Ley 24/1988, de 28 de julio, del Mercado de Valores (Law 24/1988 of 28 July on the Securities Market)

English translation of the Spanish text from boe.es (the Spanish text is the official one). Retrieved 2026-10-26.

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Consolidated document BOE-A-1988-18764

Consolidated legislation This consolidated text is informative in nature and has no legal value. Consolidation consists of integrating into a single text, without official value, the express amendments, corrections and repeals that a norm has had since its origin, with the aim of facilitating access to the law in force. For legal purposes, the official publication must be consulted.

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Repealed

Law 24/1988, of 28 July, on the Securities Market.

Consolidated text : "Last update, published on 24/10/2015"

Repealed norm, with effect from 13 November 2015, by the sole repealing provision.a) of Royal Legislative Decree 4/2015, of 23 October. Ref. BOE-A-2015-11435 .

Includes the corrections of errors published in BOE no. 122, of 23 May 1989, Ref. BOE-A-1989-11627 and in BOE no. 185, of 4 August 1989 Ref. BOE-A-1989-18720

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JUAN CARLOS I

KING OF SPAIN

To all those who see and understand this.

Know: That the Cortes Generales have approved and I come to sanction the following Law:

The need for a global reform of the securities market has been repeatedly made clear in recent years. Already in 1978, the Commission for the study of the Securities Market pointed out in its Report the multiple problems and shortcomings of said market.

Although in the first years following the publication of the Report some reforms were undertaken, these were partial and limited in nature, with the problems noted there largely persisting, to which have been added those inherent in a dynamic evolution both of our financial system and of those in our environment.

This Law aims to address those multiple and varied problems associated with the current regulation of our securities markets. But, moreover, it aspires to provide the entire body of securities market regulations with an internal coherence that is today lacking. The strong interweaving of the different elements that make up the Law responds to a global vision of the regulation of securities markets whose validity must be demonstrated by experience, but which undoubtedly guarantees said coherence.

Another basic objective of this Law consists of the need to strengthen our securities market, in view of the prospect, in 1992, of a European capital market and of a prior taking of positions in this regard by various Member States of the European Economic Community. The final objective is that our securities market be in appropriate conditions when said European market becomes a reality.

The Law incorporates too many novelties to set them out briefly, but it is worth highlighting the following essential principles or features:

1. On a merely formal level, the large number of references that the Law contains to subsequent regulatory developments may attract attention. This approach is the result of coordinating two opposing requirements: a) the need not to freeze within the framework of a Law many aspects of the functioning of securities markets that may be influenced by the important changes taking place in the national and international financial environment and which will undoubtedly continue intensively in the immediate future, and b) the need to provide the necessary legal backing to many potential actions of the Administration that, under the legal framework currently in force, are or could be left without such indispensable cover. The Securities Market Law thus has a certain character of a framework Law, susceptible to various concretions depending on the needs and problems that arise at each moment. This, which may seem inconvenient to those who would wish to see the legal consecration of specific solutions to certain very concrete problems, is a very convenient solution if the aspiration is, as is the case, for this Law to have a reasonable survival.

2. The Law rests on the concept of "securities" or, to be more precise, of "negotiable securities", a concept difficult to define succinctly in the articles of a legal text, but not for that reason lacking in reality. Thus, above all, the dominant one-to-one relationship until today between the securities market and "securities certificates" is abandoned. Alongside these, the Law introduces the important novelty that securities may be represented by book entries, which will lead to a foreseeable loss of importance of traditional certificates. The dissociation of the concept of negotiable securities from a specific formula of legal instrument is also evident in the inclusion, in certain cases, of instruments such as bills of exchange, promissory notes or any other that meets the remaining characteristics contemplated in the Law. The additional notes that define the "securities" to which the Law refers, for the purposes of its application, are their negotiability and their grouping into issues, two characteristics that the Law has not attempted to specify, since these are matters impossible to specify without a case-by-case approach that would be improper for a provision of legal rank. As regards negotiability, it suffices to note that such expression is intended to refer to something broader than mere transferability, proper to practically all rights, and which must be defined in terms of a market that, even if of reduced proportions, is characterized by the predominance of the economic terms in which the transfer takes place over the personal characteristics of the contracting parties. As regards grouping into issues, the concept of securities issued "in series" has been abandoned, both because of the difficulty of defining it legally and because there is no reason not to consider as grouped in an "issue", in accordance with the current practices of numerous financial markets, instruments that may be quite heterogeneous in some of their economic characteristics (e.g. term or interest rate) and that, in the absence of this approach, could fall entirely outside the provisions of this Law.

3. A central element of the reform is the creation of a National Securities Market Commission, conceived as a public-law entity with its own legal personality. It is a body entrusted with the supervision and inspection of the securities market, without prejudice to its collaboration in the tasks of organizing the same and in promoting the implementation of its reform. The Commission is governed by a Board of Directors whose composition is characterized by the exclusion of direct representatives of the agents subject to its supervision, who will nevertheless have a voice, through an Advisory Committee created for that purpose, in the most important decisions of the Commission. The design of the Commission's Board of Directors strengthens the professional competence, dedication and independence of its members and their action in a collegiate manner. The Commission's powers are multiple, and include, among others, that of ensuring the transparency of the various markets, the correct formation of prices in them and the protection of investors, promoting information of interest to them; that of controlling the development of primary markets, the admission to trading of securities on official secondary markets, as well as their suspension and exclusion; that of ensuring compliance with the rules of conduct by all those involved in the securities market; that of advising the Government and the Ministry of Economy and Finance on matters related to the securities markets: and the control of compliance with all obligations and requirements demanded in the Law, including the exercise of the sanctioning power.

4. The Law proclaims a general principle of freedom of issue without the need for prior authorization, except in certain exceptional cases. Likewise, the placement system that each issuer wishes to use is declared free, with no requirement other than that it be defined and made public in all its aspects before proceeding with the launch of the issue. The same applies as regards the choice of the timing of the issues. However, in order to defend the interests of investors, communication to the Commission of the issue projects is required, with publicity thereof, the registration with it of the issue's information prospectus and the prior existence of an audit of the issuer's financial statements. The Law nevertheless contemplates possible exceptions to these requirements in certain cases.

5. Without prejudice to a basic unitary regulation of the securities markets, the Law distinguishes three categories of official secondary markets: a) the Stock Exchanges existing at any given time; b) the Public Debt Market represented by book entries, and c) other official secondary markets to which the Government may grant such status. An essential reason for this approach is the existence of a Public Debt Market in book entries outside the Stock Exchanges and the desirability of leaving open the possibility of establishing other specialized markets. It is foreseeable that a normal development of events will lead to the progressive integration of all segments of the securities markets, to which this Law does not object. In any case, at an initial stage it has seemed more appropriate not to exclude any possibility, while awaiting the markets' own development to guarantee the viability of one or another approach. Without prejudice to this, the principle of reservation for the Stock Exchanges of the official trading of shares and securities assimilable to them, as well as that of all securities represented by certificates, is introduced.

6. The Law contains general provisions on the operation of official secondary markets that entail a new approach to the legal framework in which securities trading takes place. The concept of compulsory public certification by intermediary agents disappears, except in certain marginal cases, both as regards the subscription and the trading of securities, without this naturally meaning the disappearance of the voluntary intervention of a public certifying officer. In its place, when it comes to transfers by way of sale and purchase of securities admitted to trading on an official secondary market, the concept arises of compulsory participation or intermediation by at least one entity holding the status of a member thereof, following which the various categories of transactions that, depending on the type of intermediation or participation, are considered transactions of an official secondary market are specified. Such intermediation, which will be carried out, with some exception, under a system of freedom of commissions, aims to guarantee, above all, that all transactions are integrated into the market, as well as the proper supervision of the system and the necessary tax information. This also explains the declaration of nullity of transactions when that intermediation requirement is not met. In the transfer of securities by a title other than that of sale and purchase, only the requirement of notification to the governing bodies of the corresponding markets is required. The Law also regulates a new regime of non-reclaimability of securities acquired in good faith.

7. Within the same scope of general provisions of the official secondary markets, the Law creates the appropriate framework for sufficient regulation of their operation, attending both to its effectiveness and to the needs of market supervision and investor protection. The Law is, voluntarily, not very precise in this regard, given the multiple facets that must be considered in an effective regulation, but, in exchange, it grants the Government broad powers to develop it. However, there are important principles that the Law has taken care to proclaim, such as the application of market quotations to transactions agreed outside the core of the market, compliance by intermediaries with the conditions agreed with the contracting parties, the requirements for intermediaries to disclose their own interests potentially conflicting with those of their clients, the responsibility of intermediaries in transactions they carry out on behalf of others, or the publicity of all basic data of each of the transactions of the secondary market. In the more limited scope of the Stock Exchanges, an important principle of publicity is established for transactions that lead to a person exceeding or seeing their participation in the capital of a company reduced above or below, respectively, the percentages determined by regulation.

8. The organization of the Stock Exchanges is governed by the fact that only Securities Companies and Agencies that accede to such status may be members thereof, and by the decision that they will be governed by public limited companies whose capital will be reserved for those entities. Certain special features are introduced, highlighting the rules that provide for modifications of capital or mandatory transfers of shares of the governing companies of the Stock Exchanges in order to enable the cessation or incorporation of members, the subjection to official approval of their corporate bylaws, the provision that these contemplate qualified majorities for the adoption of certain resolutions, the minimum composition of their board of directors, or the prior official approval of the appointment of its members. The implementation of a Stock Market Interconnection System is envisaged, integrated through a computer network and governed by a Stock Exchange Company, constituted by the governing companies of the Stock Exchanges. Said system shall have as its object the exclusive trading of the securities incorporated into it. Finally, the basic principles of the new Securities Clearing and Settlement Service are regulated, which will adopt the form of a public limited company, in which the entities directly involved in the clearing and settlement processes related to the Securities Market will participate.

9. The regulation of the official secondary securities markets and of the Stock Exchanges, aspects just referred to, bears a very special relationship with the exercise of powers regarding securities trading centers by those Autonomous Communities that have them recognized in their Statutes of Autonomy.

The Law starts from the inalienable principle of unity of the economic order and of the national financial system, of which the securities market constitutes an essential piece. It responds to the need to organize it as a single market, an indispensable condition for its efficiency and for its competitiveness on the international plane. A solution that would lead towards a territorially fragmented model would be inadequate, especially if one takes into account the European context in which the Spanish economy operates.

Therefore, the Stock Exchanges are conceived as pieces of a single and integrated securities market. This principle is reflected, of course, in the envisaged Interconnection System, but also - and with even greater intensity if possible - in the unitary regulation of the market's intermediary entities, which may carry out their activities throughout the national territory and shall have the right to form part of any of the Stock Exchanges, and in the homogeneity imposed regarding the organization of the different Stock Exchanges.

All these considerations, together with the fact that a large part of the precepts of the Law must be classified as norms of commercial law, justify its precepts related to the Autonomous Communities.

10. The Law integrates into its scope, thereby giving it adequate legal backing, instead of the very provisional one it has today, the Public Debt market in book-entry form, which shall be governed by the specific norms established in relation to it and which rely on the existence of a Book-Entry Central and of the Market Management Entities that may act on their own account, if they are holders of accounts in the central, or only on behalf of others otherwise. Several are the principles that inspire the already existing Public Debt Market in book-entry form and appear incorporated into the Law in a general manner, as common norms to all securities markets or as norms applicable to Securities Companies and Agencies, to whose regime the status of Management Entity has been attempted to be assimilated. The Law has sought a balance between the basic powers that must correspond to the National Securities Market Commission, as the supervisory body of all securities markets, and the management powers entrusted, following the system already in force, to the Bank of Spain, configuring for these purposes a mixed Advisory Commission composed of representatives of both institutions and of the Ministry of Economy and Finance itself.

11. The Law contemplates the general framework for a regulation of public offers for the acquisition of securities, aimed at overcoming the limitations of the regulations currently in force. It also introduces the concept of a public offer for sale of securities, subject to requirements analogous to those for a new issue of securities, in order to cover a series of cases, among which the sale in Spain of foreign securities stands out, to which it is appropriate to apply certain provisions of the Law, which would not be possible without that figure.

12. The Law, following the practice of all developed foreign securities markets and seeking to ensure the financial solvency of those who carry out activities that entail significant potential risks, dispenses with the figure of the individual intermediary agent, replacing it with specialized financial entities: Securities Companies and Agencies, which are conceived in this Law as public limited companies whose corporate purpose is limited to the activities attributed to them by the Law. Securities Companies are empowered to act on their own account and on behalf of third parties, while Securities Agencies may only act on behalf of others. The Law sets out the requirements that these entities must meet and the procedure for obtaining authorization to operate as such, which is configured as regulated, since it is provided that it may only be denied for failure to comply with the requirements set out in the Law and in the provisions implementing it. The Law does not contemplate the existence of a "numerus clausus" of entities, nor, except for certain manifest incompatibilities, restrictions as to the status of their shareholders, although it does limit the maximum participation of a shareholder to half of the capital. All Companies and Agencies shall be potential members of the Stock Exchanges, acquiring in that case the status of shareholders of the governing company of a Stock Exchange, and nothing shall prevent the same entity from being a member of two or more Stock Exchanges. The Law does, however, make a distinction between the Companies and Agencies that attain the status of members of one or more Stock Exchanges, to which the trading of securities on them is reserved, with the significance that the Law itself attributes to the validity of their transfer, and the remaining Companies and Agencies, which may only carry out a series of additional activities, also open to the first group of entities, which are set out in article 71 of the Law. Such distinction is due to the restrictions that the Law imposes on the shareholding of the first group of entities during a transitional period, which are not justified for the latter. Logically, once the transitional period has ended, the distinction between both groups of entities will tend to lose importance. Finally, the Law grants the Government sufficient powers to regulate the financial aspects of the activity of Companies and Agencies and, in order to safeguard the successful outcome of the transactions that members of the Stock Exchanges carry out on behalf of others, a collective guarantee is established, to be made up of the initial and annual contributions of such members.

13. In order to protect the interests of investors, the principle is established that stock exchange trading and the habitual exercise of the remaining activities related to the securities markets, listed in article 71 of the Law, are reserved to Securities Companies and Agencies. However, in order not to cause a break with the traditional practices of our financial system, it is permitted that official credit entities, banks, savings banks, credit cooperatives and money market intermediary companies may continue to carry out certain activities cited in each case, always excluding stock exchange trading. Some of these activities may also be exercised by Collegiate Commercial Brokers and by Portfolio Management Companies. However, in all those cases the Government is empowered to establish limitations on the direct action in the securities market of the aforementioned entities, in order to promote, if deemed necessary, the constitution by such entities of Securities Companies and Agencies in which their activity in the securities markets would be concentrated. The Law has considered it premature to pronounce itself in favor of a forced specialization of financial institutions in securities market activities, but it does not exclude its possibility, which will have to be specified in light of the development of Securities Companies and Agencies.

14. The Law contains the important novelty of including minimum standards of conduct for all those who operate with the securities markets, inspired by the Recommendations and proposed Directives of the European Economic Community and aimed at defending the absolute priority of the interests of investors over those of the entities mentioned in the previous number and at ensuring the transparency of the market. It addresses the use of privileged information, and establishes the obligation to make public, immediately, any fact or decision that may influence the quotation of the securities of an issuer.

15. The Law contemplates a sanctioning regime analogous to that provided for in the Law on Discipline and Intervention of Credit Entities and which, added to the latter, makes it possible to achieve the objective that all financial activities be subject to homogeneous rules in the matter. Subject to the regime of supervision, inspection and sanction, in charge, except in exceptions, of the National Securities Market Commission, are not only the Securities Companies and Agencies, but also all natural and legal persons who carry out the activities listed in article 71 of the Law, the issuers of securities and the other persons or entities to the extent that they carry out activities regulated in the Law itself or are related to the securities market. The inspection of the securities market shall be carried out directly by the National Commission and the verified infractions, which are typified and classified as minor, serious and very serious, shall be sanctioned in accordance with the provisions of the Law itself, in accordance with the sanctioning procedure provided for in the Law on Discipline and Intervention of Credit Institutions. Given the impact on this market of the entities subject to the control of the Bank of Spain, a regime of supervision and inspection coordinated between said institution and the National Securities Market Commission is provided for in relation to them. It is important, on the other hand, to emphasize that if the Law places extraordinary emphasis on the adequate supervision of the functioning of the markets, it does so not only through the aforementioned institutional apparatus, but also by seeking support in something as essential as information. There are many provisions of the Law in which the existence of very diverse mechanisms for the collection and dissemination of information (on issuers, on securities issued, on agents operating in the market, on the negotiation process, on each of the operations carried out in the market, etc.) is prescribed or made possible. This must allow the market agents themselves, investors, market observers and public information media to exercise effective vigilance, without which the greatest supervisory efforts of the National Securities Market Commission would be of little use.

16. In order to address the proposal for a Directive of the European Economic Community relating to indirect taxes on securities transactions, the exemption provided for in the Value Added Tax for operations subject to it is extended to the Property Transfer Tax and Documented Legal Acts. It has also been sought, in accordance with the provisions of the aforementioned proposal for a Directive, to establish measures to try to counter the avoidance of the Property Transfer Tax and Documented Legal Acts in the transfer of real estate, through the interposition of corporate figures. Finally, the obligation to inform the Tax Administration of operations on issuance, subscription and transmission, already provided for by other channels in previous regulations, but which is now affected by the principles of this Law, is regulated; and the extension to the National Securities Market Commission of the tax regime that current legislation attributes to the Bank of Spain is provided for.

17. By way of additional provisions, the status of Stock Exchanges is recognized for the current Official Trade Exchanges of Madrid, Barcelona, Bilbao and Valencia and the dissolution of the Official Colleges of Exchange and Stock Agents is provided for, the full integration of their members into the Corps of Collegiate Trade Brokers, and the creation, in the places of Madrid, Barcelona, Bilbao and Valencia, of Colleges of Trade Brokers.

18. The additional provisions also contemplate the transfer to the National Securities Market Commission of certain powers over Collective Investment Institutions currently attributed to the Ministry of Economy and Finance, at the same time as they modify the regulations of said institutions, to accommodate them to the principles and content of this Law. This, furthermore, contemplates a new regime for the diversification of investments of said institutions, more rigorous than the one existing today, especially by limiting investments in companies of the same group and requiring the consolidation of investments of institutions belonging to the same group. At the same time, a new orientation is given to the so-called "Wealth Management Companies", in the sense of establishing as mandatory the registration, until today voluntary, in the corresponding Registry of all entities that carry out portfolio management activity and are not subject to special regulation that authorizes them to exercise such activity. Its corporate purpose is limited to the aforementioned activity and its current name is changed to that of "Portfolio Management Companies".

19. Finally, also through additional provisions, a new wording is given to those articles of the Commercial Code and the Law on Public Limited Companies whose adaptation to the novelties introduced in this Law has been deemed essential.

20. As for the transitional regime, it is provided that Exchange and Stock Agents who do not join a Securities Company or Agency that are members of an Exchange may acquire the latter status individually or, alternatively, opt for the exercise of the profession of Collegiate Trade Broker, for which purpose they are granted a preferential right to the positions that are called for the Colleges of the places of Madrid, Barcelona, Bilbao and Valencia. Instrumental Companies of Mediating Agents already constituted and registered in the Official Registries are empowered to transform into Securities Companies or Agencies, with the dissolution of those that do not transform being decreed. Finally, it is worth highlighting the transitional regime for limiting participation in the capital of Securities Companies and Agencies that are members of an Exchange by third parties who did not previously hold the status of Exchange and Stock Agent. This begins in 1989 with a maximum participation not exceeding 30 per 100 and concludes in 1992 with total liberalization.

Sections 3, 15 and 16 drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

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TITLE I

General provisions

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CHAPTER I

Scope of the Law

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Article 1

The purpose of this Law is to regulate the Spanish trading systems for financial instruments, establishing to that end the principles of their organization and operation and the rules relating to the financial instruments subject to their trading and to the issuers of those instruments; the provision in Spain of investment services and the establishment of the supervision, inspection and sanctioning regime.

It is amended by the sole art.1 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

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Last update, published on 20/12/2007, in force from 21/12/2007.

Original text, published on 29/07/1988, in force from 29/01/1989.

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Case law

Article 2

The following financial instruments are included within the scope of this Law:

1. The negotiable securities issued by persons or entities, public or private, and grouped in issues. Any right of patrimonial content, whatever its denomination, which by its own legal configuration and transfer regime is susceptible to generalized and impersonal trading in a financial market shall be considered a negotiable security.

The following shall in all cases be considered negotiable securities, for the purposes of this Law:

a) Shares of companies and negotiable securities equivalent to shares, as well as any other type of negotiable securities that give the right to acquire shares or securities equivalent to shares, by their conversion or by the exercise of the rights they confer.

b) The participating quotas of savings banks and the participating quotas of association of the Spanish Confederation of Savings Banks.

c) Bonds, debentures and other similar securities, representing part of a loan, including convertible or exchangeable ones.

d) Mortgage notes, bonds and participations.

e) Securitization bonds.

f) The participations and shares of collective investment institutions.

g) Money market instruments, understood as such the categories of instruments habitually traded in the money market such as Treasury bills, deposit certificates and promissory notes, unless they are drawn individually, excluding payment instruments derived from prior commercial transactions that do not involve the raising of repayable funds.

h) Preferred participations.

i) Territorial notes.

j) «Warrants» and other derivative negotiable securities that confer the right to acquire or sell any other negotiable security, or that give the right to a cash settlement determined by reference, among others, to negotiable securities, currencies, interest rates or yields, commodities, credit risk or other indices or measures.

k) The others to which legal or regulatory provisions attribute the status of negotiable security.

l) Internationalization notes and bonds.

2. Option contracts, futures, swaps, forward interest rate agreements and other derivative financial instrument contracts related to securities, currencies, interest rates or yields, or other derivative financial instruments, financial indices or financial measures that may be settled in kind or in cash.

3. Option contracts, futures, swaps, forward interest rate agreements and other derivative financial instrument contracts related to commodities that must be settled in cash or that may be settled in cash at the request of one of the parties (for reasons other than default or another event leading to the termination of the contract).

4. Option contracts, futures, swaps and other derivative financial instrument contracts related to commodities that may be settled in kind, provided that they are traded on a regulated market or multilateral trading system.

5. Option contracts, futures, swaps, forward interest rate agreements and other derivative financial instrument contracts related to commodities that may be settled by physical delivery not mentioned in the previous paragraph of this article and not intended for commercial purposes, which present the characteristics of other derivative financial instruments, taking into account, among other things, whether they are settled through recognized clearing houses or are subject to regular adjustments of guarantee margins.

6. Derivative financial instruments for the transfer of credit risk.

7. Financial contracts for differences.

8. Option contracts, futures, swaps, forward interest rate agreements and other derivative financial instrument contracts related to climatic variables, transport costs, emission allowances or inflation rates or other official economic statistics, that must be settled in cash or that may be settled in cash at the choice of one of the parties (for reasons other than default or another case leading to the termination of the contract), as well as any other derivative financial instrument contract related to assets, rights, obligations, indices and measures not mentioned in the previous paragraphs of this article, which present the characteristics of other derivative financial instruments, taking into account, among other things, whether they are traded on a regulated market or multilateral trading system, are settled through recognized clearing houses or are subject to regular adjustments of guarantee margins.

The rules provided in this Law for negotiable securities shall apply to financial instruments other than negotiable securities, with the adaptations that, where appropriate, may be necessary.

Paragraphs 5 and 8 of this article must be applied in accordance with the provisions of articles 38 and 39 of Commission Regulation 1287/2006, of 10 August 2006, implementing Directive 2004/39/EC of the European Parliament and of the Council, as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive.

Letter l) of paragraph 1 is amended by art. 32 of Law 14/2013, of 27 September. Ref. BOE-A-2013-10074 .

Letter l) is added to paragraph 1 by Royal Decree-Law 20/2012, of 13 July. Ref. BOE-A-2012-9364 .

Amended by the sole art. 2 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

The second and third paragraphs are added by art. 1.1 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

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Last update, published on 28/09/2013, in force from 29/09/2013.

Amendment published on 14/07/2012, in force from 15/07/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

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Article 3

The provisions of this Law shall apply to all securities whose issuance, trading or marketing takes place in the national territory.

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Article 4

For the purposes of this Law, the definition of group of companies established in article 42 of the Commercial Code shall apply.

Amended by the sole art. 3 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 4.1 of Law 13/1992, of 1 June. Ref. BOE-A-1992-12545

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Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 02/06/1992, in force from 01/01/1993.

Original text, published on 29/07/1988, in force from 29/01/1989.

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CHAPTER II

On securities represented by book entries

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Case law

Article 5. Representation of securities.

1. Negotiable securities may be represented by book entries or by certificates. The form of representation chosen must apply to all securities included in the same issue.

2. Securities admitted to trading on official secondary markets or on multilateral trading facilities must necessarily be represented by book entries.

As an exception to the provisions of the preceding paragraph, the necessary special rules shall be established by regulation so that foreign securities represented by certificates may be traded on Spanish official secondary markets or multilateral trading facilities and be registered in the central securities depositories established in Spain.

3. Both the representation of securities by book entries and the representation by certificates shall be reversible. The reversal from representation by book entries to certificates shall require prior authorisation from the National Securities Market Commission, under the terms provided by regulation. The change to the book-entry system may be made as the holders give their consent to the transformation.

Amended by final provision 1.A).1 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

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Last update, published on 19/06/2015, in force from 20/06/2015.

Original text, published on 29/07/1988, in force from 29/01/1989.

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Article 6. Issue document.

1. The representation of securities by book entries shall require the issuing entity to prepare a document containing the information necessary to identify the securities included in the issue.

In the case of equity securities, the aforementioned document shall be executed as a public deed and may be the deed of issue.

In the case of non-equity securities, execution of the issue document as a public deed shall be optional. This document may be replaced by:

a) The information prospectus approved and registered by the National Securities Market Commission, in accordance with the provisions of this Law.

b) The publication of the characteristics of the issue in the corresponding official gazette, in the case of issues of State or Autonomous Community debt, as well as in those other cases in which it is established.

c) The certification issued by the persons empowered in accordance with current regulations, in the case of issues that are to be admitted to trading on a multilateral trading facility established in Spain, in accordance with the provisions of Article 30 ter 4.

2. The issuing entity must deposit a copy of the issue document and its amendments with the entity responsible for the accounting record and with the National Securities Market Commission. In the case of securities admitted to trading on an official secondary market or on a multilateral trading facility, a copy must also be deposited with its governing body.

3. The issuing entity and the entity responsible for the accounting record must at all times have a copy of the aforementioned document available to the holders and the interested public in general.

4. The preparation of the issue document shall not be required for financial instruments traded on official secondary markets for futures and options or in the other cases, and under the conditions that, where applicable, are determined by regulation.

Amended by final provision 1.A).2 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Amended by art. 1.1 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

The fourth paragraph is amended and the fifth is added by art.1.2 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 14/03/2005, in force from 15/03/2005.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

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Article 7. Entities responsible for the accounting record.

1. The keeping of the accounting record of the securities represented by book entries corresponding to an issue shall be assigned to a single entity that must ensure its integrity.

2. In the case of securities not admitted to trading on official secondary markets or on multilateral trading facilities, said entity shall be freely designated by the issuer from among the investment services firms and credit institutions authorised to carry out the activity provided for in Article 63.2.a). The designation must be registered in the Register of the National Securities Market Commission provided for in Article 92, as a prerequisite for the commencement of the keeping of the accounting record. Central securities depositories may also assume said function according to the requirements that, where applicable, are established in the applicable regulations and in their rules.

3. In the case of securities admitted to trading on official secondary markets or on multilateral trading facilities, the entity responsible for keeping the accounting record of the securities shall be the designated central securities depository, which shall exercise such function together with its participating entities.

4. The entities referred to in this article shall be liable to those who are harmed, for the failure to make the corresponding entries, for inaccuracies and delays therein and, in general, for intentional or negligent breach of their legal obligations. Compensation for the damages caused, as far as possible, must be made in kind.

Amended by final provision 1.A).3 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Section 3 is amended by art. único.4 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 1.1 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

The second, fourth and fifth paragraphs are amended, and the seventh is added by art. 1.3 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 13: #a7bis]

Article 7 bis. System of registration and holding of securities.

1. Every central securities depository providing services in Spain shall adopt a registration system composed of a central register and the detailed registers kept by the participating entities in said system.

2. The central register shall be kept by the central securities depository and shall recognise, for each participating entity that requests it, the following types of account:

a) One or more own accounts in which the balances of securities owned by the participating entity shall be recorded.

b) One or more general third-party accounts in which the balances of securities corresponding to the clients of the participating entity, or to the clients of a third entity that has entrusted the requesting entity with the custody and detailed registration of the securities of said clients, shall be recorded on an aggregate basis.

c) One or more individual accounts in which the balances of securities corresponding to those clients of the participating entities that request the keeping of this type of account in the central register shall be recorded on a segregated basis.

3. Each participating entity with general third-party accounts shall keep a detailed register, in which it shall be reflected to which clients the balances of securities recorded in said accounts in the central register correspond.

4. The Government shall develop, in relation to the different entities entrusted with keeping the accounting records and the different types of securities, whether or not admitted to trading on official secondary markets or on multilateral trading systems, the rules of organization and operation of the corresponding records, the legal regime of the different admissible securities accounts, the guarantees and other requirements applicable to them, the systems of identification and control of securities represented by book entries, as well as the relations of those entities with the issuers and their intervention in the administration of securities. The conditions and cases in which central securities depositories may be authorized to keep directly client securities accounts in the central registry may be determined by regulation.

Added by final provision 1.A).4 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision seventh of the aforementioned Law regarding the application of this article.

Added text, published on 19/06/2015, in force from 20/06/2015.

[Block 14: #a8]

Article 8

Securities represented by book entries shall be constituted as such by virtue of their registration in the corresponding accounting record, which, where applicable, shall be the central one, and from then on they shall be subject to the provisions of this chapter. The content of book-entry securities shall be determined by the provisions of the document referred to in article 6.

Subscribers of securities represented by book entries shall have the right to have the corresponding registrations made in their favor, free of charge.

The conditions for securities represented by book entries to function as fungible for the purposes of clearing and settlement operations shall be established by regulation.

The first paragraph is amended by art. 1.2 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 15: #a9]

Article 9

The transfer of securities represented by book entries shall take place by accounting transfer. The registration of the transfer in favor of the acquirer shall produce the same effects as the delivery of the certificates.

The transfer shall be enforceable against third parties from the moment the registration has been made.

A third party who acquires for value securities represented by book entries from a person who, according to the entries in the accounting record, appears legitimated to transfer them shall not be subject to reivindication, unless at the time of acquisition he acted in bad faith or with gross negligence.

The issuing entity may only oppose, against the bona fide acquirer of securities represented by book entries, the exceptions arising from the registration in relation to the document provided for in article 6 and those it could have raised if the securities had been represented by certificates.

The fourth paragraph is amended by art. 1.3 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 16: #a10]

Article 10

The creation of limited real rights or any other kind of encumbrances on securities represented by book entries must be registered in the corresponding account. The registration of the pledge is equivalent to the possessory transfer of the certificate.

The creation of the encumbrance shall be enforceable against third parties from the moment the corresponding registration has been made.

[Block 17: #a11]

Article 11

The person who appears legitimated in the entries of the accounting record shall be presumed to be the legitimate holder and, consequently, may require the issuing entity to make in his favor the payments or deliveries to which the security represented by book entries gives right.

The issuing entity that makes the payment or delivery in good faith and without gross negligence in favor of the legitimated person shall be released even if the latter is not the holder of the security.

For the transfer and exercise of the rights corresponding to the holder, prior registration in his favor shall be required.

[Block 18: #a12]

Article 12

Legitimation for the transfer and for the exercise of the rights derived from securities represented by book entries may be evidenced by the exhibition of certificates that shall be duly issued by the entities in charge of the accounting records, in accordance with their own entries.

Such certificates shall not confer more rights than those relating to legitimation. Acts of disposal having the certificates as their object shall be null and void.

No more than one certificate may be issued for the same securities and for the exercise of the same rights.

The entities in charge of the accounting records and the members of the securities markets may not process transfers or encumbrances nor make the corresponding registrations if the transferor has not previously returned the certificates issued in his favor. The obligation to return shall cease when the certificate has become worthless.

[Block 19: #a12bis]

Article 12 bis. Transfer of securities and pro rata rule.

1. Once insolvency proceedings are declared in respect of an entity responsible for keeping the registry of securities represented by book entries or of an entity participating in the registry system, the holders of securities recorded in said registries shall enjoy the right of separation with respect to the securities registered in their favour and may exercise it by requesting their transfer to another entity, all without prejudice to the provisions of articles 44 bis.8 and 70 ter.2.f).

2. For the purposes of the provisions of this article, the Insolvency Judge and the bodies of the insolvency administration shall safeguard the rights arising from transactions in the course of settlement at the time when insolvency proceedings are declared in respect of any of the entities referred to in the preceding paragraph, having regard for this purpose to the rules of the corresponding clearing, settlement and registry system.

3. Central securities depositories and other entities responsible for keeping the registry of securities represented by book entries shall guarantee the integrity of the issues of securities. The registry systems managed by central securities depositories must offer sufficient guarantees so that there are no discrepancies between the central registry and the detailed registries. To this end, in addition to the provisions of this Law, the supervision mechanisms to be carried out by central securities depositories and the control systems of their participating entities, the situations in which possible incidents must be notified to the supervisory authorities, as well as the mechanisms and time limits for their resolution, shall be established by regulation.

4. In any case and without prejudice to the provisions of the preceding paragraph, when the balances of securities with the same ISIN (International Securities Identification Number) code recorded in the set of general third-party accounts of an entity participating in the central registry are not sufficient to fully satisfy the rights of the holders of the securities with the same ISIN code registered in the detailed registry maintained by said participating entity, the balance recorded in said set of general third-party accounts shall be distributed pro rata according to the rights of the holders registered in the detailed registry. The affected holders shall hold a credit right against the participating entity for the securities not delivered.

5. When there are limited real rights or any other kind of encumbrances over the securities, and without prejudice to the agreements between the guarantor and the beneficiary of the guarantee, once the pro rata rule has been applied, said encumbrances shall be understood to be constituted over the result of the pro rata distribution and over the credits against the participating entity that, where applicable, exist for the part not satisfied in securities.

Amended by final provision 1.A).5 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Take into account transitional provision seventh of the aforementioned Law regarding the application of this amendment.

Paragraph 1 is amended by art. 94.1 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Added by sole article 1 of Law 32/2011, of 4 October. Ref. BOE-A-2011-15622 .

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 28/04/2015, in force from 29/04/2015.

Amendment published on 05/10/2011, in force from 06/10/2011.

Added text, published on 05/10/2011, in force from 06/10/2011.

[Block 20: #tii]

TITLE II

National Securities Market Commission

[Block 21: #ci-6]

CHAPTER I

Creation and functions

[Block 22: #a13]

Article 13

The National Securities Market Commission is created, to which are entrusted the supervision and inspection of the securities markets and of the activity of all natural and legal persons involved in trading therein, the exercise over them of the sanctioning power and the other functions attributed to it in this Law.

The National Securities Market Commission shall ensure the transparency of the securities markets, the correct formation of prices therein and the protection of investors, promoting the dissemination of all information necessary to ensure the achievement of those purposes.

The National Securities Market Commission shall advise the Government and the Ministry of Economy and Finance and, where appropriate, the equivalent bodies of the Autonomous Communities on matters related to the securities markets, at their request or on its own initiative. It may also submit to them proposals on measures or provisions related to the securities markets that it deems necessary. It shall prepare and publicize an annual report reflecting its activity and the general situation of the securities markets.

The National Securities Market Commission shall annually submit to the Committee on Economy, Commerce and Finance of the Congress of Deputies a report on the development of its activities and on the situation of the organized financial markets. The Chairman of the Commission shall appear before the aforementioned Committee of the Congress to account for such report, as well as as many times as required to do so.

The fourth paragraph is added by art. 2.1 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Third paragraph drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 23: #a14]

Article 14

1. The National Securities Market Commission is a public law entity, with its own legal personality and full public and private capacity, which shall be governed by the provisions of this Law and by the provisions that complete or develop it.

2. In the exercise of its public functions, and in the absence of provisions in this Law and in the rules that complete or develop it, the National Securities Market Commission shall act in accordance with the provisions of Law 30/1992, of 26 November, on the Legal Regime of Public Administrations and the Common Administrative Procedure, and in Law 6/1997, of 14 April, on the Organization and Functioning of the General State Administration.

3. The contracts entered into by the National Securities Market Commission shall be governed by the provisions of the consolidated text of the Law on Contracts of Public Administrations, approved by Royal Legislative Decree 2/2000, of 16 June.

4. The Commission shall also be governed by those provisions applicable to it of the consolidated text of the General Budgetary Law, approved by Royal Legislative Decree 1091/1998, of 23 September.

5. The Commission's acquisitions of assets shall be subject, without any exception, to private law.

6. The Government and the Ministry of Economy shall exercise with respect to the National Securities Market Commission the powers attributed to them by this Law, with strict respect for its sphere of autonomy.

7. The personnel serving at the National Securities Market Commission shall be linked to it by a relationship subject to the rules of labor law. The selection of this personnel, with the exception of those of a managerial nature, shall be carried out through public call and in accordance with systems based on the principles of equality, merit and ability.

The National Securities Market Commission shall decide on the appropriateness of calling selection processes for personnel intended to fill the vacancies in the staff approved in the entity's operating and capital budget, such processes being exempt from the Public Employment Offer.

The personnel of the National Securities Market Commission shall be subject to Law 53/1984, of 26 December, on Incompatibilities of Personnel in the Service of Public Administrations. Likewise, they shall be obliged to notify, in accordance with the provisions established in the Internal Rules of Procedure of the National Securities Market Commission, the transactions they carry out in the securities markets, either directly or through an intermediary. This same provision shall determine the limitations to which this personnel shall be subject regarding the acquisition, sale or availability of such securities.

8. The National Securities Market Commission shall annually prepare a draft budget, with the structure indicated by the Ministry of Finance, and shall submit it to the latter for elevation to the Government Agreement and subsequent referral to the Cortes Generales, integrated into the General State Budget. Variations in the budget of the National Securities Market Commission shall be authorized by the Minister of Finance, when their amount does not exceed 5 per 100 of the same, and by the Government, in all other cases.

9. The economic and financial control of the National Securities Market Commission shall be carried out exclusively through periodic checks or audit procedures, by the General Comptroller of the State Administration, without prejudice to the functions corresponding to the Court of Auditors.

10. The Council of the National Securities Market Commission shall approve the Internal Rules of Procedure which shall establish the organic structure of the Commission; the distribution of powers among the different bodies; the internal operating procedures; the specific regime applicable to personnel when they cease to provide services in it, without prejudice, in this case, to the provisions of paragraph 7, second paragraph, of this article and in article 21 of this Law regarding incompatibility regimes, the procedures for admission of personnel, in accordance with the principles indicated in paragraph 7 of this article, as well as any questions relating to the operation and regime of action of the National Securities Market Commission that are necessary in accordance with the provisions of this Law.

