Ley 44/2002, de 22 de noviembre, de Medidas de Reforma del Sistema Financiero (BOE-A-2002-22807) (Law 44/2002 of 22 November on Measures to Reform the Financial System)

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-2002-22807

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 modifications, corrections and express repeals that a regulation has had since its origin, with the aim of facilitating access to current Law. For legal purposes, the official publication must be consulted.

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Consolidated text : "Last update, published on 27/12/2025"

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.

STATEMENT OF MOTIVES

I

The financial system in Spain has been configured as one of the sectors with the most weight and international projection in the current Spanish economy. On the other hand, it is an essential piece in the economic development of the country, and its modernization and permanent updating are a necessary condition for the development of the real economy, the true driver of growth and job creation.

Since Spain's entry into the European Community in 1986, it is not possible to analyze the development of the Spanish financial industry outside the process of community integration. The Economic and Monetary Union, of which our country is a founding member, and the great advances in the integration of community financial markets are causing a significant increase in the competition that our financial intermediaries must face.

In this environment and given the variety and sophistication of the financial instruments used, it is being observed that a competitive factor of enormous importance is formed by the legal system to which the intermediaries are subject. Indeed, competition between legislations is acquiring growing force, being a common practice that large intermediaries establish subsidiaries in those countries with more permissive regulations in order to locate part of their operations in them.

These considerations only underscore the reality that the competitiveness of a financial system in the Economic and Monetary Union does not depend only on the efforts of national industries, but is largely conditioned by national legal systems. A country that opts for excessively rigid regulations sees financial business escape its borders, which entails very negative consequences: a) on growth and job creation, since a large part of high value-added activities move to other economies ; b) on public resources, for identical reasons, and c) on consumer protection, since national supervisors have difficulties in controlling that services provided to Spanish investors from other jurisdictions comply with Spanish transparency regulations and our conduct rules.

It is necessary to highlight that the competitiveness factor provided by national regulations will acquire even greater weight, to the extent that the process of integration of the financial markets of the European Union deepens, which forces progress in the liberalization process of the financial system that the Spanish legislator has been promoting since our country's entry into the European Community in 1986. All this in order to provide said system with sufficiently agile and competitive regulation.

In short, the acceleration in the financial integration process, as well as the need to increase the efficiency and competitiveness of the Spanish financial system, responding to the external challenge and favoring the channeling of savings towards the real economy, all without causing a lack of protection for clients of financial services, explains a large part of the objectives and contents of this Law. These objectives, from a material point of view, are basically three:

a) Ensure that the legal system does not impose unnecessary obstacles that place financial entities at a disadvantage compared to their community counterparts. To this end, measures are adopted and instruments are created aimed at increasing the efficiency and improving the competitiveness of the Spanish financial industry.

b) Ensure that the increase in competition and the use of new technologies do not give rise to a lack of protection for clients of financial services. For this, the conditions of protection of users of financial services are improved.

c) Favor the channeling of savings towards the real economy, the true driver of growth and job creation. In this sense, the financing conditions of small and medium-sized enterprises (SMEs) are improved, given their importance in the Spanish business fabric.

On the other hand, from a formal point of view, the Law transposes into the Spanish legal system applicable in the financial field several Community Directives, such as: a) Directive 2000/26/EC of the European Parliament and of the Council, of 16 May 2000, on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (Fourth Motor Insurance Directive) ; b) Directive 2000/64/EC of the European Parliament and of the Council, of 7 November 2000, amending Council Directives 85/611/EEC, 92/49/EEC, 92/96/EEC and 93/22/EEC, as regards the exchange of information with third countries ; c) Directive 2000/46/EC of the European Parliament and of the Council, of 18 September 2000, on the taking up, pursuit of and prudential supervision of the business of electronic money institutions ; d) Directive 2000/28/EC of the European Parliament and of the Council, of 20 March 2000, amending Directive 2000/12/EC relating to the taking up and pursuit of the business of credit institutions.

II

Chapter I establishes certain measures for the promotion of the efficiency of the financial system, both in the securities market and in the credit and insurance markets.

Among these measures, those aimed at the integration of securities clearing and settlement systems, a basic pillar for the proper functioning of the securities markets, can be highlighted.

Indeed, a large part of the total cost and time required to complete securities trading is attributable to these systems ; moreover, their regulation is fundamental for the legal certainty of transactions.

In the Spanish market, the main clearing and settlement processes have been carried out by the Central de Anotaciones de Deuda Española (hereinafter, CADE) for the trading of Public Debt, and by the Servicio de Compensación y Liquidación de Valores (hereinafter, SCLV) for securities admitted to trading on the Stock Exchange and on AIAF Mercado de Renta Fija, S. A. (official secondary market for private fixed income). Furthermore, under the protection of article 54 of the Securities Market Law, the Autonomous Communities with competences in the matter have created their own clearing and settlement services for securities admitted to trading on their respective Stock Exchanges.

This multiplicity of clearing and settlement systems existing in Spain has been hindering the process of integration of the Spanish securities markets with those of their European counterparts. Indeed, the introduction of the euro has given rise to a notable movement of merger and coordination of Community securities markets, both in the area of trading and in that of clearing and settlement. Therefore, it is necessary to give the Spanish systems the opportunity to negotiate from a single position, while at the same time taking advantage of the economies of scale resulting from the consolidation process will allow offering a better service at a lower cost and, above all, facilitating operations from abroad.

To solve this situation, the Law establishes in its articles the legal modifications to carry out a process of integration of the existing clearing and settlement systems. To this end, it designs a flexible and open legal regime in which the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores (Sociedad de Sistemas) will be created, through a process of merger of the SCLV and the CADE. Other systems already existing in Spain may be integrated into said Company, such as that of financial derivatives or those managed by the Stock Exchanges of Barcelona, Bilbao and Valencia, and it may manage interconnections and alliances with those of other countries.

Another novelty of the Law is the provision for the creation of one or several Central Counterparties. The purpose of this figure is to eliminate counterparty risk in transactions, since it interposes itself between the buyer and the seller, so that they always benefit from the guarantee of the successful completion of the transaction granted by this Entity.

To facilitate this entire integration process, the demutualization of the Clearing and Settlement Systems is carried out, in parallel with that carried out by the Governing Bodies of Stock Exchanges through article 69 of Law 14/2000, of 29 December, on fiscal, administrative and social order measures. This means that it is possible to proceed to admit into the capital of these entities partners who do not participate as market participants.

The control regime over cross-shareholdings of companies that administer secondary markets with their counterparts outside Spain is also modified, establishing a more agile regime that facilitates the integration of cross-border markets, but at the same time ensuring a certain control over the adequacy of the shareholding of the Spanish markets. Among the market integration operations that are promoted, those affecting the derivatives markets stand out, in which it is common for the different phases of the operation (trading, clearing and settlement) to be carried out even in different countries.

The Law transposes into the regulation of the securities market Directive 2000/64/EC, which amends a series of Directives related to the exchange of information in the field of insurance, securities and collective investment institutions, in the sense of facilitating the exchange of information between Community supervisors and those of third countries, with the due guarantees of confidentiality. This measure is already applied in the credit market by virtue of article 6 of Royal Legislative Decree 1298/1986, of 28 June, on the adaptation of current law on credit institutions to that of the European Communities. Likewise, extensive regulation of organized trading systems is introduced, with regard to, among other aspects, the authorization regime, the obligation to establish management companies in the form of public limited companies, or the supervision and sanctioning regime.

Within the measures to promote efficiency in the credit market, the investment regime of Credit Cooperatives is made more flexible, bringing it closer to that of Banks and Savings Banks, with a dual objective: first, to allow these entities to acquire a greater size, facilitating the increase of their industrial portfolios. Second, to facilitate the management of their liabilities through the use of subordinated financing.

The State treasury management is provided for through temporary acquisition operations of fixed-income securities, whereby the Treasury can obtain a higher return on the available balance at the Bank of Spain.

On the other hand, the specific regulation existing to date in relation to guarantees constituted in favor of the Bank of Spain, the European Central Bank or the other National Central Banks of the European Union is systematized and complemented, to ensure compliance with the obligations arising from their monetary policy and intraday credit operations.

Furthermore, it is provided that these guarantees may be temporarily applied in favor of the Public Treasury management operations.

Within the measures to promote efficiency in the insurance market, certain modifications are introduced in Law 30/1995, of 8 November, on the Organization and Supervision of Private Insurance.

These modifications are basically aimed at transposing the aforementioned Directive 2000/64/EC into the regulation of the insurance market, with regard to the exchange of information between supervisors.

Within the functions of the Insurance Compensation Consortium are included those that the Liquidation Commission of Insurance Entities had been developing, which will disappear upon the entry into force of the Law.

This merger will allow reducing management costs through the exploitation of synergies between both bodies.

As an additional measure to promote the efficiency of the financial system, the strengthening of the role of the Central Credit Register of the Bank of Spain (CIR) carried out in chapter VI of the Law must be included. The CIR plays a fundamental role both in the control of risk by credit institutions and in the supervision carried out by the Bank of Spain. The Law confers upon it the legal nature of a public service, insofar as it facilitates the exercise of the Bank of Spain's powers and provides greater stability to the Spanish credit system.

III

Chapter II creates and regulates certain instruments to boost the competitiveness of the financial industry.

It is worth highlighting the new financial figure of territorial covered bonds. This new security, in the image and likeness of the mortgage covered bond, allows our credit institutions to have a refinancing channel for their loans to Public Administrations, similar to those available in other Community countries. These are fixed-income securities that credit institutions may issue and that enjoy a special guarantee on the loans and credits granted by the entity to a series of public subjects, mainly local and regional Public Administrations. These securities will enjoy the same tax and financial regime applicable to mortgage covered bonds.

The operations of collective investment institutions are expanded, which may carry out securities lending operations on their portfolios, both as market operations and off-market (over the counter or OTC operations). All this with the aim of being able to offer greater returns to investors, without undermining the security of their investment.

The Law provides security to the so-called "contractual compensation agreements" against eventual situations of bankruptcy of the parties. Indeed, it is common practice for financial institutions to operate with each other through master agreements in which guarantees are established that cover, day by day, the net position resulting from all financing, securities lending, financial derivatives, etc., operations carried out by the parties. The Law extends to said agreements the regime provided in the tenth additional provision of Law 37/1998, of 16 November, on the reform of Law 24/1988, of 28 July, on the Securities Market, which will therefore also apply to off-market operations (OTC). However, certain limitations are maintained by reason of the intervening subjects (at least one party must be a credit institution or investment services company) and the content of the agreement (it must include the mechanism for calculating the net balance due) to restrict the effects of this guarantee regime to the strictly necessary scope.

Chapter III aims to improve the financing conditions of SMEs. To this end, it expands the possibility for them to finance themselves through "factoring", by allowing the mass assignment of their portfolios against Public Administrations. On the other hand, entities (generally credit institutions) are allowed to increase the proportion of mortgage portfolios that they can assign to asset securitization funds through the figure of the mortgage participation, which in this case will be issued and marketed under the name of "mortgage participation certificate". This will improve the financing conditions of SMEs that must resort to mortgage guarantees to obtain bank financing.

Special mention deserves, among the measures aimed at improving financing for innovative small and medium-sized enterprises, the reform of the regulation of venture capital entities, regulated by Law 1/1999, of 5 January. The experience accumulated after this norm recommends introducing the following modifications: First, facilitating that these investment vehicles maintain in their assets shares of companies that were not listed at the time of their acquisition and that have subsequently come to be traded on a Stock Exchange. Likewise, this Law facilitates that venture capital entities invest in companies of their group, if they comply with transparency requirements. Third, the operations of these entities are streamlined by allowing contributions in kind to their capital after their constitution. Finally, it ensures that the corporate operations of a venture capital company or that give rise to one, are subject to due control.

