Royal Decree 102/2019 creating the Macroprudential Authority Financial Stability Council, establishing its legal regime and developing macroprudential tools

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20422 I. GENERAL PROVISIONS MINISTRY OF ECONOMY AND ENTERPRISE 2980 Royal Decree 102/2019, of March 1, creating the Macroprudential Authority Financial Stability Council, establishing its legal regime and developing certain aspects related to macroprudential tools. I In a complex and interconnected financial system like the current one, it is of special importance to ensure stability and prevent potentially systemic risks that could negatively affect the real economy. These types of risks affect the financial system as a whole and derive from phenomena such as the disproportionate growth in the price of certain financial or real estate assets, the aggregate increase in the volume of credit, risks associated with interdependencies between entities, or those related to the use of new technologies for the provision of financial services, among others. During the last financial crisis, traditional economic policy and financial supervision tools available to authorities showed their limitations in preventing and mitigating some of these risks. Similarly, in the European Union context and at the request of the European Commission, the so-called de Larosière Report was published on February 25, 2009, which was aimed at strengthening European supervision mechanisms and recommended the creation of a European body responsible for supervising risks in the entire financial system. As a consequence of this recommendation, the European Systemic Risk Board (ESRB) was created, with the objective of controlling and evaluating systemic risk, and contributing to guaranteeing financial stability and mitigating the negative impacts of financial instability on the real economy, in accordance with Regulation (EU) No. 1092/2010 of the European Parliament and of the Council of November 24, 2010, on macroprudential oversight of the financial system in the European Union and creating the European Systemic Risk Board. The ESRB issued a Recommendation on the macroprudential mandate of national authorities on December 22, 2011, urging the Member States of the European Union to designate an authority responsible for macroprudential supervision. This recommendation sought to improve the effectiveness of macroprudential policy by placing the responsibility for adopting measures to maintain financial stability at the national level. In addition to the ESRB recommendation, various regulations at both the national and European Union levels have recognized the need to adopt macroprudential measures of a state nature. Thus, within the European regulatory framework, Article 458 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, and amending Regulation (EU) No. 648/2012, sets out a series of macroprudential measures applicable under certain circumstances by the authority designated by the Member State for this purpose. In Spain, the first transitional provision of Royal Decree 84/2015, of February 13, developing Law 10/2014, of June 26, on the ordering, supervision, and solvency of credit institutions, establishes that, until a specific macroprudential authority is created, such powers will correspond to the Bank of Spain. Likewise, the eighteenth additional provision of Law 10/2014, of June 26, urged the Government to inform the General Courts on the measures that should be adopted to enhance national supervision of financial stability, macroprudential analysis, coordination and exchange of information in the prevention of financial crises, and generally cooperation between authorities with competences in preserving financial stability. cve: BOE-A-2019-2980 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20423 On its part, the International Monetary Fund (IMF), in the Financial Sector Assessment Program (FSAP) for Spain of 2017, recommended establishing a Systemic Risk Council for coordination between agencies, on factors and supervision related to systemic risk, and policies for the entire system in the financial sector. Furthermore, recently, Royal Decree-Law 22/2018, of December 14, establishing macroprudential tools, attributed additional powers to the Bank of Spain, the National Securities Market Commission (CNMV), and the General Directorate of Insurance and Pension Funds to address possible risks of the Spanish financial system from a macroprudential perspective. II This Royal Decree continues to advance in the correct supervision of macroprudential risks, and for this purpose creates the Macroprudential Authority Financial Stability Council (AMCESFI), regulating its organization and functioning. Already in 2006, then the Ministry of Economy and Finance, the Bank of Spain, the CNMV, and the General Directorate of Insurance and Pension Funds signed a cooperation agreement with the objective of fostering collaboration in matters of financial stability and prevention and management of crises with potentially systemic effects, through which the Financial Stability Committee (CESFI) was created. The AMCSEFI replaces the CESFI and seeks to improve the coordination of macroprudential supervision at the national level and help prevent or mitigate systemic risks, which should result in a more sustainable contribution of the financial system