Paragraph 7 is amended by art. 94.2 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607.

Amended by art. 46.1 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 23/11/2002, in force from 24/11/2002.

Original text, published on 29/07/1988, in force from 29/01/1989.

Upload

[Block 24: #a15]

Article 15

1. The National Securities Market Commission, for the proper exercise of the powers attributed to it by this Law, may issue the provisions required for the development and execution of the rules contained in the royal decrees approved by the Government or in the orders of the Minister of Economy and Competitiveness, provided that these provisions expressly empower it to do so.

2. The provisions issued by the National Securities Market Commission, referred to in the previous paragraph, shall be prepared by it, following the appropriate technical and legal reports from its competent services. Such provisions shall be called Circulars, shall be approved by the Council of the Commission, shall not take effect until published in the "Boletín Oficial del Estado" and shall enter into force in accordance with the provisions of article 2.1 of the Civil Code.

3. The National Securities Market Commission may draw up technical guides, addressed to supervised entities and groups, indicating the criteria, practices, methodologies or procedures that it considers appropriate for compliance with the regulations applicable to them. Such guides, which must be made public, may include the criteria that the National Securities Market Commission will follow in the exercise of its supervisory activities. The National Securities Market Commission may require supervised entities and groups to explain the reasons why, where applicable, they have departed from said criteria, practices, methodologies or procedures.

The National Securities Market Commission may adopt as its own, and transmit as such to entities and groups, as well as develop, supplement or adapt the guides that, on such matters, are approved by international bodies or committees active in the regulation and supervision of the securities market.

Amended by art. 94.3 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 25: #a16]

Article 16

The provisions and resolutions issued by the National Securities Market Commission in the exercise of the administrative powers conferred on it in this Law shall exhaust the administrative remedy and may be appealed in contentious-administrative proceedings. Excepted from this rule are:

a) The resolutions it issues in sanctioning matters, whose regime shall be that provided for in article 97.

b) The resolutions it issues in matters of intervention and replacement of administrators, whose regime shall be that provided for in article 107.

Amended by art. 2.2 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 26: #cii-2]

CHAPTER II

Organization

[Block 27: #a17]

Article 17

The National Securities Market Commission shall be governed by a Council, to which shall correspond the exercise of all the powers assigned to it by this Law and those attributed to it by the Government or the Minister of Economy and Finance in the regulatory development thereof.

Said Council shall be composed of:

a) A President and a Vice-President, who shall be appointed by the Government, on the proposal of the Minister of Economy and Finance, from among persons of recognized competence in matters related to the securities market.

b) The Director General of the Treasury and Financial Policy and the Deputy Governor of the Bank of Spain, who shall have the status of ex officio Councilors.

c) Three Councilors, appointed by the Minister of Economy and Finance from among persons of recognized competence in matters related to the securities market.

The person designated by the Council from among those who provide their services in the Commission shall act as Secretary, with voice but without vote.

[Block 28: #a18]

Article 18

1. Within the framework of the functions attributed to the National Securities Market Commission by article 13 of this Law and for the exercise of the powers conferred on the Council by article 17, the Council of the National Securities Market Commission shall have the following powers:

a) To approve the Circulars referred to in article 15 of this Law.

b) To approve the Internal Rules of Procedure of the National Securities Market Commission referred to in article 14 of this Law.

c) To approve the draft budget of the Commission.

d) To constitute the Executive Committee, regulated in this article.

e) To appoint the senior management positions of the National Securities Market Commission, on the proposal of its President.

f) To approve the annual reports referred to in article 13 of this Law.

g) To approve or propose all those matters that legally correspond to it.

Within three months from the taking of office of any member of the Council, it must proceed, in extraordinary session, to confirm, modify or revoke, expressly, each and every one of its delegations of powers to the President and the Vice-President or to the Executive Committee.

2. The President of the National Securities Market Commission shall exercise the following functions:

a) To hold the legal representation of the Commission.

b) To agree the convening of ordinary and extraordinary sessions of the Council and of the Executive Committee of the National Securities Market Commission.

c) To direct and coordinate the activities of all the management bodies of the National Securities Market Commission.

d) To authorize expenditures and order payments of the Commission.

e) To enter into contracts and agreements of the National Securities Market Commission.

f) To perform the superior leadership of all the staff of the Commission.

g) To exercise the powers expressly delegated to it by the Council.

h) To exercise the other functions attributed to it by the current legal system.

3. The Vice-President of the National Securities Market Commission shall have the following powers:

a) To replace the President in cases of vacancy, absence or illness.

b) To chair the Advisory Committee of the National Securities Market Commission referred to in article 22 of this Law.

c) To be a member, as Vice-President, of the Executive Committee of the National Securities Market Commission.

d) To exercise the functions delegated to it by the President or the Council.

In cases of vacancy, absence or illness, the Vice-President shall be replaced by the Director provided for in article 17.c) of this Law with the greatest seniority in the position and, where seniority is equal, by the older one.

4. The Executive Committee shall be composed of the Chairman, the Vice-President and the Directors provided for in article 17 c) of this Law. The Secretary of the Board of the National Securities Market Commission shall be the Secretary of the Executive Committee, with a voice but no vote.

5. The Executive Committee shall have the following powers:

a) To prepare and study the matters to be submitted to the Board of the National Securities Market Commission.

b) To study, report on and deliberate upon the matters submitted to it for consideration by the Chairman.

c) To coordinate the actions of the different management bodies of the Commission, without prejudice to the powers vested in the Chairman.

d) To approve, in the sphere of private law, the Commission's acquisitions of assets and to dispose of its property.

e) To decide on the administrative authorisations that have been assigned to it by delegation of the Board, as well as to exercise those powers expressly delegated to it by the Board.

Amended by art. 46.2 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Select wording:

Last update, published on 23/11/2002, in force from 24/11/2002.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 29: #a19]

Article 19

The term of office of the Chairman, the Vice-President and the Directors referred to in paragraph c) of article 17 shall be four years, at the end of which it may be renewed once only.

If, during the period of their term of office, the Chairman, the Vice-President or any of the Directors referred to in paragraph c) of article 17 ceases to hold office, their successor shall cease to hold office at the end of their predecessor's term of office. Where the latter cessation occurs before one year has elapsed since the appointment, the limit provided for in the last sentence of the preceding paragraph shall not apply, and the term of office may be renewed twice

[Block 30: #a20]

Article 20

The Chairman and the Vice-President shall cease to hold office for the following reasons:

a) Expiry of their term of office.

b) Resignation accepted by the Government.

c) Removal agreed by the Government for serious breach of their obligations, permanent incapacity to perform their duties, supervening incompatibility or conviction for an intentional offence, following the opening of proceedings by the Ministry of Economy and Finance.

The same grounds for cessation shall apply to the Directors referred to in paragraph c) of article 17, it being for the Minister of Economy and Finance to accept the resignation or agree the removal.

[Block 31: #a21]

Article 21

The Chairman, the Vice-President and the Directors of the National Securities Market Commission shall be subject to the incompatibility regime for Senior Positions of the Administration. Upon ceasing to hold office and for the following two years, they may not engage in any professional activity related to the Securities Market. The financial compensation they shall receive by virtue of that limitation shall be determined by regulation.

[Block 32: #a22]

Article 22

The Advisory Committee of the National Securities Market Commission is the advisory body of its Board. Said Committee shall be chaired by the Vice-President of the Commission, who shall not have a vote in relation to its reports, the number of its members and the manner of their appointment being those determined by regulation. The members shall be appointed to represent the market infrastructures, the issuers, the investors, the credit institutions and insurance undertakings, the professional groups designated by the National Securities Market Commission and the investment guarantee funds, plus one further representative designated by each of the Autonomous Communities with competence in matters of securities markets in whose territory there is an official secondary market.

Amended by final provision 2.1 of Law 21/2011, of 26 July. Ref. BOE-A-2011-12909 .

Amended by art. 2.3 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 27/07/2011, in force from 28/07/2011.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 33: #a23]

Article 23

The Advisory Committee of the National Securities Market Commission shall report on all questions put to it by the Board.

Its report shall be mandatory in relation to:

a) The provisions of the National Securities Market Commission referred to in article 15 of this Law.

b) The authorisation, revocation and corporate transactions of investment services companies and of the remaining persons or entities acting under article 65.2, where so established by regulation, having regard to their economic and legal significance.

c) The authorisation and revocation of branches of investment services companies from countries that are not members of the European Union, and the remaining subjects of the Securities Market, where so established by regulation, taking into account the economic and legal relevance of such subjects.

Without prejudice to its status as a consultative body of the Council of the National Securities Market Commission, the Consultative Committee shall report on draft general provisions on matters directly related to the securities market that are referred to it by the Government or by the Ministry of Economy and Finance, with the aim of giving effect to the principle of hearing the affected sectors in the procedure for drawing up administrative provisions.

It is amended by final provision 2.2 of Law 21/2011, of 26 July. Ref. BOE-A-2011-12909 .

Letter c) is repealed by final provision 5.1 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

It is amended by art. 2.4 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

First paragraph drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 27/07/2011, in force from 28/07/2011.

Amendment published on 05/03/2011, in force from 06/03/2011.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 34: #a24]

Article 24

The initial patrimony of the National Securities Market Commission shall consist of an initial endowment of five hundred million pesetas.

The resources of the National Securities Market Commission shall consist of:

a) The assets and securities that constitute the patrimony and the products and income thereof.

b) The fees it receives for carrying out its activities or providing its services.

c) The transfers made by the Ministry of Economy and Finance charged to the State Budget.

The profits of each financial year may be allocated to:

a) Covering losses from previous financial years.

b) Creating the reserves necessary to finance the investments that the National Securities Market Commission must carry out for the proper fulfilment of the objectives established in article 13 of this Law.

c) Creating the reserves that ensure the availability of a working capital fund appropriate to its operating needs.

d) Their incorporation as State income of the financial year in which the annual accounts of the financial year that recorded the aforementioned profit are approved.

Together with the annual accounts for the financial year, the Council of the National Securities Market Commission shall submit to the Government for approval the proposal for distribution of the result, together with a report justifying that the needs contemplated in letters a), b) and c) above are duly covered by said proposal.

The last paragraph is added by art. 153.1 of Law 13/1996, of 30 December. Ref. BOE-A-1996-29117

Letter b) is amended by art. 13.7 of Law 22/1993, of 29 December. Ref. BOE-A-1993-31153

Select wording:

Last update, published on 31/12/1996, in force from 01/01/1997.

Amendment published on 31/12/1993, in force from 01/01/1994.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 35: #tiii]

TITLE III

Primary securities market

[Block 36: #ci]

CHAPTER I

General provisions

It is added by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Added text, published on 14/03/2005, in force from 15/03/2005.

[Block 37: #a25]

Article 25. Freedom of issue, placement of issues and eligibility requirements for admission to trading on an official secondary market.

1. Issues of securities shall not require prior administrative authorisation.

2. For the placement of issues, any technique appropriate at the choice of the issuer may be used. In the event that the issuer is obliged to prepare a prospectus, the placement must comply with the conditions set out therein.

3. The issuer must be validly incorporated in accordance with the legislation of the country in which it is domiciled and must be operating in accordance with its deed of incorporation and articles of association or equivalent documents.

4. The securities must comply with the legal regime to which they are subject.

5. The securities shall be freely transferable.

It is amended by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 38: #a26]

Case law

Article 26. Information requirements for admission to trading on an official secondary market.

1. Admission to trading of securities on an official secondary market shall not require prior administrative authorisation. However, it shall be subject to prior compliance with the following requirements:

a) The submission and registration with the National Securities Market Commission of the documents proving that the issuer and the securities are subject to the legal regime applicable to them.

b) The submission and registration with the National Securities Market Commission of the issuer's financial statements prepared and audited in accordance with the legislation applicable to said issuer.

c) The submission, approval and registration with the National Securities Market Commission of an information prospectus, as well as its publication.

2. In the case of non-equity securities issued by the State, the autonomous communities and local entities, compliance with the above requirements shall not be necessary. However, these issuers may prepare the information prospectus in accordance with the provisions of this chapter. This prospectus shall have cross-border validity in accordance with the provisions of Article 29.

For the purposes of the provisions of this article, equity securities shall mean shares and negotiable securities equivalent to shares, as well as any other type of negotiable securities that give the right to acquire shares or securities equivalent to shares, by their conversion or by the exercise of the rights they confer, provided that such securities are issued by the issuer of the underlying shares or by an entity belonging to the issuer's group.

3. Additionally, the Government may totally or partially exempt from compliance with the requirements established in Article 25 and in paragraph 1 above the admission to trading of certain securities depending on the nature of the issuer or of the securities, the amount of the admission or the nature or number of investors to whom they are addressed. When the exemptions are based on the nature of the investor, additional requirements may be imposed to guarantee their correct identification.

4. The procedure for the admission of securities to trading on official secondary markets must facilitate the trading of securities in a correct, orderly and efficient manner. Said procedure shall be regulated by regulation and the conditions to be met for the approval of the information prospectus by the National Securities Market Commission and for its publication shall be determined. The lack of an express resolution by the National Securities Market Commission on the prospectus during the period established by regulation shall be deemed a rejection.

5. Likewise, the number of financial years that the financial statements referred to in paragraph 1.b) must cover shall be determined by regulation.

6. Advertising relating to admission to trading on a regulated market shall comply with the provisions of Article 94.

Amended by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 40: #a27]

Case law

Article 27. Content of the prospectus.

1. The prospectus shall contain the information relating to the issuer and the securities to be admitted to trading on an official secondary market. The prospectus shall contain all the information that, according to the specific nature of the issuer and the securities, is necessary for investors to be able to make an assessment, with sufficient information, of the assets and liabilities, the financial situation, profits and losses, as well as the prospects of the issuer, and where applicable of the guarantor, and of the rights inherent in such securities. This information shall be presented in an easily analysable and comprehensible form.

2. The prospectus must be signed by a person with the power to bind the issuer of the securities.

3. Except for admissions to trading of non-equity securities whose unit nominal value is equal to or greater than 100,000 euros, the prospectus shall contain a summary that, prepared in a standardised format, concisely and in non-technical language, provides the key information to help investors determine whether or not to invest in said securities.

Key information shall mean the essential and correctly structured information to be provided to investors so that they can understand the nature and risks inherent in the issuer, the guarantor and the securities offered to them or to be admitted to trading on a regulated market, and so that they can decide which offers of securities are worth further examination.

Without prejudice to what is determined by regulation, the following elements shall form part of the key information, at a minimum:

a) A brief description of the essential characteristics and risks associated with the issuer and any guarantors, including assets, liabilities and financial situation.

b) A brief description of the essential characteristics and risks associated with the investment in the securities in question, including the rights inherent in the securities.

c) The general conditions of the offer, including the estimated expenses charged to the investor by the issuer or the offeror.

d) Information on admission to listing.

e) The reasons for the offer and the use of proceeds.

Likewise, said summary shall warn that:

1st It must be read as an introduction to the prospectus.

2nd Any decision to invest in the securities must be based on the investor's consideration of the prospectus as a whole.

3.º No civil liability may be imposed on any person exclusively on the basis of the summary, unless it is misleading, inaccurate or inconsistent in relation to the other parts of the prospectus, or does not provide, read together with the other parts of the prospectus, essential information to assist investors in determining whether or not to invest in the securities.

4. The content of the different types of prospectuses shall be regulated by ministerial order and the exceptions to the obligation to include certain information shall be specified, with the National Securities Market Commission being responsible for authorising such omission. Upon express authorisation, the aforementioned Commission may develop or update the content of the order.

The determination of the models for the different types of prospectuses, of the documents that must accompany them and of the cases in which the information contained in the prospectus may be incorporated by reference shall also correspond to the Minister of Economy and Finance and, with his express authorisation, to the National Securities Market Commission.

Section 3 is amended by final provision 3.1 of Law 9/2012, of 14 November. Ref. BOE-A-2012-14062 .

Section 3 is amended by final provision 3.1 of Royal Decree-law 24/2012, of 31 August. Ref. BOE-A-2012-11247 .

Amended by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 15/11/2012, in force from 15/11/2012.

Amendment published on 31/08/2012, in force from 31/08/2012.

Amendment published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 41: #a28]

Case law

Article 28. Prospectus liability.

1. Responsibility for the information contained in the prospectus shall fall, at least, on the issuer, the offeror or the person requesting admission to trading on an official secondary market and the directors of the foregoing, in accordance with the conditions established by regulation.

Likewise, the responsibility indicated in the preceding paragraph shall fall on the guarantor of the securities in relation to the information it must prepare. The managing entity shall also be responsible for the verification tasks it carries out under the terms established by regulation.

Those other persons who agree to assume responsibility for the prospectus shall also be responsible, under the conditions established by regulation, provided that this is stated in said document, as well as those other persons not included among the foregoing who have authorised the content of the prospectus.

2. The persons responsible for the information contained in the prospectus shall be clearly identified in the prospectus with their name and position or, in the case of legal persons, with their name and registered office. Likewise, they must declare that, to their knowledge, the data in the prospectus conform to reality and that no fact that by its nature could alter its scope has been omitted from it.

3. In accordance with the conditions determined by regulation, all the persons indicated in the preceding paragraphs, as the case may be, shall be liable for all damages and losses caused to the holders of the securities acquired as a consequence of false information or omissions of relevant data in the prospectus or in the document that the guarantor must prepare, as applicable.

The action to claim liability shall prescribe three years from the time the claimant could have become aware of the falsehood or the omissions in relation to the content of the prospectus.

4. No liability may be imposed on the persons mentioned in the preceding paragraphs on the basis of the summary or its translation, unless it is misleading, inaccurate or inconsistent in relation to the other parts of the prospectus, or does not provide, read together with the other parts of the prospectus, essential information to assist investors in determining whether or not to invest in the securities.

Section 4 is amended by final provision 3.2 of Law 9/2012, of 14 November. Ref. BOE-A-2012-14062 .

Section 4 is amended by final provision 3.2 of Royal Decree-law 24/2012, of 31 August. Ref. BOE-A-2012-11247 .

Amended by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 15/11/2012, in force from 15/11/2012.

Amendment published on 31/08/2012, in force from 31/08/2012.

Amendment published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 42: #a29]

Article 29. Cross-border validity of the prospectus.

Without prejudice to the provisions of article 30, the prospectus approved by the National Securities Market Commission, as well as its supplements, shall be valid for admission to trading in any host Member States, provided that the National Securities Market Commission notifies the European Securities and Markets Authority and the competent authority of each host Member State in accordance with the provisions established by regulation.

The National Securities Market Commission shall publish on its website a list of the certificates of approval of prospectuses and their possible supplements, as well as a link, where appropriate, to the publication of those documents on the website of the competent authority of the home Member State, or on the website of the issuer, or on the website of the regulated market.

Likewise, without prejudice to the provisions of the aforementioned article 30, the prospectus approved by the competent authority of the home State, as well as its supplements, shall be valid for admission to trading in Spain, provided that said competent authority notifies the European Securities and Markets Authority and the National Securities Market Commission. In this case, the National Securities Market Commission shall refrain from approving said prospectus or from carrying out any administrative procedure in relation to it.

Amended by art. 3.1 of Royal Decree-law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by art. 1.4 of Royal Decree-law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select wording:

Last update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 14/03/2005, in force from 15/03/2005.

Original text, published on 29/07/1988, in force from 29/01/1989.

Upload

[Block 43: #a30]

Article 30. Preventive measures.

1. When Spain is the host Member State, the National Securities Market Commission must inform the competent authority of the home Member State and the European Securities and Markets Authority if it observes that the issuer or the financial entities responsible for the public offering have committed irregularities, or if it observes violations of the issuer's obligations arising from the admission to listing on an official secondary market.

2. In the event that, despite the measures adopted by the competent authority of the home Member State or because such measures have proved inadequate, the issuer or the financial entity responsible for the public offering persists in the violation of the relevant legal or regulatory provisions, the National Securities Market Commission, after informing the competent authority of the home Member State and the European Securities and Markets Authority, shall adopt all pertinent measures to protect investors. The National Securities Market Commission shall immediately inform the European Commission and the European Securities and Markets Authority of the measures adopted.

Amended by art. 3.2 of Royal Decree-law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by art. 1.4 of Royal Decree-law 5/2005, of 11 March. Ref. BOE-A-2005-4172

The second paragraph is amended by art. 3 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 14/03/2005, in force from 15/03/2005.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

Upload

[Block 44: #a30bis]

Case law

Article 30 bis. Public offer for sale or subscription of securities.

1. A public offer for sale or subscription of securities is any communication to persons in any form or by any means that presents sufficient information on the terms of the offer and of the securities being offered, so as to enable an investor to decide to acquire or subscribe to these securities.

The obligation to publish a prospectus shall not apply to any of the following types of offers, which, consequently for the purposes of this Law, shall not be considered a public offer:

a) An offer of securities addressed exclusively to qualified investors.

b) An offer of securities addressed to fewer than 150 natural or legal persons per Member State, not including qualified investors.

c) An offer of securities addressed to investors who acquire securities for a minimum amount of 100,000 euros per investor, for each separate offer.

d) An offer of securities whose unit nominal value is at least 100,000 euros.

e) An offer of securities for a total amount in the European Union of less than 5,000,000 euros, which shall be calculated over a period of 12 months.

In the case of placement of issues referred to in letters b), c), d) and e) of this paragraph, addressed to the general public using any form of advertising communication, an entity authorized to provide investment services must intervene for the purposes of marketing the issued securities. This obligation shall not apply to the exercise of the own activity of duly authorized crowdfunding platforms.

2. A public offer for sale or subscription of securities may not be made without the prior publication of an information prospectus approved by the National Securities Market Commission. By regulation, exceptions to the obligation to publish a prospectus in public offers for sale or subscription shall be established, depending on the nature of the issuer or the securities, the amount of the offer or the nature or number of investors to whom they are addressed, as well as the adaptations of the requirements established in the regulation of admissions that are necessary for public offers.

3. Public offers for sale or subscription of securities not exempted from the obligation to publish an information prospectus shall be subject to all the regulation relating to the admission to trading of securities on regulated markets contained in this title, with the adaptations and exceptions determined by regulation. For these purposes, it shall be taken into account that article 25.5 may not apply to public offers for sale or subscription of securities.

Paragraph 1 is amended by art. 43.1 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Paragraph 1 is amended by final provision 3.3 of Law 9/2012, of 14 November. Ref. BOE-A-2012-14062 .

Paragraph 1 is amended by final provision 3.3 of Royal Decree-law 24/2012, of 31 August. Ref. BOE-A-2012-11247 .

A paragraph is added to paragraph 1 by art. 18.1 of Royal Decree-Law 6/2010, of 9 April. Ref. BOE-A-2010-5879

Added by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select version:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 15/11/2012, in force from 15/11/2012.

Amendment published on 31/08/2012, in force from 31/08/2012.

Amendment published on 13/04/2010, in force from 14/04/2010.

Amendment published on 14/03/2005, in force from 15/03/2005.

Added text, published on 14/03/2005, in force from 15/03/2005.

[Block 45: #cii-3]

CHAPTER II

Issues of bonds or other securities that acknowledge or create debt

Added by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Added text, published on 14/03/2005, in force from 15/03/2005.

[Block 46: #a30ter]

Article 30 ter. Exemption from requirements.

1. The provisions of this article shall apply to all issues of bonds or other securities that acknowledge or create debt issued by Spanish companies provided that:

a) They are to be admitted to trading on an official secondary market or are to be the subject of a public offer for sale for which the preparation of a prospectus subject to approval and registration by the National Securities Market Commission is required under the terms set out in the preceding chapter, or

b) they are to be admitted to trading on a multilateral trading facility established in Spain.

Issues of bonds or other securities that acknowledge or create debt provided for in Title XI of the consolidated text of the Capital Companies Act approved by Royal Legislative Decree 1/2010, of 2 July, shall be understood to be included in the preceding paragraph, provided that they comply with the provisions thereof.

Participating securities referred to in article 26.2, second paragraph, such as bonds convertible into shares, shall not be considered bonds or other securities that acknowledge or create debt, provided that they are issued by the issuer of the underlying shares or by an entity belonging to the issuer's group.

2. It shall not be necessary to execute a public deed for the issue of the securities referred to in this article.

The publicity of all acts relating to the issues of securities referred to in paragraph 1.a) shall be governed by the provisions of this Law and its implementing provisions.

The publicity of all acts relating to the issues of securities referred to in paragraph 1.b) shall be carried out through the systems established for that purpose by the multilateral trading facilities.

3. For the issues referred to in paragraph 1.a), the conditions of each issue, as well as the issuer's capacity to formalise them, when they have not been regulated by law, shall be subject to the clauses contained in the issuer's Articles of Association and shall be governed by the provisions of the issue agreement and the information prospectus.

4. For the issues referred to in paragraph 1.b), the conditions legally required for the issue and the characteristics of the securities shall be recorded in a certificate issued by the persons authorised in accordance with the regulations in force. This certificate shall be considered suitable for registering the securities in book-entry form in accordance with the provisions of article 6.

Amended by art. 43.2 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Amended by art. 19.1 of Law 11/2013, of 26 July. Ref. BOE-A-2013-8187 .

Amended by final provision 3 of Law 25/2005, of 24 November. Ref. BOE-A-2005-19412

Added by art. 1.4 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Select version:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 27/07/2013, in force from 28/07/2013.

Amendment published on 25/11/2005, in force from 25/12/2005.

Amendment published on 14/03/2005, in force from 15/03/2005.

Added text, published on 14/03/2005, in force from 15/03/2005.

[Block 47: #a30quater]

Article 30 quater. Scope of application of the bondholders' syndicate.

Chapter IV of Title XI of the consolidated text of the Capital Companies Act shall apply to issues of bonds or other securities that acknowledge or create debt and that qualify as a public offer of subscription when:

a) Their terms and conditions are governed by Spanish law or by the law of a State that is not a member of the European Union nor belonging to the Organisation for Economic Co-operation and Development, and

b) they take place in Spanish territory or their admission to trading takes place on a Spanish official secondary market or on a multilateral trading facility established in Spain.

Amended by art. 43.2 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Amended by art. 19.2 of Law 11/2013, of 26 July. Ref. BOE-A-2013-8187 .

Added by art. 19 of Royal Decree-Law 4/2013, of 22 February. Ref. BOE-A-2013-2030

Select version:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 27/07/2013, in force from 28/07/2013.

Amendment published on 23/02/2013, in force from 24/02/2013.

Added text, published on 23/02/2013, in force from 24/02/2013.

[Block 48: #tiv]

TITLE IV

Official secondary securities markets

[Block 49: #ci-7]

CHAPTER I

General provisions

[Block 50: #a31]

Article 31

1. Regulated markets are those multilateral systems that allow bringing together the various buying and selling interests in financial instruments to give rise to contracts with respect to the financial instruments admitted to trading, and that are authorised and operate regularly, in accordance with the provisions of this Chapter and its implementing rules, subject in any case to conditions of access, admission to trading, operating procedures, information and publicity.

2. Spanish regulated markets receive the name of official secondary markets. For these purposes, the following shall be considered official secondary securities markets:

a) The Stock Exchanges.

b) The Public Debt Market in Book-Entry Form.

c) The Futures and Options Markets, whatever the type of underlying asset, financial or non-financial.

d) The Fixed Income Market, AIAF.

e) Any others, of state scope, that, complying with the requirements provided in paragraph 1, are authorised within the framework of the provisions of this Law and its implementing regulations, as well as those, of regional scope, that the autonomous communities with competence in the matter authorise.

3. Under the terms provided in this Law and its implementing provisions, securities and other financial instruments that by their characteristics are suitable for it may be traded on the official secondary markets.

4. The National Securities Market Commission shall keep updated and send to the European Securities and Markets Authority and to the remaining Member States of the European Union the list of official secondary markets, likewise communicating any modification of the list.

5. The direct or indirect participation of companies that administer Spanish official secondary markets in other companies that manage regulated markets outside Spain shall require the prior authorisation of the National Securities Market Commission, which shall have a period of two months from the date on which it has been informed to, where appropriate, oppose the participation. If the Commission does not pronounce itself within said period, it shall be understood that it accepts the application.

6. The participation, direct or indirect, in the capital of companies that administer Spanish official secondary markets shall be subject to the regime of significant participations provided in article 69 of this Law for investment services companies, under the terms determined by regulation, it being understood that any participation that reaches, directly or indirectly, at least 1 percent of the capital or voting rights of the company or that, without reaching that percentage, allows exercising a notable influence in the company, under the terms determined by regulation, shall in any case have such character. Without prejudice to the powers to oppose a significant participation under the terms provided in paragraph 6 of said article 69, the National Securities Market Commission may oppose the acquisition of a significant participation in the share capital of those companies when it considers that it is necessary to ensure the proper functioning of the markets or to avoid distortions in them, as well as, in the case of acquirers from third States, because equivalent treatment is not given to Spanish entities in their country of origin. The National Securities Market Commission shall communicate to the Ministry of Economy and Competitiveness its opposition to the acquisition of the significant participation and the reasons on which it is based.

Paragraph 6 is modified by art. 94.4 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Paragraph 4 is modified by art. 3.3 of Royal Decree-law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Modified by the sole art.5 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 6 is modified by art. 2.1 of Law 12/2006, of 16 May. Ref. BOE-A-2006-8637

Paragraph 6 is added and paragraphs 4, 5 and letter b) of paragraph 2 are modified by arts. 1.4.1, 2.1 and 4 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Modified by art. 4.1 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/05/2006, in force from 18/05/2006.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 51: #a31bis]

Article 31 bis. Authorisation and revocation.

1. To commence their activity, the official secondary markets must obtain the authorisation of the National Securities Market Commission. The period to resolve the authorisation procedure shall be six months from when the application or, where applicable, the information that completes the required documentation, has entered the registry of the National Securities Market Commission. In the absence of express resolution within said period, the application shall be understood as rejected. The National Securities Market Commission shall inform the Ministry of Economy and Competitiveness of the opening of the authorization procedure, indicating the essential elements of the file to be processed, and of its completion, indicating the direction of the resolution adopted by the National Securities Market Commission.

In the case of markets of autonomous scope, such authorization shall be granted by the Autonomous Community with competence in the matter.

2. Official secondary markets must meet the following requirements to obtain authorization:

a) Designate a governing company, which shall take the form of a public limited company and whose basic functions shall be the organization, operation and supervision of the market.

b) Submit the draft articles of association of the governing company.

c) Prepare a program of activities detailing the organizational structure of the market, the financial instruments capable of being traded on it and the services the governing company intends to provide.

d) That the members of the board of directors of the governing company and the persons who will effectively direct the activities and operations of the market have a recognized business or professional reputation and have adequate knowledge and experience in matters related to the securities market.

e) That the shareholders who are to have a significant participation in the governing company of the market are suitable, in accordance with the provisions of article 67.

f) That the governing company has the minimum share capital and minimum own resources established by regulation, taking into account the need to ensure its orderly operation and considering the nature and scope of the operations carried out on it and the type and degree of risk to which it is exposed.

g) Prepare a draft market regulation that contains at least the rules applicable to negotiable financial instruments, issuers, members, guarantee regime, types of operations, trading, rules on clearing, settlement and recording of transactions, distribution of dividends and other corporate events, supervision and discipline of the market and organizational measures relating, among other matters, to conflicts of interest and risk management. Likewise, consultation with the issuers of financial instruments admitted to trading on the market and with the market members must be provided for when a substantial modification of its regulation is proposed.

3. With the exceptions established by regulation, the modification of the articles of association of the governing company or of the market regulation shall require prior approval by the National Securities Market Commission or the Autonomous Community with competence in the matter, in the case of markets of autonomous scope.

4. The National Securities Market Commission may revoke the authorization granted to an official secondary market when any of these cases occurs:

a) The market does not make use of the authorization within a period of twelve months or expressly renounces it.

b) Due to lack of activity in the market during the six months prior to the revocation.

c) It has obtained the authorization by means of false statements or any other irregular means.

d) It ceases to meet the requirements to which the granting of the authorization was subject.

e) It incurs a very serious infringement, in accordance with the provisions of title VIII of this Law.

The National Securities Market Commission shall inform the Ministry of Economy and Competitiveness of the revocation of the authorization. Any revocation of an authorization shall be notified by the National Securities Market Commission to the European Securities and Markets Authority.

5. The precise rules for the application of this provision shall be developed by regulation.

6. The Autonomous Communities with competence in the matter and with respect to markets of autonomous scope may establish for those markets the additional organizational measures they deem appropriate.

7. The negotiable securities whose operations carried out in the multilateral trading segments of official secondary markets shall be subject to mechanisms allowing their orderly settlement and good completion through the necessary intervention of a central counterparty shall be determined by regulation.

8. In order to attend to the settlement of operations on negotiable securities executed on official secondary markets, their governing companies shall enter into agreements with at least one central securities depository and, where appropriate, with one or several central counterparties, without prejudice to the right of issuers to provide that their securities be registered in any central securities depository in accordance with article 49 of Regulation (EU) No. 909/2014 and the right of the members of official secondary markets to designate the settlement system in accordance with the provisions of article 44 quinquies of this Law.

Letter g) of paragraph 2 and paragraph 7 are amended and paragraph 8 is added by final provision 1.A).6 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision seven of the aforementioned Law regarding the application of this modification.

Paragraphs 1 and 4 are amended by arts. 94.5 and 94.6 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Paragraph 4 is amended by art. 3.4 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Please note that paragraph 7 enters into force on the date determined by the implementing rules.

Paragraph 7 is added by sole art. 2 of Law 32/2011, of 4 October. Ref. BOE-A-2011-15622 .

This modification enters into force on the date determined by the implementing rules, as established by final provision 6.

Added by the sole article.6 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 28/04/2015, in force from 29/04/2015.

Amendment published on 24/03/2012, in force from 25/03/2012.

Amendment published on 05/10/2011.

Amendment published on 20/12/2007, in force from 21/12/2007.

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 52: #a31ter]

Article 31 ter. Conditions for exercising.

To retain authorisation, official secondary markets must at all times comply with the requirements established in the preceding article, as well as the provisions contained in this Chapter.

Added by the sole article.7 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 53: #a31quater]

Article 31 quater. Appointment of directors and officers and replacement of the management company.

1. Once authorisation to commence activity has been received, subsequent appointments of members of the board of directors and of those holding management positions in the management company must be approved by the National Securities Market Commission or, where applicable, by the Autonomous Community with competence in the matter, in order to verify that the appointees meet the requirements of letters f) and g) of article 67.2 of this Law.

The National Securities Market Commission shall oppose the proposed changes when there are objective and demonstrable reasons to believe that they pose a significant threat to the proper and prudent management and operation of the market. The new appointments shall be deemed accepted if the National Securities Market Commission does not rule within three months from receipt of the notification.

2. The replacement of the management company of the official secondary market shall be subject to authorisation by the National Securities Market Commission. The period for resolving the procedure shall be three months from the submission of the application or from the completion of the required documentation. In the absence of an express resolution within said period, the application shall be deemed rejected. The National Securities Market Commission shall notify the Ministry of Economy and Competitiveness of the opening of the authorisation procedure, indicating the essential elements of the file to be processed, and of its completion, indicating the direction of the resolution adopted by the National Securities Market Commission.

In the case of markets of autonomous scope, such authorisation shall be granted by the Autonomous Community with competences in the matter.

Section 2 is amended by art. 94.7 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Added by the sole article.8 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 54: #a32]

Article 32

One. Access to trading on an official secondary market

1. The admission of securities to trading on official secondary markets shall require prior verification by the National Securities Market Commission of compliance with the requirements and procedure established in this law and its implementing regulations. In the case of securities negotiable on the Stock Exchanges, said verification shall be single and valid for all of them. Admission to trading on each of the official secondary markets shall additionally require the agreement of the governing body of the corresponding market, at the request of the issuer, who may request it, under its responsibility, once the securities have been issued or the corresponding book entries have been made.

2. The requirements and procedure for the admission of securities to trading on official secondary securities markets, as well as the publicity to be given to admission agreements, shall be determined by regulation. The requirements may be established differently for the different categories of securities or markets. Likewise, the requirements and procedure for the permanence of the securities in the event of a spin-off of companies shall be determined.

3. Notwithstanding the provisions of number 1 above, securities issued by the State and by the Official Credit Institute are considered admitted ex officio to trading on the Public Debt Market in Book Entries or, where applicable, on the other official secondary markets in accordance with what is determined in the issue. Securities issued by the Autonomous Communities shall be deemed admitted to trading by virtue of the mere request of the issuer. In all the above cases, they must, however, comply with the technical specifications of the market in question, in accordance with the provisions of the preceding number.

4. The competences contemplated in the preceding sections shall correspond to the Autonomous Communities with competences in the matter, with respect to securities traded exclusively on markets of autonomous scope and subject to compliance with specific requirements demanded in said markets.

Two. Special features in access to trading on an official secondary market from a multilateral trading facility.

1. Entities whose shares cease to be traded on a multilateral trading facility and become traded on an official secondary market, during a maximum transitional period of two years, shall not be obliged to comply with the following obligations:

a) The publication and dissemination of the second half-yearly financial report, contained in article 35.2, second paragraph.

b) The publication and dissemination of the interim management statement, contained in article 35.3.

2. In order to avail itself of the exemption provided for in the previous paragraph, the prospectus for admission to trading on the official secondary market must specify the entity's intention to avail itself of it in whole or in part, determining its duration. This indication shall be considered necessary information for the purposes of article 27.1.

3. When the capitalisation of the shares that are being traded exclusively on a multilateral trading facility exceeds five hundred million euros during a continuous period of more than six months, the issuing entity must apply for admission to trading on a regulated market within nine months. The governing entity of the multilateral trading facility shall ensure compliance with this obligation.

The National Securities Market Commission may set the terms under which entities of a strictly financial or investment nature, such as those regulated by Law 35/2003, of 4 November, on Collective Investment Institutions, Law 22/2014, of 12 November, regulating venture capital entities, other closed-end collective investment entities and the management companies of closed-end collective investment entities and amending Law 35/2003, of 4 November, on Collective Investment Institutions or Law 11/2009, of 26 October, regulating Listed Public Limited Companies for Investment in the Real Estate Market, shall be exempted from the previous obligation.

Please note that the six-month period referred to in this paragraph begins to run from the moment of the entry into force of Law 5/2015, of 27 April, as established by transitional provision 9 of the indicated rule. Ref. BOE-A-2015-4607 .

4. In the cases contemplated in this article, the entity shall not be obliged to carry out measures aimed at preventing a loss for shareholders in terms of liquidity of the securities.

Amended by art. 43.3 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Paragraph 1 is amended by art. 1.5 of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

Amended by art. 4.2 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 14/03/2005, in force from 15/03/2005.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 55: #a32bis]

Article 32 bis. Additional rules established by the markets for the admission of financial instruments to trading.