Chapter IV regulates the legal effects of electronic contracting and transposes into the Spanish legal system the Directives related to electronic money. All of this, with the aim of promoting competition, efficiency and legal certainty in the financial field by promoting the use of electronic techniques. For this and with the objective of normatively clarifying the equivalence between distance contracting and contracting with physical presence, the Minister of Economy is empowered to regulate the special features with respect to the general rules governing electronic contracting.

IV

Chapter V establishes a series of protective measures for clients of financial services.

First, specific newly created administrative bodies are regulated, the Commissioners for the Defense of Clients of Financial Services. These are bodies attached to the Bank of Spain, the National Securities Market Commission and the General Directorate of Insurance and Pension Funds, with the express purpose of protecting the rights of the user of financial services in the respective field.

Second, the Law establishes the obligation for all credit institutions, investment services companies and insurance entities, to attend to and resolve the complaints and claims that their clients may present, related to their legally recognized interests and rights. For these purposes, financial entities must have a customer service department or service. In addition, they may designate a Client Ombudsman, who will be responsible for attending to and resolving the types of claims determined, in each case, by its operating regulations, and who must be an independent entity or expert. The decisions of the Client Ombudsman that are favorable to the claim will bind the entity. The Law empowers the Minister of Economy to establish minimum requirements to be respected by the customer service department or service and the Client Ombudsman.

Third, Directive 2000/26/EC (Fourth Directive on motor vehicle insurance) is transposed into the Spanish legal system, which regulates the rights of the injured party in traffic accidents occurring outside their country of residence within the European Union. For said transposition, the modification of certain norms of legal rank is required:

a) Law 30/1995, of 8 November, on the Organization and Supervision of Private Insurance, which regulates the conditions of access to and exercise of insurance activity. This modification is necessary, since the introduction, required by the Directive, of the representative for the handling and settlement of claims, entails a modification of the requirements for access to and exercise of insurance activity.

b) The Law on Civil Liability and Insurance in the Circulation of Motor Vehicles, consolidated text approved by Decree 632/1968, which specifically regulates the civil liability insurance of motor vehicles. In said Law, a new title is introduced, Title III, which includes most of the regulations necessary for the incorporation of the Fourth Directive.

c) The Legal Statute of the Insurance Compensation Consortium, contained in the fourth article of Law 21/1990, of 19 December, to adapt Spanish Law to Directive 88/357/EEC on freedom of services in insurance other than life and updating of private insurance legislation which, among other aspects, regulates the functions of the aforementioned body.

The Law allows insurance entities authorized in Spain to freely choose the representative for the handling and settlement of claims, but they must reside or be established in the Member State for which they have been designated, and they must communicate to the information bodies of all Member States the name and address of the same. For its part, the Spanish injured party for accidents caused in another Member State may claim compensation from the insurance entity in said State or from its representative in Spain.

Within the reinforcement of the powers of supervisors with a view to the protection of financial users, the extension of the sanctioning regime to deficiencies in administrative organization and internal control of credit institutions, investment services companies and insurance companies, and the greater discipline to which establishments open to the public for foreign currency exchange («exchange houses») are subject, must also be fitted in.

In the capital markets, investor protection is reinforced, promoting transparency rules and recognizing that information is an asset of enormous value. First, transparency rules are imposed on related-party transactions, so as to prevent abuses by directors and board members against the interests of shareholders. In practice, this will mean that investors will have information on transactions between the listed entity itself, its directors and its significant shareholders. Likewise, the regulation of relevant information and inside information is strengthened, in order to prevent the loss of market integrity and, ultimately, the increase in the cost of corporate financing caused by the lack of confidence among investors. To this end, the concept of inside information is extended to instruments other than transferable securities themselves, and the relevant information that must be reported to the market is developed in great detail, in a universal manner and without granting priorities. In addition, preventive organizational measures are specified for entities providing services in the securities markets, so as to prevent the leakage of information between the different areas of an entity or between entities of the same group (“Chinese walls”). The aforementioned obligations to act with transparency extend to directors, administrators and employees. All of them are also prohibited from engaging in practices aimed at distorting the free formation of prices in the securities market, that is, price manipulation. Finally, with a view to the effective compliance with the aforementioned transparency obligations, the powers of the Comisión Nacional del Mercado de Valores are strengthened with the ultimate aim of protecting investors.

The Law also includes the amendment of the authorization regime for collective investment institutions, enshrining the more rational principle that the regulatory body authorizes the service provider (the management company) and the supervisory body authorizes the product (the collective investment institution). Law 24/1988, of 28 July, on the Securities Market, is amended to extend to attorneys with general powers of representation the regime of business and professional integrity of the administrators and general managers and equivalent officers of investment services companies. The sanctioning regime applicable to both credit institutions and investment services companies and insurance entities is updated; the regime for approval of the internal regulations of the Comisión Nacional del Mercado de Valores is established and, finally, the conditions of access by supervisory bodies to the working papers of the auditors of entities subject to their control are regulated.

In short, this is a broad text that places our financial industry in a competitive situation, while at the same time strengthening the protection of its clients.

CHAPTER I

Promotion of the efficiency of the financial system

Section 1. Promotion of efficiency in the Securities Market

Article 1. Integration of securities clearing and settlement systems.

First. Article 7 of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall read as follows:

“Article 7.

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

2. In the case of securities not admitted to trading on official secondary markets, said entity shall be freely designated by the issuer from among the investment services companies and credit institutions authorized to carry out the activity provided for in paragraph a) of section 2 of Article 63. The designation must be registered in the Registry of the Comisión Nacional del Mercado de Valores provided for in Article 92 of this Law, as a prerequisite for beginning to keep the accounting record. The Systems Company referred to in Article 44 bis may also assume that function in accordance with the requirements that, where applicable, are established in the Regulations referred to in said Article 44 bis, in its section 4.

3. Without prejudice to the competences assumed by the Autonomous Communities with respect to securities admitted to trading exclusively on a Stock Exchange located in their territory, where securities are admitted to trading on Stock Exchanges or on the Book-Entry Public Debt Market, the maintenance of the accounting register shall correspond to the Systems Company, as the central register, and to the participating entities authorised for that purpose, or to it exclusively, if so established, where applicable, by regulation. Notwithstanding the foregoing, such maintenance shall correspond, where applicable, to the governing company of the corresponding Stock Exchange if so determined, in accordance with the provisions of the second paragraph of Article 44 bis.

Where securities are admitted to trading on other secondary markets, the maintenance of the register shall correspond to the body or entity, including the Systems Company, that is determined by regulation or that is expressly designated by the governing bodies of said markets or organised trading systems.

4. The Government shall establish, in relation to the different entities entrusted with the maintenance of the accounting registers and the different types of securities, the rules on the organisation and operation of the corresponding registers, the guarantees and other requirements to be imposed on them, the systems for the identification and control of securities represented by book-entry, as well as the relationships of those entities with issuers and their involvement in securities administration. The aforementioned regulation shall correspond to the competent Autonomous Communities when they make use of the power provided for in the second paragraph of Article 44 bis and in relation to the services contemplated therein.

5. Failure to make the corresponding entries, inaccuracies and delays therein and, in general, infringement of the rules established for the maintenance of the registers shall give rise to the liability of the non-compliant entity, save for the exclusive fault of the injured party, to those who are prejudiced. Such liability shall, as far as possible, be made effective in kind.

6. What is set out in this Article with respect to the Systems Company shall apply to similar services created by the governing companies of the Stock Exchanges, pursuant to the provisions of the second paragraph of Article 44 bis, when so authorised by the corresponding Autonomous Community, after hearing the issuer and the service."

Second. A new Article 44 bis is introduced into Law 24/1988, of 28 July, on the Securities Market, with the following wording:

«Article 44 bis.

1. A public limited company shall be incorporated which, under the name of "Securities Registration, Clearing and Settlement Systems Management Company" (hereinafter, the Systems Company), shall have the following functions:

a) To maintain, on the terms provided for in Chapter II of Title I of this Law, the accounting register corresponding to securities represented by book-entry, admitted to trading on Stock Exchanges or on the Book-Entry Public Debt Market, as well as to securities admitted to trading on other secondary markets, when their governing bodies so request.

b) To manage the settlement and, where applicable, the clearing of securities and cash arising from ordinary transactions carried out on Stock Exchanges, from transactions carried out on the Book-Entry Public Debt Market and, where applicable, on other secondary markets.

c) To provide technical and operational services directly related to securities registration, clearing and settlement, and any others required for the Systems Company to collaborate and coordinate its actions with other areas and systems of securities registration, clearing and settlement and to be able to participate in the latter.

d) Any others entrusted to it by the Government, after a report from the National Securities Market Commission and, where applicable, from the Bank of Spain.

2. The provisions of the preceding paragraph shall be understood without prejudice to the fact that, with respect to securities admitted to trading on a single Stock Exchange, the Autonomous Communities with competence in the matter may provide for the creation by the governing company of the latter of its own service for the maintenance of the accounting register of securities represented by book-entry and for clearing and settlement, which shall have, with respect to said securities, the powers that this Law attributes to the Systems Company. The restrictions on corporate purpose and activity contained in the first paragraph of Article 46 and in the first paragraph of Article 48 shall not apply, for this sole purpose. The provisions of Article 7 and of this Article shall apply to these services, save for references to State bodies or entities, which shall be understood to be made to the corresponding autonomous bodies.

3. The Government shall establish the criteria for determining the conditions for access to and permanence in the capital of the Systems Company and for distributing its capital among its shareholders. Among said shareholders may be included non-resident institutions that carry out abroad activities analogous to those of the Systems Company, provided that they are subject in the State of origin to a regime of supervision of their securities registration, clearing and settlement activities at least equivalent to that of the Systems Company, the latter being able, in turn, to participate in the capital of the former, in both cases, with prior authorisation from the National Securities Market Commission. The conditions of the acquisitions of interests and the rights arising therefrom shall be set out in the corresponding corporate agreements, which shall be subject to prior approval by the Comisión Nacional del Mercado de Valores. Provided that the general meeting has so authorised, for the increases, reductions and alienations of shareholdings necessary for those purposes, the agreement of the Consejo de Administración shall suffice, and the provisions of Articles 75 to 79, 158 and 164 to 166 of the Ley de Sociedades Anónimas shall not apply to them. The corporate by-laws and their amendments, as well as the subscription and transfer of shares, shall require the prior approval of the Comisión Nacional del Mercado de Valores.

4. The Sociedad de Sistemas shall be governed by this Law and its implementing regulations, as well as by a Regulation whose approval shall correspond to the Ministro de Economía, following a report from the Comisión Nacional del Mercado de Valores, the Banco de España and the Autonomous Communities whose Statutes of Autonomy recognise competences in the matter of the regulation of securities trading centres. Said Regulation shall regulate the operating regime of the Sociedad de Sistemas, the services provided by it, as well as its economic regime, the procedures for setting and communicating tariffs and the conditions and principles under which said Sociedad shall provide the aforementioned services, and the legal regime of the entities participating in the systems managed by said Sociedad. In particular, it shall establish the legal regime of those participating entities that keep individualised accounts corresponding to the securities of those who do not hold such status. Furthermore, the Regulation shall regulate the procedures for ensuring the delivery of securities and their payment, as well as the guarantees of all kinds that the participating entities in the systems managed by the Sociedad de Sistemas must provide.

