Order ECC/680/2013 of 8 April authorizing the modification of Articles 11 and 12 of the Regulations of the Society for the Management of Securities Registration, Clearing and Settlement Systems, S.A.

OFFICIAL STATE GAZETTE No. 99 Thursday 25 April 2013 Sec. III. Page 31857

III. OTHER REGULATIONS MINISTRY OF ECONOMY AND COMPETITIVENESS 4405 Order ECC/680/2013, of 8 April, authorizing the modification of Articles 11 and 12 of the Regulations of the Society for the Management of the Securities Registration, Clearing and Settlement Systems, S.A.

Paragraph 4 of Article 44 bis of Law 24/1988, of 28 July, on the Securities Market, provides that the Society for the Management of the Securities Registration, Clearing and Settlement Systems, S.A. (hereinafter, the "Society of Systems" or "Iberclear"), shall be governed by said Law and its implementing regulations, as well as by a Regulation whose approval corresponds to the Minister of Economy and Competitiveness, prior to the report of the National Securities Market Commission (CNMV), the Bank of Spain, and the Autonomous Communities whose Statutes of Autonomy recognize them with competencies in the matter of regulation of securities trading centers.

In accordance with the aforementioned legal provision, by Order ECO/689/2003, of 27 March, the Regulations of the Society for the Management of the Securities Registration, Clearing and Settlement Systems were approved (BOE of 28 March 2003). Subsequently, Order EHA/2054/2010, of 26 May (BOE of 29 July 2010) modified it, adding two new Titles V and VI.

For its part, the Board of Directors of the Society of Systems, in a meeting held on 27 November 2012, agreed to propose a modification of Articles 11 and 12 of the Regulations. Subsequently, the same Board of Directors, in a meeting held on 30 January 2013, agreed to remedy its previous proposal and request authorization from this Ministry established in Article 44 bis, paragraph 4, of the Securities Market Law. The request, accompanied by an Explanatory Memorandum, was submitted to the General Secretariat of Treasury and Financial Policy with a registration entry date of 5 February 2013.

The purpose of the present modification of the Regulations of the Society of Systems is to exempt entities that are members of the stock market from the obligation to be participants in Iberclear, although in this case they must appoint as a clearing entity an entity that is indeed a participant in Iberclear, which will take charge of the registration, clearing, and settlement obligations arising from the contracting carried out by the trading member, assuming them as its own vis-à-vis said member and vis-à-vis the system. This new wording of Articles 11 and 12 of the Regulations of the Society of Systems comes to culminate the modifications introduced by Royal Decree 363/2007, of 16 March, in Articles 76 and 77 of Royal Decree 116/1992, of 14 February, on the representation of securities by means of book entries and clearing and settlement of stock market operations.

The mandatory reports from the CNMV, the Bank of Spain, and the Autonomous Communities of Catalonia, the Basque Country, and the Valencian Community have been obtained and all have been issued with a favorable character.

By virtue of the foregoing, I authorize the modification of Articles 11 and 12 of the Regulations of the Society for the Management of the Securities Registration, Clearing and Settlement Systems, which shall adopt the wording set forth in the annex to this Ministerial Order.

This Order and its annex shall be published in the "Official State Gazette". Madrid, 8 April 2013.–The Minister of Economy and Competitiveness, P.D. (Order ECC/1695/2012, of 27 July), the Secretary of State for Economy and Support for Business, Fernando Jiménez Latorre. cve: BOE-A-2013-4405

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ANNEX New wording of Articles 11 and 12 of the Regulations of the Society for the Management of the Securities Registration, Clearing and Settlement Systems, S.A. (IBERCLEAR)

CHAPTER III Participating Entities

Article 11. Concept and classes.

1. Entities belonging to any of the categories listed below may acquire the status of participating entity in each of the systems managed by the Society of Systems, acquiring such status in accordance with what is provided in Article 78 of the Royal Decree: a) Trading members in official secondary markets or multilateral trading systems whose governing body has designated the Society of Systems as responsible for the management of the settlement of some or all of the operations carried out by market members in accordance with their systems. b) The following entities, even if they do not hold the status of trading member: – Credit institutions; – Investment firms. – Foreign or national entities that carry out activities analogous to those of the Society of Systems; – Bank of Spain; – The General Administration of the State and the General Treasury of the Social Security; c) Those public law institutions and private legal persons when a general provision expressly empowers them to carry out the functions proper to participating entities.
2. Participating entities in the Clearing and Settlement System for Securities admitted to trading on the Stock Exchanges regulated in the Royal Decree, shall be liable for the obligations detailed in its Article 61 on "Characteristics, amounts and endowment of the collective bonds of the members of the Stock Exchanges and other affiliated entities".

Participating entities shall also be liable for the settlement of operations of those trading members of the corresponding Stock Exchanges or multilateral trading systems who do not hold the status of participating entity, with whom they have signed an agreement to that effect. Such agreement, of which the Society of Systems shall be a party, shall have the content determined by Circular. By virtue of said agreement, the participating entity shall accept vis-à-vis the trading member and vis-à-vis the system the obligation to settle all operations contracted by the trading member, except in those cases where the liability regarding certain operations is expressly accepted by another participating entity. Such acceptances shall produce the effects provided for in the first paragraph of Article 63 of the Royal Decree. For its part, the trading member shall be obliged vis-à-vis the Society of Systems to carry out the communications and remaining actions corresponding to it regarding the adequate processing and settlement of its operations.

In cases where the participating entity with which the agreement referred to in this paragraph was signed fails to comply with the commitments assumed by it, the trading member shall enter into an agreement with another participating entity, under the terms provided in this article, or acquire the status of participating entity. 3. The Society of Systems shall adopt specific provisions and decisions for participation in each of the systems it manages and shall establish the circumstances and requirements under which a trading member who has entered into the agreement referred to in the previous paragraph 2 may acquire the status of participating entity.

Article 12. Requirements.

1. Entities seeking to access and maintain the status of participating entity must have own resources, control systems, and adequate technical means to attend to the functions attributed to them.
2. In matters of own resources, participating entities must comply with the minimum own resource requirements required in the solvency regulations of financial entities. Participating entities that assume the obligations derived from the settlement of stock market operations of those trading members who do not hold the status of participating entity, must have a minimum level of own resources of one hundred million euros.
3. Participating entities must comply with the following technical and functional requirements: a) Have the connection mechanisms to the communications network that allows access to the Society of Systems. b) Implement the procedures and programs or computer applications that allow them to perform the functions corresponding to them. c) Be in a position to send the information requested by the Society of Systems in the exercise of its functions. The detail of the content of such requirements is specified in a specification prepared by the Society of Systems.
4. Entities wishing to access the status of participating entity in the Clearing and Settlement System for Securities must comply with the obligations derived from the constitution of the bond guaranteeing the market referred to in Chapter IV of Title I of the Royal Decree, prior to the start of their activities. cve: BOE-A-2013-4405 http://www.boe.es OFFICIAL STATE GAZETTE D. L.: M-1/1958 - ISSN: 0212-033X