1. Without prejudice to the obligations contained in article 32, the markets must establish clear and transparent rules in relation to the admission to trading of financial instruments, which ensure that they can be traded correctly, orderly and efficiently and, when they are transferable securities, that they are freely transferable. In the case of derivative financial instruments, the rules shall guarantee, in particular, that the formulation of the contract subject to trading allows a correct price formation, as well as the existence of effective settlement conditions.

The provisions of this paragraph shall be applied in accordance with the provisions of articles 35, 36 and 37 of Commission Regulation 1287/2006, of 10 August 2006, implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive.

2. The markets must have effective mechanisms to:

a) verify that the issuers of transferable securities admitted to trading on the market comply with all their legal obligations with respect to the dissemination of information;

b) facilitate their members' access to the information published by virtue of this Law and its implementing provisions;

c) periodically verify that the financial instruments admitted to trading meet the admission requirements at all times.

3. A financial instrument that has been admitted to trading on an official secondary market or on a regulated market of another Member State may subsequently be admitted to trading on another official secondary market, even without the consent of the issuer and in accordance with the provisions, regarding admission to trading, of this Law and of Royal Decree 1310/2005, of 4 November, partially implementing Law 24/1988, of 28 July, on the Securities Market, regarding admission to trading on official secondary markets, public offers for sale or subscription and the prospectus required for such purposes.

The official secondary market must inform the issuer of this circumstance. The issuer shall not be obliged to directly provide the information required in paragraph 2 to any official secondary market that has admitted the financial instruments to trading without its consent. In these cases, it will be the governing body of the market itself that must have the necessary means to obtain and disseminate that information.

Added by art. único.9 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 56: #a32ter]

Article 32 ter. Obligations regarding market abuse.

The governing bodies shall supervise the transactions carried out by market members in order to detect breaches of market rules or anomalies in trading or conduct conditions that may constitute market abuse. To this end, the governing bodies shall:

a) report to the National Securities Market Commission any significant breach of its rules and any anomaly in trading or conduct conditions that may constitute market abuse;

b) immediately provide the National Securities Market Commission with the relevant information for the investigation and prosecution of the market abuse committed in the market;

c) provide full assistance in the investigation and prosecution of the market abuse committed in or through the market systems.

Added by art. único.10 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 57: #a33]

Article 33. Suspension of trading in financial instruments.

1. The National Securities Market Commission may suspend the trading of a financial instrument in the Spanish official secondary markets in which it is admitted when special circumstances arise that may disrupt the normal course of transactions in that financial instrument or that advise such a measure in the interest of investor protection. Such competence shall correspond to the Autonomous Community with competences in the matter, with respect to financial instruments traded exclusively in markets within its autonomous scope.

2. The National Securities Market Commission shall immediately make public the suspension agreement and shall inform the European Securities and Markets Authority and the competent authorities of the other Member States in which that instrument is traded, so that they agree to suspend its trading in their regulated markets, multilateral trading facilities and systematic internalisers under their supervision, unless doing so could cause serious harm to the interests of investors or to the orderly functioning of the market.

Likewise, the National Securities Market Commission, when it deems it appropriate, shall communicate the suspension decision to the authorities of third countries to whose markets the decision may affect.

Similarly, when the competent authority of another Member State communicates a suspension agreement to the National Securities Market Commission, the latter shall agree to suspend the trading of said financial instrument in the official secondary markets, the Spanish multilateral trading facilities and in systematic internalisers under its supervision, unless doing so could cause serious harm to the interests of investors or to the orderly functioning of the market.

3. Likewise, the governing body of an official secondary market may suspend the trading of a financial instrument that ceases to comply with the market rules in accordance with the conditions provided for in the market regulations, except in the case where such a decision could cause serious harm to the interests of investors or to the orderly functioning of the market. In any event, immediately after adopting the decision, it shall communicate it to the National Securities Market Commission and make it public. In accordance with the above, the National Securities Market Commission shall duly inform the competent authorities of the other Member States thereof.

4. The entities governing multilateral trading facilities and the entities referred to in Chapter III of Title XI shall be obliged to suspend the trading of a financial instrument from the moment the suspension agreement is made public.

The first paragraph of section 2 is amended by art. 3.5 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by art. único.11 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Latest update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 58: #a34]

Article 34. Exclusion from trading.

1. The National Securities Market Commission may agree to the exclusion from trading of those financial instruments that do not meet the dissemination, frequency or trading volume requirements established by regulation, and of those whose issuer does not comply with the obligations incumbent upon it, especially regarding the submission and publication of information, as well as those companies in which the liquidation phase has been opened in accordance with Law 22/2003, of 9 July, Insolvency, or that are in the corporate liquidation phase, in accordance with the provisions of the recast text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July. Without prejudice to the precautionary measures that may be adopted, such agreements shall be taken after hearing the issuing entity, except in those cases in which the exclusion is agreed upon due to the opening of the insolvency liquidation phase, or because the company is in the corporate liquidation phase. Such competence shall correspond to the Autonomous Community with competences in the matter, with respect to financial instruments traded exclusively on markets within its autonomous scope.

2. The National Securities Market Commission shall immediately make public the delisting agreement and shall inform the European Securities and Markets Authority and the competent authorities of the other Member States in which that instrument is traded, so that they may agree to delist it from trading on their regulated markets, multilateral trading facilities and systematic internalisers under their supervision, except where serious harm could be caused to the interests of investors or to the orderly functioning of the market.

Likewise, the National Securities Market Commission, whenever it deems appropriate, shall communicate the delisting agreement to the authorities of third countries to whose markets the decision might affect.

Similarly, when the competent authority of another Member State communicates a delisting agreement to the National Securities Market Commission, the latter shall delist that financial instrument from trading on the official secondary markets, the Spanish multilateral trading facilities and the systematic internalisers under its supervision, except where serious harm could be caused to the interests of investors or to the orderly functioning of the market.

3. Likewise, the governing body of an official secondary market may delist a financial instrument that ceases to comply with the market rules in accordance with the conditions set out in the market regulations, except where such a decision could cause serious harm to the interests of investors or to the orderly functioning of the market. In any event, immediately after adopting the decision, it shall communicate it to the National Securities Market Commission and make it public. In accordance with the provisions of the preceding paragraph, the National Securities Market Commission shall duly inform the competent authorities of the other Member States thereof.

4. The governing bodies of multilateral trading facilities and the other entities referred to in Chapter III of Title XI shall be obliged to delist the financial instrument from the moment the delisting agreement is made public.

5. Likewise, the delisting of a financial instrument from an official secondary market may also be requested by the issuing entity. Thus, when a company agrees to delist its shares from the official secondary markets, it shall promote a public takeover offer addressed to all the securities affected by the delisting. Those corporate transactions by virtue of which the shareholders of the listed company may become, in whole or in part, partners of another non-listed entity shall be deemed equivalent to delisting.

The conditions for setting the price and other requirements of the public offers provided for in this paragraph shall be established by regulation.

The National Securities Market Commission may exempt from the obligation to formulate a public takeover bid in those cases in which, through another equivalent procedure, the protection of the legitimate interests of the holders of shares affected by the exclusion is ensured, as well as those corresponding to the holders of convertible bonds and other securities giving the right to subscribe for them.

In the case of an offer prior to exclusion from trading, the limit for the acquisition of own shares established in Royal Legislative Decree 1564/1989, of 22 December, approving the Consolidated Text of the Law on Public Limited Companies for shares listed on an official secondary market shall be 10 per cent of the share capital. If, as a consequence of the completion of the offer, the own shares exceed this limit, they must be redeemed or disposed of within one year.

The exclusion decision and those relating to the offer and the price offered must be approved by the General Shareholders' Meeting.

At the time of convening the corporate bodies that must approve the offer, a report by the directors justifying in detail the proposal and the price offered shall be made available to the holders of the affected securities.

Paragraph 1 is amended by art. 43.4 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

The first paragraph of paragraph 2 is amended by art. 3.6 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by the sole art. 12 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 1 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

The first paragraph is amended by art. 4.3 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Second paragraph drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 13/04/2007, in force from 13/08/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 59: #a35]

Article 35. Periodic information obligations of issuers.

1. Where Spain is the home Member State, issuers whose securities are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall make public and disseminate their annual financial report within a maximum period of four months from the end of each financial year, and must ensure that it is kept available to the public for at least ten years. Likewise, they shall submit their annual accounts to an audit of accounts. The audit report shall be made public together with the annual financial report.

The annual financial report shall comprise the annual accounts and the management report reviewed by the auditor with the scope defined in article 208 of the Consolidated Text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December, as well as the statements of responsibility for their content.

In the notes to the financial statements of issuers whose shares are admitted to trading on an official secondary market or another regulated market domiciled in the European Union, information shall be provided on transactions by the directors and by the members of the supervisory board of a European public limited company domiciled in Spain that has opted for the dual system, or by persons acting on their behalf, carried out with the aforementioned issuer or with an issuer of the same group during the financial year to which the annual accounts refer, when the transactions are outside the ordinary course of the company's business or are not carried out under normal market conditions.

2. Where Spain is the home Member State, issuers whose shares or debt securities are admitted to trading on an official secondary market or another regulated market domiciled in the European Union shall make public and disseminate a half-yearly financial report relating to the first six months of the financial year, within a maximum period of three months from the end of the corresponding period. Issuers shall ensure that the report remains available to the public for at least ten years.

Where Spain is the home Member State, issuers whose shares are admitted to trading on an official secondary market or another regulated market domiciled in the European Union shall also be obliged to make public and disseminate a second half-yearly financial report referring to the twelve months of the financial year within a maximum period of two months from the end of the corresponding period. This obligation shall not apply where the annual financial report has been made public within the two months following the end of the financial year to which it refers.

The half-yearly financial report shall comprise: the condensed annual accounts, an interim management report and the statements of responsibility for their content.

For the purposes of the provisions of this article and the following one, debt securities shall mean bonds and those other transferable securities that recognise or create a debt, except for securities that are equivalent to shares or that, by virtue of their conversion or the exercise of the rights they confer, give the right to acquire shares or securities equivalent to shares.

3. Without prejudice to the provisions of article 82 of this Law, where Spain is the home Member State, issuers whose shares are admitted to trading on an official secondary market or another regulated market domiciled in the European Union shall make public and disseminate on a quarterly basis during the first and second half of the financial year an interim management statement containing, at least:

a) An explanation of the significant events and transactions that have taken place during the corresponding period and their impact on the financial situation of the issuer and its controlled undertakings, and

b) A general description of the financial situation and the results of the issuer and its controlled undertakings during the corresponding period.

The interim management statement shall not be required from issuers that publish quarterly financial reports.

4. The periodic information referred to in the preceding paragraphs shall be submitted to the National Securities Market Commission, where Spain is the home Member State, under the terms established by regulation, for its incorporation into the official register regulated in article 92 of this Law.

The National Securities Market Commission shall verify that the periodic information has been prepared in accordance with the applicable regulations, or shall otherwise require compliance therewith.

5. The following shall not be subject to compliance with the provisions of the preceding paragraphs of this article:

a) The Member States of the European Union, the Autonomous Communities, local entities and other similar entities of the Member States of the European Union, international public bodies of which at least one Member State of the European Union is a member, the European Central Bank, the European Financial Stability Facility (EFSF) established by the EFSF Framework Agreement and any other mechanism established with the objective of preserving the financial stability of the European monetary union by providing temporary financial assistance to Member States whose currency is the euro, and the national Central Banks of the Member States of the European Union, whether or not they issue shares or other securities; and

b) Issuers that issue only debt securities admitted to trading on an official secondary market or another regulated market whose unit nominal value is at least 100,000 euros or, in the case of debt securities not denominated in euros, whose unit nominal value is, at the date of issue, equivalent to at least 100,000 euros.

c) Without prejudice to letter b) above, issuers that have only outstanding issues of debt securities admitted to trading on an official secondary market or another regulated market domiciled in the European Union before 31 December 2010, whose unit nominal value is at least 50,000 euros or, in the case of debt securities not denominated in euros, whose unit nominal value was, at the date of issue, equivalent to at least 50,000 euros, for as long as such bonds remain outstanding.

6. When Spain is the home Member State, issuers constituted before 31 December 2003 that have exclusively debt securities admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall not be subject to compliance with the provisions of paragraph 2, when such securities have the unconditional and irrevocable guarantee of the State, its Autonomous Communities or local entities.

7. The following shall be established by regulation:

a) The time limits and other requirements for the submission of financial information to the CNMV.

b) The requirements for the publication and dissemination of periodic information.

c) The time limits for the publication of quarterly information.

d) The content of the declaration of responsibility, as well as the bodies or persons of the issuer that must make it.

e) The content of the half-yearly and quarterly financial information, and where applicable, the adaptations and exceptions that correspond for certain categories of securities, markets or issuers.

f) The accounting principles acceptable for issuers from States that are not members of the European Union.

g) Any other aspect that is necessary for the application of this article and in particular the content of the information required for the publication of statistics by the National Securities Market Commission.

8. The provisions of this article and the following article shall not apply to investment funds and variable capital collective investment companies referred to in Law 35/2003, of 4 November, on Collective Investment Institutions.

The first paragraph of paragraph 1 and of paragraph 2 and letter a) of paragraph 5 are amended by final provision 1.B).1 to 3 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision six of the aforementioned Law regarding the time limits to which the amendments to paragraphs 1 and 2 refer.

Letter b) is amended and letter c) is added to paragraph 5 by final provision 3.4 of Law 9/2012, of 14 November. Ref. BOE-A-2012-14062 .

Paragraph 5 is amended by final provision 3.4 of Royal Decree-Law 24/2012, of 31 August. Ref. BOE-A-2012-11247 .

A paragraph is added to paragraph 1 by final provision 5.2 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Amended by art. 2 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

The last paragraph is added by art. 37 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

The second paragraph is amended by art. 4.4 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

The second paragraph is amended by art. 58.1 of Law 4/1990, of 29 June. Ref. BOE-A-1990-15347

The first paragraph drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 15/11/2012, in force from 15/11/2012.

Amendment published on 31/08/2012, in force from 31/08/2012.

Amendment published on 05/03/2011, in force from 06/03/2011.

Amendment published on 13/04/2007, in force from 13/08/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Amendment published on 30/06/1990, in force from 30/06/1990.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 60: #a35bis]

Article 35.bis. Other information obligations.

1. Issuers whose securities are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union, when Spain is the home Member State, shall make public and disseminate any modification produced in the rights inherent to said securities. The issuers shall submit said information to the National Securities Market Commission for its incorporation into the official register regulated in article 92.g).

The exceptions to the obligation established in the previous paragraph, the requirements for the publication and dissemination of this information as well as for its submission to the National Securities Market Commission shall be established by regulation.

2. Issuers whose shares or bonds are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall ensure that all mechanisms and information necessary to enable shareholders and bondholders to exercise their rights are available in Spain when it is the home Member State and that the integrity of the data is preserved. For these purposes, for issuers of shares listed on an official secondary market, said obligation shall be understood as fulfilled by the application of the provisions of article 117 of this Law and its implementing rules. The requirements applicable to the rest of the issuers shall be established by regulation. The provisions of this paragraph shall not apply to securities issued by the Member States of the European Union, the Autonomous Communities, local entities and other similar entities of the Member States.

The first paragraph of paragraph 1 is amended and paragraph 3 is deleted by final provision 1.B).4 and 5 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Added by art. 3 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 13/04/2007, in force from 13/08/2007.

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 61: #a35ter]

Article 35.ter. Responsibility of issuers.

1. Responsibility for the preparation and publication of the information referred to in paragraphs 1 and 2 of article 35 of this Law shall fall, at least, on the issuer and its administrators in accordance with the conditions established by regulation.

2. In accordance with the conditions determined by regulation, the issuer and its administrators shall be liable for all damages and losses caused to the holders of the securities as a consequence of the information not providing a true and fair view of the issuer. The action to demand responsibility shall prescribe after three years from the time the claimant could have become aware that the information does not provide a true and fair view of the issuer.

Added by art. 4 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 62: #a36]

Article 36

1. Transmissions by title of sale, or other onerous transactions of each market, shall be considered operations of an official secondary securities market when they are carried out on negotiable securities or other financial instruments admitted to trading therein and are effected in that market subject to its operating rules.

2. Transmissions for consideration other than those provided for in the preceding paragraph and transmissions for no consideration of securities or financial instruments admitted to trading on an official secondary market shall not be considered operations thereof.

3. Without prejudice to other forms of loan, the loan of securities traded on an official secondary market may be carried out for the purpose of disposing of them for subsequent sale, to be the subject of a loan or to serve as collateral in a financial transaction. In any case, the borrower must ensure the return of the loan by providing sufficient guarantees. Where applicable, the National Securities Market Commission shall determine what such guarantees must be. The rule requiring guarantees shall not apply to securities loans resulting from monetary policy operations, nor to those made on the occasion of a public offer for sale of securities.

The Minister of Economy and Finance and, with his express authorization, the National Securities Market Commission may:

a) Set limits on the volume of loan operations or on their conditions, taking into account market circumstances.

b) Establish specific information obligations regarding the operations.

Amended by the sole art. 13 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Letter b) of paragraph 7 is amended by art. 1.4.2 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 4.5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 63: #a36bis]

Article 36 bis. Settlement of transactions.

1. Buyers and sellers of negotiable securities admitted to trading on official secondary markets shall be obliged, in accordance with the rules of that market, to deliver the cash and the negotiable securities from the time their respective orders are executed, even if their effective settlement is carried out subsequently.

2. The buyer of negotiable securities admitted to trading on an official secondary market shall acquire ownership thereof when they are recorded in its name in the securities accounts in accordance with the rules of the registry system.

3. Official secondary markets shall determine in their regulations the theoretical settlement date of executed transactions, and may establish different dates depending on the negotiable securities to be settled, the trading segments and other criteria, in accordance with applicable European regulations and in coordination, where appropriate, with the central counterparties and central securities depositories involved in the settlement processes.

Added by final provision 1.A).7 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision seven of the aforementioned Law regarding the application of this article.

Added text, published on 19/06/2015, in force from 20/06/2015.

[Block 64: #a36ter]

Article 36 ter. Settlement of rights or obligations of economic content associated with the securities.

1. The issuing entity shall communicate sufficiently in advance to the governing company of the official secondary markets in which, at its request, its securities are admitted to trading, as well as to the central securities depository responsible for their registration, the rights or obligations of economic content that the securities generate as soon as the corresponding agreement has been adopted.

2. Taking into account the rules applicable to the trading, clearing, settlement and registration of transactions on securities admitted to trading on said markets, these communications must specify the relevant dates for the recognition, exercise, fulfilment and payment of the corresponding rights and obligations.

3. Without prejudice to the foregoing, the benefits, rights or obligations inherent in the ownership of shares and securities equivalent to shares shall accrue to and be for the account of the acquirer from the date of purchase on the corresponding official secondary market, while they shall accrue from the settlement date of the corresponding purchase transaction in the case of fixed-income securities and other securities not equivalent to shares. In the event of delays or other incidents in the settlement process, appropriate adjustments may be made to the settlement of such rights or obligations.

Added by final provision 1.A).8 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision seventh of the aforementioned Law regarding the application of this article.

Text added, published on 19/06/2015, in force from 20/06/2015.

[Block 65: #a36quater]

Article 36 quater. Guarantees aimed at mitigating settlement risk.

1. The members of official secondary markets, the members of central counterparty entities and the participating entities of central securities depositories shall enjoy ex lege a financial collateral right of pledge of those included in Royal Decree-Law 5/2005, of 11 March, on urgent reforms to boost productivity and improve public procurement, exclusively over the securities or cash resulting from the settlement of transactions on behalf of clients who are natural or legal persons when those entities have had to advance the cash or securities necessary to attend the settlement of such transactions due to default or declaration of insolvency of their clients.

2. This collateral right shall fall exclusively on the securities and cash resulting from transactions not settled by clients and shall exclusively secure the amount that the entities benefiting from this right have had to advance to attend the settlement of the aforementioned transactions, including where applicable the price of the securities they should have delivered and any sanctions and penalties they should have paid as a consequence of the default of their clients.

3. The constitution and enforcement of the aforementioned financial collateral right of pledge shall not require any formality, without prejudice to the duty of the beneficiary entities to keep at the disposal of their clients the information proving the concurrence of the requirements contemplated in this paragraph and in the previous ones.

4. The members of official secondary markets, in the event of declaration of insolvency of any of their clients, may introduce into such markets and on behalf of the insolvent party, buy or sell orders for securities opposite to the transactions contracted on behalf of that party, when the declaration of insolvency occurs while such transactions are in the course of settlement. The members of central counterparty entities and the participating entities of central securities depositories shall enjoy the same right vis-à-vis their clients, which they shall exercise by requesting from the members of official secondary markets the introduction of orders opposite to those referred to in this paragraph.

5. The provisions of the preceding paragraphs are understood without prejudice to the settlement discipline measures referred to in Articles 6 and 7 of Regulation (EU) No. 909/2014, of 23 July 2014, and without prejudice to the guarantees referred to in this Law in favor of official secondary markets, central securities depositories and central counterparty entities, which shall enjoy preference over the rights cited in the preceding paragraphs.

Added by final provision 1.A).9 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Text added, published on 19/06/2015, in force from 20/06/2015.

[Block 66: #a37]

Article 37. Members of official secondary markets.

1. Access to the status of member of an official secondary market shall be governed:

a) by the general rules established in this Law;

b) by the specific rules of each market established in this Law and its implementing provisions, or by those, in the case of markets of autonomous scope, established by the Autonomous Communities with competence in the matter, provided they conform to the provisions of this Title, and

c) by the access conditions stipulated by each market, which must in any case be transparent, non-discriminatory and based on objective criteria.

2. The following entities may be members of official secondary markets:

a) Investment services companies that are authorized to execute client orders or to trade on their own account.

b) Spanish credit institutions.

c) Investment services companies and credit institutions authorized in other Member States of the European Union that are authorized to execute client orders or to trade on their own account. Access may be through any of the following mechanisms:

1.º Directly, by establishing branches in Spain, in accordance with Article 71 bis of Title V in the case of investment services companies, or in accordance with Chapter II of Title V of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, in the case of credit institutions.

2.º By becoming remote members of the official secondary market, without having to be established in the Spanish State, when the trading procedures or systems of the market in question do not require a physical presence for the execution of transactions.

d) Investment services companies and credit institutions authorised in a State that is not a member of the European Union, provided that, in addition to complying with the requirements set out in Title V of this Law to operate in Spain, the authorisation granted by the authorities of their home country empowers them to execute client orders or to deal on their own account. The National Securities Market Commission may deny or condition the access of these entities to the Spanish markets on prudential grounds, because equivalent treatment to Spanish entities is not afforded in their home country, or because compliance with the rules of organisation and discipline of the Spanish securities markets is not ensured.

e) The General State Administration, acting through the Directorate-General of the Treasury and Financial Policy, the General Treasury of the Social Security and the Bank of Spain.

f) Those other persons who, in the judgment of the governing company of the corresponding official secondary market, which shall take into account in particular the special functions of the market that could be served by them:

1.º are suitable;

2.º possess a sufficient level of aptitude and competence in trading matters;

3.º have established, where appropriate, adequate organisational measures, and

4.º have sufficient resources for the function they are to perform, taking into account the various financial mechanisms that the official secondary market may have established to guarantee the proper settlement of transactions.

3. The governing company of the market shall communicate to the National Securities Market Commission, or to the Autonomous Community with competence in the matter in the case of official secondary markets of autonomous scope, with the periodicity established by regulation, the list of its members.

4. The members of the official secondary market shall comply with the obligations set out in articles 79 bis, 79 ter and 79 sexies of this Law, in relation to their clients when, acting on their behalf, they execute their orders on an official secondary market. However, in the case of transactions between members, on their own account and in their own name, they shall not be obliged to impose upon each other the obligations established in the articles cited above.

Letter d) of paragraph 2 is amended by art. 94.8 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Amended by the sole art. 14 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 4.6 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 67: #a38]

Article 38. Remote access.

1. The Spanish official secondary market that intends to establish mechanisms in another Member State of the European Union for the remote access of members from that State shall notify the National Securities Market Commission, which, within one month of receipt of the notification, shall forward it to the competent authority of that Member State and shall provide that information to the European Securities and Markets Authority, if the latter so requests, in accordance with the procedure and under the conditions laid down in article 35 of Regulation (EU) No. 1095/2010 of the European Parliament and of the Council, of 24 November 2010 , establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/77/EC . Likewise, at the request of that competent authority, the National Securities Market Commission shall communicate, within a reasonable period of time, the identity of the members of the official secondary market established in that State.

2. The regulated markets of other Member States of the European Union may establish in Spain the appropriate mechanisms to facilitate remote access and trading by Spanish members, following transmission by the competent authority of that Member State to the National Securities Market Commission of the market's notification. Likewise, the National Securities Market Commission may request the competent authority of the home State of the regulated market to transmit, within a reasonable period of time, the identity of the members of the regulated market.

Paragraph 1 is amended by art. 3.7 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by the sole art. 15 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Letter e) is amended by art. 1.4.3 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

The second paragraph is amended by art. 58.1 of Law 4/1990, of 29 June. Ref. BOE-A-1990-15347

Select wording:

Last update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 30/06/1990, in force from 30/06/1990.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 68: #a39]

Article 39

Any person holding the status of member of an official secondary market shall be obliged to execute, on behalf of their clients, the orders they receive from them for the trading of securities on the corresponding market. However, in the case of transactions at sight, they may make the performance of said obligation subject to the principal proving ownership of the securities or delivering the funds intended to pay their amount. In forward transactions, it may make the fulfilment of said obligation subject to the provision by the payer of the guarantees or cover it deems appropriate, which must at least be those that, where applicable, are established by regulation.

[Block 69: #a40]

Article 40

Anyone holding the status of member of an official secondary market may not trade on its own account with anyone who does not hold that status unless it is explicitly recorded, in writing, that the latter was aware of such circumstance before concluding the corresponding transaction.

Anyone holding the status of member of an official secondary market must declare to the National Securities Market Commission those economic ties and contractual relationships with third parties that, in its activity on its own account or on behalf of others, could give rise to conflicts of interest with other clients. Subject to the general criteria established by regulation, the National Securities Market Commission shall determine the cases and the manner in which such ties or relationships must be made public.

[Block 70: #a41]

Article 41

In transactions carried out on behalf of others, the members of the official secondary securities markets shall be liable to their principals for the delivery of the securities and the payment of their price.

Drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

[Block 71: #a42]

Article 42

The remuneration received by the members of an official secondary market for their participation in the trading of securities shall be free. However, the Government may establish maximum remuneration for transactions whose amount does not exceed a certain quantity and for those carried out in execution of judicial decisions. The publication and communication to the National Securities Market Commission or, in the case of the Public Debt Market in book-entry form, to the Bank of Spain, of the corresponding maximum remuneration fee schedules shall be a prior requirement for their application.

[Block 72: #a43]

Article 43. Transparency requirements.

1. In order to seek market transparency and efficiency in price formation, the official secondary markets shall be obliged to disseminate public information on transactions in shares admitted to trading on them in relation to the buy and sell positions existing at each moment and in relation to transactions already concluded on said market in accordance with the provisions contained in this article. The Minister of Economy and Finance and, with his express authorisation, the National Securities Market Commission, shall determine the transparency requirements applicable to transactions carried out on other financial instruments and may, if it deems it necessary, extend the application of the transparency requirements contained in this article to financial instruments other than shares.

2. The official secondary markets shall make public the following pre-trade information with respect to the shares admitted to trading on them:

a) the buy and sell prices existing at each moment, and

b) the depth of the trading positions at those prices that are disseminated through their systems.

The aforementioned information must be made available to the public on reasonable commercial terms and on a continuous basis during normal trading hours.

The National Securities Market Commission may exempt the official secondary markets from publishing the information mentioned in this paragraph, taking into account the market model or the type and volume of the orders. Likewise, the National Securities Market Commission may not impose said obligation in the case of transactions of large volume compared with the standard market volume for those shares or for that type of shares.

3. The official secondary markets shall make public the following information, with respect to the shares admitted to listing on them, on transactions already concluded:

a) the price,

b) the volume and

c) the time of execution.

Said information must be made available to the public on reasonable commercial terms and, as far as possible, in real time.

4. The National Securities Market Commission may authorise the official secondary markets to delay the publication of the data of the transactions carried out depending on their type or volume. In particular, they may authorise the delay of publication in the case of transactions of large volume compared with the standard market volume for those shares or for that type of shares. The official secondary markets must, in these cases, obtain from the National Securities Market Commission the prior approval of the proposed methods of delayed information, and must clearly disclose said methods to the market members and to the investing public.

5. In the event that the National Securities Market Commission grants exemptions from the pre-trade transparency requirements under paragraph 2 of this article, or authorises the delay of post-trade transparency obligations under paragraph 4 thereof, the National Securities Market Commission must accord the same treatment to all official secondary markets and multilateral trading facilities, without discrimination.

6. The official secondary markets may allow the entities referred to in article 128 of this Law to access, on reasonable commercial terms and in a non-discriminatory manner, the systems they use to publish the information referred to in paragraphs 2 and 3 of this article.

7. The provisions contained in the preceding paragraphs shall be applied in accordance with the provisions of Commission Regulation 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive.

8. Without prejudice to the public information provided for in this article, the Autonomous Communities with competence in the matter and with respect to transactions carried out in their territorial scope may establish any other information duty.

Amended by the sole article.16 of Law 47/2007 of 19 December. Ref. BOE-A-2007-21913

Amended by art. 4.7 of Law 37/1998 of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 73: #a44]

Article 44

The Government, in order to protect the interest of investors and the proper functioning of the markets, may:

a) Establish that the relations between members of an official secondary market with third parties concerning the trading of securities be formalised in written contracts, signed by the parties and with delivery of a copy to each of them.

b) Issue the precise rules to ensure that the contracts referred to in the preceding letter reflect, explicitly and with necessary clarity, the commitments undertaken by the parties and their rights in the face of the eventualities proper to each transaction. To this end it may determine the questions or eventualities that contracts concerning typical transactions must address or provide for expressly, require the use of models for them and impose some form of administrative control over said models.

c) Regulate the documents certifying the execution of transactions in the official secondary markets that must be delivered to third parties by the members of those markets.

d) Determine the form and content of the documents that, in the relations between members of an official secondary market and between these and the governing bodies or the clearing and settlement systems of the corresponding market, will certify the various phases of the trading of securities.

The Government may empower the Minister of Economy and Finance to develop the rules it establishes in application of this article. With reference to the provisions of letter d) above, said empowerment may extend to the National Securities Market Commission or, in the case of the Public Debt Market in Book Entry Form, to the Bank of Spain.

The provisions contained in the preceding paragraphs shall also apply to unofficial secondary markets.

Letter d) is amended by art. 1.4.4 of Law 44/2002 of 22 November. Ref. BOE-A-2002-22807

The last paragraph is added by art. 4.8 of Law 37/1998 of 16 November. Ref. BOE-A-1998-26345

Last paragraph drafted in accordance with the correction of errors published in BOE no. 122 of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 74: #a44bis]

Article 44 bis. The central securities depositories.

1. The authorisation as a central securities depository, its revocation and its operation when said entity is established in Spain shall be governed by the provisions of Regulation (EU) No. 909/2014 of 23 July 2014, by the provisions of this Law and by any other Spanish or European regulations applicable to it.

The National Securities Market Commission shall be the competent authority responsible for the authorisation, supervision and sanctioning of central securities depositories in accordance with Regulation (EU) No. 909/2014 of 23 July 2014.

The central securities depositories shall provide the National Securities Market Commission and the various public supervisory bodies within the scope of their respective competences with the information on the clearing, settlement and registration activities in the systems managed by them that they request, provided that said information is available to them and in accordance with the applicable regulations.

2. The central securities depositories established in Spain shall take the form of a public limited company. Their articles of association and their amendments, with the exceptions that may be established by regulation, shall require the prior approval of the National Securities Market Commission. The appointment of the members of the board of directors, general managers and equivalent of the central securities depositories shall be subject to the prior authorisation of the National Securities Market Commission.

The participation, direct or indirect, in the capital of the central securities depositories shall be subject to the regime of significant holdings provided for in article 69 for investment services companies, in the terms determined by regulation, it being understood that any participation that reaches, directly or indirectly, at least one percent of the capital or voting rights of the central securities depository or that, without reaching that percentage, allows a notable influence to be exercised in it, in the terms determined by regulation, shall in any case have such character.

Without prejudice to the provisions of Article 69.6, the National Securities Market Commission may oppose the acquisition or transfer of a significant holding in the capital of the central securities depository when it considers it necessary to ensure the proper functioning of the markets or of the securities clearing, settlement and registration systems or to avoid distortions therein, as well as because equivalent treatment is not given to Spanish entities in the acquirer's country of origin.

The central securities depositories shall have the bodies and committees provided for in Regulation (EU) No. 909/2014, of 23 July 2014 .

3. The central securities depositories shall also be governed by internal rules whose approval and that of their amendments, with the exceptions that may be established by regulation, shall be the responsibility of the National Securities Market Commission, following a report from the Bank of Spain. Said internal rules shall regulate the operating regime of the central securities depositories, the services provided by them, their financial regime, the procedures for setting and communicating tariffs, the conditions and principles under which they shall provide the aforementioned services, the records relating to the services provided and the legal regime of their participating entities. Likewise, the rules shall regulate the procedures for managing the delivery of securities and their payment, the determination of the moment of finality of settlement instructions, the risk management policy as well as the guarantees of all types that the participating entities may have to constitute depending on the activities they carry out.

The internal rules may be developed by means of circulars approved by the central securities depository itself. Said circulars must be communicated to the National Securities Market Commission and the Bank of Spain, in the terms provided for by regulation. The National Securities Market Commission may oppose them, as well as suspend them or render them ineffective when it considers that they infringe applicable legislation, or harm the prudent and safe operation of the central securities depository and of the securities markets or investor protection.

4. The internal rules and the articles of association shall have the status of market conduct and discipline rules for the securities market, and shall specify the obligations and the organizational and procedural requirements necessary to comply with the provisions of Regulation (EU) No. 909/2014, of 23 July 2014 . The Minister of Economy and Competitiveness or, through his express authorization, the National Securities Market Commission, may develop the structure and minimum content that the internal rules must have.

Likewise, the central securities depositories shall prepare a report in which they must detail the manner in which they will comply with the technical, organizational, operational, and risk management requirements demanded by Regulation (EU) No. 909/2014, of 23 July 2014 , to perform their functions. The Minister of Economy and Competitiveness or, through his express authorization, the National Securities Market Commission, may regulate the model to which said report must conform. The central securities depository shall keep the aforementioned report updated, whose amendments shall be sent to the National Securities Market Commission, duly justified.

5. The specific monitoring and control functions that the central securities depositories must exercise over their participating entities, the solvency requirements applicable to their participating entities, the types of entities that may access the status of participating entity, the accounting organization requirements, technical means, specific information obligations to the National Securities Market Commission and any other aspects considered necessary for their proper functioning shall be determined by regulation, taking into account, among others, criteria of proportionality based on their level of activity.

Likewise, the central securities depositories shall send to the National Securities Market Commission, in the terms provided for by regulation, their estimated annual budget, in which the prices and commissions they will apply shall be expressed in detail, as well as subsequent amendments they introduce in their financial regime. The National Securities Market Commission may require the central securities depository to expand the documentation received and may establish exceptions or limitations to the maximum prices of those services when they may affect the financial solvency of the central securities depository, cause disturbing consequences for the development of the securities market or the principles governing it, or introduce unjustified discrimination among the different users of the entity's services.

6. The central securities depositories may outsource their basic services, establish agreements with central counterparty entities, official secondary markets and multilateral trading facilities or links with other central securities depositories in accordance with the provisions of Regulation (EU) No. 909/2014, of 23 July 2014 , in this Law, in its implementing regulations and in the rules referred to in paragraph 3 above.

7. Once the insolvency of a participating entity in the systems managed by the central securities depositories is declared, the latter shall enjoy an absolute right of separation with respect to the assets or rights in which the guarantees constituted by said participating entities in the systems managed by the central securities depositories are materialized. Without prejudice to the foregoing, any surplus remaining after the settlement of the guaranteed transactions shall be incorporated into the assets of the participant's insolvency estate.

8. Once insolvency proceedings are declared for a participating entity in the systems referred to in this article, the National Securities Market Commission, without prejudice to the powers of the Bank of Spain and the Fund for Orderly Bank Restructuring, may order, immediately and at no cost to the investor, the transfer of its accounting records of securities to another entity authorized to carry out this activity. If no entity is in a position to take over the aforementioned records, this activity shall be assumed by the corresponding central securities depository on a provisional basis, until the holders request the transfer of the registration of their securities. For these purposes, both the insolvency judge and the insolvency administration shall facilitate the access of the entity to which the securities are to be transferred to the documentation and accounting and computer records necessary to effect the transfer. The existence of the insolvency proceedings shall not prevent the securities purchased in accordance with the rules of the clearing, settlement and registration system, or the cash proceeds from the exercise of economic rights or from the sale of the securities, from being delivered to the client.»

Amended by final provision 1.A).10 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision seven of the aforementioned Law regarding the application of this amendment.

Paragraphs 3 and 11 are amended by art. 94.9 and 10 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Paragraphs 3, 4 and 7 are amended by sole art. 3 of Law 32/2011, of 4 October. Ref. BOE-A-2011-15622 .

Paragraphs 3 and 4 shall enter into force on the date determined by the implementing regulations, as established in final provision 6.

Paragraph 12 is added and paragraph 11 and letters a), b) and c) of paragraph 1 are amended by sole art. 17 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 3 is amended by art. 2.2 of Law 12/2006, of 16 May. Ref. BOE-A-2006-8637

Paragraphs 8 and 9 are amended by final provision 18.1 of Law 22/2003, of 9 July. Ref. BOE-A-2003-13813

Added by art. 1.2 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Select version:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 28/04/2015, in force from 29/04/2015.

Amendment published on 05/10/2011, in force from 06/10/2011.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/05/2006, in force from 18/05/2006.

Amendment published on 10/07/2003, in force from 01/09/2004.

Amendment published on 23/11/2002, in force from 24/11/2002.

Added text, published on 23/11/2002, in force from 24/11/2002.

[Block 75: #a44ter]

Article 44 ter.

1. Authorization to provide clearing services as a central counterparty, its revocation and its operation when such entities are established in Spain shall be governed by the provisions of Regulation (EU) No. 648/2012 of the European Parliament and of the Council, of 4 July 2012 , on OTC derivatives, central counterparties and trade repositories, by the provisions of this Law and any other applicable regulations of the legal system or European Union law.

2. The central counterparty shall take the form of a public limited company and shall be recognized as a system for the purposes of Law 41/1999, of 12 November , on payment and securities settlement systems.