5. If a participating entity fails to meet, in whole or in part, the cash payment obligation arising from the settlement, the Sociedad de Sistemas may dispose of the unpaid securities, adopting the necessary measures to alienate them through a member of the market.

6. Without prejudice to the information obligations referred to in number 4 of Article 55 of this Law, the Sociedad de Sistemas shall provide the Ministro de Economía and the various supervisory bodies within the scope of their respective competences with the information on the registration, clearing and settlement activities in the systems managed by it that they request from it, provided that such information is available to it in accordance with the regulations applicable to it and subject to the provisions of this and other laws.

7. The System Company may establish agreements with resident and non-resident entities that perform similar functions, central counterparty entities or others, subject to the provisions of this Law, its implementing regulations and the Regulation referred to in paragraph 4 above, for the opening and maintenance of accounts or for other activities of the System Company.

8. In the event of a judicial declaration of bankruptcy or admission for processing of the request for suspension of payments of a participating entity in the systems managed by the System Company, 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 it are materialized. Without prejudice to the foregoing, the surplus remaining after the settlement of the guaranteed operations shall be incorporated into the insolvency estate of the participant.

9. Upon judicial declaration of bankruptcy or admission for processing of the request for suspension of payments of 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, 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. Likewise, the holders of such securities may request their transfer to another entity. If no entity is in a position to take charge of the aforementioned records, this activity shall be assumed by the System Company on a provisional basis, until the holders request the transfer of the registration of their securities. 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 the insolvency proceedings shall not prevent the holders of the securities from receiving the cash proceeds from the exercise of their economic rights or from their sale.

10. The System Company shall be considered a managing entity and settlement agent of the payment and securities clearing and settlement systems referred to in article 8 of Law 41/1999, of 12 November, on payment and securities settlement systems, in its paragraphs c), g) and, where applicable, i), as well as, subject to the state or Autonomous Community legislation with competence in the applicable matter, of the systems referred to in paragraphs d), e), f) and h) for all purposes provided in said Law and, in particular, for the purposes provided in articles 11, 13 and 14 thereof.

11. The Government, following a report from the National Securities Market Commission and the Bank of Spain, may authorize other financial entities to carry out all or some of the functions referred to in paragraph 1 of this article. Such entities shall be subject to the provisions of paragraphs 8 and 9 of this article, and must comply, in any case, with the minimum requirements established by regulation, which shall necessarily include the supervision regime to which they must be subject in the State of origin, where applicable, both the applicant entities and those exercising effective control over them, access to the status of participants in the systems, minimum own resources, honorability and professionalism of the directors responsible for the entity, organizational and operational structure, operational and accounting procedures, establishment of risk limitation and control measures and connection to payment systems. Likewise, the same supervision and discipline regime as that of the System Company shall apply to them, with the specifications established by regulation.»

Third. A new article 44 ter is introduced into Law 24/1988, of 28 July, on the Securities Market, with the following wording:

«Article 44 ter.

1. The Minister of Economy, on a proposal from the National Securities Market Commission, following a report from the Bank of Spain, may authorize one or several central counterparty entities to perform interposition functions on their own account, with respect to the clearing and settlement processes of obligations arising from the participation of member entities in the securities or financial instrument clearing and settlement systems recognized in accordance with Law 41/1999, of 12 November, on payment and securities settlement systems, as well as with respect to operations not carried out on official markets. The entity or entities so authorised shall carry out their activities subject to the provisions established in that regard by the corresponding Regulation, which must be approved by the Minister of Economy following a report from the National Securities Market Commission, the Bank of Spain and the Autonomous Communities whose Statutes of Autonomy recognise their powers in matters of regulation of securities trading venues.

The said Regulation shall determine, as a minimum, the requirements for access to the status of participant therein and shall establish the technical, operational and regulatory conditions of access to the services provided, the guarantees required of member entities and the information that they must provide in relation to the transactions they report to it, as well as the financial regime of the central counterparty.

2. The central counterparty may execute, in the name and on behalf of the contracting entities, the obligations arising from framework contracts for transactions carried out on negotiable securities or derivative financial instruments, subject to the provisions of this Law or other applicable laws, as well as the implementing regulations.

3. The central counterparty shall be subject to the supervision of the National Securities Market Commission and the Bank of Spain, in their respective areas of competence, and under the terms established in article 88 of this Law.

4. Likewise, the provisions established for the Sociedad de Sistemas in paragraphs 8 and 9 of article 44 bis of this Law shall apply to said central counterparty, as well as the provisions of Law 41/1999, of 12 November, on payment and securities settlement systems, for the systems regulated therein.

5. Subject to the provisions of this Law and other laws, as well as the provisions established in the implementing provisions of this Law, 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, participate in the shareholding of said entities or admit them as shareholders. Such agreements shall require the approval of the National Securities Market Commission.»

Fourth. The following provisions of Law 24/1988, of 28 July, on the Securities Market, are given new wording, and shall read as indicated below:

One. Article 31, paragraph 2, subparagraph b), of Law 24/1988, of 28 July, on the Securities Market, is worded in the following terms:

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

Two. Article 36, paragraph 7, subparagraph b), of Law 24/1988, of 28 July, on the Securities Market, is worded in the following terms:

«b) The securities lent must belong to the lender, and must be in the lender's possession by virtue of transactions already settled on the date of perfection of the contract. For this purpose, either the lender or the borrower must be a participating entity or member of the corresponding clearing and settlement system of the market where the security is traded.»

Three. Article 38, subparagraph e), of Law 24/1988, of 28 July, on the Securities Market, is worded in the following form:

«e) Establish the rules to which the clearing and settlement systems related to securities trading and the actions of the financial entities involved therein must adhere.»

Four. Article 44, subparagraph d), of Law 24/1988, of 28 July, on the Securities Market, is worded as follows:

«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, shall evidence the various phases of securities trading.»

Five. The last paragraph of article 46 of Law 24/1988, of 28 July, on the Securities Market, is worded as follows:

«In both cases, the necessary coordination between the respective settlement systems must be provided for, where applicable.»

Six. Article 55, paragraph 2, of Law 24/1988, of 28 July, on the Securities Market, is worded as follows:

«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 provide the financial servicing of the book-entry securities when it so agrees with the issuers and on their behalf, under the terms established by regulation.»

Seven. Article 55, paragraph 4, second paragraph, of Law 24/1988, of 28 July, on the Securities Market, is worded in the following terms:

«The said Regulation shall govern, in accordance with this Law and its implementing regulations, in all cases, the rules relating to listing, trading, information obligations to the Bank of Spain and publicity of transactions, including the rights and obligations of market members. Likewise, it shall govern the rights and obligations of account holders in their own name and of management entities in their capacity as market members. The Regulation may be implemented, where expressly provided for, by means of Circulars of the Bank of Spain.»

Eight. Article 57 of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall be worded as follows:

«Article 57.

1. The registration of securities traded on the Public Debt Market in Book-Entry Form shall correspond to the Sociedad de Sistemas referred to in paragraph 1 of article 44 bis of this Law and to its participating entities authorised to do so by virtue of their status as management entities of the Public Debt Market.

2. The Systems Company shall keep the securities accounts corresponding to all the securities admitted to trading on said Market, either individually, in the case of accounts in the own name of participating entities that are account holders in the Public Debt Market, or globally, in the case of customer accounts of participating entities authorized to do so by virtue of their status as management entities in said market.

3. In addition to the Bank of Spain, the clearing and settlement systems and bodies of the official secondary markets and the interbank clearing systems, in order to manage the guarantee system, as well as those who meet the requirements established for this purpose in the Market Regulations, may be holders of accounts in their own name in the Public Debt Market in Book-Entry Form and maintain an account as participating entities in their own name in the registration system of the Systems Company. Authorization of the status of holder of an account in one's own name, as well as its revocation, shall correspond to the Minister of Economy, upon a proposal from the Bank of Spain, following a report from the National Securities Market Commission.»

Nine. New wording is given to sections 3 and 4 of article 58 of Law 24/1988, of 28 July, on the Securities Market, which shall be worded in the following terms:

«3. The management entities, in their capacity as participants in the registration system entrusted to the Systems Company, shall keep the register 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 with the Systems Company a global account that shall at all times constitute the exact counterpart of those.

4. When said management entities also hold the status of holder of an account in their own name in the Public Debt Market, these latter accounts shall be kept in the Systems Company with total separation from the global accounts mentioned in the preceding section.»

Ten. New wording is given to article 84, section 1, paragraph b), of Law 24/1988, of 28 July, on the Securities Market, which shall be worded in the following terms:

«b) The Systems Company, the central counterparty entities, the Stock Exchange Company and the companies that own all the shares of the bodies provided for in paragraph a), as well as other clearing and settlement systems of the markets that are created under the provisions of this Law.»

Eleven. New wording is given to the first two paragraphs of article 88 of Law 24/1988, of 28 July, on the Securities Market:

«Without prejudice to the provisions of this Law, the Bank of Spain shall exercise supervision and inspection powers over the members of the Public Debt Market in Book-Entry Form, the holders of accounts in their own name and the management entities, as well as over the activities related to the securities market carried out by entities registered in the registers under its charge referred to in article 65.

In all cases of concurrence of supervision and inspection powers between the National Securities Market Commission and the Bank of Spain, both institutions shall coordinate their actions under the principle that the oversight of the solvency of the affected financial entities falls to the institution that maintains the corresponding register and that of the functioning of the securities markets corresponds to the National Securities Market Commission. In order to coordinate the respective supervision and inspection powers, the National Securities Market Commission and the Bank of Spain must enter into agreements specifying their corresponding responsibilities.»

Twelve. New wording is given to article 90, section 4, paragraph i), of Law 24/1988, of 28 July, on the Securities Market, which shall be worded in the following terms:

«i) The information that the National Securities Market Commission decides to provide to a clearing and settlement system or clearing house of a Spanish securities market, when it considers that it is necessary to guarantee the proper functioning of said systems in the event of any default, or possible default, occurring in the market.»

Thirteen. New wording is given to paragraphs a), c) and g) of article 99 of Law 24/1988, of 28 July, on the Securities Market:

«a) The exercise, not merely occasional or isolated, by the governing companies of the Stock Exchanges, the governing bodies of the other official or non-official markets, the Stock Exchange Company, the Systems Company, the central counterparty entities, the clearing and settlement systems of the official or non-official secondary markets, the management companies of the investment guarantee funds, or the governing companies of the organized trading systems, of activities of financial intermediation or, in general, unrelated to their exclusive corporate purpose.»

«c) The failure, not merely occasional or isolated, by the governing bodies of the secondary markets, official or not, with the exclusion of the Bank of Spain, the Systems Company, the central counterparty entities, the clearing and settlement systems of the secondary markets, official or not, or the governing companies of the organized trading systems, to comply with the rules governing said markets or their own actions, disregarding the requirements that, for this purpose, have been formulated to them by the National Securities Market Commission.»

«g) The failure by the entities participating in the systems managed by the Systems Company or in the clearing and settlement systems of the secondary markets, official or not, to comply with the rules governing their relations with the corresponding central accounting registers.»

