Circular 1/2024, of January 26, of the Bank of Spain, to banks, credit cooperatives, and other supervised entities, regarding information on capital structure and amending Circular 1/2009, of December 18, to credit institutions and other supervised entities, regarding information on capital structure and shareholdings of credit institutions, and on their offices (BOE of February 1).

Index

Chapter I. General Provisions.

Article 1. Purpose.

Article 2. Scope of Application.

Chapter II. Information on Shareholdings and Information on Capital Structure.

Article 3. Information on Shareholdings.

Article 4. Information on Capital Structure.

Chapter III. Rules for Submitting Statements and Information to the Bank of Spain.

Article 5. Rules for Submitting Statements and Information to the Bank of Spain.

Single Transitional Provision. Transitional Regime.

Single Repealing Provision. Partial Repeal of Circular 1/2009, of December 18, of the Bank of Spain.

Final Provision First. Modification of Article 6 of Circular 1/2009, of December 18, of the Bank of Spain.

Final Provision Second. Entry into Force of this Circular.

Annex I. Shareholdings in the capital or voting rights of banks, credit cooperatives, credit institutions, payment institutions, and e-money institutions

Annex II. Information on Capital Structure

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I

In recent years, modifications have been introduced into Spanish regulation that advise updating the Bank of Spain's current regulations in this matter, which were contained in Circular 1/2009, of December 18, of the Bank of Spain, to credit institutions and other supervised entities, regarding information on the capital structure and shareholdings of credit institutions, and on their offices, as well as on the senior management of supervised entities. Specifically, this circular updates and harmonizes the regulation regarding the information that banks and credit cooperatives must communicate to the Bank of Spain in accordance with Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions, and with Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions; credit institutions, in accordance with Law 5/2015, of April 27, on the promotion of business financing, and with Royal Decree 309/2020, of February 11, on the legal regime of credit institutions and amending the Commercial Register Regulations, approved by Royal Decree 1784/1996, of July 19, and Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions; payment institutions, according to Royal Decree-Law 19/2018, of November 23, on payment services and other urgent measures in financial matters, and Royal Decree 736/2019, of December 20, on the legal regime of payment services and payment institutions, and amending Royal Decree 778/2012, of May 4, on the legal regime of e-money institutions, and Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions; and e-money institutions, in accordance with Law 21/2011, of July 26, on e-money, and Royal Decree 778/2012, of May 4, on the legal regime of e-money institutions, regarding the holders of shares, partnership interests, or contributions to their share capital, given the functions corresponding to the Bank of Spain in supervising compliance with the organization and discipline regulations of said entities. In this sense, this circular includes payment entities within its scope of application – except those expressly excluded in Article 2 of this circular – which were not subject to Circular 1/2009, of December 18, of the Bank of Spain, so that it becomes applicable to all supervised entities subject to the capital structure information regime.

Knowledge of the acquisitions, increases, and reductions of shareholdings in the aforementioned entities and of their capital structure is essential for the Bank of Spain to carry out the competencies attributed to it within the framework of the organization and discipline regulations. Consequently, it is necessary to have a specific framework of confidential information in this matter that is adequate and sufficient for the proper development of the aforementioned supervisory function, which replaces the content of Article 1, as well as Annexes I and II of Circular 1/2009, of December 18, of the Bank of Spain.

Similarly, the regulatory changes produced since the publication of Circular 1/2009, of December 18, of the Bank of Spain make it necessary to repeal Article 2 and Annex III of said circular. Specifically, the thirteenth additional provision of Law 26/2013, of December 27, on savings banks and banking foundations, established the amortization of participatory quotas issued by savings banks, meaning that the information obligations regarding the structure of participatory quotas imposed in the third transitional provision of Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions, became obsolete.