to economic growth. Likewise, its mission is the monitoring and analysis of those factors that could affect systemic risk, on the one hand, and on the other, the issuance of opinions, alerts, and recommendations, when deemed appropriate in light of its previous analysis. Supervisory competences remain attributed to the national authorities that had been exercising them until now, which have greater information and experience in monitoring supervised entities, thus respecting their independence. The AMCSEFI comes to reinforce these functions, analyzing and issuing opinions and alerts, and potentially directing macroprudential policy recommendations to the three sectoral financial supervisors (Bank of Spain, CNMV, and General Directorate of Insurance and Pension Funds), so that they adopt specific measures. Furthermore, this Royal Decree develops some macroprudential tools. Thus, it establishes the aspects to be taken into account when adopting certain tools, such as capital buffer requirements, the establishment of limits on sectoral concentration, and the setting of conditions on the granting of loans and other operations, when only required regarding exposures to a specific sector or category. This Royal Decree also includes the enumeration of the different macroprudential tools defined in the single additional provision of Royal Decree-Law 22/2018, of December 14, which each sectoral regulation regulates. Likewise, regarding the different macroprudential tools, it is established that both their possible adoption, as well as their recalibration or deactivation, must be notified to the AMCSEFI before their adoption and subsequent communication to the public and affected parties. III This Royal Decree consists of six chapters. The first establishes the general provisions regarding the AMCSEFI, foreseeing its nature and purpose. It is constituted as a collegiate body provided for in Law 40/2015, of October 1, on the Legal Regime of the Public Sector, attached to the Ministry of Economy and cve: BOE-A-2019-2980 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20424 Enterprise, adopting the regime of collegiate bodies of the different Public Administrations, with the particularities established in this Royal Decree. Chapter II regulates the structure and functioning of the AMCSEFI. The AMCSEFI is composed of a Council, a Technical Committee as a support body, and the subcommittees that the Council agrees to constitute. These bodies are formed by representatives of the Ministry of Economy and Enterprise, the Bank of Spain, and the CNMV, with the possibility of inviting other public authorities, such as the FROB, the Deposit Guarantee Fund of Credit Institutions, the National Commission of Markets and Competition, or the Independent Authority of Fiscal Responsibility, as well as representatives of European and international institutions. Regarding their functioning, the criteria established for collegiate bodies of the different Public Administrations in Law 40/2015, of October 1, are followed, adapting them to the specific characteristics of the AMCSEFI. Chapter III regulates the functions and powers of the AMCSEFI, which may formulate opinions, alerts, and recommendations on all those issues that may affect financial stability. The recipients of the AMCSEFI's recommendations must explain how they will comply with them or adequately justify, if necessary, the reasons why they consider it unnecessary or inappropriate to follow them. On the other hand, Chapter IV is dedicated to macroprudential tools and the procedure for communication to the AMCSEFI. To contribute to the maintenance of financial stability within the European Union, Chapter V regulates the obligation of cooperation with macroprudential authorities of other Member States, as well as with competent European institutions. Finally, Chapter VI establishes the obligation of the AMCSEFI to account through the preparation of an annual report and the appearance of the President of the AMCSEFI before the corresponding Commission of the Congress of Deputies. Furthermore, the Royal Decree includes three additional provisions, one repealing provision, and four final provisions. Of the additional provisions, the first designates the Bank of Spain as the competent authority for the application of Article 458 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013, definitively consecrating an attribution granted until now temporarily by the first transitional provision of Royal Decree 84/2015, of February 13, developing Law 10/2014, of June 26, while the third provides that the Ministry of Economy and Enterprise will prepare every three years, and for the first time in 2022, a report on the compliance by the AMCSEFI of the objectives provided for in this Royal Decree. IV This Royal Decree responds to the principles of necessity, effectiveness, proportionality, legal certainty, transparency, and efficiency, as required by Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations, in its Article 129. With regard to the principles of necessity and effectiveness, this Royal Decree is the optimal instrument to create a national authority whose ultimate objective is to identify, prevent, and mitigate the development of systemic risk and ensure a sustainable contribution of the financial system to economic growth. The new authority adopts the form of a collegiate body