Fourteen. Article 100, paragraph a), of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall have the following wording:

«a) The appointment, by the governing companies of the Stock Exchanges, the governing bodies of the other markets, official or not, the Sociedad de Bolsas, the Sociedad de Sistemas, the settlement and clearing systems, or the management companies of the investment guarantee funds, of members of their Board of Directors and, where applicable, of General Managers without the prior approval of the National Securities Market Commission or, where appropriate, of the Autonomous Community with powers in matters of markets of autonomous scope.»

Fifth. A new seventeenth additional provision is incorporated into Law 24/1988, of 28 July, on the Securities Market, with the following literal wording:

«Seventeenth additional provision.

The specific mentions to the «Servicio de Compensación y Liquidación de Valores» and to the Central de Anotaciones of the Bank of Spain, made in the articles of this or other regulatory provisions, shall be understood as made to the “Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores”.

The generic mentions made in this Law to the services, processes or bodies of clearing and settlement shall be understood as referring to the clearing and settlement systems.»

Sixth. New wording is given to paragraphs c) and g) of Article 8 of Law 41/1999, of 12 November, on Payment and Securities Settlement Systems, which shall be worded as follows:

«c) The clearing and settlement systems for securities traded on the Stock Exchanges and managed by the Sociedad de Sistemas, in accordance with the provisions of Article 44 bis of Law 24/1988, of 28 July, on the Securities Market, whose regulation is contained in said Law and in its implementing regulations.»

«g) The clearing and settlement system relating to transactions carried out in the Public Debt Market in Book Entry form managed by the Sociedad de Sistemas referred to in number 1 of Article 44 bis of Law 24/1988, of 28 July, on the Securities Market.»

Article 2. Promotion of the opening of the Spanish securities markets.

First. The wording of subsection 5 is amended and a new subsection 6 is created in Article 31 of Law 24/1988, of 28 July, on the Securities Market:

«5. The direct or indirect participation of companies that administer official Spanish secondary markets in other companies that manage secondary markets outside Spain shall require the prior authorization 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. Participation in the capital of companies that administer Spanish secondary markets shall be subject to the regime of significant participations provided for in Article 69 of this Law for investment services companies, under the terms determined by regulation. Without prejudice to the provisions of subsection 6 of said article, the Minister of Economy, upon a proposal from the National Securities Market Commission, may oppose the acquisition of a significant participation in those companies when it considers that this is necessary to ensure the proper functioning of the markets or to avoid distortions in them, as well as because equivalent treatment is not given to Spanish entities in their country of origin.»

Second. The following modifications are introduced in the wording of Article 59 of Law 24/1988, of 28 July, on the Securities Market:

One. Subsection 2 of Article 59 of Law 24/1988, of 28 July, on the Securities Market, shall have the following wording:

«2. In these markets, futures, options and other derivative financial instruments contracts may be traded, cleared and settled, whether by carrying out all these actions or only some of them, whatever the underlying asset. The governing company of the market shall provide by itself or ensure through another entity, with prior approval in this case by the Minister of Economy, the counterparty in all contracts it issues. In addition, the governing company may carry out the central counterparty activity referred to in Article 44 ter, in which case the provisions of this article shall apply to it, with the particularities that, where appropriate, are established in its corresponding Regulation.»

Two. Subsection 3 of Article 59 of Law 24/1988, of 28 July, on the Securities Market, shall have the following literal wording:

«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 Regulation referred to in subsection 7 of this article may also access the status of member, with capacity restricted exclusively to trading, either on their own account or on behalf of entities of their group. In futures and options markets with a non-financial underlying, the acquisition of said status by entities other than those indicated above may be determined by regulation, provided that they meet the requirements of specialty, professionalism and solvency.»

Three. Subsection 4 of Article 59 of Law 24/1988, of 28 July, on the Securities Market, shall have the following literal wording:

«4. In the official secondary markets of futures and options there shall be a governing company, in the form of a public limited company, whose basic functions shall be to organize, 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. However, and for the purpose of managing the guarantee system, they may hold accounts in the Public Debt Market or have an equivalent position in foreign markets or systems that perform similar functions.»

Four. Paragraph 8 of article 59 of Law 24/1988, of 28 July, on the Securities Market, shall be worded as follows:

«8. The guarantees, whatever the form in which they are established, that are constituted in relation to any operations carried out in the field of activity of the futures and options markets referred to in paragraph 2 of this article shall not be liable for obligations other than those arising from the aforementioned operations, nor to persons or entities other than those in whose favour they were constituted.»

Five. Paragraph 9 of article 59 of Law 24/1988, of 28 July, on the Securities Market, shall be worded as follows:

«9. The governing companies of the official secondary futures and options markets shall enjoy an absolute right of separation, with respect to the securities and cash in which the guarantees that members and clients had constituted or accepted in their favour were materialised, by reason of the operations traded, cleared, settled or in respect of which the governing companies perform the counterparty function, in the event that such members or clients were subject to insolvency proceedings.

Without prejudice to the foregoing, any surplus remaining after the settlement of the guaranteed operations shall be incorporated into the insolvency estate of the client or member in question.»

Article 3. Regime for the exchange of information with third countries by the National Securities Market Commission.

Paragraph 1 of article 90 is amended and a new paragraph 2 is introduced in the same article 90 of Law 24/1988, of 28 July, on the Securities Market:

«1. In the exercise of its supervision and inspection functions provided for in this and other laws, the National Securities Market Commission shall cooperate with the competent authorities of foreign States, and may for this purpose enter into cooperation agreements. In particular, it may communicate information relating to the management, administration, solvency and ownership of investment services companies and other registered entities, as well as information that contributes to better supervision of the securities markets or serves to prevent, pursue or sanction irregular conduct.

Cooperation agreements that provide for the exchange of information with the authorities or bodies of third countries that are responsible for the public function of supervising credit institutions, insurance companies, other financial institutions and financial markets, or the management of deposit guarantee or investor compensation schemes, shall require that the exchange of information be for the purpose of fulfilling the supervisory task of the authorities or bodies in question. Where the information originates in another Member State of the European Economic Area, it may not be disclosed without the express consent of the competent authorities that provided it, and, where applicable, only for the purpose for which those authorities gave their consent.

The National Securities Market Commission may refuse to act on a request for information when:

The communication of the information could be detrimental to sovereignty, security or public order.

Judicial proceedings have been initiated for the same facts and against the same persons before the Spanish authorities.

A final judgment has been handed down on the same facts and in respect of the same persons to whom the request refers.

In these cases, the requesting authority shall be notified, providing it with the most detailed information possible on the proceedings or the judicial decision in question.

2. Where the National Securities Market Commission becomes aware that acts contrary to the provisions of articles 81, 82 and 83 ter or their implementing regulations are being or have been carried out in the territory of another Member State of the European Union, it shall notify the competent authority of that State in detail, so that appropriate measures may be taken. Where such a request is made to the National Securities Market Commission by the competent authority of another Member State, the National Commission shall inform the notifying competent authority of the result and, as far as possible, of significant intermediate progress. The National Securities Market Commission shall consult with the competent authorities of the Member States involved on the measures for following up these actions.

The National Securities Market Commission, in relation to the matters regulated in articles 81, 82 and 83 ter or their implementing regulations, may ask the competent authorities of other Member States to carry out an investigation in their territory. It may also request that members of its staff be allowed to accompany the staff of the competent authority of that other Member State during the investigation.

The competent authorities of other Member States may also request the National Securities Market Commission to carry out investigations in relation to the matters indicated above and under the same conditions.

The National Securities Market Commission may refuse to process the requests for investigation referred to in this subsection, or to have its staff accompanied by the staff of the competent authority of another Member State, when this could be detrimental to sovereignty, security or public order, or when judicial proceedings have been initiated for the same facts and against the same persons before the Spanish authorities, or when a final judgment has been handed down by a Spanish judge or court for the same facts. In this case, the competent authority that made the request shall be duly notified, providing it with the most detailed information possible on said proceedings or judgment.

All requests for information and assistance made or received under the provisions of this number by the Autonomous Communities with competence in the matter shall be processed through the National Securities Market Commission.

All of the foregoing is understood without prejudice to the general duty of collaboration with other foreign bodies and authorities in relation to the other matters regulated in this Law.

3. Access by the Cortes Generales to information subject to the duty of secrecy shall be made through the Chairman of the National Securities Market Commission, in accordance with the provisions of the parliamentary Regulations. To this end, the Chairman of the National Securities Market Commission may request, with reasons, from the competent bodies of the Chamber the holding of a secret session or the application of the procedure established for access to classified matters.»

Article 4. Creation and operating regime of organized trading systems.

Subsection 4 of Article 31 of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall have the following content:

«4. Without prejudice to what special laws may establish, the creation of any market or organized trading system for securities and other financial instruments that are not considered an official market must be authorized, prior report from the National Securities Market Commission, by the Government or, in the case of markets of autonomous scope, by the Autonomous Community with competences in the matter. Failure to comply with the conditions that, where applicable, are imposed in the authorization shall be grounds for revocation of the authorization.

In said markets and systems there shall be a governing company which shall take the form of a public limited company whose basic functions shall be the organization, supervision and supply of information of the market or trading system, as well as the approval of the Operating Regulations of the corresponding market or trading system. These governing companies may not buy or sell for themselves the securities offered or demanded in the market or trading system, except in cases in which said companies are organized and act as central counterparty.

The Operating Regulations of the market or trading system and the Articles of Association of the governing company, as well as their amendment, shall require the approval of the National Securities Market Commission.

The supervision and sanctioning regime applicable to these institutions and their responsible persons shall be that established in Title VIII of this Law.

The Government, by Royal Decree, may develop the precise rules for the application of this provision and, where applicable, shall determine the procedure and requirements for authorization of markets and trading systems; the functions and minimum organization that governing companies must have; the general conditions of honorability and technical and economic solvency that must be accredited by those who intend to be members of the governing companies; the securities subject to trading; the regime of publicity of prices and volumes offered or contracted; the regime of guarantees and the minimum content of the Operating Regulations of the market or trading system.»

Section 2. Promotion of efficiency in the credit market

Article 5. Flexibilization of the regime applicable to credit cooperatives.

First. Subsection 2 of Article 39 of Law 20/1990, of 19 December, on the Tax Regime of Cooperatives, is given new wording, as follows:

«2. Those credit cooperatives that have been sanctioned for the commission of infractions classified as serious or very serious in Law 26/1988, of 29 July, on Discipline and Intervention of Credit Entities, or incur any of the circumstances provided in Article 13 of this Law, with the exception of those contemplated in its subsections 6, 9, 10 and 13 which, for the purposes of their application to credit cooperatives, are replaced by the following, shall not be considered as such, even when they use that denomination and had not been previously disqualified:

a) When the returns were credited to the members in a proportion different from the operations carried out with the cooperative or were distributed to third parties who are not members. If there were worker members, the status of protected shall not be lost when the returns credited to them are proportional to the labor advances received during the economic year.

b) The participation of the cooperative, in an amount greater than 25 percent, in the share capital of non-cooperative entities. However, said participation may be greater when it concerns entities that carry out preparatory, complementary or subordinate activities to those of the cooperative itself.

The set of these participations may not exceed 50 percent of the cooperative's own resources.

The Minister of Economy may authorize higher holdings, without loss of the status of a fiscally protected cooperative, in those cases in which it is justified that such holding contributes to the better fulfillment of the cooperative purposes and does not entail a breach of the fundamental principles of operation of these entities.

c) The carrying out of active transactions with non-member third parties in an amount greater in the financial year than 50 percent of the total resources of the cooperative.