To facilitate the exercise of their functions, central counterparties may access the status of participant of the central securities depositories that admit them as such, of any other securities and financial instruments settlement system or of a regulated market or multilateral trading facility, when they comply with the conditions required by each system and provided that the participation of the central counterparty therein does not compromise the security or solvency of said entity.

3. Central counterparties may not be authorized as central securities depositories.

4. Central counterparties shall draw up their articles of association as well as internal rules, which shall have the status of market conduct and discipline rules for the securities market.

The internal rules shall govern the operation of the central counterparty and the services it provides. The articles of association shall govern the internal operation of the central counterparty as a company. The rules and articles of association shall contain the obligations and organizational and procedural requirements necessary to comply with the provisions of Regulation (EU) No. 648/2012, of 4 July . The Minister of Economy and Competitiveness or, through express authorization, the National Securities Market Commission, may develop the structure and minimum content that the internal rules must have.

Only the entities referred to in article 37.2.a) to d) and f), the Bank of Spain and other resident or non-resident entities that carry out similar activities under the terms and with the limitations provided for in the regulations and in the internal rules of the central counterparty may access the status of member of the central counterparties. The access of the latter to the status of member shall be subject to the provisions of this Law, its implementing regulations, and its internal rules, as well as to the approval of the National Securities Market Commission.

Likewise, central counterparties shall prepare a report in which they must detail how they will comply with the technical, organisational, operational and risk management requirements laid down in Regulation (EU) No 648/2012 of 4 July, in order to perform their functions. The Minister of Economy and Competitiveness or, by express authorisation thereof, the National Securities Market Commission, may regulate the model to which the said report must conform. The central counterparty shall keep the aforementioned report up to date, and any amendments thereto shall be submitted to the National Securities Market Commission, duly reasoned and, where they affect risk management in accordance with the provisions of that Regulation, incorporating the mandatory report of the risk committee and of the internal unit or body that assumes the risk management function.

With the exceptions laid down by regulation, the amendment of the articles of association of the central counterparty or of its internal rules shall require, following a report from the Bank of Spain, the authorisation of the National Securities Market Commission. The internal rules may be supplemented by circulars approved by the central counterparty itself. Such circulars must be communicated to the National Securities Market Commission and the Bank of Spain within twenty-four hours of their adoption. The National Securities Market Commission may object to, as well as suspend or annul, the circulars when it considers that they infringe applicable legislation, or harm the prudent and safe operation of the central counterparty and of the markets to which it provides services or the protection of investors.

The appointment of the members of the board of directors, general managers and equivalent officers of central counterparties shall be subject to the prior approval of the National Securities Market Commission.

Central counterparties shall have at least an audit committee, the risk committee provided for in Article 28 of Regulation (EU) No 648/2012 of 4 July, a compliance committee and a nominations and remuneration committee. In addition, they shall have an internal unit or body that assumes the risk management function, in a manner proportionate to the nature, scale and complexity of their activities. This unit or body shall be independent of the operational functions, shall have sufficient authority, rank and resources, and shall have appropriate access to the board of directors. They shall also have mechanisms and organisational structures so that users and other interested parties can express their views on their operation, as well as rules aimed at avoiding possible conflicts of interest to which they might be exposed as a result of their relationships with shareholders, directors and managers, participating entities and clients. The provisions of this paragraph may be developed by regulation.

The central counterparty shall submit to the National Securities Market Commission, before 1 December each year, its estimated annual budget, which shall set out in detail the prices and fees to be applied, as well as any subsequent amendments introduced in its economic regime. The National Securities Market Commission may require the central counterparty to expand the documentation received and may establish exceptions or limitations to the maximum prices for those services when they may affect the financial solvency of the central counterparty, cause disruptive consequences for the development of the securities market or the principles governing it, or introduce unjustified discrimination among the different users of the entity's services.

The Minister of Economy and Competitiveness or, with express authorisation thereof, the National Securities Market Commission may develop the information that will be necessary to provide in order to assess the suitability of shareholders acquiring a qualifying holding in the capital of the central counterparty in accordance with Regulation (EU) No 648/2012 of 4 July.

5. The National Securities Market Commission shall be the Spanish authority that performs the authorisation and supervision activities of central counterparties established in Spain in application of Regulation (EU) No 648/2012 of 4 July.

6. The central counterparty shall keep the central accounting record corresponding to the cleared financial instruments together with, where applicable, the members authorised to keep the detailed records corresponding to their clients' contracts.

The central counterparty shall establish in its internal rules the solvency conditions and technical means required for members to be authorised to keep the records of their clients' contracts, as well as the procedures that safeguard the correspondence between the central accounting record and the detailed records. The solvency conditions and technical means may differ depending on the financial instruments in respect of which those members participate in the keeping of the record or in clearing. Likewise, the central counterparty shall establish mechanisms for access to the information in the detailed records in which members keep the records of their clients' contracts in order to identify, monitor and manage possible risks to the entity arising from the dependencies between members and their clients.

7. The guarantees that members and clients constitute in accordance with the regime contained in the internal rules of the central counterparty and in relation to any transactions carried out within the scope of its activity shall only be enforceable against the entities in whose favor they were constituted and only for the obligations arising from such transactions with the central counterparty or with its members, or arising from the status of member of the central counterparty.

The internal rules of the entity and its circulars may establish the cases that determine the early termination of all contracts and positions of a member, whether on its own account or on behalf of clients, which, under the terms provided in said rules and circulars, shall give rise to their netting and the creation of a single legal obligation covering all the transactions included, and by virtue of which the parties shall only be entitled to demand from each other the net balance resulting from the netting of said transactions. The above cases may include the non-payment of obligations and the opening of insolvency proceedings in relation to members and clients or to the central counterparty itself. That netting regime shall be considered a contractual netting agreement in accordance with the provisions of Real Decreto-ley 5/2005, de 11 de marzo, de Reformas Urgentes para el Impulso a la Productividad y para la Mejora de la Contratación Pública and without prejudice to the application of the specific regime contained in Ley 41/1999, de 12 de noviembre, sobre Sistemas de Pagos y de Liquidación de Valores.

If a member or a client of a member fails to meet, in whole or in part, the obligations undertaken towards the central counterparty or towards the member, they may dispose of the guarantees provided by the defaulting party, and to that end may adopt the necessary measures for their satisfaction under the terms established in the entity's rules.

In the event that any member of a central counterparty or any of its clients is subject to insolvency proceedings, the central counterparty shall enjoy an absolute right of separation with respect to the guarantees that such members or clients had constituted before said central counterparty. Without prejudice to the foregoing, the surplus remaining after the liquidation of the guaranteed transactions shall be incorporated into the insolvency estate of the client or the member.

In the event that the clients of the members of a central counterparty are subject to insolvency proceedings, the members shall enjoy an absolute right of separation with respect to the financial instruments and cash in which the guarantees that their clients had constituted in their favor in accordance with the regime contained in the internal rules of the central counterparty were materialized. Without prejudice to the foregoing, the surplus remaining after the liquidation of the transactions shall be incorporated into the insolvency estate of the client.

Upon the declaration of insolvency of a member, the central counterparty, having previously notified the Comisión Nacional del Mercado de Valores, shall manage the transfer of the contracts and positions it had registered on behalf of clients, together with the financial instruments and cash in which the corresponding guarantees were materialized. For these purposes, both the competent judge and the bodies of the insolvency proceedings shall provide the entity to which the contracts, accounting records and guarantees are to be transferred with the documentation and computer records necessary to effect the transfer. In the event that such transfer cannot be carried out, the entity may agree to the liquidation of the contracts and positions that the member had open, including those on behalf of its clients. In this case, once the actions to be carried out in relation to the positions registered and guarantees constituted by the clients before the member in question are concluded, those clients shall have a right of separation with respect to any eventual surplus.

If the central counterparty is subject to insolvency proceedings, and all contracts and positions of a member are liquidated, whether on its own account or on behalf of clients, the members and clients that have not breached their obligations with the central counterparty shall enjoy an absolute right of separation with respect to the surplus of the guarantees that, having been constituted in favor of the central counterparty in accordance with its internal rules, results from the liquidation of the guaranteed transactions, with the exception of contributions to the default guarantee fund.

8. The central counterparty shall establish in its internal rules the rules and procedures to address the consequences resulting from defaults of its members. Such rules and procedures shall specify how the various guarantee mechanisms available to the central counterparty shall be applied and the ways to replenish them with the aim of enabling the central counterparty to continue operating in a solid and secure manner.

9. Subject to the provisions of this Law and the remaining national or European Union regulations that may be applicable, the central counterparty may establish agreements with other resident and non-resident entities whose functions are analogous or which manage securities clearing and settlement systems. Such agreements, as well as those it may enter into with markets or multilateral trading facilities, shall require the approval of the National Securities Market Commission, following a report from the Bank of Spain, and must comply with the requirements established by regulation and in the internal rules of the entity itself.

Sections 2 and 3 are amended by final provision 1.A).11 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Amended by final provision 1.1 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

For its application, transitional provision thirteenth.1 of the aforementioned Law should be taken into account.

Amended by sole article.4 of Law 32/2011, of 4 October. Ref. BOE-A-2011-15622 .

Added by art. 1.3 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 27/06/2014, in force from 28/06/2014.

Amendment published on 05/10/2011, in force from 06/10/2011.

Amendment published on 23/11/2002, in force from 24/11/2002.

Added text, published on 23/11/2002, in force from 24/11/2002.

[Block 76: #a44quater]

Article 44 quater. Possibilities for choosing a clearing and settlement system or a central counterparty.

1. Official secondary markets may enter into agreements with a central counterparty or a clearing and settlement system of another Member State to carry out the clearing or settlement of some or all of the transactions concluded by the market members in accordance with their systems.

2. The National Securities Market Commission may oppose such agreements when it considers that they may undermine the orderly functioning of the market and taking into account the conditions of the settlement systems provided for in section 1 of article 44 quinquies.

Added by sole article.18 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 77: #a44quinquies]

Article 44 quinquies. Right to designate a settlement system.

1. Official secondary markets must offer all their members the right to designate the settlement system for transactions in financial instruments carried out on that market, provided that the following conditions are met:

a) That the necessary technical and operational procedures, links and mechanisms are established between the settlement system designated by the market and the system or infrastructure designated by the member to ensure the efficient and economical settlement of the transaction in question.

b) That the National Securities Market Commission recognizes that the technical conditions for the settlement of transactions carried out on that market through a system other than the one designated by it allow for the harmonious and orderly functioning of the financial markets, taking into particular account the manner in which relations between the various systems for recording transactions and financial instruments will be ensured. The assessment of the National Securities Market Commission shall be without prejudice to the powers of the Bank of Spain, in its capacity as supervisor of payment systems, as well as other supervisory authorities of such systems. The National Securities Market Commission shall take into account the supervisory work carried out by such entities in order to avoid unnecessary repetitions of controls.

2. The provisions of this article shall not affect the right of the operator of the central counterparty, clearing or settlement system for financial instruments to refuse to provide the requested services for legitimate commercial reasons.

Added by sole article.19 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 78: #a44sexies]

Article 44 sexies. Access to central counterparty, clearing and settlement systems.

Investment services companies and credit institutions from other Member States of the European Union shall have the right to access the central counterparty, clearing and settlement systems existing in Spanish territory, in order to settle or arrange the settlement of transactions in financial instruments, whether they are traded on Spanish official secondary markets or multilateral trading facilities or on regulated markets or multilateral trading facilities of other Member States of the European Union.

Access to these systems shall be subject to the same objective, transparent and non-discriminatory criteria that apply to local members.

The provisions of this article shall not affect the right of the operator of the central counterparty, clearing or securities settlement system to refuse to provide the requested services for legitimate commercial reasons.

Added by sole article.20 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 79: #a44septies]

Article 44 septies. Information system for the supervision of trading, clearing, settlement and registration of negotiable securities.

1. Central securities depositories providing services in Spain must establish an information, transmission and data storage system that serves as a tool for the exchange and processing of information for carrying out the activities of clearing, settlement and registration of securities admitted to trading on an official secondary market and that allows supervising the proper keeping of the securities registry, both at the central registry level and at the detail registry level.

2. The system provided for in the preceding paragraph must record, at least, the operations, events and annotations likely to give rise to variations in the securities balances of each holder both in the central registry and in the detail registries.

3. The information system for the supervision of the trading, clearing, settlement and registration of negotiable securities must comply with the following:

a) Guarantee the traceability of transactions carried out on securities admitted to trading on an official secondary securities market from trading until their annotation in the securities registry and vice versa, as well as to know their status.

b) Facilitate the transmission of the information necessary to carry out the clearing, settlement and registration of securities as well as to know the status of said operations.

c) Facilitate the control of risks and of the guarantees required by the corresponding entities and market infrastructures.

d) Inform issuing entities daily about the ownership of the securities issued by them when they so request.

4. The central securities depository, in its capacity as responsible for and manager of the information, transmission and data storage system, must comply with the following obligations:

a) Establish the necessary means so that the information is entered into the system in accordance with the established rules and is complete.

b) Allow the introduction of the necessary information within the established period.

c) Provide sufficient security and confidentiality to the information supplied, so that the entities that enter information into the system access exclusively the data strictly necessary for their activity or those for which they are authorized.

d) Ensure the maintenance and continuity of the system.

e) Allow non-discriminatory access of the market infrastructures and entities involved in the securities clearing and settlement processes.

5. The information system shall be fed by the information that the official secondary markets, the central counterparty entities, the central securities depositories as well as their respective members or participating entities shall be obliged to provide, in accordance with what is established by regulation. The aforementioned entities shall be responsible for the integrity and veracity of the information communicated by each of them through said system and shall retain ownership of said information.

6. The information stored in the system may not be used or transmitted for purposes other than those provided for in the law, unless there is authorization from the respective supplying entity, without prejudice to the information obligations before the National Securities Market Commission or the Bank of Spain in the exercise of their respective powers.

7. The central securities depositories shall enter into the corresponding contracts in which they shall establish the legal relationships necessary for the proper functioning of the system. Likewise, they shall publish the operating rules of the information system establishing the rights, obligations and responsibilities of the persons who will manage and who will make use of the information stored in the system. The National Securities Market Commission shall approve these rules and their modifications. Both the rules and their modifications shall be previously examined by the users committee of the central securities depository, which may forward its observations thereon to the National Securities Market Commission.

8. With full respect for the principles of equal treatment and non-discrimination, foreign central counterparty entities and central securities depositories with which the central securities depositories enter into agreements or establish links may access this system, being obliged to supply the necessary information so that the purposes thereof are fulfilled, in accordance with the provisions of this article. Said infrastructures must request from their members or participants the information necessary to adequately perform their function.

Added by final provision 1.A).12 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Take into account transitional provision seventh of the aforementioned Law regarding the application of this article.

Added text, published on 19/06/2015, in force from 20/06/2015.

[Block 80: #a44octies]

Article 44 octies. Monitoring and control of the correct functioning of the trading, clearing, settlement and registration of securities systems.

1. Without prejudice to the supervision, inspection and sanctioning powers corresponding to the National Securities Market Commission in accordance with Title VIII, the governing companies of the official secondary markets, the central counterparty entities and the central securities depositories that provide services in Spain must ensure, within the scope of their respective competences, the correct functioning and efficiency of the processes of trading, clearing and settlement of transactions and of registration of securities.

2. The Government is empowered to develop by regulation the content of the function provided for in the preceding paragraph, including the obligations and powers for its adequate exercise.

Added by final provision 1.A).13 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Take into account transitional provision seventh of the aforementioned Law regarding the application of this article.

Added text, published on 19/06/2015, in force from 20/06/2015.

[Block 81: #cii-4]

CHAPTER II

On the Stock Exchanges

[Block 82: #a45]

Article 45

The creation of Stock Exchanges shall be the responsibility of the National Securities Market Commission, in accordance with the provisions of article 31 bis, except in the case of Stock Exchanges located in the territory of Autonomous Communities whose Statutes of Autonomy recognize their competence for this purpose. In this case, the creation of Stock Exchanges shall be the responsibility of said Autonomous Communities.

Amended by art. 94.11 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Amended by the sole art. 21 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 4.9 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 83: #a46]

Article 46

The purpose of the Stock Exchanges shall be the trading of those categories of negotiable securities and other financial instruments, of those provided for in article 2, which by their characteristics are suitable for this in accordance with the provisions of the market regulations, as established in article 31 bis.

Financial instruments admitted to trading on another official secondary market may be traded on the Stock Exchanges, under the terms established in their Regulations. In this case, the necessary coordination between the respective registration, clearing and settlement systems must be provided for, where applicable.

Amended by the sole art. 22 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

The last paragraph is amended by art. 1.4.5 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 4.10 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 84: #a47]

Article 47

Entities that comply with the provisions of article 37 of this Law may acquire the status of members of the Stock Exchanges.

Amended by art. 69.1 of Law 14/2000, of 29 December. Ref. BOE-A-2000-24357

Amended by art. 4.11 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 30/12/2000, in force from 01/01/2001.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 85: #a48]

Article 48

1. The Stock Exchanges shall be governed and administered by a governing company, in accordance with the provisions of article 31 bis, which shall be responsible for their internal organization and operation, and shall be the owner of the means necessary for this, this being its main corporate purpose. Said companies may also carry out other complementary activities. The shares of said companies shall be registered shares. Such companies must necessarily have a Board of Directors composed of no fewer than five persons and, at least, one General Manager. Said companies shall not have the legal status of members of the corresponding Stock Exchanges and may not carry out any financial intermediation activity, nor the activities listed in article 63.

2. The Autonomous Communities with competence in the matter and with respect to Stock Exchanges of autonomous scope may establish for them the organization they deem appropriate.

Paragraph 1 is amended by the sole art. 23 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 1 is amended by art. 2.3 of Law 12/2006, of 16 May. Ref. BOE-A-2006-8637

Paragraph 1 is amended by art. 69.2 of Law 14/2000, of 29 December. Ref. BOE-A-2000-24357

Amended by art. 4.12 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Fourth paragraph drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/05/2006, in force from 18/05/2006.

Amendment published on 30/12/2000, in force from 01/01/2001.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 86: #a49]

Article 49

The Stock Exchanges shall establish a state-wide Stock Market Interconnection System, integrated through a computer network, in which those securities agreed by the National Securities Market Commission shall be traded, from among those previously admitted to trading on at least two Stock Exchanges, at the request of the issuing entity and following a favorable report from the Stock Exchange Company referred to in the following article, in accordance with the provisions established by regulation.

[Block 87: #a50]

Article 50

The management of the Stock Market Interconnection System shall correspond to the Stock Exchange Company, which shall be constituted by the management companies of the Stock Exchanges existing at any given time. The capital of the aforementioned Company shall be distributed in equal parts among said management companies, and its Board of Directors shall be formed by one representative from each Stock Exchange and one more, who shall act as Chairman, elected by majority among them. Said company shall be the holder of the means necessary for the operation of the Stock Market Interconnection System, and responsible for it, with the consideration of governing body thereof, this being its exclusive corporate purpose.

The bylaws of the Stock Exchange Company, their amendments and the appointment of the members of its Board of Directors shall require the approval of the National Securities Market Commission, following a report from the Autonomous Communities with competence in the matter.

[Block 88: #a51]

Article 51

The National Securities Market Commission may provide that the integration of an issue of securities into the Stock Market Interconnection System implies its exclusive trading through the same and may require, as a prior condition, its incorporation into the Securities Clearing and Settlement Service.

[Block 89: #a52]

Article 52

Each of the stock market operations must be assigned to a single Stock Exchange or, where applicable, to the Stock Market Interconnection System. The criteria to be followed for said assignment in the case of operations in which members of different Stock Exchanges concur shall be determined by regulation.

[Block 90: #a53]

Article 53. Obligations of the shareholder and of the holders of other securities and financial instruments.

1. The shareholder who, directly or indirectly, acquires or transfers shares of an issuer for which Spain is the Home State, in the terms established by regulation, whose shares are admitted to trading on an official secondary market or on any other regulated market domiciled in the European Union, and which confer voting rights, and as a result of said operations, the proportion of voting rights remaining in their power reaches, exceeds or falls below the percentages established, must notify the issuer and the National Securities Market Commission, under the conditions indicated, of the resulting proportion of voting rights.

The obligation contained in the preceding paragraph shall also apply when the proportion of voting rights exceeds, reaches or falls below the percentages referred to in the preceding paragraph as a result of a change in the total number of voting rights of an issuer on the basis of the information communicated to the National Securities Market Commission and made public.

2. The obligations established in the preceding paragraph shall also be applicable to any person who, regardless of the ownership of the shares, has the right to acquire, transfer or exercise the voting rights conferred by them, in the cases determined by regulation.

3. Likewise, the provisions of the preceding paragraphs shall apply to whoever possesses, acquires or transfers, directly or indirectly, other securities and financial instruments that confer the unconditional right or the discretionary power to acquire shares that confer voting rights or financial instruments that are referenced to shares that confer voting rights and have an economic effect similar to the aforementioned securities and financial instruments, regardless of whether or not they give the right to settlement by physical delivery of the underlying securities, in the terms and with the breakdown determined by regulation.

4. The obligations established in the preceding paragraphs shall also be applicable when the admission to trading for the first time on an official secondary market or on another regulated market domiciled in the European Union of the shares of an issuer for which Spain is the Home State occurs.

5. When the person in the cases provided for in the preceding paragraphs is a director of the issuer, in addition to complying with the obligation to communicate any operations carried out on shares of the issuer or on securities or other financial instruments referenced to said shares, they must communicate to the National Securities Market Commission the holding they had at the time of their appointment and cessation.

The executives of the issuer shall be obliged to notify those operations referred to in article 83.bis.4 of this Law.

6. The issuer must make public and disseminate the information referred to in the preceding paragraphs.

7. The form, term and other conditions for compliance with the obligations established in this article shall be determined by regulation as well as, where applicable, the cases exempted from compliance with these obligations.

8. The provisions of this article shall not apply to the participants and shareholders in variable capital collective investment funds and companies referred to in Law 35/2003, of 4 November, on Collective Investment Institutions.

Section 3 is amended by final provision 1.B).6 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision six of the aforementioned Law regarding the application of the amendments introduced in section 3.

Amended by art. 5 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

The second and third paragraphs are amended by additional provision 17.1 of Law 55/1999, of 29 December. Ref. BOE-A-1999-24786

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 13/04/2007, in force from 13/08/2007.

Amendment published on 30/12/1999, in force from 01/01/2000.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 91: #a53bis]

Article 53.bis. Obligations of the issuer in relation to treasury shares.

When Spain is the home Member State, issuers whose shares are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union must notify the National Securities Market Commission, make public and disseminate transactions on their own shares, under the terms established by regulation, when the proportion reaches, exceeds or is reduced by the percentages determined. This information shall be incorporated into the official register regulated in article 92 of this Law.

The provisions of this article shall not apply to variable capital collective investment companies referred to in Law 35/2003, of 4 November, on Collective Investment Institutions.

Added by art. 6 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 92: #a53ter]

Article 53.ter. Preventive measures.

1. When Spain is the host Member State under the terms established by regulation, the National Securities Market Commission must inform the competent authority of the home Member State and the European Securities and Markets Authority if it observes that the issuer, the holder of shares or other financial instruments or the natural or legal person referred to in section 2 of article 53, has committed irregularities or breached the obligations referred to in articles 35, 35 bis, 53 and 53 bis of this Law.

2. In the event that, either because the authority of the home Member State has not adopted measures, or because despite the measures adopted by the competent authority of the home Member State or because such measures have proved inadequate, the person indicated in the previous section persists in the violation of the relevant legal or regulatory provisions, the National Securities Market Commission, after informing the competent authority of the home Member State, shall adopt all pertinent measures to protect investors. The National Securities Market Commission shall immediately inform the European Commission and the European Securities and Markets Authority of the measures adopted.

Amended by art. 3.8 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Added by art. 7 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Select wording:

Last update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 13/04/2007, in force from 13/08/2007.

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 93: #a54]

Article 54

(Repealed)

Repealed by final provision 1.A).14 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Repealed in the manner indicated by sole repeal provision.b) and transitional provision two of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 4.13 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 94: #ciii]

CHAPTER III

On the Public Debt Market in Book-Entry Form

[Block 95: #a55]

Article 55

1. The Public Debt Market in Book-Entry form shall have as its purpose the trading of fixed-income securities represented by book entries issued by the State, by the Official Credit Institute and, at their request, by the European Central Bank, by the National Central Banks of the European Union, by the Autonomous Communities, by multilateral development banks of which Spain is a member, by the European Investment Bank or by other public entities, in the cases established by regulation, as well as the trading of other financial instruments, in all the foregoing cases in accordance with the provisions of the market regulations as set out in article 31 bis. In any case, the securities must comply with the technical specifications established for that purpose in the Market regulations. The securities admitted to trading on this market may be traded on other official secondary markets, under the terms set out in the Regulations of the corresponding market.

2. The Bank of Spain shall be considered the governing body of the Public Debt Market in Book-Entry form. The Bank of Spain shall carry out the financial servicing of the book-entry securities when it so agrees with the issuers and on their behalf, under the terms established in the Market regulations.

3. The replacement of the governing body of the Public Debt Market in Book-Entry form shall be governed by the provisions of paragraph 2 of article 31 quáter.

4. The Public Debt Market in Book-Entry form shall be governed by this Law and its implementing regulations, as well as by Regulations, as provided in article 31 bis.

5. The Autonomous Communities with competence in the matter may create, regulate and organize an autonomous Public Debt Market in Book-Entry form whose purpose is the trading of fixed-income securities issued by them and other public-law entities within their territorial scope.

Amended by the sole art. 24 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 3 is repealed and paragraph 2 and the second paragraph of 4 are amended by the sole repeal provision.a) and art. 1.4.6 and 7 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 4.14 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 96: #a56]

Article 56

1. In addition to the Bank of Spain, entities that meet the requirements of article 37 of this Law may access the status of members of the Public Debt Market in Book-Entry form, under the terms established in that article and in accordance with what is set out in the Market regulations.

2. Market members may operate for their own account or for the account of others, with or without representation, in accordance with their legal statute of activities.

Paragraph 3 is repealed and paragraph 1 is amended by the sole art. 25 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 4.15 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 97: #a57]

Article 57

1. The registration of the securities traded on the Public Debt Market in Book-Entry form shall correspond to the Management Company of the Securities Registration, Clearing and Settlement Services Systems referred to in additional provision seventeenth and to its participating entities authorized for this purpose by virtue of their status as management entities of the Public Debt Market.

2. In addition to the Bank of Spain, the clearing and settlement systems and bodies of the official secondary markets and the interbank clearing systems may be holders of accounts in their own name in the Public Debt Market in Book-Entry form and maintain accounts as participating entities in their own name in the registration system of the Systems Company, for the purpose of managing the guarantee system, as well as those who meet the requirements established for that purpose in the market regulations.

Amended by final provision 1.A).15 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Please note transitional provision seventh of the aforementioned Law regarding the application of this amendment.

Paragraph 3 is amended by the sole art. 26 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 1.4.8 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 4.16 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 98: #a58]

Article 58

1. In addition to the Bank of Spain, the members of the market that meet the requirements established for that purpose in the market regulations may be management entities.

2. The managing entities, in their capacity as participants in the registry system operated by the Sociedad de Sistemas, shall keep the registry of the securities of those who are not holders of accounts in their own name in the Public Debt Market in Book-Entry Form, and shall maintain in the Sociedad de Sistemas a global account that shall at all times constitute the exact counterpart of those.

3. When said managing entities also hold the additional status of holder of an account in their own name in the Public Debt Market, these latter accounts shall be kept in the Sociedad de Sistemas totally separate from the global accounts mentioned in the previous paragraph.

4. Under the terms established by regulation, the Banco de España may precautionarily agree to the suspension or limitation of activities of market members and managing entities when their actions generate a danger or cause serious disruption to the market, to the clearing and settlement procedures or, in the case of managing entities, to the legal certainty of the book-entry securities. These measures shall be communicated by the Banco de España to the Comisión Nacional del Mercado de Valores and to the Ministerio de Economía y Hacienda, so that the Minister, where appropriate, proceeds to ratify them.

5. Once the insolvency of a managing entity of the Public Debt Market in Book-Entry Form is declared, the Banco de España may immediately and at no cost to the investor order the transfer of the book-entry securities to third-party accounts of other managing entities. Likewise, the holders of the securities may request their transfer to another managing entity. For these purposes, both the insolvency judge and the insolvency administration shall facilitate the access of the receiving managing entity to the documentation and accounting and computer records necessary to effect the transfer, thereby ensuring the exercise of the rights of the holders of the securities. The existence of the insolvency proceeding shall not prevent the holders of the securities from receiving the cash proceeds from the exercise of economic rights or from their sale.

6. If, in accordance with the provisions of article 55.3, the Banco de España ceases to be the governing body of the market, the powers attributed to it in paragraphs 4 and 5 of this article shall correspond to the Comisión Nacional del Mercado de Valores.

Amended by the sole article.27 of Ley 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 6 is amended by final provision 18.2 of Ley 22/2003, of 9 July. Ref. BOE-A-2003-13813

Paragraphs 3 and 4 are amended and paragraphs 6 and 7 are repealed by art. 1.4.9 and the sole repeal provision.a) of Ley 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 4.17 of Ley 37/1998, of 16 November. Ref. BOE-A-1998-26345

The first paragraph is amended by art. 58.1 of Ley 4/1990, of 29 June. Ref. BOE-A-1990-15347

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 10/07/2003, in force from 01/09/2004.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Amendment published on 30/06/1990, in force from 30/06/1990.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 99: #civ]

CHAPTER IV

On the Official Secondary Markets for Futures and Options represented by book entries

Amended by art. 4.18 of Ley 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 100: #a59]

Article 59. Official Secondary Markets for Futures and Options.

1. Official secondary markets for futures and options may be created, at state level, whose form of representation is that of book entries. It shall be for the Minister of Economy and Competitiveness, on a proposal from the Comisión Nacional del Mercado de Valores, to authorize such creation, in accordance with the provisions of article 31 bis.

In the case of markets at autonomous community level, the authorization for the creation of the market, as well as the rest of the authorizations and approvals indicated in this article, shall correspond to the Autonomous Community with competence in the matter.

2. These markets shall have as their object futures, options and other derivative financial instruments contracts, whatever the underlying asset, defined by the market's governing company. The governing company shall organize the trading of said contracts.

The market's governing company shall ensure, through a central counterparty entity, subject to prior approval by the Comisión Nacional del Mercado de Valores, the counterparty in all contracts it issues.

3. The entities referred to in article 37 of this Law may be members of these markets. Entities whose main corporate purpose consists of investment in organized markets and which meet the conditions of means and solvency established by the market Regulations referred to in paragraph 7 of this article may also access the status of member, with capacity restricted exclusively to trading, either on their own account or on account of entities of their group. In futures and options markets with a non-financial underlying, regulations may determine the acquisition of said status by entities other than those previously indicated, provided they meet the requirements of specialization, professionalism and solvency.

4. In the official secondary markets for futures and options there shall be, in accordance with the provisions of article 31 bis, a governing company, in the form of a public limited company, whose basic functions shall be to organise, direct and supervise the activity of the market. These companies may not carry out any financial intermediation activity, nor the activities listed in article 63, except as provided in this Law.

5. The amendment of the articles of association of the governing company shall require prior approval by the National Securities Market Commission, in accordance with the provisions of article 31 bis, with the exceptions established by regulation.

6. The governing company shall have a board of directors with at least five members, and at least one general manager. Once the initial authorisation has been received, new appointments must be approved by the National Securities Market Commission or, where applicable, by the Autonomous Community with competence in the matter, in order to verify that the appointees meet the requirements of article 67.2.f) of this Law.

7. These markets, in addition to being governed by the rules provided in this Law and its implementing regulations, shall be governed by specific regulations, which shall have the status of rules of organisation and discipline of the Securities Market, the approval and amendment of which shall follow the procedure provided in article 31 bis. The aforementioned regulations shall detail the types of members, specifying the technical and solvency requirements they must meet in relation to the various activities they carry out in the market, the contracts specific to the market, the legal relationships of the governing company and of the market members with the clients acting in the market, the supervision rules, the trading regime, as well as any other aspects required by regulation.

Amended by final provision 1.2 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Please note for its application to the Olive Oil Futures Market transitional provision thirteenth.2 of the aforementioned Law.

Amended by sole article 28 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by article 2 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by article 4.18 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 101: #civbis]

CHAPTER IV BIS

On the reporting of transactions

Added by sole article 29 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 102: #a59bis]

Article 59 bis. Reporting of transactions to the National Securities Market Commission.

1. Investment services companies and credit institutions that execute transactions in financial instruments must report them to the National Securities Market Commission as soon as possible and, as regards the data set out in the first paragraph of number 3 of this same article, no later than the end of the next business day following their execution. This obligation shall be understood to apply in all cases, regardless of the method, medium, market or system through which the transactions were executed.

Excluded from this reporting obligation are transactions carried out on units or shares of collective investment institutions not admitted to trading either on regulated markets or on multilateral trading facilities.

2. Reports on executed transactions may be reported by the entity itself, by a third party acting on its behalf, by the governing company of the regulated market, or the management company of the multilateral trading facility through which the transaction was carried out, or by a transaction matching or reporting system approved by the National Securities Market Commission.

When transactions are reported to the National Securities Market Commission directly by the governing companies of the regulated markets, by the management companies of the multilateral trading facilities, or by the transaction matching or reporting systems, the investment services company or the credit institution may be exempted from the obligation set out in paragraph 1 of this article.

3. The reports shall have the content set out in Commission Regulation 1287/2006, of 10 August 2006, implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive.

In addition, the entities indicated in number 1 of this article must provide the CNMV, in the form, detail and time limits determined by regulation, with the identity of the clients on whose behalf they have executed their transactions.

The Minister of Economy and Finance is empowered to, where appropriate, establish additional information requirements when considered necessary to enable the proper exercise of the supervision functions entrusted to the National Securities Market Commission and provided that one of the following criteria is met:

a) the financial instrument that is the subject of the report has specific characteristics that are not included in the information required by Commission Regulation 1287/2006; or

b) the specific trading methods of the trading system where the transaction was carried out have characteristics that are not included in the information required by Commission Regulation 1287/2006.

4. Likewise, investment services companies and credit institutions must keep at the disposal of the National Securities Market Commission for at least five years the data indicated in this article on all transactions carried out.

5. The National Securities Market Commission shall ensure that the reports it receives are forwarded, in accordance with the provisions of article 91 bis, to the competent authority of the most important market in terms of liquidity of the financial instrument to which the transactions refer, when said market is located in another Member State of the European Union.

The reports sent to the National Securities Market Commission by the branches in Spain of investment services companies and credit institutions of other Member States in accordance with the provisions of the fifth paragraph of article 71 bis 2, shall be forwarded by it to the competent authority of the State of origin of the entity, unless the latter waives receiving the information.

6. The determination of the most important market in terms of liquidity, the specification of the permitted channels for sending reports, the exchange of information of the National Securities Market Commission with other competent authorities and the development of the other matters established in this article are contemplated in articles 9 to 14 of Commission Regulation 1287/2006, of 10 August 2006, implementing Directive 2004/39/EC of the European Parliament and of the Council, as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive.

Added by the sole art.29 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 103: #cv]

CHAPTER V

On public takeover bids

Amended by art. 8 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Select version:

Last update, published on 13/04/2007, in force from 13/08/2007.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 104: #a60]

Article 60. Mandatory public takeover bid.

1. Whoever reaches control of a listed company, whether achieved:

a) Through the acquisition of shares or other securities that confer, directly or indirectly, the right to subscribe for or acquire shares with voting rights in said company;

b) Through shareholders' agreements with other holders of securities; or

c) As a consequence of the other cases of an analogous nature that are established by regulation.

The obligations referred to in this Chapter shall be understood as referring to those companies whose shares are, in whole or in part, admitted to trading on a Spanish official secondary market and have their registered office in Spain.

The obligations referred to in this Chapter shall also apply, under the terms established by regulation, to companies that do not have their registered office in Spain and whose securities are not admitted to trading on a regulated market in the Member State of the European Union in which the company has its registered office, in the following cases:

a) When the company's securities are only admitted to trading on a Spanish official secondary market.

b) When the first admission to trading of the securities on a regulated market was on a Spanish official secondary market.

c) When the company's securities are admitted to trading simultaneously on regulated markets of more than one Member State and on a Spanish official secondary market, and the company so decides by notification to said markets and their competent authorities on the first day of trading of the securities.

d) When on 20 May 2006 the company's securities were already admitted to trading simultaneously on regulated markets of more than one Member State and on a Spanish official secondary market and the National Securities Market Commission had so agreed with the competent authorities of the other markets in which they had been admitted to trading or, failing agreement, the company had so decided.

Likewise, the provisions of this Chapter shall apply, under the terms determined by regulation, to companies that have their registered office in Spain and whose securities are not admitted to trading on a Spanish official secondary market.

The price shall be understood to be equitable when, at a minimum, it is equal to the highest price paid by the party obliged to formulate the offer or by persons acting in concert with it for the same securities during a period of time prior to the offer determined by regulation and under the terms established. However, the National Securities Market Commission may modify the price thus calculated in the circumstances and according to the criteria established by regulation. Among the aforementioned circumstances, the following may be included, among others: that the highest price has been set by agreement between the buyer and the seller; that the market prices of the securities in question have been manipulated; that market prices, in general, or certain prices, in particular, have been affected by exceptional events; that it is intended to favor the restructuring of the company. Among the aforementioned criteria, the following may be included, among others: the average market value over a given period; the net asset value of the company or other objective valuation criteria generally used.

In the event of a modification of the price referred to in the previous paragraph, the National Securities Market Commission shall publish on its website the decision that the offer be made at a price other than the equitable one. Such decision must be reasoned.

2. For the purposes of this Chapter, a natural or legal person shall be understood to have control of a company, individually or jointly with persons acting in concert with it, when it reaches, directly or indirectly, a percentage of voting rights equal to or greater than 30 percent; or when it has reached a lower stake and appoints, under the terms established by regulation, a number of directors that, together, where applicable, with those already appointed, represent more than half of the members of the company's administrative body.

The National Securities Market Commission shall conditionally exempt, under the terms established by regulation, from the obligation to formulate the public acquisition offer established in this article, when another person or entity, directly or indirectly, holds a percentage of voting rights equal to or greater than that held by the party obligated to formulate the offer.

3. Whoever fails to comply with the obligation to formulate a public acquisition offer may not exercise the political rights derived from any of the securities of the listed company that correspond to them by any title, without prejudice to the sanctions provided in Title VIII of this Law. This prohibition shall also apply to securities held indirectly by the party obligated to present the public offer and to those corresponding to persons acting in concert with it.

For the purposes of this section, a person shall be understood to fail to comply with the obligation to formulate a public acquisition offer if they do not present it, present it beyond the maximum established period, or present it with essential irregularities.

Resolutions adopted by the bodies of a company shall be null and void when, for their constitution or the adoption of such resolutions, it would have been necessary to count the securities whose political rights are suspended in accordance with the provisions of this section.