On the other hand, regarding registration in the Senior Management Register and the submission of information on the positions held by these individuals in other companies, Circular 1/2009, of December 18, of the Bank of Spain sought to harmonize in a single regulation and a single form the communications that different types of supervised entities must send to the Bank of Spain regarding their administrative and management positions, for supervisory reasons or due to the imposition of respective senior management registers created by regulations. However, since then, in addition to the regulatory modifications that have followed in sectoral Spanish regulation, mentioned above, the manner in which interested parties must interact with the Administration has changed radically to favor greater agility and the necessary modernization of administrative procedures. Specifically, the Virtual Office has been created on the Bank of Spain's website; there, the various forms that must be submitted in each procedure entities wish to initiate are made available to them – among others, the registry inscription of their senior management, where the necessary instructions for completion are included. This initiative aims to gain efficiency and effectiveness in the processing and management of various administrative procedures, promoting the use of Electronic Administration, in line with the guidelines set by Law 40/2015, of October 1, on the Legal Regime of the Public Sector.

As a result of the combination of both factors, Articles 4 and 5 of Circular 1/2009, of December 18, of the Bank of Spain, included in Chapter III, have become obsolete, being superseded by subsequent regulation of equal or higher rank, and are therefore repealed in this circular along with Annex V. Nevertheless, entities will maintain the information obligations in this matter that arise from the regulations applicable to them.

Regarding the drafting procedure of this circular, the public consultation provided for in Article 133.1 of Law 39/2015, of October 1, was carried out. Likewise, the draft circular was submitted to the public hearing procedure provided for in Article 26.6 of Law 50/1997, of November 27, and in Article 133.2 of Law 39/2015, of October 1, thus enabling the active participation of potential recipients. Furthermore, the final legal opinion was requested from the Legal Department of the General Secretariat of the Bank of Spain, in which no legal objections were raised and in which it was deemed appropriate to submit the draft to the opinion of the Council of State before its approval by the Governing Council of the Bank of Spain, following a favorable opinion from the Council of State. These procedures were followed to complete the drafting of the circular.

II

This circular consists of five articles, one transitional provision, one repealing provision, and two final provisions. Additionally, it includes two annexes.

Chapter I collects the general provisions, which are materialized in two articles regulating the purpose and scope of application of this circular. The purpose of this circular is to establish information requirements regarding the acquisitions, increases, and reductions of shareholdings in entities and their capital structure. The scope of application covers banks, credit cooperatives, credit institutions, payment institutions, and e-money institutions.

Chapter II, which contains two articles, regulates the information that the aforementioned entities must send regarding the acquisitions, increases, and reductions of shareholdings in them, and the information they must send regarding their capital structure. Through these articles, the indicated entities are obliged to report to the Bank of Spain certain acquisitions, increases, and reductions of shareholdings in them as soon as they become aware of them; likewise, they must periodically send information to the Bank of Spain regarding the holders of shares, partnership interests, or contributions to their share capital.

Chapter III, composed of a single article, collects the rules applicable to the submission of information that must be sent to the Bank of Spain based on this circular.

For its part, the Single Transitional Provision indicates the transitional regime that will be followed until the definitive application of what is stated in this circular.

In the Single Repealing Provision, those norms that are repealed by this circular are mentioned; namely: Chapters I and III, as well as Annexes I, II, III, and V, of Circular 1/2009, of December 18, of the Bank of Spain.

The First Final Provision modifies Article 6 of Circular 1/2009, of December 18, of the Bank of Spain.

The Second Final Provision indicates the entry into force date of this circular.

Finally, the annexes collect the statement models that entities must send to the Bank of Spain to comply with their obligations in this matter. Specifically, Annex I collects the information that entities subject to this circular must send when certain shareholdings in them are acquired, increased, or reduced. Annex II indicates the information that the aforementioned entities must report periodically to the Bank of Spain regarding the capital structure.

III

This circular is issued in the exercise of the regulatory powers attributed to the Bank of Spain, which are collected below:

– Regarding banks and credit cooperatives, the powers are found in Article 22 of Law 10/2014, of June 26, and in Article 27 and letter f) of the Sixth Final Provision of Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions.