Transactions carried out by credit cooperatives with the members of the associated cooperatives, those for the placement of excess treasury funds in the interbank market, and the acquisition of fixed-income securities and financial assets for the coverage of legal ratios or for the placement of excess treasury funds shall not be counted in the aforementioned percentage.

d) The reduction of the share capital to an amount lower than the mandatory minimum determined by the Government without it being restored within the regulatory period or the carrying out by the cooperative of transactions or services outside its statutory scope without having previously carried out the necessary capital increase and the required amendment of the Bylaws.»

Second. Section 3 of article 53 of Law 27/1999, of 16 July, on Cooperatives, is given a new wording, as follows:

«3. For credit and insurance cooperatives, the provisions of this article shall only apply when their regulatory legislation expressly so provides, and they may raise resources with the character of subordinated resources upon agreement of the governing council, whatever their instrument, and provided that such possibility is expressly provided for in the Bylaws.»

Article 6. Management of the State Treasury.

First. An article 118 bis is introduced into the consolidated text of the General Budgetary Law, approved by Royal Legislative Decree 1091/1988, of 23 September, with the following literal wording:

«Article 118 bis.

In order to facilitate the management of the State treasury, the Minister of Economy may authorize the Directorate General of the Treasury and Financial Policy to carry out temporary acquisition of assets or loan transactions. In said authorization, the conditions under which such transactions may be carried out shall be specified.

The temporary acquisition of assets transactions may have as their object Public Debt securities of any Member State of the European Union, as well as of other public entities or supranational institutions or other fixed-income securities of similar credit quality, traded on regulated markets.»

Second. An article 118 ter is incorporated into the consolidated text of the General Budgetary Law, approved by Royal Legislative Decree 1091/1988, of 23 September, with the following content:

«Article 118 ter.

The assets referred to in the preceding article, which had been subject to guarantee in favor of the Bank of Spain, as provided in the sixth additional provision of Law 13/1994, of 1 June, on the Autonomy of the Bank of Spain, may be temporarily applied by their holders in coverage of the treasury management operations of the State Directorate General of the Treasury and Financial Policy, instrumented through the Bank of Spain, under the terms established by the Minister of Economy and provided that the following conditions are met:

a) That the holder of the assets grants its consent, which may be given in the contract or guarantee document entered into with the Bank of Spain.

b) That there are available guarantee assets, once the obligations vis-à-vis the Bank of Spain have been adequately guaranteed and to its satisfaction.

The aforementioned assets shall be subject to compliance with the obligations vis-à-vis the Treasury, this guarantee having full effects vis-à-vis third parties, with no further formality than that the Bank of Spain adequately identify the guarantee assets assigned to compliance with each of said obligations, carrying out the corresponding breakdown. This breakdown must be maintained as long as the transaction in question has not come to an end. Once such obligations have been satisfied, the assets shall again be assigned as guarantee vis-à-vis the Bank of Spain.

In the event of non-compliance with the obligations contracted vis-à-vis the Public Treasury, the enforcement of the guarantees temporarily applied shall be carried out by the Bank of Spain acting on behalf of the former, through the procedures provided for in section 2 b) of the sixth additional provision of Law 13/1994, of 1 June, on the Autonomy of the Bank of Spain. For these purposes, the certification provided for in the first paragraph of said letter must be issued by the Treasury, and a certification from the Bank of Spain attesting to the temporary assignment of the guarantee assets that are the object of enforcement must also be attached.»

Article 7. Legal regime of the guarantees constituted in favor of the European Central Bank, the Bank of Spain or other National Central Banks of the European Union.

The following sixth additional provision is incorporated into Law 13/1994, of 1 June, on the Autonomy of the Bank of Spain:

«Sixth additional provision. Legal regime applicable to the guarantees constituted in favor of the Bank of Spain, the European Central Bank or other National Central Banks of the European Union, in the exercise of their functions.

1. For the purposes of the provisions of this disposition, guarantee shall mean any deposit, pledge, simultaneous transaction, sale with repurchase agreement, charge, right of retention or any other legal transaction, affecting any realizable asset, including cash, and whose purpose is to secure the rights and obligations arising from any present or future transaction, concluded with the Banco de España, the European Central Bank or another National Central Bank of the European Union.

2. The following legal regime shall apply to these guarantees:

a) Their constitution shall not require for its full validity and effectiveness against third parties the intervention of a notary or any other formal requirement, except that the constitution must be recorded in writing and registered in the corresponding registry by the entity responsible for it. In the case of securities represented by physical certificates, their delivery to the beneficiary of the guarantee or to a third party established by mutual agreement between the parties shall also be necessary.

The formalization of the corresponding principal obligation shall also not require for its full validity and effectiveness against third parties the intervention of a notary or compliance with any other formal requirement.

The formalization of simultaneous transactions or sales with repurchase agreement shall be governed by their specific regulations.

b) For their enforcement, the certification issued by the Banco de España, the European Central Bank or the corresponding National Central Bank of the European Union, certifying the amount of the matured, liquid and payable amounts being enforced, together with a copy of the document of constitution of the guarantee, shall suffice.

In this certification it must be stated that the settlement has been carried out in accordance with the agreement, pact or rule from which the obligation in question derives.

When the object of the guarantee consists of assets negotiable on an organized market, its enforcement shall be carried out through the corresponding governing body. In other cases, it shall be carried out by auction organized by the Banco de España. In any case, the surplus remaining once the corresponding debt has been satisfied shall be returned to the entity that provided the aforementioned guarantee assets.

In simultaneous transactions or sales with repurchase agreement, in the event of default by any of the parties to the transaction, the provisions of additional provision twelfth of Law 37/1998, of 16 November, reforming Law 24/1988, of 28 July, on the Securities Market, and its implementing regulations shall apply.

c) When the object of the guarantee consists of a pledge over cash deposits, the depositary entity of the cash must record in the corresponding account the pledged balance, once it has evidence of the consent of the holder of said account and of the entity in whose favor it is constituted.

The pledge constituted in accordance with the provisions of this section shall be fully valid and shall have full effects against third parties from the date of the recording referred to in the preceding paragraph, without the need for any other formality. Said pledge shall be enforced by set-off, with the surplus funds, if any, remaining at the disposal of the account holder once the debt has been satisfied.

From the recording provided for in the first paragraph of this paragraph c), the amounts deposited in the account whose balance remains pledged shall, by the mere fact of their deposit, be irrevocably and without any limitation assigned to the full performance of the guaranteed obligations.

Likewise, from the moment of the recording of the pledge, the account holder may not withdraw funds deposited therein without the prior consent of the beneficiary of the guarantee.

d) In cases of bankruptcy or suspension of payments, transactions guaranteed in accordance with the provisions of this disposition shall enjoy the same privileges that article 1.926 of the Civil Code confers on pledge credits.

Guarantees constituted in accordance with the rules of this disposition shall not be subject to seizure, attachment, lien or any other restriction or retention of any nature, whether legal or contractual, from the moment of their constitution.

Neither the constitution, acceptance or enforcement of the guarantees referred to in this disposition, nor the balance of the accounts or registries in which they are materialized, nor the formalization of the guaranteed obligations shall be contestable in the case of measures of a retroactive nature, linked to the aforementioned insolvency proceedings.

3. The parties may agree that in the event of variations in the price of the assets subject to the guarantee, new assets, including cash, must be provided to restore the balance between the value of the guaranteed obligation and the value of the guarantees constituted to secure it. In such case, said assets shall be considered an integral part of the guarantee, and all provisions of this disposition shall apply to them.

4. The charge of non-mortgage loans or credits as guarantee in favor of the Banco de España, the European Central Bank, or other National Central Banks of the European Union, to secure the performance of present or future obligations, contracted with them for transactions concluded in the exercise of their functions, shall be governed, in addition to the provisions of section one, paragraphs a), b) and d) of section two and section three of this disposition, by the following rules:

a) Loans and credits shall be susceptible to charge whatever the formal or material requirements that the parties had agreed upon regarding their assignment or encumbrance. The charge shall refer only, unless otherwise agreed, to the credit right arising from the corresponding contract. In no case shall the beneficiary of the guarantee assume the obligation to make funds available to the borrowers.

b) Said charge may be formalized using the official model approved for this purpose by the Bank of Spain, which shall produce all its effects against third parties from its registration in the Register established for this purpose by the Bank of Spain. The document must also be registered in the Register of Movable Assets, regulated in article 15 of Law 28/1998, of 13 July, on Installment Sales of Movable Assets. The documents so registered shall be sufficient title for their enforcement. If the original document of the loan or credit charged is not delivered to the beneficiary of the guarantee, the reference of said registration shall be recorded therein.

c) The fruits of the loans or credits charged shall correspond, unless otherwise agreed, to the credit institution providing the guarantee.

d) In the event of non-compliance with the guaranteed obligations, the beneficiary of the guarantee shall acquire full ownership of the right to collect the part of the loan or credit charged. However, the guarantee may also be enforced through an auction organized by the Bank of Spain, according to the procedure it establishes.»

Article 8. Reform of the legal regime of Savings Banks.

First. The second paragraph of article 1 of Law 31/1985, of 2 August, on Regulation of Basic Rules on Governing Bodies of Savings Banks, is modified, with the following content:

«The members of such bodies shall exercise their functions for the exclusive benefit of the interests of the Savings Bank to which they belong and of the fulfillment of its social function, and must meet, without prejudice to the provisions of article 8, the requirements of commercial and professional honorability determined by the development rules of this Law. In any case, it shall be understood that commercial and professional honorability exists in those who have been observing a personal trajectory of respect for commercial laws or others that regulate economic activity and business life, as well as good commercial and financial practices.»

Second. The wording of sections 1, paragraphs a), b), c) and d), and 3 of article 2 of Law 31/1985, of 2 August, on Regulation of Basic Rules on Governing Bodies of Savings Banks, is modified, with the following content:

«1. The representation of collective interests in the General Assembly shall be carried out through the participation of at least the following groups:

a) The Municipal Corporations in whose territory the Entity has an open office.

b) The Depositors of the Savings Bank.

c) The persons or Entities Founding the Savings Banks. The persons or Entities Founding the Savings Banks may assign a part of their representation to Local Corporations that, in turn, are not founders of other Savings Banks in their scope of action.

d) The employees of the Savings Banks.»

«3. The representation of public administrations and entities and corporations of public law in their governing bodies, including that corresponding to the founding entity when it has the same nature, may not exceed in its entirety 50 percent of the total voting rights in each of such bodies, and all entities and corporations must be represented.

For the purposes of their representation in the governing bodies of savings banks, the percentage of representation assigned to the group of depositors shall range between a minimum of 25 percent and a maximum of 50 percent of the total voting rights in each of the governing bodies.

The percentage of representation of the group of employees shall range between a minimum of 5 percent and a maximum of 15 percent of the voting rights in each body.»

Third. Article 4 of Law 31/1985, of 2 August, on Regulation of Basic Rules on Governing Bodies of Savings Banks, is modified, and shall have the following literal wording:

«Article 4.

The General Councilors, representing the group of depositors of the Savings Bank, shall be elected by delegates from among them.

For the election of delegates, those who are part of the group of depositors shall be listed in a single list or in single lists by constituencies, provinces, districts or districts of large capitals, and may not appear more than once, regardless of the number of accounts they may hold. In the event that they prepare single lists by constituencies, provinces, districts or districts of large capitals, strict proportionality between the number of depositors and that of delegates must be respected. The election shall be carried out before a Notary, by public drawing of lots.»

Fourth. Article 7 of Law 31/1985, of 2 August, on Regulation of Basic Rules on Governing Bodies of Savings Banks, is modified, and shall have the following wording:

«Article 7.