The National Securities Market Commission shall be entitled to exercise the corresponding challenge actions, within one year from the date it becomes aware of the resolution, without prejudice to the standing that may correspond to other persons.

The National Securities Market Commission may challenge the resolutions of the Board of Directors of the listed company, within one year from the date it becomes aware of them.

4. When the consideration offered consists of securities to be issued by the company obligated to formulate the offer, it shall be understood that the preemptive subscription right contemplated in article 158 of Royal Legislative Decree 1564/1989, of 22 December, approving the Consolidated Text of the Law on Public Limited Companies, does not exist for former shareholders and holders of convertible bonds.

5. The following shall be established by regulation:

a) The securities to which the offer must be addressed;

b) The rules and periods for calculating the percentage of votes that confers control of a company, taking into consideration direct and indirect holdings, as well as agreements, pacts, or situations of joint control;

c) The person who shall be obligated to present the public acquisition offer in cases of shareholders' agreements and situations of supervening control in which there is an obligation to present it;

d) The terms under which the offer shall be irrevocable or may be subject to a condition or be modified;

e) The guarantees required depending on whether the consideration offered is in cash, already issued securities, or securities whose issuance has not yet been agreed by the offering company or entity;

f) The form of administrative control by the National Securities Market Commission and, in general, the procedure for public acquisition offers;

g) The regime for possible competing offers;

h) The rules for proration;

i) The transactions excepted from this regime;

j) The equitable price, the forms of consideration, and the exceptions, if any, applicable;

k) The information that must be made public before the presentation of an offer, once the decision to present it has been adopted, during the course of the offer, and once it has ended;

l) The period within which a public acquisition offer must be presented from its public announcement;

m) The rules on the expiration of offers;

n) The rules applicable to the publication of the results of offers;

o) The information that must be provided by the administrative or management bodies of the affected company and of the offeror to the representatives of their respective workers or, failing that, to the workers themselves, as well as the procedure applicable to said obligation, without prejudice to the provisions of labor legislation, and

p) Any other matters whose regulation is deemed necessary.

6. Without prejudice to the provisions of the first paragraph, mandatory public takeover bids shall be subject to the regime of paragraph 2 of article 61 of this Law when any of the circumstances established in paragraph 3 of said provision concur.

7. The provisions of this article shall not apply in the case of use of the instruments, powers and resolution mechanisms established in Law 11/2015, of 18 June, on the recovery and resolution of credit institutions and investment firms.

Paragraph 7 is added by final provision 1.A).16 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Paragraph 6 is added by additional provision 2.1 of Law 1/2012, of 22 June. Ref. BOE-A-2012-8406 .

It is modified by art. 8 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Amendment published on 23/06/2012, in force from 24/06/2012.

Amendment published on 13/04/2007, in force from 13/08/2007.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 105: #a60bis]

Article 60.bis. Obligations of the administrative and management bodies.

1. During the period and under the terms determined by regulation, the administrative and management bodies of the affected company or of the companies belonging to its same group must obtain prior authorization from the general shareholders' meeting in accordance with the provisions of article 103 of the Consolidated Text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December, before undertaking any action that could prevent the success of the bid, with the exception of the search for other bids, and in particular before initiating any issue of securities that could prevent the bidder from obtaining control of the affected company.

With respect to decisions adopted before the start of the period contemplated in the previous paragraph and not yet applied in whole or in part, the general shareholders' meeting must approve or confirm in accordance with the provisions of article 103 of the Consolidated Text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December, any decision that does not fall within the normal course of business of the company and whose application could frustrate the success of the bid.

In the event that the affected company has a dual administration system, the provisions of the previous paragraphs shall also be applicable to the supervisory board.

The general shareholders' meeting referred to in this paragraph may be convened fifteen days before the date set for its holding, by notice published in the Official Gazette of the Commercial Registry and in one of the newspapers with the largest circulation in the province, stating the date of the meeting on first call and all matters to be dealt with.

The Official Gazette of the Commercial Registry shall publish the notice immediately upon receipt.

2. Companies may not apply the provisions of the previous paragraph when they are subject to a public takeover bid made by an entity that does not have its registered office in Spain and that is not subject to such rules or equivalent ones, including those referring to the rules necessary for the adoption of decisions by the General Meeting, or by an entity controlled by that one, directly or indirectly, in accordance with the provisions of article 4 of this Law.

Any decision adopted under the provisions of the previous paragraph shall require authorization from the general shareholders' meeting, in accordance with the provisions of article 103 of the Consolidated Text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December, adopted, at most, 18 months before the public takeover bid has been made public.

3. The administrative body of the affected company must publish a detailed report on the bid under the terms and deadlines established by regulation.

It is added by art. 8 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 106: #a60ter]

Article 60 ter. Neutralization measures.

1. Companies may decide to apply the following neutralization measures:

a) The ineffectiveness, during the acceptance period of the bid, of the restrictions on the transferability of securities provided for in the shareholders' agreements referring to said company.

b) The ineffectiveness, in the general shareholders' meeting that decides on the possible defense measures referred to in article 60 bis.1 of this Law, of the restrictions on the right to vote provided for in the bylaws of the affected company and in the shareholders' agreements referring to said company.

c) The ineffectiveness of the restrictions contemplated in letter a) above and, of those being of those provided for in letter b) above, contained in shareholders' agreements, when after a public takeover bid, the bidder has reached a percentage equal to or greater than 70 percent of the capital conferring voting rights.

2. The bylaw clauses that, directly or indirectly, generally set the maximum number of votes that a single shareholder, the companies belonging to the same group or those acting in concert with the foregoing may cast, shall be without effect when after a public takeover bid, the bidder has reached a percentage equal to or greater than 70 percent of the capital conferring voting rights, unless said bidder or its group or those acting in concert with the foregoing were not subject to equivalent neutralization measures or had not adopted them.

3. The decision to apply paragraph 1 of this article must be adopted by the general shareholders' meeting of the company, with the quorum and majority requirements provided for the amendment of the articles of association of public limited companies in Royal Legislative Decree 1/2010, of 2 July, approving the Consolidated Text of the Capital Companies Act, and shall be communicated to the National Securities Market Commission and to the supervisors of the Member States in which the company's shares are admitted to trading, or admission has been requested. The National Securities Market Commission shall publish this communication in the terms and within the period established by regulation.

At any time the general shareholders' meeting of the company may revoke the decision to apply paragraph 1 of this article, with the quorum and majority requirements provided for the amendment of the articles of association of public limited companies in Royal Legislative Decree 1/2010, approving the Consolidated Text of the Capital Companies Act. The majority required under this paragraph must coincide with that required under the preceding paragraph.

4. When the company decides to apply the measures described in paragraph 1, it must provide for adequate compensation for the loss suffered by the holders of the rights mentioned therein.

5. Companies may cease to apply the neutralization measures in force under the provisions of paragraph 1 of this article when they are subject to a public takeover bid made by an entity or group or those acting in concert with the foregoing, which have not adopted equivalent neutralization measures.

Any measure adopted under the provisions of the preceding paragraph shall require authorization from the general shareholders' meeting, with the quorum and majority requirements provided for the amendment of the articles of association of public limited companies in Royal Legislative Decree 1/2010, approving the Consolidated Text of the Capital Companies Act, at the latest, eighteen months before the public takeover bid has been made public.

6. Other matters whose regulation is deemed necessary for the development of the provisions of this article may be established by regulation.

Amended by additional provision 1.3 of Law 1/2012, of 22 June. Ref. BOE-A-2012-8406 .

Added by art. 8 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Select wording:

Last update, published on 23/06/2012, in force from 24/06/2012.

Amendment published on 13/04/2007, in force from 13/08/2007.

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 107: #a60quater]

Article 60 quater. Forced sales.

1. When, as a result of a public takeover bid for all the securities, under the terms of articles 60 and 61 of this Law, the offeror holds securities representing at least 90 percent of the capital conferring voting rights and the offer has been accepted by holders of securities representing at least 90% of the voting rights, other than those already held by the offeror:

a) The offeror may require the remaining holders of securities to sell such securities to it at a fair price.

b) The holders of securities of the affected company may require the offeror to purchase their securities at a fair price.

2. If, in the case regulated in this article, the securities subject to the forced sale or purchase are encumbered as a result of administrative acts or judicial decisions, or if there is any type of charge on them, including liens, limited real rights or financial guarantees, the securities shall be sold free of such charges, which shall instead be constituted on the price paid or the securities delivered by the offeror as payment of the price for the sale.

The depositary of the securities shall be obliged to hold in deposit the sale price or, where applicable, the securities delivered, informing the judicial or administrative authority that ordered the encumbrances or the holder of any other charges of the application of this procedure.

If, once the provisions of this paragraph have been applied, there is a portion of the price that is unnecessary for the satisfaction of the obligations secured by the encumbrance or encumbrances effected, or by the charges existing on the securities, it shall be immediately placed at the disposal of the holder thereof.

3. The procedure and requirements applicable to the forced sale referred to in the preceding paragraph shall be established by regulation.

Paragraph 2 is renumbered as 3 and paragraph 2 is added by art. 1.1 of Law 5/2009, of 29 June. Ref. BOE-A-2009-10751

Added by art. 8 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Select wording:

Last update, published on 30/06/2009, in force from 01/07/2009.

Amendment published on 13/04/2007, in force from 13/08/2007.

Added text, published on 13/04/2007, in force from 13/08/2007.

[Block 108: #a61]

Article 61. Voluntary public takeover bids.

1. Public takeover bids for shares, or for other securities conferring directly or indirectly voting rights in a listed company, made voluntarily, must be addressed to all their holders, shall be subject to the same procedural rules as the bids contemplated in this Chapter and may be made, under the conditions established by regulation, for a number of securities less than the total.

The mandatory offer contemplated in article 60 of this Law shall not be required when control has been acquired following a voluntary offer for all the securities, addressed to all their holders and which has complied with all the requirements set out in this Chapter.

2. When, within the two years prior to the announcement relating to the offer, any of the circumstances indicated in the following third subsection concurs, the offeror must provide a report by an independent expert on the valuation methods and criteria applied to determine the price offered, among which shall be included the average market value over a given period, the net asset value of the company, the value of the consideration paid by the offeror for the same securities in the twelve months prior to the announcement of the offer, the theoretical book value of the company and other generally accepted objective valuation criteria which, in any case, ensure the safeguarding of the rights of the shareholders.

The report shall justify the respective relevance of each of the methods used in the valuation. The price offered may not be less than the greater of the equitable price referred to in article 60 of this Law and that resulting from taking into account, and justifying their respective relevance, the methods contained in the report.

Likewise, if the offer is formulated as an exchange of securities, in addition to the foregoing, consideration or a cash price financially equivalent, at a minimum, to the exchange offered must be included, at least as an alternative.

In order for the offer to comply with the provisions of this subsection, the National Securities Market Commission may adapt the administrative procedure, extending the time limits to the extent necessary and requiring the information and documents it deems appropriate.

3. The circumstances referred to in the preceding second subsection are the following:

a) That the market prices of the securities to which the offer is addressed present reasonable indications of manipulation, which had led to the initiation of a sanctioning procedure by the National Securities Commission for infringement of the provisions of article 83 ter of Law 24/1988, of 28 July, on the Securities Market, without prejudice to the application of the corresponding sanctions, and provided that the corresponding statement of charges had been notified to the interested party;

b) That the market prices, in general, or of the affected company in particular, have been affected by exceptional events such as natural catastrophes, situations of war or calamity or others arising from force majeure;

c) That the affected company has been subject to expropriations, confiscations or other circumstances of a similar nature that may entail a significant alteration of the real value of its assets.

4. By regulation, the other matters whose regulation is deemed necessary for the development of the provisions of this article may be established.

It is numbered as subsection 1 and subsections 2 to 4 are added by additional provision 2.2 of Law 1/2012, of 22 June. Ref. BOE-A-2012-8406 .

It is amended by art. 8 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

It is repealed by sole repealing provision.a) of Royal Decree-Law 5/2005, of 11 March. Ref. BOE-A-2005-4172

The first paragraph is amended by art. 4.19 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 23/06/2012, in force from 24/06/2012.

Amendment published on 13/04/2007, in force from 13/08/2007.

Amendment published on 14/03/2005, in force from 15/03/2005.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 109: #cvi]

CHAPTER VI

On the annual corporate governance report

It is added by final provision 5.3 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Added text, published on 05/03/2011, in force from 06/03/2011.

[Block 110: #a61bis]

Article 61 bis. On the annual corporate governance report.

(Repealed)

It is repealed by repealing provision.a) of Law 31/2014, of 3 December. Ref. BOE-A-2014-12589 .

It is added by final provision 5.3 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Select wording:

Last update, published on 04/12/2014, in force from 24/12/2014.

Amendment published on 05/03/2011, in force from 06/03/2011.

Added text, published on 05/03/2011, in force from 06/03/2011.

[Block 111: #a61ter]

Article 61 ter. On the annual report on the remuneration of the directors.

(Repealed)

It is repealed by repealing provision.b) of Law 31/2014, of 3 December. Ref. BOE-A-2014-12589 .

It is amended by final provision 6.1 of Law 26/2013, of 27 December. Ref. BOE-A-2013-13723 .

It is added by final provision 5.3 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Select wording:

Last update, published on 04/12/2014, in force from 24/12/2014.

Amendment published on 28/12/2013, in force from 29/12/2013.

Amendment published on 05/03/2011, in force from 06/03/2011.

Text added, published on 05/03/2011, in force from 06/03/2011.

[Block 112: #tv]

TITLE V

Investment services companies

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select version:

Last update, published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 113: #ci-8]

CHAPTER I

General provisions

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select version:

Last update, published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 114: #a62]

Article 62. Concept of investment services company and excluded cases.

1. Investment services companies are those companies whose main activity consists of providing investment services, on a professional basis, to third parties in relation to the financial instruments indicated in article 2 of this Law.

2. Investment services companies, in accordance with their specific legal regime, shall carry out the investment services and ancillary services provided for in the following article, and may be members of the official secondary markets if they so request in accordance with the provisions of Title IV of this Law.

3. The Law shall not apply to the following persons:

a) persons who do not perform any investment service other than dealing on own account, except if these persons are market makers or deal on own account outside a regulated market or a multilateral trading facility in an organised, frequent and systematic manner providing an accessible system to third parties for the purpose of entering into transactions with them;

b) persons who provide investment services consisting exclusively of the management of employee participation schemes and/or the provision of investment services exclusively to their parent undertakings, to their subsidiaries or to other subsidiaries of their parent undertakings;

c) persons who deal on own account in financial instruments or provide investment services in financial instruments derivatives on commodities or derivative contracts referred to in article 2.8 to the clients of their main activity, provided that they do so as an ancillary activity with respect to the main one, when they are considered as part of a group, and that main activity is not the provision of investment services within the meaning of this Law or of banking services according to Directive 2000/12/EC;

d) persons whose main activity consists of dealing on own account in commodities or financial instruments derivatives on commodities. This exception shall not apply when the persons who deal on own account in commodities or derivatives on commodities form part of a group whose main activity is the provision of other investment services within the meaning of this Law, or of banking services in accordance with Directive 2000/12/EC;

e) companies that provide investment services consisting exclusively of dealing on own account in markets of financial instruments derivatives and in spot markets for the sole purpose of covering positions in markets of financial instruments derivatives, or that operate on behalf of other members of those markets or facilitate prices for them, and that are guaranteed by clearing members of the same market, when the responsibility for the fulfilment of the contracts entered into by those companies is assumed by the clearing members of the same market;

f) persons who provide an investment service, when that service is provided as an ancillary part of a professional activity, and provided that the latter is regulated by legal or regulatory provisions or by a professional code of conduct that does not exclude the provision of that service;

g) persons who provide investment advice in the exercise of another professional activity not regulated by this Law, provided that the provision of that advice is not specifically remunerated;

h) members of the European System of Central Banks, other national bodies with similar functions, or other public bodies that are responsible for or intervene in the management of public debt;

i) collective investment undertakings and pension funds, their depositaries and management companies. However, the Law shall apply to the management companies of collective investment institutions in relation to the activities described and under the conditions set out in article 65.2 of this Law.

4. The services provided as counterparty in transactions carried out by public bodies that deal in public debt or by the Bank of Spain, the European Central Bank or by other members of the European System of Central Banks, within the functions assigned to them by the applicable legislation, shall not be subject to this Law.

Amended by the sole art. 30 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select version:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 115: #a63]

Case law

Article 63. Investment services and ancillary services.

1. The following shall be considered investment services:

a) The reception and transmission of orders from clients in relation to one or more financial instruments.

This service shall be understood to include bringing two or more investors into contact with each other so that they execute transactions between themselves on one or more financial instruments.

b) The execution of such orders on behalf of clients.

c) Dealing on own account.

d) Discretionary and individualised management of investment portfolios in accordance with mandates given by clients.

e) The placing of financial instruments without a firm commitment basis.

f) The underwriting of financial instruments or placing of financial instruments on a firm commitment basis.

g) Investment advice, understood as the provision of personalised recommendations to a client, either at the client's request or on the initiative of the investment services firm, with respect to one or more transactions relating to financial instruments. For the purposes of this paragraph, generic and non-personalised recommendations that may be made in the context of the marketing of securities and financial instruments shall not be considered to constitute advice. Such recommendations shall have the status of commercial communications.

h) The operation of multilateral trading facilities.

2. The following are considered ancillary services:

a) The custody and administration on behalf of clients of the instruments provided for in Article 2.

b) The granting of credits or loans to investors, so that they may carry out a transaction on one or more of the instruments provided for in Article 2, provided that the firm granting the credit or loan is involved in such transaction.

c) Advice to undertakings on capital structure, industrial strategy and related matters, as well as advice and other services relating to mergers and acquisitions of undertakings.

d) Services related to the underwriting of issues or the placing of financial instruments.

e) The preparation of investment reports and financial analyses or other forms of general recommendation relating to transactions in financial instruments.

This paragraph shall be understood to include any information that, without taking into account the specific personal circumstances of the client to whom it is addressed, recommends or proposes an investment strategy, explicitly or implicitly, on one or several financial instruments or on the issuers of financial instruments, including any opinion on the value or the current or future price of such instruments, provided that the information is intended for distribution channels or the public and that the following conditions are met:

i) That the investment report is qualified as such, or as a financial analysis or any similar term, or is presented as an objective or independent explanation of those issuers or instruments on which recommendations are made.

ii) That, when the recommendation is made by an investment services firm to a client, it does not constitute investment advice in accordance with the provisions of letter g) of the preceding paragraph of this article.

f) Foreign exchange services, where related to the provision of investment services.

g) Investment services as well as ancillary services relating to the non-financial underlying of derivative financial instruments referred to in paragraphs 3, 4, 5 and 8 of Article 2 of this Law, where they are linked to the provision of investment services or ancillary services.

This shall be understood to include the deposit or delivery of goods that qualify as deliverable.

3. Investment services firms, under the terms established by regulation, and provided that the possible risks and conflicts of interest between them and their clients, or those that may arise between different clients, are adequately resolved, may carry out the activities provided for in the preceding paragraphs, relating to instruments not covered by Article 2 of this Law, or other ancillary activities that constitute an extension of their business, where this does not distort the exclusive corporate purpose of the investment services firm.

Investment services firms may not assume functions exclusive to management companies of collective investment institutions, pension funds or asset securitisation funds.

4. The marketing of investment services and the solicitation of clients do not in themselves constitute investment services but activities prior to each of the investment services listed in the preceding paragraphs, which may be carried out separately from the provision of the service itself.

5. The Government may amend the content of the list of investment services and ancillary services set out in this article as well as that of financial instruments set out in Article 2, in order to adapt them to the amendments established in European Union regulations. The Government may also regulate the manner of providing the investment services and ancillary services referred to in this article.

Letters e) and f) of paragraph 1 are amended by final provision 1.3 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Amended by sole article 31 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by Article 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 116: #a64]

Article 64. Classes of investment services firms.

1. The following are investment services companies:

a) Securities companies.

b) Securities agencies.

c) Portfolio management companies.

d) Financial advisory firms.

2. Securities companies are those investment services companies that may operate professionally, both on behalf of third parties and on their own account, and provide all the investment services and ancillary services provided for in Article 63.

3. Securities agencies are those investment services companies that professionally may only operate on behalf of third parties, with or without representation. They may provide the investment services and ancillary services provided for in Article 63, with the exception of those provided for in paragraph 1, letters c) and f), and in paragraph 2, letter b).

4. Portfolio management companies are those investment services companies that may exclusively provide the investment services provided for in Article 63.1.d) and g). They may also provide the ancillary services provided for in Article 63.2.c) and e).

5. Financial advisory firms are those natural or legal persons that may exclusively provide the investment services provided for in Article 63.1.g) and 63.2.c) and e).

In no case shall the activities carried out by these firms be covered by the Investment Guarantee Fund regulated in Title VI of this Law.

Likewise, these firms, as well as those described in the previous paragraph, may not carry out transactions on securities or cash on their own account, except to administer their own assets, subject to the limitations established by regulation. These firms shall not be authorized to hold clients' funds or securities, and therefore may in no case be placed in a debtor position with respect to their clients.

6. The designations "Sociedad de Valores", "Agencia de Valores", "Sociedad Gestora de Carteras" and "Empresa de Asesoramiento Financiero", as well as their abbreviations "S.V.", "A.V.", "S.G.C." and "E.A.F.I.", respectively, are reserved for entities registered in the corresponding registers of the National Securities Market Commission, which are obliged to include them in their name. No other person or entity may use such designations or abbreviations, nor the designation "empresa de servicios de inversión", nor any other designation or abbreviation that may cause confusion.

7. No person or entity may, without having obtained the required authorization and being registered in the corresponding administrative registers, professionally carry out the activities provided for in paragraph 1 and in letters a), b), d), f) and g) of paragraph 2 of Article 63, in relation to the financial instruments contemplated in Article 2, including, for this purpose, transactions on foreign currency.

Likewise, the marketing of investment services and the solicitation of clients may only be carried out professionally, by themselves or through the agents regulated in Article 65 bis of this Law, by entities that are authorized to provide such services.

8. Persons or entities that fail to comply with the provisions of the two preceding paragraphs shall be required to cease immediately the use of the designations or the offering or carrying out of the activities described. If, within thirty days from notification of the requirement, they continue to use them or carry them out, they shall be sanctioned with coercive fines of up to five hundred thousand euros, which may be repeated on the occasion of subsequent requirements.

The National Securities Market Commission shall be competent to issue the requirements and impose the fines referred to in the preceding paragraph, and may also issue public warnings regarding the existence of this conduct. The requirements shall be issued after hearing the interested person or entity, and the fines shall be imposed in accordance with the procedure provided for in the Law.

The provisions of this paragraph are without prejudice to the other sanctions that may apply in accordance with the provisions of Title VIII of this Law and the other liabilities, including criminal, that may be enforceable.

9. The Commercial Registry and other public Registries shall not register those entities whose corporate purpose or name is contrary to the provisions of this Law. When, nevertheless, such registrations have been made, they shall be null and void by operation of law, and their cancellation shall be proceeded with ex officio or at the request of the National Securities Market Commission. Such nullity shall not prejudice the rights of third parties in good faith, acquired in accordance with the content of the corresponding Registries.

Amended by the sole article 32 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 7 is amended by Article 40 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by Article 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 117: #a65]

Article 65. Other entities.

1. Credit institutions, even if they are not investment services companies under this Law, may habitually provide all the services provided for in Article 63, provided that their legal regime, their bylaws and their specific authorization enable them to do so.

In the procedure by which credit institutions are authorised to provide investment services or ancillary services, a report from the National Securities Market Commission shall be mandatory.

Likewise, the provisions of this Law and its implementing regulations shall apply to credit institutions with regard to the provision and discipline of the services and activities provided for in Article 63 thereof and their possible participation in official secondary markets.

2. The rules provided for in this Law, and in its implementing provisions, that regulate the discretionary and individualised management of investment portfolios, investment advice, the custody and administration of units or shares in investment funds and, where applicable, shares in investment companies, shall apply to Collective Investment Institution Management Companies that were authorised to do so. In particular, Articles 70 ter, 70 quater, 78, 78 bis, 79, 79 bis, 79 ter and 79 quater shall apply to them, where applicable with the special features that may be established by regulation.

Amended by the sole article.33 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 5 is added by Article 54 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by Article 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 118: #a65bis]

Article 65 bis. Agents of investment services companies.

1. Investment services companies may appoint agents for the promotion and marketing of the investment services and ancillary services covered by their programme of activities. Likewise, they may appoint them to habitually carry out, vis-à-vis clients, in the name and on behalf of the investment services company, the investment services provided for in Article 63.1.a) and e), as well as to provide advice on the financial instruments and investment services offered by the company.

Agents shall act exclusively for a single investment services company, or for several companies in the same group, and, under no circumstances, shall they hold any representation of investors, nor may they carry out other activities that could conflict with the proper performance of their functions.

2. Agents must meet the requirements of good repute, knowledge and experience set out in Article 67.2.f).

3. Agents shall act on behalf and under the full and unconditional responsibility of the investment services companies that have engaged them.

4. Investment services companies must, as a prerequisite for the appointment of agents, have the necessary means to effectively control the actions of their agents and to enforce the internal rules and procedures of the entities applicable to them. Likewise, they must ensure that the agents comply with the provisions of paragraph 2 above; that they do not carry out activities that could adversely affect the provision of the services entrusted to them and that they inform clients of the name of the investment services company they represent and that they act in its name and on its behalf when they contact or before negotiating with any client or potential client.

Investment services companies that appoint agents must grant them sufficient power to act in their name and on their behalf in the provision of the services entrusted to them.

Agents may not receive from clients, even temporarily, financial instruments or money, nor receive fees, commissions or any other type of remuneration from the client. Agents may also not sub-delegate their actions.

5. Investment services companies that engage agents must notify the National Securities Market Commission, which shall register them in the register referred to in Article 92, following registration of the powers of attorney in the Commercial Registry and once it has been verified that the agent has proven good repute, knowledge and experience to be able to communicate accurately to the client or potential client all relevant information about the proposed service. Registration in the register of the National Securities Market Commission shall be a necessary requirement for agents to be able to commence their activity.

When the investment services company terminates its relationship with an agent, it must immediately notify the National Securities Market Commission, for annotation in the corresponding register.

When a Spanish investment services company uses a tied agent established in another Member State of the European Union, the tied agent shall be registered in the register of the National Securities Market Commission when the Member State in which it is established does not allow its national investment services companies to use tied agents.

6. Credit institutions that, in accordance with the provisions of the preceding article, are authorised to provide investment services may appoint agents under the terms and conditions established in this article. In this case, the agents shall be registered in the register that exists for this purpose at the Bank of Spain and shall be governed by the provisions of the banking regulations applicable to them, insofar as they are not contradictory to the provisions of this article.

7. The provisions of this article shall be developed by regulation, establishing, in particular, the other requirements to which the actions of the agents and of the investment services companies to which they provide their services shall be subject.

Paragraphs 2 and 5 are amended by final provision 1.4 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Added by sole article 34 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Amendment published on 20/12/2007, in force from 21/12/2007.

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 119: #a65ter]

Article 65 ter. Contracting by electronic means.

In accordance with the provisions of the rules that, on a general basis, regulate contracting by electronic means, the Minister of Economy and Finance is empowered to regulate the special features of the contracting of investment services electronically, guaranteeing the protection of the legitimate interests of the clientele and without prejudice to the freedom of contract which, in its substantive aspects and with the limitations that may arise from other legal provisions, must govern the relations between investment services companies and their clientele.

Added by sole article 35 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 120: #cii-5]

CHAPTER II

Conditions of access to the activity

Amended by article 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Added text, published on 17/11/1998, in force from 18/11/1998.

[Block 121: #a66]

Article 66. Authorization and registration.

1. The National Securities Market Commission shall be responsible for authorizing the creation of investment services companies.

The authorization shall state the class of investment services company concerned, as well as the specific investment services and ancillary services authorized among those appearing in the programme of activities referred to in the following paragraph.

The administrative decision shall be reasoned and must be notified within three months following receipt of the application, or the moment when the required documentation is complete and, in any case, within six months following receipt thereof. When the application is not resolved within the aforementioned period, it may be deemed rejected. The National Securities Market Commission shall communicate to the Ministry of Economy and Competitiveness, on a quarterly basis, the authorization procedures initiated indicating the essential elements of the file to be processed, and the completion thereof, indicating the sense of the resolution adopted by the National Securities Market Commission.

2. The application for authorization must be accompanied, together with, where applicable, the articles of association and other documents determined by regulation, in all cases by a programme of activities, in which it must specifically state which of those provided for in article 63 the company intends to carry out and with what scope, as well as its organization and resources. Investment services companies may not carry out activities that are not expressly stated in the authorization referred to in paragraph 1 above.

Likewise, in no case shall authorization be granted for the provision solely of ancillary services.

3. For the provision of the service of management of a multilateral trading facility, the governing companies of official secondary markets as well as entities constituted for that purpose by one or more governing companies may also be authorized, which must have as their exclusive corporate purpose the management of the system and must be 100 percent owned by one or more governing companies, provided they comply, in the terms and with the adaptations established by regulation, with the requirements of investment services companies to obtain the authorization established in this chapter, with the exception of the obligation to adhere to the Investment Guarantee Fund and of the provisions of article 71.4, second paragraph.

4. The authorization of an investment services company must be subject to prior consultation with the competent supervisory authority of the corresponding Member State of the European Union when any of the following circumstances occurs:

a) That the new company is to be controlled by an investment services company, a credit institution, an insurance company or a management company of collective investment institutions authorized in that State.

b) That its control is to be exercised by the dominant company of an investment services company, a credit institution, an insurance company or a management company of collective investment institutions authorized in that State.

c) That its control is to be exercised by the same natural or legal persons that control an investment services company, a credit institution, an insurance company or a management company of collective investment institutions authorized in that Member State.

A company shall be understood to be controlled in accordance with the provisions of article 4 of this Law.

That consultation shall cover, in particular, the assessment of the suitability of the shareholders and the good repute, knowledge and experience of the administrators and directors of the new entity or of the dominant entity, and may be repeated for the ongoing assessment of compliance, by Spanish investment services companies, with said requirements.

5. In the case of the creation of investment services companies that are to be controlled, directly or indirectly, by one or several companies authorised or domiciled in a State that is not a member of the European Union, the granting of the requested authorisation must be suspended, denied or its effects limited, when a decision adopted by the European Union has been notified to Spain upon verifying that Community investment services companies do not benefit in said State from treatment offering the same conditions of competition as to its national entities, and that the conditions for effective market access are not met.

6. In order for an investment services company, once authorised, to be able to commence its activity, the promoters must incorporate the company, registering it in the Mercantile Registry and subsequently in the corresponding Registry of the National Securities Market Commission. In the case of financial advisory companies that are natural persons, registration in the registry of the National Securities Market Commission shall suffice.

The National Securities Market Commission shall notify every authorisation granted to the European Securities and Markets Authority.

7. The authorisation referred to in this article shall be declared expired if, after a period of one year, counted from the day following the date of notification of the administrative resolution granting the authorisation, the promoters of the investment services company do not request, after complying with the provisions of the preceding paragraph, their registration in the corresponding registry of the National Securities Market Commission.

Paragraph 1 is amended by art. 94.12 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

The last paragraph of paragraph 4 is amended by final provision 1.5 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Paragraph 6 is amended by art. 3.9 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by art. único.36 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 3 is amended by art. 11.1 of Law 5/2005, of 22 April. Ref. BOE-A-2005-6561

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Letters h) and j) drafted in accordance with the correction of errors published in BOE no. 122, of 23 May 1989. Ref. BOE-A-1989-11627

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 27/06/2014, in force from 28/06/2014.

Amendment published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/04/2005, in force from 24/04/2005.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

Upload

[Block 122: #a67]

Article 67. Denial of authorisation and access requirements.

1. The National Securities Market Commission may only deny authorisation to incorporate an investment services company on the following grounds:

a) When the legal and regulatory requirements provided for obtaining and maintaining authorisation are not met.

b) When, in view of the need to guarantee sound and prudent management of the entity, the suitability of the shareholders who are to hold a significant shareholding, as defined in article 69, is not considered appropriate. Among other factors, suitability shall be assessed based on:

1.º The honour of the shareholders.

2.º The patrimonial means available to said shareholders to meet the commitments assumed.

3.º The possibility that the entity may be inappropriately exposed to the risk of the non-financial activities of its promoters; or, when dealing with financial activities, the stability or control of the entity may be affected by the high risk of those activities.

The references made to shareholders in this article shall be understood as made to the entrepreneurs in the case of financial advisory companies that are natural persons.

c) The lack of transparency in the structure of the group to which the entity may eventually belong, or the existence of close links with other investment services companies or other natural or legal persons that prevent the effective exercise of the supervision functions of the National Securities Market Commission, and, in general, the existence of serious difficulties in inspecting it or obtaining the information that the National Securities Market Commission deems necessary for the proper development of its supervisory functions.

d) When the legal, regulatory or administrative provisions of a State that is not a member of the European Union governing the natural or legal persons with which the investment company maintains close links, or the difficulties involved in their application, prevent the effective exercise of supervision functions.

e) The lack of honour, knowledge and experience, and capacity to exercise good governance of the company on the part of the members of the board of directors and the persons responsible for the effective management of the mixed financial holding company, when the investment services company is to be dependent on it as a member of a financial conglomerate.

f) The existence of serious conflicts of interest between the positions, responsibilities or functions held by the members of the board of directors of the investment services company and other positions, responsibilities or functions that they hold simultaneously.

2. The following shall be requirements for an entity to obtain its authorisation as an investment services company:

a) That its exclusive corporate purpose is the carrying out of the activities that are specific to investment services companies, in accordance with this Law.

b) That it takes the form of a public limited company, incorporated for an indefinite period, and that the shares comprising its share capital are registered shares. By regulation, it may be provided that the investment services company takes another form of company when it concerns financial advisory companies that are legal persons.

c) That when it concerns a newly created entity, it is incorporated by the simultaneous incorporation procedure and that its founders do not reserve for themselves advantages or special remunerations of any kind.

d) The existence of a minimum share capital fully paid up in cash and of the minimum own funds that are determined by regulation based on the services and activities provided and the expected volume of its activity.

When it concerns investment services companies that are only authorized to provide the investment advisory service or to receive and transmit orders from investors without holding funds or transferable securities belonging to clients, and that for this reason can never be in a debtor position with respect to said clients, they must subscribe a minimum share capital or a professional liability insurance, or a combination of both, in accordance with what is established by regulation.

e) That it has at least three directors or, where applicable, that the board of directors is made up of no fewer than three members. By regulation, a greater number of directors may be required, based on the investment and ancillary services that the entity is going to provide. In the case of financial advisory companies that are legal persons, the entity may appoint a sole director.

f) That the chairpersons, vice-chairpersons, directors or administrators, general managers and persons assimilated to the latter, possess recognized good repute, knowledge and experience for the proper exercise of their functions and are in a position to exercise good governance of the investment services company. In the case of parent entities of investment services companies, the good repute requirement must also be met by the chairpersons, vice-chairpersons, directors or administrators, general managers and persons assimilated to the latter, and the majority of the members of the board of directors must possess knowledge and experience for the proper exercise of their functions.

Likewise, the requirements of good repute, knowledge and experience must be met by the persons responsible for the internal control functions and other key positions for the daily development of the activity of an investment services company and of its parent entity, as established by the National Securities Market Commission.

g) That it has the procedures, measures and means necessary to comply with the organizational requirements provided for in paragraphs 2 and 3 of article 70 ter of this Law.

h) That it has an internal code of conduct, adjusted to the provisions of this Law, as well as control and security mechanisms in the IT field and adequate internal control procedures, including, in particular, a regime for personal transactions of the directors, managers, employees and agents of the company.

i) That it adheres to the Investment Guarantee Fund provided for in Title VI of this Law, when the specific regulation thereof so requires. This requirement shall not be applicable to the investment services companies provided for in article 64.1.d) of this Law.

j) That it has submitted a business plan that reasonably proves that the investment services company project is viable in the future.

k) That it has submitted adequate documentation on the conditions and the services, functions or activities that are to be subcontracted or outsourced, so that it can be verified that this fact does not distort or render devoid of content the authorization requested.

l) That it has adequate procedures for the prevention of money laundering and the financing of terrorism.

In the regulatory development of the requirements provided for in this paragraph, account must be taken of the class of investment services company concerned and the type of activities it carries out, in particular, in relation to the establishment of the minimum share capital and minimum own funds provided for in letter d) above.

When the governing company of the official secondary market applies for authorization and the persons who manage the multilateral trading system are the same as those who manage said market, it shall be presumed that those persons comply with the requirements established in letter f) above.

3. In addition, when the authorization application refers to the provision of the service of management of a multilateral trading system, the investment services company, the governing company or, where applicable, the entity constituted for that purpose by one or several governing companies, must submit to the approval of the National Securities Market Commission an Operating Regulation that, without prejudice to the other specifications established in article 120, must:

a) Establish clear and transparent rules governing access to the multilateral trading system in accordance with the conditions established in article 37.2 and that set the criteria for determining the financial instruments that may be traded in the system.

b) Establish rules and procedures governing trading in these systems in a fair and orderly manner, establishing objective criteria that allow for efficient execution of orders.

4. For the purposes of the provisions of paragraphs 1 and 2:

a) There is honorability in those who have been demonstrating personal, commercial and professional conduct that casts no doubt on their capacity to perform a sound and prudent management of the investment services company.

To assess the concurrence of honorability, all available information must be considered, in accordance with the parameters determined by regulation. In any case, such information must include that relating to conviction for the commission of crimes or offenses and sanction for the commission of administrative infractions.

b) Those who have training of the appropriate level and profile, in particular in the areas of securities and financial services, and practical experience derived from their previous occupations for a sufficient time, possess adequate knowledge and experience to exercise their functions in investment services companies.

c) For the purposes of assessing the disposition of the members of the board of directors to exercise good governance of the investment services company, the presence of potential conflicts of interest that generate undue influences from third parties and the capacity to dedicate sufficient time to carry out the corresponding functions shall be taken into account.

5. Financial advisory companies that are natural persons must comply with the following requirements to obtain the corresponding authorization:

a) Have adequate honorability, knowledge and experience in accordance with the provisions of section 2.f) above.

b) Comply with the financial requirements established by regulation.

c) Comply with the requirements established in section 2.g) and h) above, in the terms established by regulation.

Section 1 is modified by art. 94.13 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

It is modified by final provision 1.6 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

It is modified by sole art. 37 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Letter d) of section 1 is added by art. 11.2 of Law 5/2005, of 22 April. Ref. BOE-A-2005-6561

Letter g) of section 2 is modified by final provision 18.2 of Law 22/2003, of 9 July. Ref. BOE-A-2003-13813

It is modified by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Modification published on 27/06/2014, in force from 28/06/2014.

Modification published on 20/12/2007, in force from 21/12/2007.

Modification published on 23/04/2005, in force from 24/04/2005.

Modification published on 10/07/2003, in force from 01/09/2004.