– Regarding credit institutions, the powers are found in Article 7 of Law 5/2015, of April 27, on the promotion of business financing, and in Article 26 and the Fourth Final Provision of Royal Decree 309/2020, of February 11, on the legal regime of credit institutions and amending the Commercial Register Regulations, approved by Royal Decree 1784/1996, of July 19, and Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions.

– Regarding payment institutions, the powers are in paragraphs 2 and 5 of Article 17 and the Twelfth Final Provision of Royal Decree-Law 19/2018, of November 23, on payment services and other urgent measures in financial matters, and in Article 29 and letter f) of paragraph 2 of the Fifth Final Provision of Royal Decree 736/2019, of December 20, on the legal regime of payment services and payment institutions and amending Royal Decree 778/2012, of May 4, on the legal regime of e-money institutions, and Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions.

– Regarding e-money institutions, the powers are found in Article 25 and letter c) of paragraph 1 of the Third Final Provision of Royal Decree 778/2012, of May 4, on the legal regime of e-money institutions; in Article 20.1 of Law 21/2011, of July 26, on e-money, and in the Third Additional Provision and the Twelfth Final Provision of Royal Decree-Law 19/2018, of November 23, since these last two provisions refer to payment service providers, and thus would be applicable to e-money institutions to the extent that they provide payment services.

IV

This circular adheres to the principles of good regulation required by Article 129 of Law 39/2015, of October 1, on the common administrative procedure of Public Administrations.

Regarding the principle of necessity required by Law 39/2015, of October 1, the establishment of a specific framework of confidential information on the acquisitions, increases, and reductions of shareholdings in entities and their capital structure, which provides adequate and sufficient information, is necessary for the proper development of the supervisory function entrusted to the Bank of Spain.

In relation to the principle of efficacy stipulated in the aforementioned law, this circular serves to update the information that the Bank of Spain must request from supervised entities regarding certain shareholdings in them and their capital structure. In this way, the circular also complies with the principles of legal certainty and administrative efficiency, by prescribing a stable, predictable, complete, and clear regulation for all the aforementioned entities.

Taking into account the differences in nature, scale, and complexity of the activities of the different entities subject to the circular, a simplified regime has been established for some of them. This regime applies both regarding the volume of data to be reported and the periodicity with which affected entities must send information to the Bank of Spain. The principle of proportionality is thus fulfilled.

The principle of transparency is achieved through the prior public consultation with potential affected parties, fixed by Article 133 of Law 39/2015, of October 1, and the public hearing with interested parties. Both procedures are part of the processing process of this circular.

Consequently, in the exercise of the powers conferred upon it, the Governing Council of the Bank of Spain, upon proposal of the Executive Commission, and in accordance with the Council of State, has approved this circular, which contains the following articles:

CHAPTER I

General Provisions

Article 1. Purpose.

1. This circular aims to establish the confidential information to be sent to the Bank of Spain, relating to the acquisitions, increases, and reductions in shareholdings in the capital of the entities cited in Article 2, as well as that of their capital structure.

Article 2. Scope of Application.

1. This circular shall apply, with the scope provided in the following articles, to the types of entities indicated below:

a) Banks and credit cooperatives, as defined in Article 1 of Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions.

b) Credit institutions, as defined in Article 6 of Law 5/2015, of April 27, on the promotion of business financing. Hybrid credit institutions are therefore included.

c) Payment institutions defined in Article 3.15 of Royal Decree-Law 19/2018, of November 23, on payment services and other urgent measures in financial matters. Hybrid payment institutions are included, in accordance with Article 23 of Royal Decree 736/2019, of December 20, on the legal regime of payment services and payment institutions and amending Royal Decree 778/2012, of May 4, on the legal regime of e-money institutions, and Royal Decree 84/2015, of February 13, which develops Law 10/2014, of June 26, on the organization, supervision, and solvency of credit institutions. Natural or legal persons providing payment services under the exemption regime provided for in Article 14 of Royal Decree-Law 19/2018, of November 23, and entities providing account information services defined in Article 3.30 of Royal Decree-Law 19/2018, of November 23, are excluded from the scope of application of this circular.

d) E-money institutions defined in Article 3 of Law 21/2011, of July 26, on e-money. Hybrid e-money institutions are included, in accordance with Article 21 of Royal Decree 778/2012, of May 4, on the legal regime of e-money institutions.