The General Councilors must meet the following requirements:

a) Be a natural person, with habitual residence in the region or area of activity of the Savings Bank.

b) Be of legal age and not incapacitated.

c) Have the status of depositor of the Savings Bank to which the appointment refers, with a seniority of more than two years at the time of the election, as well as, indistinctly, a movement or an average balance in accounts not less than what is determined in the rules that develop this Law, at the time of formalizing the acceptance of the position, in the case of being elected in representation of the group of depositors.

d) Be up to date in compliance with the obligations they had contracted with the Savings Bank by themselves or on behalf of other persons or entities.

e) Not be subject to the incompatibilities regulated in article 8.»

Fifth. Paragraph one of Article 9 of Law 31/1985, of 2 August, on the Regulation of the Basic Rules on the Governing Bodies of Savings Banks, is amended to read as follows:

«Artículo 9.

Uno. General Councillors shall be appointed for a term that shall be the one set out in the Articles of Association, which may not be less than four years or more than six. Notwithstanding the foregoing, the Articles of Association, in accordance with the provisions of the implementing legislation of this Law, may provide for the possibility of reappointment for another term of equal length, provided that they continue to meet the requirements established in Article 7 and in accordance with the provisions of paragraph three. The term of reappointment shall be counted even if several years have elapsed between the cessation and the new appointment.

The term of office may not exceed twelve years, regardless of the representation held. Once the twelve-year term of office has been completed, whether continuously or with interruptions, and eight years have elapsed since that date, the person may be elected again under the conditions established in this Law. »

The clauses highlighted in bold in paragraph five are declared unconstitutional and void by Judgment of the Constitutional Court 118/2011, of 5 July. Ref. BOE-A-2011-13308 .

Sexto. The first paragraph of Article 10 of Law 31/1985, of 2 August, on the Regulation of the Basic Rules on the Governing Bodies of Savings Banks, is amended to read as follows:

As long as the term for which they were appointed has not expired, and outside the cases of resignation, death or declaration of death or legal absence, the appointment of the Councillors shall be irrevocable except, exclusively, in the cases of subsequent incompatibility, loss of any of the requirements required for the designation, and separation agreement adopted by the General Assembly if just cause is found.

Just cause shall be deemed to exist when the General Councillor fails to comply with the duties inherent to his or her office, or harms, through his or her public or private conduct, the prestige, good name or activity of the Savings Bank.

Seventh. Paragraph one of Article 11 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

«One. The appointment of the members of the Board of Directors and of the members of the Supervisory Committee within its competence, as well as the adoption of the corresponding separation agreements from office in accordance with the provisions of Article 18.»

Eighth. Paragraph b) of Article 14 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

«b) The appointment of the members representing depositors shall be made by the General Assembly and from among them.

Notwithstanding the foregoing, up to a maximum of two persons who meet the appropriate requirements of professionalism and who are not General Councillors may be designated.»

Ninth. Article 15 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

«Article 15.

The members of the Board of Directors shall meet the same requirements as those established in Article 7 for General Councillors, and shall be under seventy years of age at the time of taking office, unless the legislation developing this Law establishes a different age limit.

The members of the Board of Directors with executive functions shall, in addition, possess sufficient knowledge and experience for the exercise of their functions.»

Tenth. Paragraph 1 of Article 17 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

«1. The term of office of a member of the Board of Directors shall be as set out in the Articles of Association, and may not be less than four years or more than six. Notwithstanding the foregoing, the Articles of Association may provide for the possibility of re-election, in accordance with the provisions of the regulations developing this Law, provided that the same conditions, requirements and procedures as for the appointment are met.

The calculation of this re-election period shall apply even if several years have elapsed between the cessation and the new appointment.

The term of office may not exceed twelve years, regardless of the representation held.

Once the twelve-year term of office has been completed, whether continuously or with interruptions, and eight years have elapsed since that date, he or she may be elected again under the conditions established in this Law. »

The clauses highlighted in bold in paragraph tenth are declared unconstitutional and void by Judgment of the Constitutional Court 118/2011, of 5 July. Ref. BOE-A-2011-13308 .

Eleventh. Article 18 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

«Article 18.

The appointment of the members of the Board of Directors shall be irrevocable, with the same exceptions as those provided for General Councillors in Article 10 of this Law applying.»

Twelfth. Article 19 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, which, as a basic provision, is amended to read as follows:

«Article 19.

1. The Board of Directors shall be the representative of the Entity in all matters relating to its ordinary business and transactions, as well as in litigation.

The exercise of its powers shall be governed by the provisions of the Articles of Association and the agreements of the General Assembly.

2. The Board of Directors may delegate one or more of its management powers to the governing bodies of the entities that constitute and establish alliances between Savings Banks or to those created for that purpose within the Spanish Confederation of Savings Banks, with the aim of reducing the operating costs of the entities that comprise it, to increase their efficiency without endangering competition in national markets or to participate with sufficient volume in international capital markets. This delegation shall remain in force during the term of the alliance or until the entities agree to modify it through the procedure they have previously established for that purpose. This delegation shall not extend to the duty of supervision of the delegated activities nor to the powers that the Supervisory Committee has in respect thereof.»

Thirteenth. Paragraph 1 of Article 22 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

«1. The members of the Supervisory Committee shall be elected by the General Assembly from among the General Councillors who do not hold the status of members of the Board of Directors, and representatives of the same groups or sectors that make up the General Assembly must be included therein in the same proportion.

The submission of candidatures shall be carried out in accordance with the provisions for members of the Board of Directors.»

Fourteenth. A new paragraph five is added to Article 31 of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, which is to read as follows:

“Five. Without prejudice to the provisions of this Title, Savings Banks may establish, by resolution of their Board of Directors, collaboration or cooperation agreements and alliances with other Savings Banks.”

Fifteenth. Additional Provision Two of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

“Second. In the case of Savings Banks whose Articles of Association record the Catholic Church as the founding entity, the appointment, suitability and term of office of the representatives of the various groups in the governing bodies shall be governed by the Articles of Association in force on 1 November 2002, and the principle of representativeness of all groups must be respected.

In any event, taking into account the scope of the international agreement of 3 January 1979 on legal matters and the principles set out in Article Five thereof, and without prejudice to the relations that correspond with the Autonomous Communities with respect to the activities carried out in their territories, the approval of the Articles of Association, of the Regulations governing the designation of members of the Governing Bodies and of the annual budget of the social work of those Savings Banks whose direct founding entity under the aforementioned Articles of Association is the Catholic Church or the Public Law Entities of the same, shall fall within the competence of the Ministry of Economy, when the Savings Bank concerned so certifies before the aforementioned Ministry.”

The bolded clause of paragraph fifteen is declared unconstitutional and void by Judgment of the Constitutional Court 151/2011, of 29 September. Ref. BOE-A-2011-16813 .

Sixteenth. The following Additional Provision Five is added to Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks:

“Fifth. Where a merger takes place between Savings Banks having their registered offices in different Autonomous Communities, authorisation for the same must be agreed jointly by the Governments of the Autonomous Communities concerned.

The instrument authorising the merger shall determine the proportion that shall correspond to the public administrations and Public Law Entities and Bodies of each Community in the governing bodies of the resulting Savings Bank.”

Seventeenth. Paragraph 3 of Final Provision Four of Law 31/1985, of 2 August, regulating the Basic Rules on Governing Bodies of Savings Banks, is amended to read as follows:

“3. The provisions of this Law listed below shall not be of the nature of basic rules:

Article 2.2, paragraph 1;

Article 4;

Article 6.1;

Article 9.2, insofar as it imposes the renewal by halves of the General Assembly;

Article 12.1, except paragraphs 1 and 4;

Article 13.2, insofar as it refers to the minimum and maximum number of members of the Board of Directors, and 13.3;

Article 14, insofar as it establishes the mechanism relating to the form and requirements for the provision of members of the Board of Directors;

The last paragraph of Article 20.2;

The second paragraph of Article 26, insofar as it refers to the retirement age of the General Director;

Articles 31.3 and 31.4;

The fourth transitional provision;

The fifth transitional provision.»

Section 3. Promotion of efficiency in the insurance market

Article 9. Regime of the exchange of information with third countries by the Directorate-General of Insurance and Pension Funds.

(Repealed)

Article 10. Suppression of the autonomous body «Liquidation Commission of Insurance Entities».

First. The autonomous body «Liquidation Commission of Insurance Entities» is suppressed, whose functions, assets and personnel shall be assumed from the entry into force of this Law by the public business entity «Consortium of Insurance Compensation».

Second. All references to the Liquidation Commission of Insurance Entities contained in current legislation shall be understood as made to the Consortium of Insurance Compensation.

Article 11. Reform of the legal regime of the Consortium of Insurance Compensation.

First. (Repealed)

Second. (Repealed)

Third. (Repealed)

Article 12.

Article 83 of Law 50/1980, of 8 October, on Insurance Contract, is amended, and shall be worded as follows:

"Article 83.

By the life insurance contract the insurer undertakes, through the collection of the stipulated premium and within the limits established in the Law and in the contract, to pay the beneficiary a capital, an annuity or other agreed benefits, in the event of death or survival of the insured, or both events jointly.

Life insurance may be stipulated on one's own life or that of a third party, both for the event of death and for the event of survival or both jointly, as well as on one or several heads.

Life insurance contracts are those in which, in compliance with the provisions of the preceding paragraphs, the benefit agreed in the policy has been determined by the insurer through the use of actuarial criteria and bases.

In insurance for the event of death, if the persons of the policyholder and the insured are different, the consent of the latter shall be required, given in writing, unless their interest in the existence of the insurance can be presumed otherwise.

For the purposes of the provisions of Article 4, in life insurance it is understood that a risk exists if at the time of contracting the event subject to the coverage granted in the policy has not occurred.

If the insured is a minor, the written authorization of their legal representatives shall also be required.

No insurance for the event of death may be contracted on the head of persons under fourteen years of age or of incapacitated persons. Excepted from this prohibition are insurance contracts in which the death coverage is less than or equal to the premium paid for the policy or the surrender value."

CHAPTER II

Promotion of the competitiveness of the financial industry

Article 13. Territorial bonds.

(Repealed).

Article 13 bis. Internationalization bonds.

(Repealed)

Article 14. Participating quotas.

First. Article 7 of Law 13/1985, of 25 May, on Investment Ratios, Own Resources and Information Obligations of Financial Intermediaries, is given a new wording, which shall have the character of a basic provision, in the following terms:

"Article 7.

1. For the purposes of this Title, the own resources of credit institutions and of consolidated groups of credit institutions comprise:

Share capital.

The foundational fund.

The participating quotas of Savings Banks.

The reserves.

The generic funds and provisions.

The funds of the Charitable-Social Work of Savings Banks and those for education and promotion of Credit Cooperatives.

The preferred shares.

The subordinated financings.

Other items, whether payable or not, capable of being used to cover losses.

From these resources shall be deducted the losses, as well as any assets that may diminish the effectiveness of said resources for covering losses.

2. The participating quotas of Savings Banks are negotiable securities representing monetary contributions of indefinite duration, which may be applied in equal proportion and to the same purposes as the foundational funds and the reserves of the Entity.