Modification published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 123: #a67bis]

Article 67 bis. Regime of incompatibilities and limitations.

1. The National Securities Market Commission shall determine the maximum number of positions that a member of the board of directors or a general director or equivalent may simultaneously hold, taking into account the particular circumstances and the nature, size and complexity of the entity's activities.

The members of the board of directors with executive functions and the general directors and equivalents of investment services companies may not simultaneously hold more positions than those provided for credit institutions in article 26 of Law 10/2014, on the Organization, Supervision and Solvency of Credit Institutions.

2. The National Securities Market Commission may authorize the positions mentioned in the previous section to hold an additional non-executive position if it considers that this does not prevent the correct performance of their activities in the investment services company. Such authorization must be communicated to the European Banking Authority.

3. Notwithstanding the foregoing, this article shall not apply to investment services companies that comply with the following requirements:

a) They are not authorized to provide the auxiliary service referred to in article 63.2.a),

b) They provide only one or several of the investment services or activities listed in article 63.1 a), b) d) and g); and

c) They are not allowed to hold money or securities of their clients in deposit and that, for this reason, they can never be in a debtor situation with respect to said clients.

It is added by final provision 1.7 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Added text, published on 27/06/2014, in force from 31/10/2014.

[Block 124: #ciii-2]

CHAPTER III

Conditions of exercise

It is added by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Added text, published on 17/11/1998, in force from 18/11/1998.

[Block 125: #a68]

Article 68. Statutory modifications, alteration of investment services and auxiliary services and changes in administration and management positions.

1. Modifications to the social statutes of investment services companies shall be subject to the authorization procedure for new entities, although the authorization request must be resolved, notifying the interested parties, within two months of its presentation. When the request is not resolved within this period, it shall be deemed approved. All of them must be registered in the Mercantile Registry and in that of the National Securities Market Commission, within the periods and with the requirements established by regulation.

Modifications to the social statutes that have as their object the following shall not require prior authorization, although they must subsequently be communicated to the National Securities Market Commission for its record in the corresponding registry:

a) Change of registered address within the national territory as well as the change of name of the investment services company.

b) Incorporation into the articles of association of the investment services companies of legal or regulatory provisions of a mandatory or prohibitive nature, or compliance with judicial or administrative resolutions.

c) Capital increases charged to reserves of the investment services companies.

d) Those other amendments for which the National Securities Market Commission, in response to a prior consultation or, by means of a general resolution, has considered the authorization procedure unnecessary, due to its scant relevance.

2. Any alteration of the specific investment services and auxiliary services initially authorized shall require prior authorization granted in accordance with the authorization procedure for new entities and registration in the registers of this Commission, in the manner determined by regulation. Authorization may be denied if the entity does not comply with the provisions of articles 67, 70 and 70 ter, and, in particular, if it considers the administrative and accounting organization of the entity, its human and technical resources, or its internal control procedures to be insufficient.

If, as a consequence of the authorized alteration, the investment services company restricts the scope of its activities, the pending operations shall be settled, where appropriate, or the securities, instruments and cash entrusted to it by its clients shall be transferred. The National Securities Market Commission may adopt the appropriate precautionary measures, including intervention in the settlement of pending operations.

3. The appointment of new management or direction positions of the investment services companies and, where applicable, of their parent entities, shall be subject to prior notification to the National Securities Market Commission, in the manner and within the periods determined by regulation. The National Securities Market Commission may oppose such appointments, with reasons, within three months from receipt of the notification, if it considers that such persons do not enjoy sufficient good repute or experience, in accordance with the provisions of article 67.2.f) and g) or when there are objective and demonstrable grounds for believing that the proposed changes may jeopardize the sound and prudent management of the entity or of the group to which it belongs.

In the case of new management or direction positions of the parent entity of the investment services company that are subject to authorization by other supervisory bodies, mere notification to the National Securities Market Commission of the new positions shall suffice.

Section 2 is amended by art. 94.14 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Amended by the sole art. 38 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 126: #a69]

Article 69

1. For the purposes of this Law, a significant shareholding in a Spanish investment services company shall mean one that reaches, directly or indirectly, at least 10 per cent of the capital or voting rights of the company.

A shareholding that, without reaching the aforementioned percentage, allows significant influence to be exercised over the company shall also be considered a significant shareholding. It shall be determined by regulation, taking into account the characteristics of the different types of investment services companies, when it must be presumed that a natural or legal person may exercise such significant influence, taking into account for these purposes, among others, the possibility of appointing or removing a member of its board of directors.

2. The provisions of this Title for investment services companies shall be understood without prejudice to the application of the rules on public takeover bids and information on significant shareholdings contained in this Law and the special rules established in the seventeenth additional provision and in articles 31 and 44 bis of this Law, as well as in their implementing regulations.

3. Any natural or legal person who, alone or acting in concert with others, has acquired, directly or indirectly, a shareholding in a Spanish investment services company, such that its percentage of voting rights or capital held is equal to or greater than 5 per cent, shall immediately notify in writing the National Securities Market Commission and the corresponding investment services company, indicating the amount of the shareholding reached.

4. Any natural or legal person who, alone or acting in concert with others, hereinafter the potential acquirer, has decided to acquire, directly or indirectly, a significant shareholding in a Spanish investment services company or, alternatively, to increase, directly or indirectly, the shareholding in the same such that either the percentage of voting rights or capital held is equal to or greater than 20, 30 or 50 per cent, or that, by virtue of the acquisition, control of the investment services company could be obtained, hereinafter the proposed acquisition, shall notify in advance the National Securities Market Commission, indicating the amount of the intended shareholding, and including all the information determined by regulation. Such information must be relevant to the assessment and proportionate and appropriate to the nature of the potential acquirer and of the proposed acquisition.

A control relationship shall be deemed to exist for the purposes of this article whenever any of the cases provided for in article 42 of the Commercial Code occur.

For the purposes of this section, voting rights or capital resulting from the underwriting of an issue or placement of financial instruments or from the placement of financial instruments based on a firm commitment shall not be taken into account, provided that such rights are not exercised to intervene in the management of the issuer and are transferred within one year from their acquisition.

When the National Securities Market Commission receives two or more notifications relating to the same investment services company, it shall treat all potential acquirers in a non-discriminatory manner.

5. The National Securities Market Commission, in order to ensure sound and prudent management of the investment services company in which the acquisition is proposed, and taking into account the possible influence of the potential acquirer over it, shall assess the suitability of the latter and the financial soundness of the proposed acquisition, in accordance with the following criteria:

a) the commercial and professional integrity of the potential acquirer;

b) the commercial and professional integrity and the experience of the directors and managers who will direct the activity of the investment services company as a consequence of the proposed acquisition;

c) the financial solvency of the potential acquirer to meet the commitments assumed, especially in relation to the type of activity carried out or intended to be carried out in the investment services company in which the acquisition is proposed;

d) the ability of the investment services company to comply on a lasting basis with the obligations established in the regulations applicable to it. In particular, where appropriate, it shall assess whether the group of which it will become part has a structure that does not prevent effective supervision, and that allows for an effective exchange of information between the competent authorities to carry out such supervision and determine the distribution of responsibilities among them; and,

e) that there are no rational indications allowing the assumption that:

i) in relation to the proposed acquisition, money laundering or terrorist financing operations within the meaning of the regulations on the prevention of such activities are being, have been or have been attempted to be carried out; or,

ii) the aforementioned acquisition cannot increase the risk that such operations are carried out.

As soon as it receives the notification referred to in the previous paragraph, the National Securities Market Commission shall request a report from the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences, in order to obtain an adequate assessment of this criterion. With said request, the National Securities Market Commission shall send to the Executive Service all information it has received from the potential acquirer or has at its disposal in the exercise of its powers that may be relevant for the assessment of this criterion. The Executive Service shall send the report to the National Securities Market Commission within a maximum period of 30 business days from the day following that on which it received the request with the indicated information.

6. The National Securities Market Commission shall have a period of 60 business days, from the date on which it has acknowledged receipt of the notification referred to in paragraph 4, to carry out the assessment referred to in the previous paragraph and, where appropriate, to oppose the proposed acquisition. The acknowledgement of receipt shall be made in writing within 2 business days from the date of receipt of the notification by the National Securities Market Commission, provided that it is accompanied by all the information required in accordance with paragraph 4 above, and it shall indicate to the potential acquirer the exact date on which the assessment period expires. In the terms provided for in article 71 of Law 30/1992, of 26 November, on the Legal Regime of Public Administrations and the Common Administrative Procedure, if the notification does not contain all the required information, the potential acquirer shall be required to remedy the omission or provide the mandatory information within a period of ten days, with the indication that, if it does not do so, it shall be deemed to have withdrawn from the proposed acquisition.

If the National Securities Market Commission does not issue a decision within the previous period, it shall be understood that there is no opposition.

If it considers it necessary, the National Securities Market Commission may request additional information to that which, in general, is required in accordance with the provisions of paragraph 4, in order to properly assess the proposed acquisition. This request shall be made in writing and shall specify the additional information required. When the request for additional information is made within the first fifty business days of the period established in the previous paragraph, the National Securities Market Commission may interrupt the computation of said period, on a single occasion, during the period between the date of the request for additional information and the date of receipt thereof. This interruption may have a maximum duration of twenty business days, which may be extended up to thirty days, in the cases determined by regulation.

The National Securities Market Commission may only oppose the proposed acquisition when there are reasonable grounds for doing so on the basis of the criteria established in paragraph 5 or if the information provided by the potential acquirer is incomplete. If, once the assessment has been completed, the National Securities Market Commission raises objections to the proposed acquisition, it shall inform the potential acquirer thereof, in writing and stating the reasons for its decision, within two business days, and in no case may the maximum period for carrying out the assessment be exceeded. When it does not oppose the proposed acquisition, it may set a maximum period for its completion and, where appropriate, extend it.

The National Securities Market Commission may not impose prior conditions as to the amount of the holding to be acquired nor shall it take into account the economic needs of the market when carrying out the assessment.

The decisions adopted by the National Securities Market Commission shall mention any possible observations or reservations expressed by the competent supervisory authority of the potential acquirer, consulted in accordance with paragraph 7.

At the request of the potential acquirer or on its own initiative, the National Securities Market Commission may make public the reasons justifying its decision, provided that the information disclosed does not affect third parties outside the transaction.

7. The National Securities Market Commission, when carrying out the assessment referred to in paragraph 5, shall consult the authorities responsible for supervision in other Member States of the European Union, when the potential acquirer is:

a) a credit institution, insurance or reinsurance undertaking, investment services company or management company of collective investment institutions or pension funds, authorised in another Member State of the European Union; or,

b) the parent company of a credit institution, of an insurance or reinsurance undertaking, of an investment services company or of a management company of collective investment institutions or pension funds, authorised in another Member State of the European Union; or,

c) a natural or legal person that exercises control over a credit institution, an insurance or reinsurance undertaking, an investment services company or a management company of collective investment institutions or pension funds, authorised in another Member State of the European Union.

The National Securities Market Commission, when carrying out the assessment referred to in the previous paragraph, shall consult:

a) the Bank of Spain, provided that the potential acquirer is a credit institution, or a parent company of a credit institution, or a natural or legal person that exercises control over a credit institution; or,

b) the Directorate-General for Insurance and Pension Funds, provided that the potential acquirer is an insurance or reinsurance undertaking or a management company of pension funds, or a parent company of an insurance or reinsurance undertaking or of a management company of pension funds, or a natural or legal person that exercises control over an insurance or reinsurance undertaking or over a management company of pension funds.

The National Securities Market Commission shall reciprocally attend to the consultations sent to it by the authorities responsible for the supervision of potential acquirers from other Member States, and, where appropriate, the Bank of Spain or the Directorate-General for Insurance and Pension Funds. In addition, it shall provide them on its own initiative and without unjustified delay with all the information that is essential for the assessment, as well as the rest of the information they request, provided that it is appropriate for the assessment.

8. When an acquisition of those regulated in paragraph 4 is carried out without having previously notified the National Securities Market Commission; or, having notified it, the period provided for in the first paragraph of paragraph 6 has not yet elapsed, or if there is express opposition from the National Securities Market Commission, the following effects shall occur:

a) In any case and automatically, the political rights corresponding to the irregularly acquired holdings may not be exercised until the National Securities Market Commission, once it has received and assessed the necessary information on the acquirers, deems them suitable. If, nevertheless, they are exercised, the corresponding votes shall be null and the resolutions shall be challengeable in judicial proceedings, as provided in Section 2 of Chapter V of Royal Legislative Decree 1564/1989, of 22 December, approving the Consolidated Text of the Law on Public Limited Companies, with the National Securities Market Commission being entitled to do so.

b) The suspension of activities provided for in article 75 may be agreed.

c) If necessary, the intervention of the company or the replacement of its administrators shall be agreed, as provided in Title VIII.

In addition, the sanctions provided for in Title VIII shall be imposed.

9. Any natural or legal person that has decided to cease to have, directly or indirectly, a significant holding in an investment services company shall first notify the National Securities Market Commission, indicating the amount of the proposed transaction and the period envisaged for carrying it out. Such person shall also notify if it has decided to reduce its significant holding in such a way that the percentage of voting rights or capital held is less than 20, 30 or 50 per cent, or that it may lose control of the investment services company.

Failure to comply with this duty shall be sanctioned as provided in Title VIII.

10. Likewise, investment services companies shall inform the National Securities Market Commission, as soon as they become aware thereof, of acquisitions or transfers of holdings in their capital that exceed any of the levels indicated in the preceding paragraphs of this article.

11. When there are well-founded and substantiated reasons that the influence exercised by persons holding a significant holding in an investment services company may be detrimental to its sound and prudent management, seriously damaging its financial situation, the National Securities Market Commission shall adopt one or more of the following measures:

a) Those provided for in letters a) and b) of paragraph 8, although the suspension of voting rights may not exceed three years.

b) Exceptionally, the revocation of the authorization.

In addition, the appropriate sanctions may be imposed as provided for in Title VIII.

The National Securities Market Commission shall give reasoned account to the Ministry of Economy and Competitiveness of this decision.

Paragraph 11 is amended by art. 94.15 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Amended by art. 1.2 of Law 5/2009, of 29 June. Ref. BOE-A-2009-10751

Paragraphs 2, 6 to 8 and 10 are amended by the sole art. 39 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 30/06/2009, in force from 01/07/2009.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 127: #a69bis]

Article 69 bis. Communication of shareholder structure.

Investment services companies shall inform the National Securities Market Commission, in the manner and with the periodicity established by regulation, about the composition of their shareholding or about any alterations that occur therein. Such information shall necessarily include that relating to the participation of other financial entities in its capital, whatever its amount. It shall be established by regulation in which cases the information provided shall be public.

In addition, at least once a year, investment services companies shall inform the National Securities Market Commission of the identity of the shareholders holding significant holdings, indicating the volume of such holdings.

Added by the sole art. 40 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 129: #a70]

Article 70. Financial requirements.

1. The obligations of investment services companies are the following:

a) Those derived from Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013, on prudential requirements for credit institutions and investment firms, and amending Regulation (EU) No. 648/2012 .

However, the obligations of the preceding paragraph shall not apply, under the terms and with the exceptions provided for in Regulation (EU) No. 575/2013, of 26 June, to investment services companies not authorized to provide the ancillary service referred to in article 63.2.a), which provide only one or several of the investment services or activities listed in article 63.1.a), b), d) and g) of this law, and which are not permitted to hold money or securities of their clients on deposit and which, for this reason, can never be in a debtor position with respect to such clients.

The calculations to verify compliance by investment services companies with the obligations established in this letter a) shall be carried out at least semi-annually, aligning the reference dates of the information with those of the end of the natural semester.

Investment services companies shall communicate to the National Securities Market Commission, in the form and content it determines, the results and all necessary calculation elements.

b) Investment services companies shall maintain the minimum volumes of investment in certain categories of liquid and low-risk assets that, in order to safeguard their liquidity, are established by regulation.

c) The financing of investment services companies, when it takes forms other than participation in their capital, shall comply with the limitations established by regulation.

2. The consolidated groups of investment services companies, as well as investment services companies not integrated in a consolidated group, except those referred to in the second paragraph of letter a) of the preceding paragraph, shall specifically have sound, effective and comprehensive strategies and procedures to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider adequate to cover the nature and level of the risks to which they are or may be exposed. Such strategies and procedures shall be periodically subject to internal review to ensure that they remain comprehensive and proportionate to the nature, scale and complexity of the activities of the entity concerned.

Paragraph 2 is amended and paragraphs 3 and 4 are deleted by final provision 1.8 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Letter a) of paragraph 1 is amended by art. 3.1 of Royal Decree-Law 14/2013, of 29 November. Ref. BOE-A-2013-12529 .

This modification will be applicable to entities as of 1 January 2014, as established in final provision 8.2.a).

Section 2 is modified by art. 3.1 of Law 15/2011, of 16 June. Ref. BOE-A-2011-10531 .

Section 4 is added by art. 2.1 of Law 6/2011, of 11 April. Ref. BOE-A-2011-6548 .

Modified by the sole art. 41 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Letter i) is modified by art. 11.3 of Law 5/2005, of 22 April. Ref. BOE-A-2005-6561

Modified by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 27/06/2014, in force as of 28/06/2014.

Modification published on 30/11/2013, in force as of 01/12/2013.

Modification published on 17/06/2011, in force as of 18/06/2011.

Modification published on 12/04/2011, in force as of 13/04/2011.

Modification published on 20/12/2007, in force as of 21/12/2007.

Modification published on 23/04/2005, in force as of 24/04/2005.

Modification published on 17/11/1998, in force as of 18/11/1998.

Original text, published on 29/07/1988, in force as of 29/01/1989.

[Block 130: #a70bis]

Article 70 bis. Information on solvency.

1. Consolidable groups of investment services companies, as well as investment services companies not integrated into one of these consolidable groups, must make public, as soon as possible and at least annually, duly integrated into a single document called "Information on solvency", the information referred to in Part Eight of Regulation (EU) No. 575/2013, of 26 June , and in the terms established in that Part.

2. The National Securities Market Commission may require parent companies to publish annually, either in full or by means of references to equivalent information, a description of their legal and governance structure and of the group's organisational structure.

3. The disclosure, in compliance with the requirements of commercial or securities market legislation, of the data referred to in section 1 shall not exempt them from their inclusion in the document "Information on solvency" in the form provided for in that section.

4. The National Securities Market Commission may require entities obliged to disclose the information referred to in section 1:

a) The verification by statutory auditors or independent experts, or by other means satisfactory in its opinion, of the information not covered by the audit of accounts, in accordance with the provisions of Chapter III of the Consolidated Text of the Audit of Accounts Law, approved by Royal Legislative Decree 1/2011, of 1 July , with respect to the independence regime to which statutory auditors are subject.

b) The disclosure of one or more of such information, either independently at any time, or more frequently than annually, and to establish maximum deadlines for disclosure.

c) The use for disclosure of means and places other than the financial statements.

5. The provisions of this article shall not apply to investment services companies referred to in the second paragraph of article 70.1.a).

Modified by final provision 1.9 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Section 1 is modified by art. 2.2 of Law 6/2011, of 11 April. Ref. BOE-A-2011-6548 .

Sections 1 and 3 are modified by final provision 5.4 and 5 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Added by the sole art. 42 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 27/06/2014, in force as of 28/06/2014.

Modification published on 12/04/2011, in force as of 13/04/2011.

Modification published on 05/03/2011, in force as of 06/03/2011.

Modification published on 20/12/2007, in force as of 21/12/2007.

Added text, published on 20/12/2007, in force as of 21/12/2007.

[Block 131: #a70bisuno]

Article 70 bis.One. Annual report of investment services companies.

1. Investment services companies shall submit to the National Securities Market Commission and publish annually, specifying the countries where they are established, the following information on a consolidated basis for each financial year:

a) Name, nature and geographical location of the activity.

b) Turnover.

c) Number of full-time employees.

d) Gross profit before taxes.

e) Taxes on profit.

f) Public subsidies or aid received.

2. The information referred to in the previous section shall be published as an annex to the entity's financial statements audited in accordance with the regulations governing the audit of accounts.

3. Entities shall make public in their annual report of investment services companies, among the key indicators, the return on their assets, which shall be calculated by dividing net profit by the total balance sheet.

4. The National Securities Market Commission shall have these reports available on its website.

5. The provisions of this article shall not apply to investment services companies referred to in the second paragraph of article 70.1.a).

Added by final provision 1.10 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

For its application, take into account transitional provision twelfth of the aforementioned Law.

Text added, published on 27/06/2014, in force from 28/06/2014.

[Block 132: #a70ter]

Article 70 ter. Corporate governance rules and internal organisation requirements.

1. Investment services companies shall carry out their activity in compliance with the corporate governance rules and internal organisation requirements established in this Law and other applicable legislation.

2. Investment services companies and the remaining entities that, in accordance with the provisions of this Title, provide investment services must define and apply adequate policies and procedures to ensure that the company, its directors, its staff and its agents comply with the obligations imposed on them by the Securities Market regulations.

To this end, they must:

a) In the case of investment services companies, have solid corporate governance procedures, including a clear, adequate and proportionate organisational structure in accordance with the nature, scale and complexity of their activities and with well-defined, transparent and coherent lines of responsibility. And, in the case of the remaining entities that provide investment services, in accordance with the provisions of this title, with an equally clear, adequate and proportionate organisational structure in accordance with the nature, scale and complexity of the investment services they provide.

b) Have a unit that ensures the development of the compliance function under the principle of independence with respect to those areas or units that carry out the investment services provision activities on which the exercise of that function focuses. The existence of procedures and controls must be ensured to guarantee that the staff complies with the decisions adopted and the functions entrusted.

The compliance function must regularly control and evaluate the adequacy and effectiveness of the procedures established for the detection of risks, and the measures adopted to address possible deficiencies as well as assist and advise the competent persons responsible for carrying out the investment services for the fulfilment of the functions.

c) Have information systems that ensure that their staff knows the obligations, risks and responsibilities arising from their actions and the regulations applicable to the investment services they provide.

d) Have adequate administrative and organisational measures to prevent possible conflicts of interest regulated in article 70.quater from harming their clients.

Likewise, they must establish control measures for the operations carried out, on a personal basis, by the members of their administrative bodies, employees, agents and other persons linked to the company, when such operations may entail conflicts of interest or infringe, in general, the provisions of this Law.

e) Keep records of all operations on securities and financial instruments and investment services they provide so that it can be verified that they have complied with all the obligations imposed on them by this Law in relation to their clients.

The data to be included in the transaction records are established in Commission Regulation (EU) No. 1287/2006 of 10 August 2006 , implementing Directive 2004/39/EC of the European Parliament and of the Council , as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive. The other aspects relating to the obligation to keep the record shall be determined by regulation.

Likewise, they must inform the National Securities Market Commission, in the manner determined by regulation, of the operations they carry out, in accordance with the provisions of article 59 bis.

f) Adopt adequate measures to protect the financial instruments entrusted to them by their clients and prevent their misuse. In particular, they may not use clients' financial instruments for their own account, unless the clients give their express consent. Likewise, they must maintain an effective separation between the securities and financial instruments of the company and those of each client. The internal records of the entity must allow knowing, at all times and without delay, and especially in the event of insolvency of the company, the position of securities and operations in progress of each client.

Once the insolvency proceedings of a securities depositary entity have begun, the National Securities Market Commission, without prejudice to the powers of the Bank of Spain and the Fund for Orderly Bank Restructuring, may immediately and at no cost to the investor arrange the transfer to another entity authorised to carry out this activity, of the securities deposited on behalf of its clients, even if such assets are deposited in third entities in the name of the entity providing the deposit service. For these purposes, both the competent judge and the bodies of the insolvency proceedings shall facilitate the access of the entity to which the securities are to be transferred to the documentation and accounting and computer records necessary to make the transfer effective. The existence of insolvency proceedings shall not prevent the purchased securities or the cash arising from the exercise of economic rights or from the sale of securities from being delivered to the client, in accordance with the rules of the clearing, settlement and registration system.

g) Prepare and keep up to date a general viability plan that contemplates the measures to be adopted to restore the viability and financial soundness of the investment services company in the event that these suffer any significant deterioration. The plan shall be submitted for approval to the National Securities Market Commission, which may require the modification of its content.

3. Likewise, entities providing investment services must:

a) Have effective procedures for the identification, management, control and communication of the risks to which they are or may be exposed, and have adequate internal control mechanisms, including adequate administrative and accounting procedures. Likewise, they must have remuneration policies and practices that are compatible with, and promote, sound and effective risk management.

The organization must have a verification body that performs the internal audit function under the principle of independence from those areas or units that carry out the investment service provision activities on which the exercise of that function focuses.

The internal audit function must prepare and maintain an audit plan aimed at examining and evaluating the adequacy and effectiveness of the systems, internal control mechanisms and arrangements of the investment services company, formulate recommendations based on the work carried out in execution thereof and verify their compliance.

b) Adopt adequate measures to guarantee, in the event of incidents, the continuity and regularity in the provision of its services. They must have, in particular, mechanisms for the control and safeguarding of their computer systems and contingency plans for damage or catastrophes.

c) Adopt adequate measures, in relation to the funds entrusted to them by their clients, to protect their rights and prevent misuse of those funds. Entities may not use their clients' funds for their own account, except in the exceptional cases that may be established by regulation and always with the express consent of the client. The entity's internal records must allow knowing, at all times and without delay, and especially in the event of insolvency of the company, the fund position of each client.

In particular, the accounts maintained in the name of clients shall be of an instrumental and transitory nature and must be related to the execution of transactions carried out on their behalf. The entity's clients shall retain the right of ownership over the funds delivered to the entity even when these are materialized in assets in the name of the entity and on behalf of clients.

d) Adopt the necessary measures so that operational risk does not increase unduly when they entrust to a third party the performance of investment services or the exercise of essential functions for the provision of investment services. When internal control functions are delegated to third parties, entities shall ensure that this does not diminish their internal control capacity and shall guarantee the necessary access of the competent supervisor to the information. Under no circumstances may they delegate functions to third parties when this diminishes the internal control capacity or that of supervision of the competent supervisory body. It shall be the responsibility of the entity to verify that the person or entity to which it intends to delegate functions meets the requirements established in this Law and its implementing provisions.

Credit institutions that provide investment services must respect the internal organization requirements set out in this section, with the specifications determined by regulation, with the Bank of Spain having the powers of supervision, inspection and sanction of these requirements. The aforementioned entities shall not be subject to the prohibition on using their clients' funds for their own account established in letter c) above.

4. The systems, procedures and mechanisms contemplated in this article shall be comprehensive and proportionate to the nature, scale and complexity of the risks inherent in the business model and the activities of the entity. Likewise, they shall be configured in accordance with technical criteria that guarantee adequate management and treatment of the risks determined by regulation.

The content and requirements of the procedures, records and measures indicated in this article shall be established by regulation. Likewise, the internal organization requirements applicable to financial advisory firms that are natural persons shall be established by regulation.

5. In any group of investment services companies, each of the integrated financial entities must adopt the precise measures to adequately resolve possible conflicts of interest between the clients of different entities of the group.

6. The board of directors of investment services companies must define a corporate governance system that guarantees effective and prudent management of the entity, and that includes the adequate distribution of functions in the organization and the prevention of conflicts of interest.

The board of directors shall monitor the application of the corporate governance system and shall be responsible for it. To this end, it must periodically control and evaluate the effectiveness of the system and adopt adequate measures to remedy its deficiencies.

7. The corporate governance system shall be governed by the following principles:

a) The responsibility for the administration and management of the entity, the approval and oversight of the implementation of its strategic objectives, its risk strategy and its internal governance, shall fall to the board of directors.

b) The board of directors shall ensure the integrity of the accounting and financial information systems, including financial and operational control and compliance with applicable legislation.

c) The board of directors must supervise the information disclosure process and communications relating to the investment services company.

d) The board of directors is responsible for ensuring effective oversight of senior management.

e) The chairman of the board of directors may not simultaneously hold the position of chief executive officer, unless the entity justifies it and the National Securities Market Commission authorizes it.

8. Investment services companies must have, under conditions proportionate to the nature, scale and complexity of their activities, adequate units and internal procedures to carry out the selection and continuous evaluation of the members of their board of directors and their general managers or equivalent, and of the persons who assume internal control functions or occupy key positions for the daily development of the activity of the investment services company, in accordance with the provisions of this section.

The assessment of the suitability of the aforementioned positions in accordance with the criteria of honorability, experience and good governance established in this Law shall be carried out both by the investment services company itself and by the National Securities Market Commission, under the terms provided for by regulation.

Investment services companies must ensure at all times compliance with the suitability requirements provided for in this Law.

9. Investment services companies shall have a website where they will disseminate the public information provided for in this Chapter and communicate how they comply with corporate governance obligations.

10. For the purposes of the provisions of this Law, the board of directors shall be equated to any equivalent body of investment services companies.

The second paragraph of letter f) of section 2 is amended by final provision 1.A).17 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Amended by final provision 1.11 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Please note that letter e) of section 7 shall be enforceable as of 31 October 2014, as established by final provision 14.2.a).2º) of the aforementioned Law.

Added by sole article 43 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 19/06/2015, in force as of 20/06/2015.

Amendment published on 27/06/2014, in force as of 28/06/2014.

Amendment published on 20/12/2007, in force as of 21/12/2007.

Text added, published on 20/12/2007, in force as of 21/12/2007.

[Block 133: #a70teruno]

Article 70 ter.One. Appointments committee.

1. Investment services companies must establish an appointments committee, composed of members of the board of directors who do not perform executive functions in the entity. The National Securities Market Commission may determine that an investment services company, due to its size, its internal organization, the nature, scope or low complexity of its activities, may establish said committee jointly with the remuneration committee, or be exempt from this requirement.

2. The appointments committee shall establish a representation objective for the least represented sex on the board of directors and shall prepare guidelines on how to achieve said objective.

3. Notwithstanding the provisions of section 1, this article shall not apply to investment services companies that meet the following requirements:

a) Not being authorized to provide the auxiliary service referred to in article 63.2.a).

b) Providing only one or several of the investment services or activities listed in article 63.1.a), b), d) and g).

c) Not being authorized to hold money or securities of their clients in deposit and that, for this reason, can never be in a debtor position with respect to said clients.

This article shall also not apply to those investment services companies authorized exclusively to provide the service referred to in article 63.1.h).

Added by final provision 1.12 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Please note that this article shall be enforceable as of 31 October 2014, as established by final provision 14.2.b) of the aforementioned Law, except for those entities that, prior to the entry into force of this law, were already obliged, in accordance with previous regulations, to establish an appointments committee, a remuneration committee or a joint appointments and remuneration committee.

Text added, published on 27/06/2014, in force as of 28/06/2014.

[Block 134: #a70terdos]

Article 70 ter.Two. Remuneration obligations.

1. Investment services companies shall have, under conditions proportionate to the nature, scale and complexity of their activities, remuneration policies consistent with the promotion of sound and effective risk management.

2. The remuneration policy shall apply to the categories of employees whose professional activities have a significant impact on their risk profile, at the level of the group, parent company and subsidiary. In particular, it shall apply to senior managers, to employees who assume risks for the investment services company, to those who perform control functions, as well as to any worker who receives overall remuneration that places them in the same remuneration bracket as the aforementioned, whose professional activities have a significant impact on the risk profile of the entity.

3. Investment services companies shall submit to the National Securities Market Commission all information it requires from them for compliance with remuneration obligations and, in particular, a list indicating the categories of employees whose professional activities have a significant impact on their risk profile. This list must be submitted annually and, in any case, when significant alterations have occurred in the lists submitted.

4. The remuneration policy shall be determined in accordance with the general principles provided for credit institutions in article 33 of Law 10/2014, of 26 June, on the Organization, Supervision and Solvency of Credit Institutions.

5. With regard to the variable elements of remuneration, the principles provided for credit institutions in article 34 of Law 10/2014, of 26 June, on the Organization, Supervision and Solvency of Credit Institutions shall apply.

6. Investment services companies must establish a remuneration committee. The National Securities Market Commission may determine that an investment services company, on account of its size, its internal organization, the nature, scope or low complexity of its activities, may establish said committee jointly with the appointments committee, or be exempt from this requirement.

Notwithstanding the foregoing, this article shall not apply to investment services companies that meet the following requirements:

a) Not being authorized to provide the auxiliary service referred to in article 63.2.a).

b) Providing only one of the investment services or activities listed in article 63.1.a), b), d) and g).

c) Not being authorized to hold money or securities of their clients in deposit and that, for this reason, can never be in a debtor position with respect to said clients.

This article shall also not apply to those investment services companies authorized exclusively to provide the service referred to in article 63.1 h).

7. In the case of investment services companies that receive public financial support, in addition to the rules established in article 33 of Law 10/2014, of 26 June, on the Organization, Supervision and Solvency of Credit Institutions, those contained, for credit institutions, in article 35 of said Law and its implementing regulations shall apply, with the adaptations that, where appropriate, may be necessary due to the nature of the entity.

Added by final provision 1.13 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Please note that section 6 shall be enforceable as of 31 October 2014, as established by final provision 14.2.b) of the aforementioned Law, except for those entities that, prior to the entry into force of this law, were already obliged, in accordance with the previous regulations, to establish an appointments committee, a remuneration committee or a joint appointments and remuneration committee.

Added text, published on 27/06/2014, in force as of 28/06/2014.

[Block 135: #a70tertres]

Article 70 ter.Three. Risk management and risk committee.

1. The board of directors is responsible for the risks assumed by an investment services company. For these purposes, investment services companies must establish effective channels of information to the board of directors on the company's risk management policies and all significant risks to which it is exposed.

2. In the exercise of its responsibility for risk management, the board of directors must:

a) Devote sufficient time to the consideration of risk-related matters. In particular, it shall participate actively in the management of all substantial risks covered by Regulation (EU) No. 575/2013, of 26 June, and in the solvency rules established in this Law and its implementing provisions, shall ensure that adequate resources are allocated for risk management, and shall intervene, in particular, in the valuation of assets, the use of external credit ratings and internal models relating to these risks.

b) Approve and periodically review the strategies and policies for assuming, managing, supervising and reducing the risks to which the investment services company is or may be exposed, including those presented by the macroeconomic situation in which it operates in relation to the phase of the economic cycle.

3. Investment services firms shall have a unit or body that assumes the risk management function proportionate to the nature, scale and complexity of their activities, independent of the operational functions, which has sufficient authority, standing and resources, as well as timely access to the board of directors.

4. Investment services firms shall establish a risk committee. The National Securities Market Commission may determine that an investment services firm, by reason of its size, its internal organisation, the nature, scope or limited complexity of its activities, may assign the functions of the risk committee to the joint audit committee or be exempt from establishing this committee.

Notwithstanding the foregoing, this article shall not apply to investment services firms that meet the following requirements:

a) Not being authorised to provide the auxiliary service referred to in Article 63.2.a).

b) Providing only one of the investment services or activities listed in Article 63.1.a), b), d) and g).

c) Not being authorised to hold money or securities of their clients in deposit and, for that reason, never being in a debtor position vis-à-vis such clients.

This article shall also not apply to those investment services firms authorised exclusively to provide the service referred to in Article 63.1.h).

Added by final provision 1.14 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Please note that paragraph 4 will be enforceable from 31 October 2014, as provided for in final provision 14.2.a).1º) of the aforementioned Law.

Text added, published on 27/06/2014, in force from 28/06/2014.

[Block 136: #a70quater]

Case Law

Article 70 quater. Conflicts of interest.

1. In accordance with the provisions of letter d), paragraph 2, of Article 70 ter, firms providing investment services shall organise themselves and adopt measures to detect potential conflicts of interest between their clients and the firm itself or its group, including its directors, employees, agents or persons linked to it, directly or indirectly, by a relationship of control; or between the different interests of two or more of its clients, vis-à-vis each of which the firm maintains obligations.

For these purposes, it shall not be considered sufficient that the firm may obtain a benefit if there is not also a potential detriment to a client; or that a client may obtain a gain or avoid a loss if there is no possibility of concomitant loss for a client.

Likewise, they shall approve, apply and maintain a conflict of interest management policy that is effective and appropriate to their organisation, designed to prevent conflicts of interest from harming the interests of their clients.

2. Where the organisational or administrative measures adopted to manage the conflict of interest are not sufficient to ensure, with reasonable certainty, that the risks of harm to the client's interests will be prevented, the investment services firm shall disclose the nature and origin of the conflict to the client prior to acting on its behalf.

3. Regulations shall establish the rules for the identification and recording of conflicts of interest, and the measures, organisational requirements and policies that must be adopted to ensure the independence of personnel carrying out activities that involve a risk of conflict of interest, as well as the information that must be provided to the clients concerned or to the general public.

Paragraph 1 is amended by art. 94.16 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Added by art. único.44 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select version:

Latest update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 137: #a70quinquies]

Article 70 quinquies. Combined capital buffer requirement.

1. Investment services firms shall at all times meet the combined capital buffer requirement, understood as the total of the Common Equity Tier 1 capital defined in Article 26 of Regulation (EU) n.º 575/2013, of 26 June, necessary to comply with the capital conservation buffer obligation, plus, where applicable:

a) An institution-specific countercyclical capital buffer.

b) A buffer for global systemically important institutions (G-SIIs).

c) A buffer for other systemically important institutions (O-SIIs).

d) A systemic risk buffer.

This obligation shall be met without prejudice to the own funds requirements established in Article 92 of Regulation (EU) n.º 575/2013, of 26 June, and to those others that the National Securities Market Commission may require, where appropriate, pursuant to the provisions of Article 87 octies.

2. These buffers shall be calculated in accordance with the provisions of Chapter III of Title II of Law 10/2014 on the Organisation, Supervision and Solvency of Credit Institutions.

3. Notwithstanding the foregoing, these buffers shall not apply to investment services firms not authorised to carry out the activities set out in letters c) and f) of Article 63.1.

Likewise, they shall not apply to small and medium-sized investment services firms, provided that, in the opinion of the National Securities Market Commission, this does not pose a threat to the stability of the Spanish financial system, the capital conservation buffer and the countercyclical buffer.

For these purposes, a small and medium-sized enterprise shall be understood to be the one defined in accordance with Commission Recommendation 2003/361/CE of 6 May 2003 on the definition of micro, small and medium-sized enterprises.

4. The Tier 1 common equity required to meet each of the different buffers in accordance with paragraphs 1 and 2 may not be used to meet the remaining buffers and the own funds requirements referred to in the last subparagraph of paragraph 1, save as provided by the Comisión Nacional del Mercado de Valores in relation to the buffers for entities of systemic importance and the systemic risk buffers.

5. Compliance with the capital buffer requirements shall be carried out on an individual, consolidated or sub-consolidated basis in accordance with what is established by regulation, pursuant to Part One, Title II, of Regulation (EU) n.º 575/2013 of 26 June.

