 and to transmit it to the ECB.

On the other hand, the Bank of Spain also has the authorization provided for in Article 9 of Royal Decree 1816/1991, of December 20, on economic transactions with the outside world, and in Article 8 of the Order of December 27, 1991, which establish the obligation of entities registered in cases of transactions, operations, acts, or business with non-residents, as well as in variations in accounts or financial positions, debtor or creditor, with the outside world, and of residents who carry out the operations indicated in Article 1 of said royal decree or hold assets or liabilities abroad, to provide the competent bodies of the General State Administration and the Bank of Spain with the data required of them, in the form, periodicity, and amount determined by it, for the purposes of administrative, tax, and statistical monitoring of operations.

Bank of Spain Circular 2/2001, of July 18, on the declaration of transactions and balances of external assets and liabilities in negotiable securities, allows collecting this information on portfolio investments for the scope of external statistics (mainly, balance of payments and international investment position). However, with this circular, the new information needs, on a security-by-security basis, contemplated in Regulation (EU) No 1011/2012 and which must be supplied by resident depositary entities, regarding the holdings of their clients – also residents – of securities issued by other residents, are not covered.

Consequently, in exercise of the powers granted, the Governing Council of the Bank of Spain, on the proposal of the Executive Committee, and in agreement with the Council of State, has approved this circular, which contains the following rules:

First Rule. Obligation to report.

The following are subject to the provisions of this circular:

1. Credit institutions and branches in Spain of credit institutions registered in the official registers of the Bank of Spain that act as depositaries or clearing houses in regulated markets for negotiable securities, and the Bank of Spain.

2. Resident financial entities registered in the official registers of the National Securities Market Commission (CNMV) that act as depositary or clearing entities in regulated markets for negotiable securities.

3. Financial entities registered in the official registers of the National Securities Market Commission (CNMV) that act as management companies for investment funds, with respect to holdings in Spanish investment funds.

Second Rule.

Periodicity and content of information.

The information on negotiable securities that must be transmitted, on a security-by-security basis (broken down by class of security, and by individual security, identified by its ISIN code), with monthly periodicity, within ten business days following the end of each month, is as follows:

1. The entities mentioned in paragraphs 1 and 2 of the previous rule will communicate:

The transactions carried out and the balances held on behalf of their clients, including those corresponding to investment funds. When it comes to negotiable securities issued by residents, held on behalf of resident clients, they will only report the balances. Resident entities in Spain that market foreign investment funds, registered as such in the official registers of the National Securities Market Commission (CNMV), will communicate the information (transactions and balances) of the shares of investors.

The total of the transactions and the balances of the entity's securities accounts (own and third-party), corresponding to securities issued by residents that are deposited in accounts of the entity itself opened in non-resident depositary entities, in non-resident central securities depositories, or in international clearing and settlement systems.

2. Management companies of Spanish investment funds will report on the transactions carried out with shares in said funds (except those corresponding to the entities cited in the First Rule) and their balances. However, such information may be provided by the corresponding depositary entities, if so agreed between them and the management companies. To this end, management companies must provide depositary entities with the information they might require. In order to use this procedure, both types of entities must communicate this previously to the Statistics Department of the Bank of Spain.

Third Rule.

Transmission of information.

The information will be transmitted to the Statistics Department by telematic means, in accordance with the formats, conditions, and requirements established in the "technical applications" of this circular. An updated version of these specifications will be maintained on the Bank of Spain's website, freely accessible on the internet.

Transitional Provision.

The entities mentioned in paragraphs 1 and 2 of the First Rule will communicate the information included in the following three items from the entry into force of this circular until the one corresponding to December 31, 2014:

The transactions carried out and the balances held on their own account. In the case of negotiable securities issued by residents, they will only communicate those corresponding to temporary acquisitions/disposals and loans of securities received/granted when such operations have non-residents in Spain as the counterparty.

The transactions carried out and the balances of securities issued by non-residents, held on behalf of other entities mentioned in the First Rule, which transmit directly to the Bank of Spain the information on their own transactions and balances.

The total of the transactions and the balances of the entity's securities accounts (own and third-party), corresponding to securities issued by non-residents.

This information will be transmitted in accordance with what is established in the Third Rule of this circular.

Final Provision First. Repeal of regulations.

Upon the entry into force of this circular, Bank of Spain Circular 2/2001, of July 18, on the declaration of transactions and balances of external assets and liabilities in negotiable securities, shall be repealed.

Final Provision Second. Entry into force.

This circular shall enter into force on January 1, 2014. In the first declaration, which must be transmitted within the first ten business days of February 2014, opening balances shall indicate those existing on December 31, 2013; closing balances, those existing on January 31, 2014; and transactions, those corresponding to the month of January 2014.

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