Circular 2/2009 of the Bank of Spain, of December 18, to Approved Valuation Companies and Services, Modifying Circular 3/1998 on Information Reporting

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Circular 2/2009, of December 18, of the Bank of Spain, to Approved Valuation Companies and Services, Modifying Circular 3/1998, of January 27, to Approved Valuation Companies and Services, on Information to be Reported to the Bank of Spain (BOE of 31)

The fundamental purpose of this Circular is to incorporate various technical improvements into the information required from valuation companies. First, the information required regarding their shareholders is standardized so that it aligns with supervisory needs and has a certain uniformity in relation to that sent to the Bank of Spain by other supervised entities.

Secondly, the Circular adapts the formats of the balance sheet and profit and loss account 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 regime for presenting information to the Bank of Spain is adapted, which will be done, except in exceptional cases, by telematic means, resulting in greater simplicity in the method of sending and greater ease of processing the information by the Bank of Spain.

Consequently, in exercise of the powers granted, the Governing Council 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 into Bank of Spain Circular 3/1998, of January 27, to Approved Valuation Companies and Services [1]:

1. Points 2 and 3 of the First Rule are given a new wording. Information to be reported by valuation companies, which shall be worded as follows:

«2. Accounting and statistical information:

a) No later than February 28, they shall send the balance sheet and profit and loss account corresponding to the previous financial year, using for this purpose the models of reserved statements I and II included in the annex, applying for their preparation the principles and criteria of the General Accounting Plan, unless the annual accounts are prepared applying the General Accounting Plan for Small and Medium-sized Enterprises (SMEs) because the company 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 SME General Accounting Plan.

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

In the event that 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) No later than the last day of the second month following the close of each natural quarter, statements III and XI shall be sent to the Bank of Spain, and for each natural half-year, statements IV to VIII and X. The information shall be presented with data accumulated up to the close of the period, except for statements III, X, and XI, which shall include information on valuations carried out during the corresponding period.

3. Information on shareholders:

a) As soon as they are known, and at the latest within ten business days from the entry in the register of registered shares, the company shall communicate the transfers (acquisitions and disposals) of shares that determine that the percentage of participation or voting rights held by 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 company, or that, without reaching said percentage, allow them to exercise significant influence in said company. 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 company.

These communications shall be made using the model included in statement XII.

b) As soon as they are known, and at the latest within ten business days from the entry in the register of registered shares, the company shall communicate the transfers of shares that, although not subject to the provisions of the previous letter a), imply the net acquisition by a natural or legal person, in one or several transactions, of a direct percentage equal to or greater than 5% of the share capital of the company. These communications shall be made by completing the part relating to direct participations of the model included in statement XII.

c) 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 statement IX included in the annex.

With regard to the previous letter a), the definition of group contained in Article 4 of the Securities Market Law shall be used, and for the purposes 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 issues relating to the legal regime of credit institutions, shall apply. The same article shall be applicable for the purposes of determining what is understood by significant influence.»

2. Point 2 of the Second Rule is given a new wording. Information to be reported by valuation services of credit institutions, which shall be worded as follows:

«2. Statistical information:

No later than the last day of the second month following the close of each natural quarter, statements III and XI shall be sent to the Bank of Spain, and for each natural half-year, statements IV to VIII and X. The information shall be presented with data accumulated up to the close of the period, except for statements III, X, and XI, which shall include information on valuations carried out during the corresponding period.»

3. The Third Rule shall be renamed "Third Rule. Presentation of information to the Bank of Spain," and section 2 shall be replaced by the following text:

«2. The presentation to the Bank of Spain of the information referred to in points 2 and 3 of the First Rule and point 2 of the Second Rule shall be made by telematic transmission, in accordance with the technical specifications communicated for each of them.

The information referred to in letters a) and b) of point 2 and letter a) of point 3 of the First Rule shall be electronically signed by the sole administrator, chairman, 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 documents sent via telematic means are faithful copies of the originals, which must be available to the Bank of Spain at all times.

The Bank of Spain may also request 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 presentation of all or some of the information on paper, using forms prepared by the Bank of Spain, which shall be delivered dated, stamped, and initialed on all pages, and signed by the sole administrator, chairman, chief executive officer, or general manager.»

4. A Single Additional Rule is added with the following text:

"Single 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."

5. The references made in the Circular to the "Office of Financial Institutions" and the "Office of Financial Entity Inspection" shall be replaced by "Financial Institutions Department" and "Credit Entity Inspection Services," respectively.

6. The formats of Statement I. Balance Sheet, Statement II. Profit and Loss Account, and Statement IX. Information on the capital structure of valuation companies are replaced by those included in the annex of this Circular, and Statement XII. Participations in the capital of valuation companies is added, which is included as an annex to this Circular.

7. In Statement III.2, the item "1.1 Land of urbanistic level I" is added.

[1]

Texts incorporated into Bank of Spain Circular 3/1998, of January 27.

Transitional Provision.

Valuation companies shall send telematically to the Bank of Spain before July 16, 2010:

a) 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.

b) For participations in the capital that meet the criteria of point 3.a) of the First Rule of Circular 3/1998, as amended by this Circular, as of June 30, 2010, the data appearing in Statement XII.

Final Provision. Entry into Force.

This Circular shall enter into force twenty days after its publication in the Official State Bulletin, except for the modification of Statement III.2, which shall apply from the statement corresponding to June 30, 2010, inclusive. However, the new telematic declarations shall begin to be made from those corresponding to June 30, 2010, inclusive, and the presentation of previous declarations shall be carried out in accordance with the procedure prior to the entry into force of this Circular.

ANNEX-C-2-2009.PDF (197 KB)

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