6. Where an undertaking or group fails to comply with the obligation established in paragraph 1, it shall be subject to restrictions on distributions related to Tier 1 common equity, pursuant to Article 48 of Law 10/2014 on the Organisation, Supervision and Solvency of Credit Institutions, and shall submit a capital conservation plan to the Comisión Nacional del Mercado de Valores in accordance with Article 49 of said Law.

Amended by final provision 1.15 of Law 10/2014 of 26 June. Ref. BOE-A-2014-6726 .

The eighth to eleventh transitional provisions of the aforementioned Law shall be taken into account for its application.

Added by art. 3.2 of Royal Decree-Law 14/2013 of 29 November. Ref. BOE-A-2013-12529 .

This amendment shall be binding on entities from 30 June 2014, as established by final provision 8.2.b).

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Amendment published on 30/11/2013, in force from 01/12/2013.

Text added, published on 30/11/2013, in force from 01/12/2013.

[Block 138: #a70sexies]

Article 70 sexies. Notification of infringements.

Investment services firms shall have in place adequate procedures to enable their employees to report infringements internally through an independent, specific and autonomous channel.

These procedures shall ensure the confidentiality of both the person reporting the infringements and the natural persons allegedly responsible for the infringement.

Furthermore, it shall be ensured that employees who report infringements committed in the entity are protected against retaliation, discrimination and any other type of unfair treatment.

Added by final provision 1.16 of Law 10/2014 of 26 June. Ref. BOE-A-2014-6726 .

Text added, published on 27/06/2014, in force from 28/06/2014.

[Block 139: #civ-2]

CHAPTER IV

Cross-border activity

Added by art. 5 of Law 37/1998 of 16 November. Ref. BOE-A-1998-26345

Added text, published on 17/11/1998, in force from 18/11/1998.

[Block 140: #a71]

Article 71. Cross-border activity of Spanish investment services firms.

1. Spanish investment services firms may provide investment services, as well as ancillary services for which they are authorised, in the territory of other Member States of the European Union, either through the establishment of a branch or through the free provision of services, under the terms established in the following two paragraphs of this article.

2. Any Spanish investment services firm wishing to establish a branch in the territory of another Member State must notify the National Securities Market Commission. The notification must state:

a) The Member States in whose territory it proposes to establish a branch.

b) A programme of activities specifying, among other aspects, the investment services, as well as the ancillary services it proposes to carry out and the organisational structure of the branch, in addition to indicating whether the branch intends to use tied agents.

c) The address in the host Member State where documentation can be obtained.

d) The name of the directors responsible for the management of the branch.

Unless it has reasons to doubt the suitability of the administrative structure or the financial situation of the entity, taking into account the activities it proposes to carry out, the National Securities Market Commission must send all the information submitted by the Spanish investment services firm to the competent authority of the host Member State within three months from its receipt, and duly inform the investment services firm thereof.

If the National Securities Market Commission decides not to send the information to the host Member State for any of the reasons indicated in the preceding paragraph, it must communicate this to the investment services firm within three months from the receipt of the information, stating the reasons for its refusal.

In the event of modification of any of the data communicated in accordance with the provisions of letters a), b), c), and d) of the first paragraph of this section, the investment services firm must communicate it in writing to the National Securities Market Commission at least one month before making it effective. The National Securities Market Commission shall communicate it to the competent authority of the host Member State.

In addition, the National Securities Market Commission must send to the competent authority of the host Member State the data on the Investment Guarantee Fund to which the entity is attached, as well as any modification that may occur in this regard.

The branch may be established and commence its activities when it has received the communication from the competent authority of the host Member State or, in the absence thereof, within two months from the date of the communication by the National Securities Market Commission to that competent authority.

When the Spanish investment services firm uses an agent established in another Member State of the European Union, said agent shall be treated as a branch and shall be subject to the regime established in this article for branches.

3. Any Spanish investment services firm that, under the free provision of services regime, wishes to provide services for the first time in the territory of another Member State of the European Union, or wishes to modify the range of services or activities provided under this regime, must notify the National Securities Market Commission. The notification must state:

a) The Member State in which it intends to operate.

b) A programme of activities specifying, among other things, the investment services, as well as the ancillary services it proposes to carry out and an indication of whether it intends to use tied agents in the territory of the Member States in which it intends to provide services. Where the investment services company intends to use tied agents, the Comisión Nacional del Mercado de Valores shall communicate, at the request of the competent authority of the host Member State and within a reasonable period of time, the identity of the tied agents that it intends to use in that Member State. The Comisión Nacional del Mercado de Valores shall give access to that information to the European Securities and Markets Authority, in accordance with the procedure and under the conditions laid down in Article 35 of Regulation (EU) No. 1095/2010 .

4. Spanish investment services companies that intend to open a branch, or provide services without a branch, in a State that is not a member of the European Union, must first obtain authorisation from the Comisión Nacional del Mercado de Valores, with the requirements and procedure applicable to this case being determined by regulation.

The Comisión Nacional del Mercado de Valores shall inform the European Commission and the European Securities and Markets Authority of the general difficulties faced by investment services companies when establishing themselves or providing investment services in a State that is not a member of the European Union.

5. The creation by a Spanish investment services company or a group of Spanish investment services companies of a foreign investment services company, or the acquisition of a holding in an existing company, shall also be subject to prior authorisation from the Comisión Nacional del Mercado de Valores, where said foreign investment services company is to be incorporated or is domiciled in a State that is not a member of the European Union. The information to be included in the application shall be determined by regulation.

The Comisión Nacional del Mercado de Valores shall decide on the request within three months from receipt of all the required information. Where the application is not decided within the aforementioned period, it may be deemed granted.

The Comisión Nacional del Mercado de Valores may refuse the request when, taking into account the financial situation of the investment services company or its management capacity, it considers that the project may disrupt the proper conduct of its activities in Spain; when, given the location and characteristics of the project, effective supervision of the group, on a consolidated basis, by the Comisión Nacional del Mercado de Valores cannot be ensured or, when the activity of the controlled entity is not subject to effective supervision by any national supervisory authority.

Paragraphs 3.b) and the second paragraph of 4 are amended by art. 3.10 and 11 of Real Decreto-ley 10/2012, de 23 de marzo. Ref. BOE-A-2012-4091 .

Drafted in accordance with the correction of errors published in BOE núm. 88, de 12 de abril de 2012. Ref. BOE-A-2012-4956 .

Amended by art. único.45 of Ley 47/2007, de 19 de diciembre. Ref. BOE-A-2007-21913

Amended by art. 5 of Ley 37/1998, de 16 de noviembre. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Bloque 141: #a71bis]

Article 71 bis. Investment services companies authorised in another Member State of the European Union.

1. Investment services companies authorised in another Member State of the European Union may carry out in Spain, either by opening a branch or under the freedom to provide services, investment services and ancillary services. It shall be essential that the authorisation, the articles of association and the legal regime of the entity enable it to carry out the activities it intends to perform. In any case, ancillary services may only be provided together with an investment service.

In no case may the establishment of branches or the freedom to provide services referred to in the preceding paragraph be conditioned on the obligation to obtain an additional authorisation, or on the obligation to provide an endowment fund, or on any other measure having an equivalent effect.

2. The opening in Spain of branches of investment services companies authorised in other Member States of the European Union shall not require prior authorisation. However, it shall be conditioned on the Comisión Nacional del Mercado de Valores receiving a communication from the competent authority of the Member State of origin of the investment services company. Such communication shall contain the information indicated in letters a), b), c) and d) of the first paragraph of section 2 of Article 71.

Once the communication has been received, the National Securities Market Commission shall proceed to notify its receipt to the entity, which shall register the branch in the Commercial Registry and in the corresponding registry of the National Securities Market Commission, communicating to the latter the date of the effective start of its activities. If the National Securities Market Commission does not make this communication, the branch may be established, registering in the Commercial Registry and in that of the National Securities Market Commission, and may start its activities within a period of two months from the date of the communication from the competent authority of the State of origin.

One year after the investment services undertaking has been notified of the receipt of the communication made by its supervisory authority, without the branch having been registered in the corresponding registry of the National Securities Market Commission, the procedure shall be deemed to have lapsed.

In the event of closure, the branch shall communicate this situation to the National Securities Market Commission at least three months in advance of the date foreseen for it.

The National Securities Market Commission shall assume responsibility for ensuring that the services provided by the branch in Spanish territory comply with the obligations established in Articles 59 bis, 79, 79 bis, 79 ter, 79 sexies and the obligations established in Chapter III of Title XI and the measures adopted in accordance with them. Consequently, the National Securities Market Commission shall have the right to examine the measures adopted by the branch and to request the modifications strictly necessary to guarantee compliance with the provisions of such articles and the measures adopted in accordance with them, with regard to the services or activities provided by the branch in Spanish territory.

Likewise, the National Securities Market Commission shall assume control of the obligation established in letter e) of section 2 of Article 70 ter regarding the recording of transactions carried out by the branch, without prejudice to the competent authority of the State of origin having direct access to that record.

The provisions of the two preceding paragraphs shall also apply in the case of branches of Community credit institutions authorised to provide investment services in Spanish territory.

Without prejudice to the provisions of the two preceding paragraphs, the competent authority of the Member State of origin may, in the exercise of its responsibilities and after informing the National Securities Market Commission, carry out "in situ" inspections of that branch.

Likewise, the National Securities Market Commission may require, for statistical purposes, that all Community investment services undertakings that have branches in Spanish territory periodically inform it about the activities of those branches.

Where the investment services undertaking uses an agent established in a Member State of the European Union other than the investment services undertaking's Member State of origin, the tied agent shall be assimilated to the branch and shall be subject to the provisions of this Law for branches.

3. The carrying out for the first time in Spain of investment activities or services, and ancillary services, under the freedom to provide services regime, by investment services undertakings authorised in another Member State of the European Union, may commence once the National Securities Market Commission has received a communication from the competent authority of the entity's Member State of origin, on the terms indicated in section 3 of Article 71.

Where the investment undertaking intends to use tied agents, the National Securities Market Commission may request from the competent authority of the State of origin the communication, within a reasonable period of time, of the identity of the tied agents that the entity intends to use in Spanish territory. The National Securities Market Commission may decide to make this information public.

Section 2 is amended by art. 94.17 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

The fifth paragraph of section 2 is amended by final provision 1.17 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Added by art. único.46 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Latest update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 27/06/2014, in force from 28/06/2014.

Amendment published on 20/12/2007, in force from 21/12/2007.

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 142: #a71ter]

Article 71 ter. Coercive measures.

1. Where the National Securities Market Commission has clear and demonstrable grounds for believing that an investment services undertaking authorised in another Member State of the European Union which operates in Spain through a branch or under the freedom to provide services regime is in breach of obligations arising from national provisions adopted pursuant to Directive 2004/39/EC, it shall communicate the facts to the competent authority of the Member State of origin.

In the event that, despite the measures adopted by the competent authority of the Member State of origin, the investment services firm persists in conduct clearly detrimental to the interests of investors in Spain or to the proper functioning of the markets, the Comisión Nacional del Mercado de Valores, after informing the competent authority of the Member State of origin, shall adopt all relevant measures, including the possibility of preventing infringing investment services firms from carrying out new operations in Spanish territory. The Comisión Nacional del Mercado de Valores shall inform the European Commission and the European Securities and Markets Authority without delay of these measures. The Comisión Nacional del Mercado de Valores may urge the European Securities and Markets Authority to act in accordance with the powers conferred on it by Article 19 of Regulation (EU) n.º 1095/2010 .

2. Notwithstanding the provisions of the preceding paragraph, where the Comisión Nacional del Mercado de Valores finds that the branch in Spain of a Community investment services firm does not comply with the obligations set out in Articles 79 bis, 79 ter, 79 sexies, 59 bis and Chapter III of Title XI of this Law and in its implementing provisions, it shall require the investment services firm to put an end to its irregular situation.

If the investment services firm does not adopt the appropriate measures, the Comisión Nacional del Mercado de Valores shall take all necessary measures to put an end to this situation, and shall inform the competent authorities of the Member State of origin of the nature of the measures adopted.

If, despite the measures adopted by the Comisión Nacional del Mercado de Valores, the firm continues to infringe the provisions contained in this Law and its implementing rules, the Comisión Nacional del Mercado de Valores, after informing the competent authorities of the Member State of origin, may sanction it and, where appropriate, prohibit it from carrying out new operations in Spanish territory. The Comisión Nacional del Mercado de Valores shall inform the European Commission and the European Securities and Markets Authority without delay of these measures. The Comisión Nacional del Mercado de Valores may urge the European Securities and Markets Authority to act in accordance with the powers conferred on it by Article 19 of Regulation (EU) n.º 1095/2010 .

3. Any measure adopted pursuant to the provisions of this Article that involves sanctions or restrictions on the activities of an investment firm shall be duly reasoned and communicated to the investment services firm concerned.

4. The provisions of this Article shall also apply in the case of Community credit institutions authorised to provide investment services in Spanish territory, whether under the freedom to provide services regime or under the freedom of establishment regime.

Paragraphs 1 and 2 are amended by art. 3.12 and 13 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Added by art. único.47 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 24/03/2012, in force from 25/03/2012.

Amendment published on 20/12/2007, in force from 21/12/2007.

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 143: #a71quater]

Article 71 quater. Non-community investment services companies.

Non-community investment services companies that intend to open a branch in Spain shall be subject to the prior authorization procedure provided for in Chapter II of this Title V with the adaptations established by regulation. If they intend to provide services without a branch, they must be authorized in the form and conditions established by regulation. In both cases, authorization may be denied, or conditioned, for prudential reasons, for failure to grant equivalent treatment to Spanish entities in their country of origin, or for failure to ensure compliance with the rules of organization and discipline of the Spanish securities markets.

Non-community investment services companies operating in Spain shall be subject to this Law and its implementing rules.

Added by the sole art. 48 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 144: #cv-2]

CHAPTER V

Corporate operations and revocation of investment services companies

Added by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Added text, published on 17/11/1998, in force from 18/11/1998.

[Block 145: #a72]

Article 72

The transformation, merger, spin-off and segregation of a branch of activity, as well as the other operations of corporate modification carried out by an investment services company or that lead to the creation of an investment services company, shall require prior authorization, in accordance with the procedure established in article 66, with the adaptations specified by regulation, without in any case the corporate alteration entailing any reduction of the requirements established by law or regulation for the constitution of investment services companies.

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 146: #a73]

Article 73

The authorization granted to an investment services company or to one of the entities referred to in article 65.2 of this Law or to a branch of an entity headquartered in non-community States may be revoked in the following cases:

a) If it does not commence the authorized activities within twelve months following the date of notification of the authorization, for reasons attributable to the interested party.

b) If it expressly renounces the authorization, regardless of whether it transforms into another entity or agrees to its dissolution.

c) If it de facto interrupts the specific authorized activities for a period exceeding six months.

d) If for one year it carries out a volume of activity lower than the normal determined by regulation.

e) If it subsequently fails to comply with any of the requirements for obtaining the authorization, unless otherwise provided in relation to the aforementioned requirements.

f) In case of serious and systematic breach of the obligations provided for in letter a) of paragraph 1 of article 70 and in letters c), e) and f) of paragraph 2 of article 70 ter of this Law.

g) When the situation provided for in number 11 of article 69 occurs.

h) If the investment services company or the person or entity is declared insolvent by a court.

i) As a sanction, as provided for in Title VIII of this Law.

j) If the investment services company ceases to belong to the Investment Guarantee Fund provided for in Title VI.

k) When any of the causes of compulsory dissolution provided for in article 260 of the Law on Public Limited Companies, or in article 104 of the Law on Limited Liability Companies, occurs.

l) If it had obtained authorisation by virtue of false declarations or by any other irregular means.

ll) When the situation provided for in article 69.11.b) occurs.

Letter f) is amended by art. 40.18 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Letter ll) is added and letter f) is amended by the sole art. 49 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Letter h) is amended by final provision 18.4 of Law 22/2003, of 9 July. Ref. BOE-A-2003-13813

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Amended by art. 4.2 of Law 13/1992, of 1 June. Ref. BOE-A-1992-12545

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 10/07/2003, in force from 01/09/2004.

Amendment published on 17/11/1998, in force from 18/11/1998.

Amendment published on 02/06/1992, in force from 01/01/1993.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 147: #a74]

Article 74

1. The revocation of authorisation shall be subject to the common procedure provided for in Title VI of Law 30/1992, of 26 November, on the Legal Regime of Public Administrations and the Common Administrative Procedure, with the processing and resolution being the responsibility of the National Securities Market Commission.

The National Securities Market Commission shall notify the Ministry of Economy and Competitiveness of the revocation of the authorisation granted.

2. However, when the cause for revocation that applies is any of those provided for in letters a), b) or h) of the preceding article, it shall be sufficient to give a hearing to the interested entity. In the cases provided for in letters i) and j), the specific procedures provided for in this Law must be followed.

3. The resolution agreeing to the revocation shall be immediately enforceable. Once notified, the interested investment services company may not carry out new transactions. The resolution must be registered in the Commercial Registry and in that of the National Securities Market Commission, and shall be notified to the European Securities and Markets Authority. Likewise, it shall be published in the «Boletín Oficial del Estado», producing effects against third parties from then on.

4. The National Securities Market Commission may agree that the revocation entails the compulsory dissolution of the entity. In these cases, the National Securities Market Commission and the governing bodies of the official secondary markets, on their own initiative or at the request of the former, if market members are affected, may, in the interest of investor protection and the regular functioning of the securities markets, agree to all precautionary measures deemed appropriate and, in particular:

a) Agree to the transfer to another entity of the negotiable securities, financial instruments and cash that its clients had entrusted to it.

b) Require some specific guarantee from the liquidators appointed by the company.

c) Appoint the liquidators.

d) Intervene in the liquidation operations. If by virtue of the provisions of this precept, or others of this Law, liquidators, or interveners in the liquidation operation, must be appointed, the provisions contemplated in Title III of Law 26/1988, on Discipline and Intervention of Credit Entities, shall apply, with the pertinent adaptations.

5. When the revocation does not entail the dissolution of the investment services company, it must proceed in an orderly manner to liquidate the pending transactions and, where appropriate, to transfer the negotiable securities, financial instruments and cash that its clients had entrusted to it. The National Securities Market Commission may agree to the appropriate precautionary measures, including intervention in the liquidation of pending transactions.

6. When an investment services company agrees to its dissolution for any of the causes provided for in article 260 of the Law on Public Limited Companies, or in article 104 of the Law on Limited Liability Companies, the authorisation shall be understood to be revoked, and the National Securities Market Commission may agree, for its orderly liquidation, any of the measures indicated in number 4 of this article.

7. The revocation of the authorisation granted to a non-Community investment services company shall determine the revocation of the authorisation of the branch operating in Spain.

8. In the event that the National Securities Market Commission becomes aware that an investment services company from another Member State of the European Union operating in Spain has had its authorisation revoked, it shall immediately agree to the pertinent measures so that the entity does not initiate new activities and the interests of investors are safeguarded. Without prejudice to the powers of its supervisory authority and in collaboration with it, the National Securities Market Commission may agree to the measures provided for in this Law to guarantee a correct liquidation.

Paragraphs 1 and 4 are amended by arts. 94.19 and 94.20 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Paragraph 3 is amended by art. 3.14 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select version:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 24/03/2012, in force from 25/03/2012.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 148: #a75]

Article 75

The National Securities Market Commission may suspend, in whole or in part, the effects of the authorisation granted to an investment services company. When the suspension is partial, it shall affect some activities or the scope with which they were authorised.

Amended by art. 57 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select version:

Last update, published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 150: #a76]

Article 76

1. The suspension referred to in the preceding article may be agreed when any of the following cases occurs:

a) Opening of a sanctioning proceeding for a serious or very serious infringement.

b) When any of the causes provided for in letters e), f), h), j), or l) of article 73 occurs, while the revocation procedure is being processed.

c) When the case provided for in number 8 of article 69 occurs.

d) When the company does not make the contributions to the Investment Guarantee Fund provided for in Title VI.

e) As a sanction, as provided for in Title VIII.

2. The suspension shall only be agreed when, one of the causes provided for in the preceding number occurring, the measure is necessary to ensure the solvency of the entity or to protect investors. It may not be agreed, unless it is a sanction, for a period exceeding one year, extendable for another.

3. The measure of suspension of activities shall be agreed and shall produce its effects as provided for in article 74, except when a case arises that has a specific regime in this Law.

Amended by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

The first paragraph is amended by art. 58.1 of Law 4/1990, of 29 June. Ref. BOE-A-1990-15347

Select version:

Last update, published on 17/11/1998, in force from 18/11/1998.

Amendment published on 30/06/1990, in force from 30/06/1990.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 151: #a76bis]

Article 76 bis

The National Securities Market Commission shall be entitled to request the declaration of insolvency of investment services companies, provided that from the financial statements submitted by the entities, or from the checks carried out by the services of the Commission itself, it appears that they are in a state of insolvency in accordance with the provisions of the Insolvency Law .

Amended by final provision 18.5 of Law 22/2003, of 9 July. Ref. BOE-A-2003-13813

Added by art. 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select version:

Last update, published on 10/07/2003, in force from 01/09/2004.

Amendment published on 17/11/1998, in force from 18/11/1998.

Added text, published on 17/11/1998, in force from 18/11/1998.

[Block 152: #tvi-2]

TITLE VI

Investment Guarantee Fund

Added by art. 6.1 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Added text, published on 17/11/1998, in force from 18/11/1998.

[Block 153: #a77]

Article 77

1. An Investment Guarantee Fund shall be created to ensure the coverage referred to in paragraph 7 of this article on the occasion of the provision of the services envisaged in article 63, as well as the complementary activity of deposit and administration of financial instruments.

2. The Investment Guarantee Fund shall be constituted as a separate patrimony, without legal personality, whose representation and management shall be entrusted to a management company which shall take the form of a public limited company, and whose capital shall be distributed among the member investment services companies in the same proportion in which they make their contributions to the Fund.

3. The budgets of the management companies, their articles of association, as well as their amendments, shall require the prior approval of the National Securities Market Commission. The estimated budget of the funds prepared by the management companies shall be subject to the same approval.

The procedure envisaged in the third, fourth, fifth and sixth paragraphs of article 48 of this Law shall apply to the incorporation or withdrawal of shareholders and to the adaptation of their holdings to the variations in capital that occur, with such adaptations as may be necessary. The result of this adaptation process shall be communicated to the National Securities Market Commission.

4. The appointment of the members of the Board of Directors and of the Director or General Directors of the management companies shall require the prior approval of the National Securities Market Commission.

A representative of the National Securities Market Commission shall be integrated into the Board of Directors, with voice and without vote, who shall ensure compliance with the rules governing the activity of each fund. Likewise and with the same functions, each Autonomous Community with competences in the matter in which an official secondary market exists shall designate a representative on said Board of Directors.

The National Securities Market Commission may suspend any resolution of the Board of Directors that is considered contrary to said rules and to the fund's own purposes.

5. All Spanish investment services companies shall be required to adhere to the investment guarantee funds. Branches of foreign companies may adhere if they are from the European Union. The regime for the adherence of branches of companies from a third State shall be adjusted to the terms established by regulation.

The funds shall cover the operations carried out by the companies adhering to them within or outside the territory of the European Union, as corresponds to each type of company, under the terms established by regulation.

Likewise, the following shall be established by regulation:

a) (Repealed)

b) (Repealed)

c) The specific regime for the adherence of newly created investment services companies.

d) The exceptions to adherence to the fund for those investment services companies that do not incur the risks mentioned in number 1 of this article.

6. An investment services company may only be excluded from the fund to which it belongs when it fails to comply with its obligations to the same. The exclusion shall entail the revocation of the authorization granted to the company. The guarantee shall extend to clients who had made their investments up to that moment.

The National Securities Market Commission shall be competent to agree the exclusion, following a report from the fund's management company. Before adopting this decision, the necessary measures must be agreed, including the requirement of surcharges on unpaid fees, so that the investment services company complies with its obligations. The suspension envisaged in article 75 may also be agreed by the National Securities Market Commission. The fund's management company shall collaborate with the National Securities Market Commission to achieve the greatest effectiveness of the measures agreed.

The exclusion agreement shall be given adequate dissemination to guarantee that the clients of the affected investment services company have immediate knowledge of the measure adopted.

7. Investors who cannot obtain directly from an entity adhering to a fund the reimbursement of the amounts of money or the restitution of the securities or instruments belonging to them may request from the fund's management company the execution of the guarantee provided by the fund, when any of the following circumstances occur:

a) That the entity has been declared in a state of bankruptcy.

b) That the declaration of suspension of payments of the entity has been judicially deemed requested.

c) That the National Securities Market Commission declares that the investment services company cannot, apparently and for reasons directly related to its financial situation, comply with the obligations contracted with the investors, provided that the investors had requested from the investment services company the return of funds or securities entrusted to it and had not obtained satisfaction from the same within a maximum period of twenty-one business days.

Once the guarantee has been made effective by the fund, the fund shall be subrogated in the rights that the investors hold against the investment services company, up to an amount equal to the amount that had been paid to them as compensation.

In the event that the securities or other financial instruments entrusted to the investment services company were returned by the latter after the payment of the amount guaranteed by the fund, the fund may be reimbursed for the amount paid, in whole or in part, if the value of those to be returned is greater than the difference between that of those entrusted to the investment services company and the amount paid to the investor. To this end, it is empowered to dispose of them in the amount that may be appropriate, in accordance with the prescriptions established by regulation.

8. The Government is empowered to regulate, in all matters not provided for in this Law, the operating regime of investment guarantee funds and the scope of the guarantee they are to provide. In particular, it may determine:

a) The amount of the guarantee and the form and period in which it will be made effective.

b) The investors excluded from the guarantee, among whom shall be professional or institutional investors and those especially linked to the defaulting company.

c) The budgetary and financial regime, both of the management companies and of the investment guarantee funds, which shall regulate, among other matters, their borrowing possibilities and the manner in which the former may pass on their operating expenses to the latter.

d) The investment regime for the resources that make up the funds' assets, which shall be inspired by the principles of profitability and liquidity in order to meet their commitments promptly.

e) The rules for determining the amount of the contributions to be made by the adhering entities, which must be sufficient to cover the guarantee provided.

f) The frequency with which the contributions must be made and the regime for late payment.

g) Repealed.

Letters a) and b) of subsection 5 are repealed and subsections 1, 2, 8.e) and f) are amended by art. 96.1.1 to 3 of Law 53/2002, of 30 December. Ref. BOE-A-2002-25412

Amended by art. 6.1 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

This amendment enters into force in accordance with the provisions of final provision 1.2.

The third paragraph is added by art. 58.1 of Law 4/1990, of 29 June. Ref. BOE-A-1990-15347

Select wording:

Last update, published on 31/12/2002, in force from 01/01/2003.

Amendment published on 17/11/1998, in force from 18/11/1998.

Amendment published on 30/06/1990, in force from 30/06/1990.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 154: #tvii]

TITLE VII

Rules of conduct

[Block 155: #ci-2]

CHAPTER I

Rules of conduct applicable to those who provide investment services

Added by sole art. 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 156: #a78]

Case law

Article 78. Obligated subjects.

1. Those who provide investment services must respect:

a) The rules of conduct contained in this Chapter.

b) The codes of conduct that, in development of the rules referred to in letter a) above, are approved by the Government or, with its express authorization, by the Minister of Economy and Finance, on a proposal from the National Securities Market Commission.

c) Those contained in their own internal rules of conduct.

2. The Minister of Economy and Finance and, with his express authorization, the National Securities Market Commission shall establish the minimum content of the internal rules of conduct.

Amended by sole art. 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 38.1 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 6.2 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 157: #a78bis]

Case law

Article 78 bis. Classes of clients.

1. For the purposes of the provisions of this Title, investment services companies shall classify their clients as professional and retail. The same obligation shall apply to the other companies that provide investment services with respect to the clients to whom they provide or offer such services.

2. Those who are presumed to have the experience, knowledge and qualification necessary to make their own investment decisions and properly assess their risks shall be considered professional clients.

3. In particular, the following shall be considered professional clients:

a) Financial entities and other legal persons that, in order to operate in the financial markets, must be authorised or regulated by States, whether or not they are members of the European Union.

These shall include credit institutions, investment services companies, insurance companies, collective investment institutions and their management companies, pension funds and their management companies, securitisation funds and their management companies, those that habitually operate with commodities and commodity derivatives, as well as operators that contract in their own name and other institutional investors.

b) States and regional administrations, public bodies that manage public debt, central banks and international and supranational bodies, such as the World Bank, the International Monetary Fund, the European Central Bank, the European Investment Bank and others of a similar nature.

c) Undertakings that individually meet at least two of the following conditions:

1st that the total of the asset items is equal to or greater than 20 million euros;

2nd that the amount of their annual turnover is equal to or greater than 40 million euros;

3rd that their own resources are equal to or greater than 2 million euros.

d) Institutional investors that, not included in letter a), have as their habitual activity investing in securities or other financial instruments.

This section shall include, in particular, venture capital entities and their management companies.

The entities indicated in the preceding paragraphs shall be considered professional clients without prejudice to the fact that they may request non-professional treatment and that investment services companies may agree to grant them a broader level of protection.

e) Other clients that request it beforehand, and expressly waive their treatment as retail clients. However, in no case shall clients that request to be treated as professionals be considered to possess knowledge and market experience comparable to the categories of professional clients listed in letters a) to d) of this paragraph.

Acceptance of the request and waiver shall be subject to the company providing the investment service carrying out an adequate assessment of the client's experience and knowledge in relation to the operations and services requested, and ensuring that it can make its own investment decisions and understands its risks. When carrying out the aforementioned assessment, the company must verify that at least two of the following requirements are met:

1st that the client has carried out operations of significant volume in the securities market, with an average frequency of more than ten per quarter during the four previous quarters;

2nd that the value of the cash and securities deposited is greater than 500,000 euros;

3rd that the client occupies, or has occupied for at least one year, a professional position in the financial sector that requires knowledge of the operations or services envisaged.

The Government and, with its express authorisation, the Minister of Economy and Finance or the National Securities Market Commission may determine the method of calculating the magnitudes indicated in this paragraph and establish requirements for the procedures that entities establish to classify clients.

4. All those who are not professionals shall be considered retail clients.

The first paragraph of letter e) of paragraph 3 is amended by final provision 1.18 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Added by sole article 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Amendment published on 20/12/2007, in force from 21/12/2007.

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 158: #a78ter]

Article 78 ter. Operations with eligible counterparties.

1. For the purposes of the provisions of this article, the following entities shall be considered eligible counterparties: investment services companies, credit institutions, insurance entities, collective investment institutions and their management companies, pension funds and their management companies, other financial entities authorised or regulated by Community legislation or by the national law of a Member State, undertakings indicated in letters d) and e) of paragraph 3 of article 62, national governments and their corresponding services, including those that trade debt, Central Banks and supranational bodies. Equivalent third-country entities and autonomous communities shall also have such consideration.

Likewise, if requested, undertakings that meet the requirements established in letter e) of paragraph 3 of article 78 bis shall also be considered eligible counterparties, in which case they shall only be recognised as an eligible counterparty in relation to the services or operations for which they may be treated as a professional client. Third-country undertakings that are subject to equivalent requirements and conditions shall be understood to be included.

2. Investment firms authorised to execute orders on behalf of third parties, to deal on own account or to receive and transmit orders may carry out these transactions, or ancillary services directly related to them, with the entities referred to in the previous paragraph without complying with the obligations established in articles 79 bis, 79 ter and 79 sexies, provided that such entities are previously informed thereof and that they do not expressly request that they be applied to them.

In the case of the entities referred to in the first paragraph of the previous section, the classification as eligible counterparty shall be understood without prejudice to the right of these entities to request, either generally or for each transaction, treatment as a client, in which case their relationship with the investment firm shall be subject to the provisions of articles 79 bis, 79 ter and 79 sexies of this Law.

Likewise, in the case of the firms referred to in the second paragraph of the previous section, express confirmation must be obtained that the firm agrees to be treated as an eligible counterparty, either generally or for each transaction.

When the transaction is carried out with a firm domiciled in another Member State of the European Union, the status of the firm as determined by the legislation of that State must be respected.

Added by the sole art.50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 159: #a79]

Case law

Article 79. Duty of diligence and transparency.

Entities providing investment services must behave with diligence and transparency in the interest of their clients, taking care of such interests as if they were their own, and, in particular, observing the rules established in this chapter and in its implementing regulations.

Specifically, investment firms shall not be considered to act with diligence and transparency and in the interest of their clients if, in relation to the provision of an investment or ancillary service, they pay or receive any fee or commission, or provide or receive any non-monetary benefit that does not comply with the provisions that develop this Law.

Amended by the sole art.50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 2 is added and paragraph 1 is numbered and amended by arts. 20.1 and 55 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 6.3 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 160: #a79bis]

Case law

Article 79 bis. Information obligations.

1. Entities providing investment services must keep their clients adequately informed at all times.

2. All information addressed to clients, including advertising, must be impartial, clear and not misleading. Advertising communications must be clearly identifiable as such.

3. Clients, including potential clients, shall be provided, in an understandable manner, with adequate information about the entity and the services it provides; about financial instruments and investment strategies; about order execution venues and about associated expenses and costs, in such a way as to enable them to understand the nature and risks of the investment service and of the specific type of financial instrument offered, and thus be able to make investment decisions on an informed basis. For these purposes, a potential client shall be considered to be any person who has had direct contact with the entity for the provision of an investment service, at the initiative of either party.

The information referred to in the previous paragraph may be provided in a standardised format.

The information concerning financial instruments and investment strategies must include appropriate guidance and warnings about the risks associated with such instruments or strategies. The National Securities Market Commission may require that the information provided to investors prior to the acquisition of a product include any warnings it deems necessary relating to the financial instrument and, in particular, those highlighting that it is a product not suitable for non-professional investors due to its complexity. Likewise, it may require that these warnings be included in advertising materials.

In the case of securities other than shares issued by a credit institution, the information provided to investors must include additional information to highlight to the investor the differences between these products and ordinary bank deposits in terms of profitability, risk and liquidity. The Minister of Economy and Competitiveness or, with his express authorisation, the National Securities Market Commission, may specify the terms of the aforementioned additional information.

4. The client must receive adequate reports from the entity on the service provided. Where appropriate, such reports shall include the costs of transactions and services carried out on behalf of the client.

5. Entities providing investment services must ensure at all times that they have all the necessary information about their clients, in accordance with the provisions of the following paragraphs.

6. When the investment advisory or portfolio management service is provided, the entity shall obtain the necessary information on the knowledge and experience of the client, including, where applicable, potential clients, in the investment field corresponding to the specific type of product or service in question; and on the financial situation and investment objectives of the client, so that the entity may recommend the investment services and financial instruments that are most suitable for the client. When the entity does not obtain this information, it shall not recommend investment services or financial instruments to the client or potential client. In the case of professional clients, the entity shall not have to obtain information on the client's knowledge and experience. The entity shall provide the client, in writing or through another durable medium, with a description of how the recommendation made fits the investor's characteristics and objectives.

7. When services other than those provided for in the preceding paragraph are provided, the investment services company shall ask the client, including, where applicable, potential clients, to provide information on their knowledge and experience in the investment field corresponding to the specific type of product or service offered or requested, so that the entity may assess whether the investment service or product is suitable for the client. The entity shall provide the client with a copy of the document recording the assessment carried out.

When, based on that information, the entity considers that the product or investment service is not suitable for the client, it shall warn the client of this. Likewise, when the client does not provide the information indicated in this paragraph or it is insufficient, the entity shall warn the client that such decision prevents it from determining whether the intended investment service or product is suitable for the client.

If the investment service is provided in relation to a complex instrument as established in the following paragraph, the contractual document shall be required to include, alongside the client's signature, a handwritten statement, in the terms determined by the Comisión Nacional del Mercado de Valores, by which the investor states that they have been warned that the product is not convenient for them or that it has not been possible to assess them under the terms of this article.

In the terms determined by the Comisión Nacional del Mercado de Valores, entities providing investment services shall at all times keep an updated record of unsuitable clients and products, reflecting, for each client, the products whose suitability has been assessed with a negative result.

8. When the entity provides the service of execution or reception and transmission of client orders, with or without the provision of ancillary services, it shall not have to follow the procedure described in the preceding paragraph provided that the following conditions are met:

a) That the order relates to shares admitted to trading on a regulated market or on an equivalent market of a third country; to money market instruments; to bonds or other forms of securitised debt, unless they incorporate an embedded derivative; to collective investment undertakings harmonised at European level and to other non-complex financial instruments. Equivalent third-country markets shall be considered those that meet requirements equivalent to those established in Title IV. The European Commission shall publish a list of the markets that must be considered equivalent, which shall be updated periodically.

In addition to those expressly indicated in the preceding paragraph, financial instruments in which the following conditions concur shall be considered non-complex financial instruments:

i) that there are frequent possibilities for sale, redemption or other type of liquidation of said financial instrument at prices publicly available to market members and that are market prices or prices offered, or validated, by valuation systems independent of the issuer;

ii) that they do not involve real or potential losses for the client that exceed the acquisition cost of the instrument;

iii) that sufficient information on their characteristics is available to the public. This information must be understandable in such a way as to allow an average retail client to make an informed judgment to decide whether to carry out a transaction in that instrument.

The following shall not be considered non-complex financial instruments:

i) securities that give the right to acquire or sell other transferable securities or that give rise to their settlement in cash, determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures;

ii) the financial instruments referred to in paragraphs 2 to 8 of article 2 of this Law;

b) that the service is provided at the initiative of the client;

c) that the entity has clearly informed the client that it is not obliged to assess the suitability of the instrument offered or the service provided and that, therefore, the client does not enjoy the protection established in the preceding paragraph. Such warning may be made in a standardised format;

d) that the entity complies with the provisions of article 70 ter.2.d).

Letter d) of paragraph 8 is amended by final provision 1.19 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Paragraphs 3, 6 and 7 are amended by final provisions 3.5 and 6 of Law 9/2012, of 14 November. Ref. BOE-A-2012-14062 .

Paragraphs 3, 6 and 7 are amended by final provisions 3.5 and 6 of Royal Decree-Law 24/2012, of 31 August. Ref. BOE-A-2012-11247 .

Added by sole article 50 of Law 47/2007, of 19 December. Ref. BOE-A-2002-22807

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Modification published on 15/11/2012, in force from 15/11/2012.

Modification published on 31/08/2012, in force from 31/08/2012.

Modification published on 23/11/2002, in force from 24/11/2002.

Text added, published on 23/11/2002, in force from 24/11/2002.

[Block 161: #a79ter]

Article 79 ter. Register of contracts.

Entities providing investment services must create a register that includes the contract or contracts whose purpose is the agreement between the firm and the client and in which the rights and obligations of the parties and other conditions under which the firm will provide the service to the client must be specified.

Contracts entered into with retail clients must be recorded in writing. For the provision of the investment advice service to such clients, written or reliable evidence of the personalised recommendation shall suffice.

Added by the sole art. 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 162: #a79quater]

Article 79 quater. Investment services as part of a financial product.