under the provisions of Law 40/2015, of October 1, and is composed of representatives of the three sectoral financial supervisors and the Ministry of Economy and Enterprise. Regarding the principles of proportionality, legal certainty, and efficiency, this Royal Decree establishes the minimum necessary regulation for the fulfillment of its purposes, is coherent with the rest of the legal order, both national and international, and does not impose administrative burdens. Finally, with regard to the principle of transparency, the Royal Decree has been submitted to the pertinent public hearing and information process. cve: BOE-A-2019-2980 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20425 V This Royal Decree is approved by virtue of what is provided in Article 22 of Law 40/2015, of October 1, on the Legal Regime of the Public Sector, the second final provision of Royal Decree-Law 22/2018, of December 14, the fifth final provision of Law 35/2003, of November 4, on Collective Investment Institutions, the thirteenth final provision of Law 10/2014, of June 26, the seventh final provision of Law 22/2014, of November 12, regulating venture capital entities, other closed-type collective investment entities, and management companies of closed-type collective investment entities, and amending Law 35/2003, of November 4, on Collective Investment Institutions; the second final provision of the consolidated text of the Securities Market Law, approved by Royal Legislative Decree 4/2015, of October 23, and the seventeenth final provision of Law 20/2015, of July 14, on the ordering, supervision, and solvency of insurance and reinsurance entities. Likewise, it is issued in execution of Article 458 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013. During its elaboration process, the project was submitted to the consideration of the Insurance and Pension Funds Consultative Board, through a written procedure, to the prior report of the Spanish Data Protection Agency, and to the opinion of the European Central Bank. By virtue thereof, on the proposal of the Minister of Economy and Enterprise, with the prior approval of the Minister of Territorial Policy and Civil Service, in accordance with the Council of State and prior deliberation of the Council of Ministers in its meeting of March 1, 2019, I HEREBY ORDER: CHAPTER I General Provisions Article 1. Nature and purpose of the AMCSEFI.

1. This Royal Decree aims to create the Macroprudential Authority Financial Stability Council (AMCESFI), as the national macroprudential authority destined to identify, prevent, and mitigate the development of systemic risk and ensure a sustainable contribution of the financial system to economic growth.
2. Likewise, it aims to develop the macroprudential tools that the Bank of Spain, the National Securities Market Commission (CNMV), and the General Directorate of Insurance and Pension Funds may adopt, as well as the procedure for their communication to the AMCSEFI before their adoption.
3. For the purposes of this Royal Decree, systemic risk shall be understood, as provided in the single additional provision of Royal Decree-Law 22/2018, of December 14, establishing macroprudential tools, as that which may generate a disturbance in financial services markets with potential negative impact on the real economy.
4. The AMCSEFI is a collegiate body attached to the Ministry of Economy and Enterprise. It shall be governed by what is established in this regulation and, for matters not provided for therein, by Section 3 of Chapter II of Title Preliminary of Law 40/2015, of October 1, on the Legal Regime of the Public Sector.
5. The AMCSEFI aims to contribute to the stability of the financial system as a whole by identifying, preventing, and mitigating those circumstances or actions that could originate systemic risk. To this end, the AMCSEFI will monitor and analyze factors that may affect systemic risk and may issue opinions, alerts, and recommendations in the terms provided in Chapter III. cve: BOE-A-2019-2980 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20426 6. The AMCSEFI will pursue the objective established in paragraph 5 with functional independence and in collaboration with the three sectoral financial supervisors as provided in this Royal Decree and in the corresponding sectoral legislation. CHAPTER II Structure and functioning of the AMCSEFI Article 2. Composition of the AMCSEFI. The AMCSEFI will be composed of a Council, a Technical Committee, and the subcommittees created in accordance with Article 8. Article 3. Composition and functioning of the Council.

1. It corresponds to the Council to exercise the functions attributed to the AMCSEFI, for which purpose it will adopt the pertinent decisions and monitor their execution.
2. The Council will be composed of the following members: a) The Minister of Economy and Enterprise, who will preside. b) The Governor of the Bank of Spain, who will assume the vice-presidency. c) The President of the CNMV. d) The Deputy Governor of the Bank of Spain. e) The Vice President of the CNMV. f) The Secretary of State for Economy and Support for Enterprise. g) The Director General of Insurance and Pension Funds.
3. The State Lawyer of the General Secretariat of Treasury and International Financing will act as Secretary of the Council, with voice but without vote, as he is not a member of the Council.