2. Any reference in the circular to the "entity" or "entities" shall be understood to refer to all the aforementioned entities, except in those paragraphs where it is specifically indicated that it is only applicable to one or several types of these entities.

CHAPTER II

Information on Shareholdings and Information on Capital Structure

Article 3. Information on Shareholdings.

The entities indicated in Article 2, paragraph 1, shall communicate to the Bank of Spain, as soon as they become aware, and at the latest within ten business days from the annotation of the direct shareholding in the register of registered shares or in the register of contributions to share capital or the register of partners:

a) The acquisitions of significant shareholdings in the entity as defined in Article 16 of Law 10/2014, of June 26, in Article 17 of Royal Decree-Law 19/2018, of November 23, and in Article 4 of Law 21/2011, of July 26.

b) The acquisitions of shareholdings in the entity that, although not significant, result in the percentage of voting rights or capital held being equal to or greater than 5%.

c) The increases in shareholdings in the entity that result in the percentage of voting rights or capital held being equal to or greater than 20%, 30%, or 50%, or that would allow controlling the entity. A relationship of control shall be presumed when any of the circumstances provided for in Article 42 of the Commercial Code occur.

d) The losses or reductions in significant shareholdings in the entity or those that imply that the percentage of voting rights or capital held becomes lower than the thresholds indicated in letters b) or c) above, or imply the loss of control of the entity.

In the case that the entity is a listed public limited company and its bylaws have modified the proportion between the nominal value of the share and the voting right, granting a double vote to each share based on Article 527 ter of the consolidated text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2, the communication to the Bank of Spain shall be made, at the latest, within ten business days from the attribution, modification, or cancellation of the double voting right to the shareholder, as stated in subsection 4 of section 3 of Chapter VI of Title XIV of Royal Legislative Decree 1/2010, of July 2.

The communications of the entities shall refer to the acquisitions, increases, reductions, and losses of shareholdings, both direct and indirect, carried out by natural or legal persons, acting alone or in concert. For this purpose, the model included in Annex I shall be used.

Article 4. Information on Capital Structure.

1. The entities indicated in Article 2, paragraph 1, shall communicate to the Bank of Spain, with the periodicity indicated in paragraph 4 of this article, the composition of their share capital, relating:

a) All direct holders of shares, partnership interests, or contributions to share capital that, at the end of the period indicated in paragraph 4, have the status of "financial entities." Those with Spanish nationality and those other foreigners of whom the declaring entity is aware have a similar nature to said entities shall be included in any case.

b) The rest of the direct holders that, at the end of the period indicated in paragraph 4, have registered in their name shares, partnership interests, or contributions to share capital representing a percentage of the share capital in the entity equal to or greater than 0.25% in the case of banks, 1% in the case of credit cooperatives and credit institutions, and 2.5% in the case of payment institutions and e-money institutions.

c) The sum of the rest of the direct holders that, at the end of the period indicated in paragraph 4, have registered in their name shares, partnership interests, or contributions to share capital, or that, individually, do not reach the thresholds indicated in letter b).

2. Additionally, payment institutions and e-money institutions shall communicate the "financial entities" that are indirect holders of shares or partnership interests, at the end of the period indicated in paragraph 4 of this article, with the periodicity indicated in said paragraph.

3. For the purposes of this circular, "financial entities" shall be understood as those companies that meet the definition of paragraph 26 of Article 4.1 of Regulation (EU) No 575/2013 of the European Parliament and of the Council, of June 26, 2013, on prudential requirements for credit institutions and investment firms, as well as credit institutions.

4. Banks, credit cooperatives, and credit institutions shall report this information on a quarterly basis. Payment institutions and e-money institutions shall send it on a semi-annual basis. The data to be sent shall correspond to the last day of the reporting period.

5. These communications...