The information and record-keeping obligations set out in Articles 79 bis and 79 ter above shall apply to investment services offered as part of other financial products, without prejudice to the application to the latter of their specific regulations, especially those related to risk assessment and the information requirements to be provided to clients.

Amended by final provision 1.20 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Added by the sole art. 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Select wording:

Last update, published on 27/06/2014, in force from 28/06/2014.

Modification published on 20/12/2007, in force from 21/12/2007.

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 163: #a79quinquies]

Article 79 quinquies. Compliance with information obligations in the case of provision of services through another investment services firm.

When an entity provides investment services or ancillary services on behalf of a client following instructions from another investment services firm, it may rely on the information about the client transmitted to it by the latter. In this case, the firm transmitting the instructions shall be responsible for ensuring that the information about the client is complete and accurate.

Likewise, the firm receiving the instructions may rely on recommendations provided to the client by another investment services firm with respect to the service or transaction in question. In this case, the firm transmitting the instructions shall be responsible for the suitability for the client of the recommendations or advice provided.

In any case, the firm receiving the instructions or orders shall be responsible for carrying out the service or transaction, on the basis of the information or recommendations received, in accordance with the relevant provisions of this chapter.

Added by the sole art. 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Text added, published on 20/12/2007, in force from 21/12/2007.

[Block 164: #a79sexies]

Case law

Article 79 sexies. Obligations relating to the management and execution of orders.

1. Persons or entities providing investment services must, when executing client orders, whether they provide this service independently or in conjunction with another:

a) Take reasonable measures to obtain the best possible result for their clients' transactions, taking into account price, costs, speed and likelihood of execution and settlement, volume, nature of the transaction and any other element relevant to the execution of the order.

b) Have order management procedures and systems, under the terms determined by regulation, that allow their rapid and correct execution and subsequent allocation, so that no client is harmed when transactions are carried out for several of them or when acting on own account. Such procedures or systems shall allow the execution of client orders that are equivalent, according to the time at which they were received by the investment services firm.

2. To comply with the provisions of letter a) of the preceding paragraph, entities must have an order execution policy that defines the relative importance attributed to price, costs, speed and efficiency in execution and settlement, and any other element they consider relevant for the execution of the order.

Such order execution policy must include, for each class of instrument, information on the different markets, systems or any other trading venue in which the firm executes its clients' orders, and the factors influencing the choice of the trading venue. The entity must identify those venues that, in its judgment, allow it to systematically obtain the best possible result for the execution of client orders.

3. The entity must inform its clients about its order execution policy, and must obtain their consent before applying it to them. When such policy allows the entity to execute orders outside regulated markets and multilateral trading facilities, clients must be aware of this and must give their prior express consent before proceeding to execute orders outside the aforementioned markets or systems. Consent may be obtained generally or for each particular transaction.

The entity must be able to demonstrate to its clients, at their request, that they have executed their orders in accordance with the company's execution policy.

4. When the client gives specific instructions on the execution of their order, the company shall execute the order following the specific instruction.

In the case of orders from retail clients that have not given specific instructions, the best possible result shall be determined in terms of total consideration, comprising the price of the financial instrument and the costs related to execution, which shall include all expenses incurred by the client that are directly related to the execution of the order, including the fees of the execution venue, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.

5. Entities shall monitor the effectiveness of their systems and their order execution policy in order to detect and, where appropriate, correct any deficiencies. In particular, they shall periodically check whether the execution venues included in the order execution policy provide the best possible results for the client or whether it is necessary to change their execution systems. Entities shall notify their clients of any significant change in their systems or in their order execution policy.

6. The minimum requirements for order management systems and procedures; the manner of considering the costs and fees associated with execution; the rules for the selection of the different systems or markets and for the execution of limit orders; and the other matters relating to the order management and execution policy shall be established by regulation.

Added by the sole art. 50 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 165: #cii-7]

CHAPTER II

Market abuse

Added by the sole art. 51 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Added text, published on 20/12/2007, in force from 21/12/2007.

[Block 166: #a80]

Article 80. Obligated subjects.

1. Investment services companies, credit institutions, collective investment institutions, issuers, analysts and, in general, all persons or entities that directly or indirectly carry out activities related to the securities markets, must respect the rules contained in this Chapter.

2. Likewise, the entities to which the provisions of Articles 82 and 83 bis below apply must prepare, submit to the National Securities Market Commission and comply with an internal code of conduct in which they shall incorporate the provisions contained in said articles and in their implementing provisions. Likewise, they shall submit a written commitment guaranteeing the updating of said internal codes of conduct and that their content is known, understood and accepted by all persons belonging to the organization to whom they apply.

In those cases in which it is detected that their content does not conform to the provisions above or is not appropriate to the nature or the set of activities that the entity or group carries out, the National Securities Market Commission may require it to incorporate into the code any modifications or additions it deems necessary.

Amended by the sole art. 52 by Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Amended by art. 38.2 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Select wording:

Last update, published on 20/12/2007, in force from 21/12/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 167: #a81]

Article 81

1. Inside information shall be considered any information of a concrete nature that refers directly or indirectly to one or several negotiable securities or financial instruments included within the scope of application of this Law, or to one or several issuers of the aforementioned negotiable securities or financial instruments, which has not been made public and which, if made or having been made public, could influence or would have influenced appreciably their quotation on a market or organized trading system.

The provisions of the preceding paragraph shall also apply to negotiable securities or financial instruments for which an application for admission to trading on a market or organized trading system has been submitted.

In relation to financial instruments derived from commodities, inside information shall be considered any information of a concrete nature, which has not been made public, and which refers directly or indirectly to one or several of those derivative financial instruments, which the users of the markets in which those products are traded would expect to receive in accordance with the accepted market practices in those markets.

2. Anyone who has inside information must refrain from executing, on their own account or on behalf of a third party, directly or indirectly, any of the following conducts:

a) Preparing or carrying out any type of operation on the negotiable securities or on financial instruments mentioned in the previous paragraph to which the information refers, or on any other security, financial instrument or contract of any type, traded or not on a secondary market, which has as underlying the negotiable securities or financial instruments to which the information refers.

The preparation and execution of operations whose existence itself constitutes inside information are excepted, as well as operations carried out in compliance with a matured obligation to acquire or transfer negotiable securities or financial instruments, when this obligation is contemplated in an agreement entered into before the person in question is in possession of the inside information, or other operations carried out in accordance with applicable regulations.

b) To communicate such information to third parties, except in the normal exercise of their work, profession or position.

c) To recommend to a third party that they acquire or transfer negotiable securities or financial instruments or that they cause another to acquire or transfer them based on such information.

The prohibitions established in this section apply to any person who possesses inside information when such person knows, or should have known, that it is this class of information.

The prohibitions established in this section also apply to the directors and members of the supervisory board of a European public limited company domiciled in Spain that has opted for the dual system in relation to any operation on securities of the company itself or of its subsidiaries, associates or affiliates, regarding which they have, by reason of their position, inside or reserved information, as well as to suggest their execution to any person as long as that information is not made publicly known.

3. The prohibitions established in the previous section do not apply to operations carried out to execute monetary, exchange rate or public debt management policy by a Member State of the European Union, the European System of Central Banks, a national Central Bank or another body officially designated for that purpose, or by any other person acting on behalf of these. Nor shall they apply to operations on own shares in the framework of buyback programmes carried out by issuers, nor to the stabilisation of a negotiable security or financial instrument provided that these operations are carried out under the conditions established by regulation.

4. All persons or entities that act in the securities markets or carry out activities related to them and, in general, anyone who possesses inside information, has the obligation to safeguard it, without prejudice to their duty of communication and collaboration with judicial and administrative authorities under the terms provided in this or other laws. Therefore, they shall adopt adequate measures to prevent such information from being subject to abusive or unfair use and, where appropriate, shall immediately take the necessary measures to correct the consequences that may have derived from it.

5. Public bodies that provide statistics that could have significant repercussions on the financial markets shall disseminate them correctly and transparently.

6. The Minister of Economy and, with their express authorisation, the National Securities Market Commission, are empowered to establish, with respect to the different categories of persons or entities and their operations in the securities market, specific measures for the safeguarding of the inside information possessed.

A paragraph is added to section 2 by final provision 5.6 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Amended by art. 38.3 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Section 3 is deleted and section 2 is amended by art. 6.4 and 5 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Amended by art. 6 of Law 9/1991, of 22 March. Ref. BOE-A-1991-7736

Select wording:

Last update, published on 05/03/2011, in force from 06/03/2011.

Amendment published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Amendment published on 27/03/1991, in force from 28/03/1991.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 168: #a82]

Article 82. Consideration of relevant information, persons obliged to disseminate it and publicity.

1. All information whose knowledge could affect a reasonably investor to acquire or transmit securities or financial instruments and therefore could significantly influence their quotation on a secondary market shall be considered relevant information.

2. Issuers of securities are obliged to make public and disseminate, under the terms established by regulation, immediately to the market all relevant information. Likewise, they shall send to the National Securities Market Commission that information for its incorporation into the official register regulated in article 92 of this Law.

3. The communication to the National Securities Market Commission must be made simultaneously with its dissemination by any other means and as soon as the fact is known, the decision has been adopted or the agreement or contract with third parties in question has been signed. The content of the communication must be truthful, clear, complete and, when the nature of the information so requires, quantified, so that it does not induce confusion or deception. Issuers of securities shall also disseminate this information on their internet pages. However, when the relevant information could disturb the normal development of operations on the issuer's securities or endanger the protection of investors, the issuer must communicate the relevant information, prior to its publication, to the National Securities Market Commission, which shall disseminate it immediately.

4. An issuer may, under its own responsibility, delay the publication and dissemination of relevant information when it considers that the information harms its legitimate interests, provided that such omission is not likely to mislead the public and that the issuer can guarantee the confidentiality of said information. The issuer shall immediately inform the Comisión Nacional del Mercado de Valores.

5. The Minister of Economy and Finance and, with his express authorization, the Comisión Nacional del Mercado de Valores, are empowered to develop, with respect to the obligations established in this article, the procedures and forms of making the aforementioned communications, determine the period during which the relevant information shall be published on the issuers' Internet pages, as well as to specify the other matters to which this refers.

Amended by art. 9 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Amended by art. 38.4 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Select wording:

Last update, published on 13/04/2007, in force from 13/08/2007.

Amendment published on 23/11/2002, in force from 24/11/2002.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 169: #a83]

Article 83

1. All entities or groups of entities that provide investment services and the other entities that act or provide investment advisory services in the securities markets have the obligation to establish the necessary measures to prevent the flow of inside information between their different areas of activity, so as to guarantee that each of these takes autonomously its decisions regarding the scope of the securities markets and, likewise, to avoid conflicts of interest.

In particular, these entities are obliged to:

a) Establish separate areas of activity within the entity or the group to which they belong, provided that they act simultaneously in several of them. In particular, at least each of the departments that carry out the activities of own portfolio management, third-party portfolio management and analysis must be constituted as separate areas.

b) Establish adequate information barriers between each separate area and the rest of the organization and between each of the separate areas.

c) Define an investment decision system that guarantees that these are adopted autonomously within the separate area.

d) Prepare and keep updated a list of securities and financial instruments on which inside information is available and a list of persons and dates on which they have had access to such information.

2. In addition, all entities and groups of entities that prepare, publish or disseminate reports or recommendations on companies issuing listed securities or financial instruments must behave loyally and impartially, stating in a prominent place in their reports, publications or recommendations the relevant links, including commercial relationships, and the stable participation that the entity or group maintains or is going to maintain with the company subject to the analysis, as well as that the document does not constitute an offer of sale or subscription of securities.

3. The Minister of Economy and, with his specific authorization, the Comisión Nacional del Mercado de Valores, may establish mandatory measures in development of this article and, specifically, the obligation for these entities to have a specific internal code of conduct for the investment advisory service.

Amended by art. 38.5 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by art. 6.6 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 23/11/2002, in force from 24/11/2002.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 170: #a83bis]

Article 83 bis

1. Issuers of securities, during the phases of study or negotiation of any type of legal or financial operation that may significantly influence the quotation of the affected securities or financial instruments, have the obligation to:

a) Limit knowledge of the information strictly to those persons, internal or external to the organization, to whom it is essential.

b) Keep, for each operation, a documentary record containing the names of the persons referred to in the previous paragraph and the date on which each of them became aware of the information.

c) Expressly warn the persons included in the record of the nature of the information and of their duty of confidentiality and the prohibition of its use.

d) Establish security measures for the custody, archiving, access, reproduction and distribution of the information.

e) Monitor the evolution in the market of the securities issued by them and the news that professional disseminators of economic information and the media issue and could affect them.

f) In the event of an abnormal evolution of the contracted volumes or of the negotiated prices and there are rational indications that such evolution is occurring as a consequence of a premature, partial or distorted dissemination of the operation, immediately disseminate a relevant fact that informs, clearly and precisely, of the state in which the operation in progress is or that contains an advance of the information to be supplied, all without prejudice to the provisions of article 82.4 of this Law.

2. Issuers of securities are obliged to subject the execution of transactions on their own shares or financial instruments referenced to them to measures that prevent investment or divestment decisions from being affected by knowledge of inside information.

3. Issuers are likewise obliged to subject the members of their administrative body, the executives as defined by regulation, and the personnel integrated in areas related to securities market activities to measures that prevent the use of inside information on the securities and financial instruments issued by the entity itself or by others in its group.

4. The Minister of Economy and, with his express authorization, the National Securities Market Commission, may establish measures on a mandatory basis in development of this article. In particular, they shall determine the form and deadlines in which the administrators and executives, and those persons who have a close link with them, must inform the National Securities Market Commission and the general public about acquisitions of securities and financial instruments issued by the entity in which they hold such positions or referenced to them.

Added by art. 38.6 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Added text, published on 23/11/2002, in force from 24/11/2002.

[Block 171: #a83ter]

Article 83 ter.

1. Any person or entity that acts or relates in the securities market must refrain from preparing or carrying out practices that falsify the free formation of prices. The following shall be understood as such:

a) Transactions or orders:

That provide or may provide false or misleading indications as to the supply, demand or price of negotiable securities or financial instruments.

That secure, through one person or several persons acting in concert, the price of one or several financial instruments at an abnormal or artificial level, unless the person who carried out the transactions or issued the orders demonstrates the legitimacy of their reasons and that these conform to accepted market practices in the regulated market concerned.

b) Transactions or orders that employ fictitious devices or any other form of deception or contrivance.

c) Dissemination of information through the media, including the internet, or through any other means, that provides or may provide false or misleading indications as to financial instruments, including the spreading of rumours and false or misleading news, when the person who disclosed it knew or ought to have known that the information was false or misleading. With respect to journalists acting in a professional capacity, such dissemination of information shall be assessed taking into account the rules governing their profession, unless such persons obtain directly or indirectly an advantage or benefit from the aforementioned dissemination of information.

2. However, the transactions or orders referred to in article 81.3 and in general those carried out in accordance with applicable regulations shall not be considered included in the previous paragraph.

3. The Minister of Economy and, with his express authorization, the National Securities Market Commission, are empowered to develop, with respect to the prohibition established in this article, a non-exhaustive list and description of specific practices contrary to the free formation of prices.

Added by art. 39.1 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Added text, published on 23/11/2002, in force from 24/11/2002.

[Block 172: #a83quater]

Article 83 quater. Communication of suspicious transactions.

1. Entities that carry out transactions with financial instruments must notify the National Securities Market Commission, as quickly as possible, when they consider that there are reasonable indications to suspect that a transaction uses inside information or constitutes a practice that falsifies the free formation of prices.

Entities obliged to communicate to the National Securities Market Commission shall be Spanish investment services companies and credit institutions, including subsidiaries of foreign entities, as well as branches of non-Community investment services companies or credit institutions. Where appropriate, the National Securities Market Commission shall forward the suspicious transaction report to the supervisory authority of the Member State in which the market where such transaction was carried out is located.

2. The suspicious transaction report may be made by letter, email, fax or telephone, and in the latter case written confirmation must be given at the request of the National Securities Market Commission.

3. The report shall contain the following information:

a) The description of the transactions, including the type of order, and the trading method used.

b) The reasons leading to suspicion that the transaction is carried out using inside information or constitutes a practice that falsifies the free formation of prices.

c) The means of identification of the persons on whose behalf the transactions were carried out and, where applicable, of those other persons involved in the transactions.

d) Whether the person subject to the reporting obligation acts on their own account or on behalf of third parties.

e) Any other relevant information relating to the suspicious transactions.

If at the time of making the report the entity does not have such information, it must at least mention the reasons why it considers it to be a suspicious transaction, without prejudice to the obligation to send the supplementary information as soon as it is available.

4. The entities that communicate suspicious transactions to the National Securities Market Commission shall be obliged to keep silent about said communication, except, where applicable, as provided in the legal provisions in force. In any case, communication in good faith may not entail liability of any kind nor shall it constitute a violation of the prohibitions on disclosure of information under contracts or legal, regulatory or administrative provisions.

5. The identity of the entity that makes the communication of a suspicious transaction shall be subject to the professional secrecy established in paragraph four of article 90 of this Law.

Added by art. 2.4 of Law 12/2006, of 16 May. Ref. BOE-A-2006-8637

Added text, published on 17/05/2006, in force from 18/05/2006.

[Block 173: #tviii]

TITLE VIII

Supervision, inspection and sanctioning regime

[Block 174: #ci-9]

CHAPTER I

General provisions

[Block 175: #a84]

Article 84. Scope of supervision, inspection and sanctioning.

The following are subject to the supervision, inspection and sanctioning regime established in this law, under the responsibility of the National Securities Market Commission:

1. The following persons and entities, with regard to compliance with this Law and its implementing regulations, as well as with the rules of European Union Law that contain provisions specifically referring to them:

a) The governing companies of official secondary markets, the governing entities of multilateral trading facilities, the central counterparties and the central securities depositories. The Bank of Spain is excluded.

b) The Sociedad de Bolsas and the companies that own all of the shares or a participation that confers control, direct or indirect, of the entities provided for in the preceding letter.

c) Spanish investment services companies, this competence extending to any office or centre within or outside the national territory.

d) Non-Community investment services companies operating in Spain.

e) The agents of the entities that provide investment services.

f) The management companies of investment guarantee funds.

g) Those who, not being included in the preceding letters, hold the status of member of an official secondary market or of the clearing and settlement systems for their transactions.

1 bis. Credit rating agencies, established in Spain and registered under Chapter I of Title III of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies, the persons participating in rating activities, the rated entities or related third parties, the third parties to which credit rating agencies have outsourced some of their functions or activities, and the persons related or connected in any other way with the agencies or with credit rating activities. The National Securities Market Commission shall exercise its powers in accordance with what is established in the European Union regulations on credit rating agencies.

2. The following persons and entities, as regards their actions related to the Securities Market:

a) The issuers of securities.

b) Credit institutions and their agents, this competence extending to any branch opened outside the national territory, as well as non-Community credit institutions operating in Spain.

c) Investment services companies authorised in another Member State of the European Union that operate in Spain, under the terms established in this Law and its implementing provisions, including their tied agents and branches in the national territory, as well as, under the same terms, the branches in Spain of credit institutions authorised in another Member State of the European Union.

c bis) The Management Companies of Collective Investment Institutions insofar as they provide investment services.

d) The remaining natural or legal persons, insofar as they may be affected by the rules of this Law and its implementing provisions.

e) The credit rating agencies registered by another competent authority of the European Union under Chapter I of Title III of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies and the rating agencies that have received the equivalence certification under article 5 of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies. The CNMV shall exercise its powers in accordance with what is established in the European Union regulations on credit rating agencies.

3. Persons resident or domiciled in Spain who control, directly or indirectly, investment services companies in other Member States of the European Union, within the framework of collaboration with the authorities responsible for the supervision of said companies, as well as the holders of significant participations for the purposes of compliance with the provisions of article 69 of this Law.

4. The entities that form part of the consolidated groups of investment services companies contemplated in article 86 of this Law, for the sole purposes of compliance at a consolidated level with the own resources requirements and the limitations that may be established on investments, transactions or positions that involve high risks.

5. The entities that form part of the consolidable groups of which the entities referred to in letters a) and b) of section 1 above are dominant, for the sole purposes of complying with the obligation to consolidate their annual accounts and of the limitations that may be established in relation to their activity and financial balance.

5 bis. Financial holding companies, mixed financial holding companies and mixed holding companies, in accordance with Article 4.1.20 and 21, respectively, of Regulation (EU) No. 575/2013, of 26 June, among whose subsidiaries are investment services companies.

6. The natural persons and non-financial entities mentioned in section 9 of Article 86, for the sole purposes provided for in that section.

7. Any person or entity, for the purposes of verifying whether it infringes the name and activity reservations provided for in Articles 64, 65 and 65 bis. In the case of legal persons, the powers corresponding to the National Securities Market Commission according to the preceding sections may be exercised over those who hold administration, management or similar positions in them.

The provisions of this article shall be understood without prejudice to the supervision, inspection and sanctioning powers corresponding to the Autonomous Communities that have been assigned them over the governing bodies of secondary markets of autonomous scope and, in relation to operations on securities admitted to trading only in them, over the other persons or entities listed in the first two preceding sections. For the purposes of exercising said powers, the corresponding provisions of this Title shall have basic character, except for the references contained in them to state bodies or entities. The National Securities Market Commission may enter into agreements with Autonomous Communities with powers in matters of securities markets in order to coordinate their respective actions.

8. With respect to the provisions of Articles 81, 82 and 83 ter, and without prejudice to the powers of the Autonomous Communities, the National Securities Market Commission shall be competent not only over acts carried out in Spanish territory or outside it that refer to negotiable securities and other financial instruments admitted to trading on an official secondary market or for which an application for admission to trading has been filed on one of said markets, but also with respect to acts carried out in Spanish territory in relation to negotiable securities and other financial instruments admitted to trading on a regulated market of another Member State of the European Union or for which an application for admission to trading has been filed on one of such markets.

Letters a) and b) of section 1 are modified by final provision 1.A).18 of Law 11/2015, of 18 June. Ref. BOE-A-2015-6789 .

Section 1 is modified by art. 94.21 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Section 5 bis is added by final provision 1.21 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Modified by art. 3.2 of Law 15/2011, of 16 June. Ref. BOE-A-2011-10531 .

Letters a), b) and g) of section 1 are modified and letter c bis) is added to section 2 by final provision 5.7 and 8 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Modified by sole art. 53 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Section 8 is added and letter b) of section 1 is modified by arts. 38.7 and 1.4.10 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Modified by art. 7.1 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Sections 3 to 5 are added and the last paragraph of section 2 is modified by art. 4.3 of Law 13/1992, of 1 June. Ref. BOE-A-1992-12545

Select wording:

Last update, published on 19/06/2015, in force from 20/06/2015.

Modification published on 28/04/2015, in force from 29/04/2015.

Modification published on 27/06/2014, in force from 28/06/2014.

Modification published on 17/06/2011, in force from 18/06/2011.

Modification published on 05/03/2011, in force from 06/03/2011.

Modification published on 20/12/2007, in force from 21/12/2007.

Modification published on 23/11/2002, in force from 24/11/2002.

Modification published on 17/11/1998, in force from 18/11/1998.

Modification published on 02/06/1992, in force from 01/01/1993.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 176: #a84bis]

Article 84 bis. Supervisory program.

1. The National Securities Market Commission shall approve, at least once a year, a supervisory program in relation to the following investment services companies:

a) Those whose results in the stress tests, referred to in section 3, or in the supervision and evaluation process, reveal the existence of significant risks to their financial soundness or reveal non-compliance with solvency regulations.

b) Those that pose a systemic risk to the financial system.

c) Any others that the National Securities Market Commission considers necessary in the exercise of its supervisory functions.

2. This program shall contain at least the information referred to in Article 55.2 of Law 10/2014, on the Organization, Supervision and Solvency of Credit Entities and the National Securities Market Commission, in view of the results of the program, may adopt the measures it considers appropriate in each case, among which are those established in Article 55.3 of the aforementioned Law.

3. At least once a year, the National Securities Market Commission shall subject the investment services companies subject to its supervision to stress tests, in order to facilitate the review and evaluation process provided for in this article. To this end, the National Securities Market Commission may adopt and transmit as such to the entities and groups the guidelines approved by the European Banking Authority for these purposes.

Notwithstanding the foregoing, this article shall not apply to investment services companies not authorised to provide the auxiliary service referred to in article 63.2.a), which provide only one or several of the investment services or activities listed in article 63.1.a), b), d) and g), and which are not permitted to hold money or securities of their clients in deposit and which, for this reason, can never be in a debtor position with respect to said clients.

4. The National Securities Market Commission shall take into account when establishing its supervisory programme the information received from the authorities of other Member States in relation to the branches of investment services companies established there. For these same purposes, it shall also take into consideration the stability of the financial system of said Member States.

Added by final provision 1.22 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Added text, published on 27/06/2014, in force from 28/06/2014.

[Block 177: #a85]

Article 85. Powers of the National Securities Market Commission. Supervision and inspection.

1. The National Securities Market Commission shall have all the supervision and inspection powers necessary for the exercise of its functions. It may exercise these powers:

a) directly, without prejudice to the power to seek the collaboration of third parties in the terms established in paragraph 9;

b) in collaboration with other authorities, national or foreign, in the terms provided for in this Law and its implementing rules;

c) by request to the competent judicial authorities. In particular, it may request the seizure or freezing of assets.

2. In the manner and with the limitations established in the legal system, the supervision and inspection powers of the National Securities Market Commission shall include at least the following powers:

a) Access any document in any form and receive a copy thereof;

b) require from any person the submission of information within the period reasonably set by the National Securities Market Commission and, if necessary, summon and take a statement from a person to obtain information;

c) carry out inspections with physical presence at any office or premises;

d) require the telephone and data traffic records available to them;

e) require the cessation of any practice contrary to the provisions established in this Law and its implementing rules, as well as require that such practice not be repeated in the future;

f) request the seizure or freezing of assets;

g) require temporary prohibition from carrying out professional activity;

h) obtain from the auditors of investment services companies and of the entities referred to in article 84.1.a) and b) any information they have obtained in the exercise of their function;

i) adopt any type of measure to ensure that the persons and entities subject to its supervision comply with the applicable rules and provisions, or with the remediation or correction requirements made, and may require such persons and entities, individually or collectively and for this purpose, to provide reports from independent experts, auditors or their internal control or regulatory compliance bodies;

j) agree to the suspension or limitation of the type or volume of operations or activities that natural or legal persons may carry out in the securities market;

k) agree to the suspension or exclusion from trading of a financial instrument, whether on an official secondary market or on a multilateral trading facility;

l) refer matters for criminal prosecution;

m) authorise auditors or experts to carry out verifications or investigations, in accordance with the provisions of letter c) of paragraph 4 of article 91;

n) in the exercise of the function of verifying the periodic information referred to in article 35.4 of this Law, the National Securities Market Commission may:

1.º Obtain from the account auditors of issuers whose securities are admitted to trading on an official secondary market or another regulated market domiciled in the European Union, by written request, whatever information or documents are necessary, in accordance with the provisions of Law 19/1988 , of 11 July, on Account Auditing.

The disclosure by the account auditors of the information required by the National Securities Market Commission in accordance with the provisions of this article shall not constitute a breach of the duty of secrecy.

2.º Require issuers whose securities are admitted to trading on an official secondary market or another regulated market domiciled in the European Union to publish additional information, reconciliations, corrections or, where appropriate, restatements of the periodic information.

ñ) obtain, through its employees, information on the degree of compliance with the rules affecting the securities markets by the supervised entities, without revealing their status as staff of the National Securities Market Commission and, in particular, regarding the way in which their financial products are being marketed, as well as on the good or bad practices that such entities may be carrying out.

The measures referred to in letters e), g), i), j) and k) may be adopted as a precautionary measure in the course of a sanctioning proceeding or as a measure outside the exercise of the sanctioning power, provided it is necessary for the effective protection of investors or the proper functioning of the markets, and they shall be maintained as long as the cause that motivated them remains.

The National Securities Market Commission may make public any measure adopted as a consequence of the breach of the applicable rules, unless its disclosure could put the securities markets at serious risk or cause disproportionate harm to the affected persons.

When the measures contemplated in letters e), g), j) and n) are exercised over entities subject to the supervision of the Bank of Spain, whether as a precautionary measure in a sanctioning proceeding or outside the exercise of the sanctioning power, they must be notified in advance to the aforementioned body.

Likewise, in the case of the measures contemplated in letter f), a prior report from said body shall be mandatory.

3. By virtue of the provisions of the preceding paragraph, the natural and legal persons listed in article 84 are obliged to make available to the Commission all books, records and documents, whatever their medium, that it considers necessary, including computer programs and magnetic, optical or any other kind of files, including telephone conversations of a commercial nature that have been recorded with the prior consent of the client or investor.

Natural persons are obliged to appear before summonses of the Commission for the taking of a statement.

To the extent necessary for the effective exercise by the Commission of its supervision and inspection functions, the persons or entities that provide any type of professional service to the persons included in the preceding paragraphs are obliged to provide all data and information required of them by the Commission, in accordance with the provisions, where applicable, of the specific regulations governing their profession or activity.

For these purposes, access to the information and data required by the National Securities Market Commission in the exercise of its inspection and supervision functions is covered by article 11.2.a) of Organic Law 15/1999, of 13 December, on the Protection of Personal Data. The data accessed shall be used solely for the exercise of the aforementioned powers under the terms provided in this Law.

The organs and bodies of any Public Administration; the chambers and corporations, professional associations, councils of professional associations and professional associations; the other public entities, including the managing entities and common services of the Social Security and those who, in general, exercise public functions, shall be obliged to collaborate and provide to the National Securities Market Commission all data, documents, records, reports and background information necessary for the exercise by the National Securities Market Commission of the functions set out in article 13 of this Law, whatever their medium, through specific requirements and within the indicated period, and to provide it with the assistance, support and protection for the exercise of its functions.

Likewise, the verification and investigation actions, including the taking of statements, may be carried out, at the choice of the services of the National Securities Market Commission:

a) In any office, premises or dependency of the entity or person inspected or its representative.

b) In the premises of the National Securities Market Commission itself or of other administration bodies.

When the verification and investigation actions are carried out in the places indicated in letter a) above, their working hours shall be observed, without prejudice to the possibility of acting by mutual agreement at other hours and days.

4. The auditors of investment services companies are obliged to comply with the duty of communication to the National Securities Market Commission referred to in the first final provision of Law 19/1988, of 12 July, on Auditing of Accounts.

5. The National Securities Market Commission may require, in writing or verbally, the persons and entities listed in article 84 to make public immediately the information that it deems pertinent about their activities related to the securities market or that may influence it. If the obligated parties do not do so directly, the National Securities Market Commission itself shall do so.

6. The National Securities Market Commission, in the exercise of the supervision and inspection powers contemplated in this Law, may communicate and require, to the entities provided for in articles 64, 65, 84.1 a) to e), and 84.2.a) to c), by electronic means, the information and measures set out in this Law and in its implementing provisions. The aforementioned entities shall be obliged to enable, within the period established for this purpose, the technical means required by the National Securities Market Commission for the effectiveness of its electronic notification systems, in accordance with the provisions of article 27.6 of Law 11/2007, of 22 June, on electronic access of citizens to Public Services.

The electronic notification system, which shall respect the principles and guarantees of Law 11/2007, of 22 June, on electronic access by citizens to Public Services and of article 59 of Law 30/1992, of 26 November, on the Legal Regime of Public Administrations and the Common Administrative Procedure, shall make it possible to certify the date and time on which the act subject to notification is made available to the interested party, as well as access to its content, from which moment the notification shall be deemed to have been effected for all legal purposes. When, there being evidence of the making available of the act subject to notification, ten calendar days pass without access to its content, the notification shall be deemed to have been rejected with the effects provided for in article 59.4 of Law 30/1992.

7. The facts established in the exercise of their supervision and inspection functions by the authorized personnel of the National Securities Market Commission shall have evidentiary value, without prejudice to the evidence that may be adduced or provided in defense of their respective rights or interests by the interested persons or entities.

8. The National Securities Market Commission shall have the supervision and inspection powers contained in this article that are necessary to comply with the functions assigned to it under a regime of delegation or cooperation with other competent authorities, over credit rating agencies registered under Chapter I of Title III of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, of 16 September 2009, on credit rating agencies, the persons participating in rating activities, the rated entities or related third parties, the third parties to which credit rating agencies have outsourced some of their functions or activities, and the persons related to or connected in any other way with the agencies or with credit rating activities, that are domiciled in Spain, in accordance with the European Union regulations on credit rating agencies.

9. For the better exercise of the supervision functions legally assigned to it, the National Securities Market Commission may, in cases of duly justified necessity, use the background information derived from the collaboration that it requests for that purpose from account auditors, consultants or other independent experts, who must in any case comply with the rules and instructions determined by that body.

In particular, the National Securities Market Commission, in order to assess the degree of compliance with the rules affecting the securities markets by the supervised entities and, in particular, regarding the marketing practices of financial instruments, may request the collaboration of experts through the issuance of reports. For the preparation of these reports, the designated experts as well as their employees may act anonymously, without revealing their action on behalf of the National Securities Market Commission.

Acting under a collaboration regime with the National Securities Market Commission in accordance with the provisions of this subsection shall in no case entail the exercise of administrative powers.

Subsections 1 and 2 are amended and a new subsection 9 is added by arts. 94.22 to 94.25 of Law 5/2015, of 27 April. Ref. BOE-A-2015-4607 .

Letter e) of subsection 2 and the first paragraph of subsection 6 are amended by final provision 1.23 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726 .

Subsection 7 is amended and the second subsection 7sic is renumbered as 8 by art. 3.15 of Royal Decree-Law 10/2012, of 23 March. Ref. BOE-A-2012-4091 .

Drafted in accordance with the correction of errors published in BOE no. 88, of 12 April 2012. Ref. BOE-A-2012-4956 .

Subsection 7 is amended by art. 3.3 of Law 15/2011, of 16 June. Ref. BOE-A-2011-10531 .

Subsections 2 and 3 are amended and subsections 6 and 7 are added by final provision 5.9 to 12 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117 .

Amended by art. único.54 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Subsection 1.bis is added by art. 10 of Law 6/2007, of 12 April. Ref. BOE-A-2007-7787

Amended by art. 7.2 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Select wording:

Last update, published on 28/04/2015, in force from 29/04/2015.

Amendment published on 27/06/2014, in force from 28/06/2014.

Amendment published on 24/03/2012, in force from 25/03/2012.

Amendment published on 17/06/2011, in force from 18/06/2011.

Amendment published on 05/03/2011, in force from 06/03/2011.

Amendment published on 20/12/2007, in force from 21/12/2007.

Amendment published on 13/04/2007, in force from 13/08/2007.

Amendment published on 17/11/1998, in force from 18/11/1998.

Original text, published on 29/07/1988, in force from 29/01/1989.

[Block 178: #a86]

Article 86. Accounting and consolidation information obligations.

1. The individual and consolidated accounts and management reports corresponding to each financial year of the entities cited in article 84.1 must be approved, within four months following the close of that year, by their corresponding general meeting, after the audit of accounts has been carried out.

2. Without prejudice to the provisions of Title III of Book I of the Commercial Code, the Minister of Economy and Competitiveness is empowered, and with his express authorization, the National Securities Market Commission, the Bank of Spain or the Institute of Accounting and Auditing of Accounts, to establish and modify, in relation to the entities cited in the previous paragraph, the accounting rules and the models to which their financial statements must conform, as well as those referring to compliance with the coefficients that are established, providing the frequency and detail with which the corresponding data must be supplied to the Commission or made public on a general basis by the entities themselves. This power shall have no restrictions other than the requirement that the publicity criteria be homogeneous for all entities of the same category and similar for the various categories.

The ministerial order in which the authorization is established shall determine the reports that, where applicable, shall be mandatory for the establishment and modification of the aforementioned rules and models, as well as for the resolution of queries on that regulation.

Likewise, the Minister of Economy and Competitiveness is empowered, and with his express authorization, the National Securities Market Commission, to regulate the registers, internal or statistical databases and documents that must be kept by the entities listed in article 84.1, as well as, in relation to their securities market operations, the other entities contemplated in article 65.

3. The Minister of Economy and Competitiveness and, with his express authorization, the National Securities Market Commission, the Bank of Spain or the Institute of Accounting and Auditing of Accounts, shall have the same powers provided in the previous paragraph in relation to the consolidable groups of investment services companies contemplated in the following paragraph and with the consolidable groups whose parent entity is any of those cited in article 84.1.a) and b). The exercise of these powers shall require the mandatory reports that, where applicable, are determined in the ministerial order of authorization.

4. For compliance with the minimum levels of own resources and limitations required under Regulation (EU) No. 575/2013, of 26 June, investment services companies shall consolidate their financial statements with those of the other investment services companies and financial entities that form with them a unit of decision, as provided in article 4 and in accordance with the provisions of said regulation.

5. The National Securities Market Commission may require from the entities subject to consolidation all information necessary to verify the consolidations carried out and analyze the risks assumed by the set of consolidated entities, as well as, for the same purpose, inspect their books, documentation and records.

When from the economic, financial or managerial relations of an investment services company with other entities it may be presumed that a control relationship exists in the sense of this article, without the entities having proceeded to consolidate their accounts, the National Securities Market Commission may request information from those entities or inspect them, for the purposes of determining the appropriateness of consolidation.

6. The National Securities Market Commission may request information from natural persons and inspect non-financial entities with which there is a control relationship in accordance with the provisions of article 4, in order to determine their impact on the legal, financial and economic situation of the investment services companies and their consolidable groups.

7. The duty of consolidation established in article 42 of the Commercial Code shall be understood as fulfilled through the consolidation referred to in the previous numbers by those groups of companies whose dominant entity is an investment services company, or by those others that have as dominant a company whose main activity is the holding of shares in investment services companies. Said duty shall be understood as fulfilled, likewise, for the groups of the governing bodies of the official secondary markets and of the Securities Clearing and Settlement Service.

This is understood without prejudice to the obligation to consolidate with each other that may exist for subsidiaries that are not financial entities, in the cases that apply in accordance with the aforementioned article 42 of the Commercial Code.

Amended by final provision 1.24 of Law 10/2014, of 26 June. Ref. BOE-A-2014-6726.

Paragraph 2 is amended by final provision 5.13 of Law 2/2011, of 4 March. Ref. BOE-A-2011-4117.

Paragraphs 6 and 15 are amended by sole article 55 of Law 47/2007, of 19 December. Ref. BOE-A-2007-21913

Paragraph 15 is added and 4.c), 6.f) and 7 are amended by article 11.4 of Law 5/2005, of 22 April. Ref. BOE-A-2005-6561

Paragraph 14 is added by article 56 of Law 44/2002, of 22 November. Ref. BOE-A-2002-22807

Amended by article 7.3 of Law 37/1998, of 16 November. Ref. BOE-A-1998-26345

Amended by article 4.4 of Law 13/1992, of 1 June. Ref. BOE-A-1992-12545