3. The issuance of participating quotas shall entail the constitution of the following funds:

a) Participation Fund: it shall be equal to the sum of the nominal value of the participating quotas that are issued.

b) Reserve Fund of the Quota Holders: it shall be composed of the percentage of the freely disposable surplus corresponding to the participating quotas that was neither allocated to the Stabilization Fund nor effectively paid to the quota holders.

c) Stabilization Fund: its purpose shall be to prevent excessive fluctuations in the remuneration of the participating quotas. The endowment of this Fund, as well as the application of its resources to the remuneration of the participating quotas, must be agreed by the General Assembly. The constitution of the Stabilization Fund shall be optional.

The Participation Fund, the Reserve Fund of the Quota Holders and, if it exists, the Stabilization Fund shall be applied to the compensation of losses in the same proportion and order as the foundational funds and the reserves.

The Participation Fund and the Reserve Fund of Quota Holders shall be considered own resources.

4. The participating quotas confer upon their holders the following rights of an economic nature:

a) Participation in the distribution of the freely disposable surplus of the bank in the proportion that the volume of quotas in circulation represents over the equity of the bank plus the volume of quotas in circulation. The volume of quotas in circulation is understood as the sum of the Participation Fund and the Reserve Fund of Quota Holders and the Stabilization Fund of the issues of participating quotas in circulation, and equity as the Foundational Fund, the general reserves of the bank and the Fund for general banking risks.

b) Preferential subscription of participating quotas in new issues, without prejudice to their suppression under the legally provided terms.

c) Obtaining their net asset value in the event of liquidation.

d) Obtaining, in the cases of amortization provided in paragraph 9 of this article, the market value of the participating quotas.

e) Receipt of a remuneration of a variable nature charged to the part of the freely disposable surplus corresponding to them or, where applicable, to the Stabilization Fund.

The net asset value of each quota is understood as the part corresponding to each quota of the Participation Fund, the Reserve Fund of Quota Holders and the Stabilization Fund, reduced or increased by the part attributable to it of the loss or profit of the liquidation balance not previously distributed.

Market value is understood as the average of the secondary market quotation over the last 30 sessions prior to the determination of the event that entails the redemption transaction. If this determination is not possible, the value shall be determined by the valuation carried out by an independent auditor chosen by lot from among the account auditors and audit firms registered as practicing in the Official Register of Account Auditors, which have audited credit institutions, excluding the Caja's own account auditor.

The units lack all political rights.

A syndicate of unit-holders may be created, whose Chairman may attend the General Assemblies of the Caja with voice and without vote. In its operating rules, the syndicate shall be governed by the provisions set forth in the implementing regulations of this Law.

Savings Banks must include in the issuance of participating units an automatic redemption clause in the event of a modification of the legal regime relating to the political rights of the unit-holders. The redemption referred to in this paragraph must be carried out in accordance with a specific plan, which must be approved by the Bank of Spain, so that the solvency of the Entity is not affected.

5. Participating units may not be issued at a value lower than their nominal value. Their issuance must be made with a premium when necessary to avoid the dilution of pre-existing rights over the equity and future surpluses. The premium shall be allocated to the general reserves of the caja and to the reserve fund of the unit-holders in the proportion determined by the issuance agreement. The starting point for the valuation of the issuance premium shall be the economic value of the Savings Bank, which must take into account, among others, the value of goodwill, latent capital gains and the real capacity to generate profits in the future.

The participating units shall be registered and shall be fully paid up at the time of issuance. Their consideration shall always be in cash.

Participating units of different class or series may be issued, with all units of the same class corresponding to equal rights.

6. The volume of participating units in circulation may not exceed 50 per 100 of the Caja's equity.

7. The participating units shall be listed on organized secondary markets. However, no person, natural or legal, or economic group may hold, directly or indirectly, participating units for an amount greater than 5 per 100 of the total units in force. If this is exceeded, all economic rights of the units acquired by the person or economic group shall be suspended.

The foregoing shall be understood without prejudice to the possibility that the Deposit Guarantee Fund or other entities in the Savings Banks sector, previously authorized by the Bank of Spain, may exceed the 5 per 100 limit of participating units issued by a Savings Bank in situations of exceptional gravity that endanger the effectiveness of its own resources, as well as the stability, liquidity and solvency of the issuing entity.

8. The competent body to agree each issuance of participating units shall be the General Assembly, which may delegate this competence to the Board of Directors of the Caja.

The original acquisition of participating units by the Caja or its economic group is prohibited; however, a derivative acquisition may be carried out, provided that the nominal value of the units held by the entity or its consolidated group does not exceed 5 per 100 of the total units issued.

9. In cases of merger, the issuing Savings Bank shall grant the unit-holders a minimum period of one month, counted from the registration of the corresponding agreement in the Mercantile Registry, so that they may, if they wish, transfer their units to the Caja. The latter must pay for them the market value determined in section 4.

If the limit provided in the previous section is exceeded, the Caja must proceed to the disposal or redemption, within a maximum period of three months, of that excess over the maximum permitted limit.

10. The surplus of free disposal that, in accordance with section 4, corresponds to the participating units shall be distributed among the following destinations:

Reserve Fund of the Unit-holders.

Effective remuneration of the Unit-holders.

Stabilization Fund, if applicable.

The annual remuneration of the units and their distribution must be approved by the General Assembly, which shall take into account the solvency ratio of the Caja when making such distribution.

When the Savings Bank or the consolidated group to which it belongs presents a deficit of own resources over the legally required minimum, 100 per 100 of the annual surplus corresponding to the units shall be allocated to the Unit-holders' Reserve Fund, and the remuneration of the unit-holders charged to the Stabilization Fund shall require prior authorization from the Bank of Spain.

11. The Spanish Confederation of Savings Banks may issue participating association units, and the provisions of the previous sections shall apply to them with the adaptations established by the Government.

12. The Government is authorized to regulate the criteria for the allocation of issuance premiums, the cash remuneration referred to in paragraph e) of section 4, and the allocation of reserves that do not arise from the application of results, if applicable, of the participating units, as well as the items that make up own resources and their deductions, and may establish limits or conditions for those that present reduced effectiveness for covering losses."

Second. New wording is given to Article 11.4 of Law 13/1985, of 25 May, on Investment Ratios, Own Resources and Information Obligations of Financial Intermediaries, which shall have the status of a basic provision, in the following terms:

«Savings Banks must allocate to reserves or provision funds not attributable to specific risks, a minimum of 50 per 100, of that part of the freely disposable surpluses that is not attributable to the cuotapartícipes. This percentage may be reduced by the Bank of Spain when own resources exceed by more than one third the established minimums.»

Article 15. Securities lending by collective investment institutions.

Section 3 of Article 10 of Law 46/1984, of 26 December, regulating Collective Investment Institutions, is amended, and shall read as follows:

«3. The securities and other assets comprising the portfolio may not be pledged or constitute any kind of guarantee, except to serve as guarantee in transactions carried out by the institution on official secondary markets. Where applicable, the securities and assets comprising the portfolio must be deposited under the custody of the depositaries regulated in this Law. However, they may be subject to stock lending or securities lending transactions with the limits and guarantees established by the Minister of Economy.»

Article 16. Flexibilization of the guarantee regime.

First. The tenth additional provision of Law 37/1998, of 16 November, reforming Law 24/1988, of 28 July, on the Securities Market, is amended, and shall have the following literal wording:

«1. The rules of this provision shall apply to financial transactions carried out within the framework of, or in relation to, a contractual netting agreement, provided that the following requirements are met:

a) That at least one of the parties to the agreement is a credit institution or an investment services firm, or a non-resident entity authorized to carry out the activities reserved under Spanish legislation to the aforementioned entities or firms.

b) That the agreement provides for the creation of a single legal obligation covering all the aforementioned financial transactions included therein and by virtue of which, in the event of early termination, the parties shall only be entitled to claim from each other the net balance of the proceeds from the liquidation of said transactions. The net balance shall be calculated in accordance with the provisions of the contractual netting agreement or the agreements related thereto.

2. For the purposes of this provision, the following shall be considered financial transactions:

a) Those carried out on the financial instruments provided for in paragraph 2 of Article 2 of Law 24/1988, of 28 July, on the Securities Market, including credit derivatives.

b) Double or repurchase transactions defined in the twelfth additional provision of this Law, whatever the assets on which they fall, and, in general, temporary transfers of assets.

c) Securities lending.

d) Guarantees and transfers as guarantee or other transactions with the direct or indirect purpose of guarantee linked to the contractual netting agreement itself that have as their object public debt, other negotiable securities or cash. The execution of the transactions indicated in this paragraph shall, where applicable, be carried out in the manner provided for in the contractual netting agreement or in the agreements related thereto.

The financial transactions referred to in this section shall be valid and effective against third parties, whatever the Law governing them, with no requirements other than their private documentary formalization and the delivery, transmission or registration entry of the securities, as appropriate, and the deposit or transfer of cash, with the provisions of the sixth additional provision of Law 37/1998, of 16 November, reforming Law 24/1988, of 28 July, on the Securities Market, being applicable.

3. The declaration of early termination, resolution, termination, execution or equivalent effect of the financial transactions defined in the preceding sections carried out within the framework of, or in relation to, a contractual netting agreement, may not be limited, restricted or affected in any way by a state or request for bankruptcy, suspension of payments, liquidation, administration, intervention or creditors' composition affecting any of the parties to said agreement, their subsidiaries or branches.

In cases where one of the parties to the contractual netting agreement is in one of the insolvency situations provided for in the preceding paragraph, only the net amount of the financial transactions covered by the agreement, calculated in accordance with the rules established therein or in the agreements related thereto, shall be included as a credit or debt of the party in such situations.

4. The financial transactions or the contractual netting agreement regulating them may only be challenged under the second paragraph of Article 878 of the Commercial Code, by action brought by the trustees in bankruptcy, in which fraud in said contracting is demonstrated.»

Second. New wording is given to section 4 of the twelfth additional provision of Law 37/1998, of 16 November, reforming Law 24/1988, of 28 July, on the Securities Market, and shall read as follows:

«4. The provisions of sections 3 and 4 of the tenth additional provision of this Law shall apply to the transactions contemplated in section 1 of this provision that are carried out on other financial assets as guarantee of the general obligations contracted vis-à-vis the Bank of Spain in the exercise of its monetary policy operations.»

CHAPTER III

Financing of small and medium-sized enterprises

Article 17. Assignment of receivables owed by a public administration.

Article 100 of Royal Legislative Decree 2/2000, of 16 June, approving the consolidated text of the Law on Contracts of Public Administrations, is amended as follows:

One. A new paragraph 3 is added to Article 100 of Royal Legislative Decree 2/2000, of 16 June, approving the consolidated text of the Law on Contracts of Public Administrations, as follows:

«3. The effectiveness of the second and subsequent assignments of the collection rights assigned by the contractor shall be subject to compliance with the provisions of the preceding paragraph.»

Two. Paragraph 3, which becomes paragraph 4, of Article 100 of Royal Legislative Decree 2/2000, of 16 June, approving the consolidated text of the Law on Contracts of Public Administrations, is amended and shall read as follows:

«4. Once the Administration has knowledge of the assignment agreement, the payment order must be issued in favour of the assignee. Before the assignment is brought to the knowledge of the Administration, payment orders in the name of the contractor or the assignor shall have discharging effect.»