4. The Council may agree on the attendance at its sessions, in the capacity of experts with voice but without vote, of personnel from the Ministry of Economy and Enterprise, the Bank of Spain, the CNMV, and other public institutions related to financial stability, such as the FROB, the Deposit Guarantee Fund of Credit Institutions, the National Commission of Markets and Competition, and the Independent Authority of Fiscal Responsibility, as well as representatives of European and international institutions.
5. The members of the Council: a) Will receive the summons containing the agenda of the meetings with the minimum advance provided in Article 6.2. Information on the content of the items on the agenda will be available to the members with sufficient advance notice before the meeting. b) May participate in the debates of the sessions. c) May exercise their right to vote and formulate a particular vote, as well as express the sense of their vote and the reasons justifying it. d) May make requests and questions. e) Will obtain the information necessary to fulfill the assigned functions. f) Will exercise any other functions inherent to their status.
6. The members of the Council may not attribute to themselves the representation functions recognized in Article 4 to the President and Vice President.
7. In cases of vacancy, absence, or illness, and generally when any justified cause occurs, the titular members of the Council may be replaced by the substitute they designate. This must hold a position with a minimum rank of Director General in the organization where the titular holds their position, except in the case of the Director General of Insurance and Pension Funds, whose substitute may be any of the other representatives of the Ministry of Economy and Enterprise. cve: BOE-A-2019-2980 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20427 The substitution of the Minister of Economy and Enterprise will be exercised in accordance with what is provided in Article 4.2. 8. The Council may approve an internal regulations where the rules of organization and functioning of the Council itself and the Technical Committee will be developed. Article 4. Presidency and Vice-Presidency of the Council.

1. The Presidency corresponds to: a) Driving and supervising all actions that, according to this Royal Decree, the AMCSEFI must execute. b) Holding the representation of the AMCSEFI. c) Agreeing on the summons of ordinary and extraordinary sessions and the setting of the agenda, taking into account the requests of the other members, provided they have been made with sufficient advance notice. d) Presiding over the sessions, moderating the development of debates, and suspending them for justified causes. e) Resolving ties with their vote, for the purpose of adopting agreements. f) Ensuring compliance with the laws. g) Visiting the minutes and certifications of the agreements of the body. h) Account to the General Courts in the terms provided in Article 20.
2. The Vice President corresponds to represent the AMCSEFI in international institutions and organizations and to substitute the President in case of vacancy, absence, or illness. Article 5. Secretary of the Council.
3. The Secretary of the Council corresponds to: a) Attend meetings with voice but without vote. b) Effect the summons of the body's sessions by order of the President, as well as the citations to the members. c) Ensure the formal and material legality of the actions of the collegiate body. d) Guarantee that the procedures and rules of constitution and adoption of agreements are respected. e) Receive communication acts of the members with the body, whether notifications, data requests, rectifications, or any other type of writings of which they must have knowledge. f) Prepare the dispatch of matters, draft and authorize the minutes of the sessions. g) Issue certifications of consultations, opinions, and approved agreements. h) Any other functions inherent to their status as Secretary.
4. In case of vacancy, absence, or illness of the Secretary, he will be replaced by the person decided by the President of the Council, who will be a person performing functions in the organizations that form part of the Council and who has a qualification similar to that of the person being replaced, including members of the Council. Article 6. Summons and sessions of the Council.
5. The Council will meet at least once every six months, and whenever summoned by the President on her own initiative, at the request of at least two of its members, or at the request of the Technical Committee, in accordance with the following paragraph.
6. The summons will be made with a minimum advance of fifteen days. This period may be reduced to a minimum of two days when reasons of urgency so advise. Likewise, exceptionally, the Council may hold extraordinary sessions, without prior summons, provided that, with all its members and the Secretary present, they unanimously agree to constitute the Council and hold the corresponding session. cve: BOE-A-2019-2980 Verifiable at http://www.boe.es

OFFICIAL STATE BULLETIN No. 53 Saturday, March 2, 2019 Sec. I. Page 20428 Exceptionally, for reasons of urgency duly specified in the summons, the Council may be held and its decisions adopted remotely by electronic means. 3. For the valid constitution of the Council, for the purpose of holding sessions, deliberations, and taking agreements, the attendance, in person or telematically, of all its members or, if applicable, those who should exercise their substitution, will be required. 4. The decisions of the Council will be approved by the simple majority of its members, with the casting vote of its President in case of a tie. 5. The minutes must include