Three. A new paragraph 5 is added to Article 100 of Royal Legislative Decree 2/2000, of 16 June, approving the consolidated text of the Law on Contracts of Public Administrations, as follows:

«5. In the event of bankruptcy of the assigning contractor, the nullity referred to in Article 878, paragraph 2, of the Commercial Code shall not be declared if the following requirements are met:

a) That the assigned receivables arise from the business activity of the assigning contractor,

b) That the assignee is a credit institution,

c) That the receivables subject to assignment under the agreement already exist on the date of the assignment agreement or arise from the business activity carried out by the assigning contractor within a maximum period of one year from that date, or that the identity of the future debtors is recorded in the assignment agreement,

d) That the assignee pays the assignor, in cash or on deferred terms, the amount of the assigned receivables less the cost of the service provided,

e) That the certainty of the date of the assignment is established by any of the means set out in Articles 1.218 and 1.227 of the Civil Code or by any other means admitted in law,

f) That the notification referred to in paragraph 2 of this article is proven to have been made.»

Article 18. Extension of the object of the mortgage participation.

A new paragraph is added to paragraph two of the fifth additional provision of Law 3/1994, of 14 April, adapting Spanish legislation on credit institutions to the Second Banking Coordination Directive and introducing other amendments relating to the financial system, as follows:

«Mortgage participations grouped in asset securitisation funds may correspond to loans and credits that do not meet the requirements established in Section 2 of Law 2/1981, of 25 March, on the Regulation of the Mortgage Market. These participations shall be issued and marketed under the name of “mortgage transfer certificates”.»

Article 19. Amendments to the legal and tax regime of Venture Capital Entities.

First. Article 2.1 of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies, is given a new wording:

«1. Venture Capital Companies are public limited companies whose main corporate purpose is to take temporary holdings in the capital of non-financial companies that, at the time of taking the holding, are not listed on the primary market of the Stock Exchanges.»

Second. A new paragraph 4 is added to Article 2 of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies:

«4. For the purposes of this Law, non-financial companies shall also include those entities whose main activity is the holding of shares or holdings issued by entities belonging to non-financial sectors».

Third. A new paragraph 3 is added to Article 16 of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies:

«3. Investments in securities issued by companies whose assets consist of more than 50 per 100 in real estate shall be considered investments proper to the object of the venture capital activity provided for in Article 2.1 of this Law, provided that they are directly attached to a business purpose or activity that is not strictly real estate.»

Fourth. The first paragraph of Article 18.2 of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies, is given a new wording:

«2. Venture capital entities may invest up to 25 per 100 of their assets in companies belonging to their group or to that of their management company, as defined in Article 4 of Law 24/1988, provided that they meet the following requirements:

a) That the articles of association or regulations provide for these investments.

b) That the entity or, where applicable, its management company has a formal internal procedure, set out in its internal code of conduct, to avoid conflicts of interest and to ensure that the transaction is carried out in the exclusive interest of the entity. Verification of compliance with these requirements shall be the responsibility of an independent committee created within its board or an internal body of the management company entrusted with this function.

c) That the prospectuses and periodic public information of the entity provide detailed information on investments made in group entities.»

Fifth. New wording is given to article 23.2 of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies:

«2. The minimum subscribed share capital shall be 1.200.000 euros, and at least 50 per 100 must be paid up at the time of its incorporation, and the remainder, in one or several instalments, within a period of three years from the incorporation of the company. The payments of the minimum share capital must be made in cash or in assets forming part of its fixed assets, and the latter may not exceed 10 per 100 of its share capital.

Additional payments to the minimum share capital or subsequent increases thereof may also be made in fixed assets or financial assets suitable for investment in accordance with section 2 of chapter II of Title I of this Law.»

Sixth. A second paragraph is incorporated into article 23.4 of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies:

«4. The transformation, merger, demerger and other corporate transactions carried out by a venture capital company or that lead to the creation of a venture capital company shall require prior approval of the Minister of Economy, and the provisions of article 8 of this Law shall apply.»

Seventh. The following paragraph is added to subsection 3 of article 69 of Law 43/1995, of 27 December, on Corporate Income Tax:

«(...) Likewise, the positive income revealed in the transfer or redemption of shares or holdings representing the equity of venture capital companies and funds shall enjoy the deduction provided for in article 28.5 of this Law, whatever the percentage of participation and the holding period of the shares or holdings.»

CHAPTER IV

Promotion of the use of electronic techniques

Article 20. Legal effects of electronic contracting.

First. The following subsection 2 is introduced into article 79 of Law 24/1988, of 28 July, on the Securities Market, with the article 79 up to now becoming subsection 1 thereof:

«2. In accordance with the provisions of the rules that, on a general basis, regulate contracting by electronic means, the Minister of Economy 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 contracting which, in its substantive aspects and with the limitations that may emanate from other legal provisions, must govern relations between investment services companies and their clientele.»

Second. A new paragraph g) is added to subsection 2 of article 48 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, with the following wording:

«g) Regulate the special features of the contracting of banking services electronically in accordance with the provisions of the rules that, on a general basis, regulate contracting by electronic means.»

Article 21. Electronic money.

(Repealed)

CHAPTER V

Protection of clients of financial services

Section 1. Defence of the client of financial services

Articles 22 to 28.

(Repealed)

Article 29. Customer service department and Customer Ombudsman.

1. Credit institutions, financial credit establishments, payment entities, entities covered by the provisions of articles 14 and 15 of Royal Decree-Law 19/2018, of 23 November, on payment services and other urgent measures in financial matters, electronic money entities, management companies of collective investment institutions, insurance brokerage companies, insurance brokers, pension fund management entities, with the clarifications established in the first additional provision of Order ECO/734/2004, of 11 March, on customer service departments and services and the customer ombudsman of financial entities, real estate lenders that are not credit institutions, credit intermediaries, when they operate in a geographical area larger than that of an autonomous community, financial entities operating in Spain under the free provision of services regime, insurance entities, investment services companies and the branches in Spain of the entities listed with registered office in another State shall be obliged to attend to and resolve the complaints and claims that users of financial services may submit, related to their legally recognised interests and rights, including those arising from incidents or queries not satisfactorily resolved by the office or department that provided the service.

For these purposes, the entities must have a customer service department or service responsible for attending to and resolving complaints and claims. Entities that form part of the same economic group may have a single customer service department or service for the entire group.

Such customer service services, which must guarantee the minimum level of quality in attention to compliance with the provisions of this law, shall be designed using means and supports that follow the principles of universal accessibility, equal treatment and non-discrimination, guaranteeing access for persons with disabilities or elderly persons.

For the purposes of this law, complaint or claim shall be understood as: any manifestation relating to the defective provision of the service or the non-compliance or defective compliance with the offer made, communicated by the clientele to the service of attention, regardless of its internal classification as a complaint, claim or other similar ones.

Likewise, those derived from incidents or queries not satisfactorily resolved by the office or department that had provided the service shall also be understood as such.

Said customer service, which shall be free of charge, effective, universally accessible, inclusive, non-discriminatory and evaluable, shall be provided during commercial business hours. However, the provision of a service of attention on a continuous basis 24 hours a day every day of the year must be guaranteed when necessary to address complaints or claims arising from the failure to address incidents relating to the maintenance of those services that require continuous provision.

Entities shall ensure their customers the availability of in-person channels, whether permanent or intermittent, or telephone or telematic channels for the customer service, in accordance with the principle of personalized provision.

Personalized provision is understood as that which takes into consideration the age, the disability situation, the status of foreign person and their administrative situation of the person addressing the customer service, the characteristics of the geographical area in which the person resides in terms of population and the level of digital skills of said person, among other matters.

Entities that, where applicable, make available to customers a telephone or electronic customer service must guarantee personalized attention by the customer service, offered through an operator or agent thereof, that ensures fluid interaction. The agents of the customer service shall have supervisors or hierarchical superiors who will manage possible complaints that the attention received could generate. Specifically, entities must have adequate resources that, through telephone attention, can provide specific personalized attention to vulnerable persons or those at risk of financial exclusion, assisting them in accessing the customer service.

In the event that customer services use telephone or electronic attention to carry out their functions, the use of automatic answering machines or other analogous means as the exclusive means of customer service is prohibited, without prejudice to the submission of the complaint or claim in paper format or by computer, electronic or telematic means, in accordance with article 29 ter.

Companies that, where applicable, make available to customers a telephone customer service for the purposes of this law, must ensure that the use of telephone attention does not entail for the consumer a cost higher than the cost of a call to a standard geographic fixed or mobile telephone line. Otherwise, they must be informed about an alternative geographic or mobile number and informed about the cost of the service associated with each numbering.

The communication initiated by the customer via telephone must be effectively attended by the company as soon as possible, within the technical and human means available to the customer service. A communication initiated by telephone shall not be considered to have been effectively attended when said attention does not allow the customer to state the reason for the communication and request personalized attention by an operator.

In any case, the forwarding, by any means, of a toll-free telephone to numbers that entail a cost for the customer is prohibited.

In the case of persons with hearing disability, said telephone channel shall be accessible and must be complemented with adequate mechanisms that guarantee proper communication with the affected person.

Said entities may, either individually or grouped by branches of activity, geographic proximity, volume of business or any other criterion, designate a Customer Defender, who must be an entity or independent expert of recognized prestige, and who shall be responsible for attending to and resolving the types of claims submitted to their decision within the framework of what is provided in their operating regulations, as well as promoting compliance with the regulations on transparency and customer protection and good financial practices and uses.

2. The decision of the Customer Defender favorable to the claim shall bind the entity. This binding shall not be an obstacle to the fullness of judicial protection, to the recourse to other conflict resolution mechanisms or to administrative protection.

3. Entities must adopt the necessary measures to separate the customer service department or service from the other commercial or operational services of the organization, so as to guarantee that it autonomously makes its decisions regarding the scope of its activity and, likewise, to avoid conflicts of interest, allowing customers to perceive this service as one whose purpose is to facilitate information or resolve complaints or claims. In adopting said measures, the criteria set by the supervisory guides of the corresponding supervisory authorities must be taken into account.

Without prejudice to the provisions of the preceding paragraph, entities shall adopt the appropriate measures to guarantee that the procedures provided for the transmission of information required by the customer service department or service to the other services of the organization respond to the principles of speed, security, effectiveness and coordination.

In no case shall the customer service departments of the entities take advantage of the filing of complaints or claims to offer goods, services or commercial offers, unless these were directly and clearly related to the resolution of the complaint or claim, and implied, in any case, an improvement in the conditions of provision of the service or the price.

4. The entities shall ensure that their customer service departments or services are equipped with the adequate human, material, technical and organizational means for the fulfillment of their functions.

In particular, they shall adopt the necessary actions so that the personnel serving in said departments have specialized training and instruction, depending on the sector or activity, that guarantees effectiveness in the management they carry out, including specific prior training in attention to vulnerable consumers and, especially, to persons with disabilities or of advanced age, providing the continuous training and instruction necessary to adapt their knowledge of the activity to technological variations and market needs.

5. The entities shall make available to their customers, in each and every one of the offices open to the public, as well as on their websites, in a specific section that is easily identifiable, the following information about the customer service service:

a) The existence of said customer service department and, where applicable, of a customer ombudsman, indicating their postal and electronic address.

b) The obligation on the part of the entity to attend to and resolve the complaints and claims presented by its customers, within a period of one month from their presentation. In the cases of claims relating to payment services, the resolution period regime provided for in article 69 of Real Decreto-ley 19/2018, of 23 November, shall apply.

c) The communication channels available with the customer service department, as well as the mechanisms enabled to ensure the registration and record of the complaint or claim presented, and of its content.

d) Mechanisms to facilitate the monitoring of the processing of the complaints and claims presented by the interested party.

e) Means chosen to communicate the resolution of the complaints and claims, which must be done in writing, either on paper or by computer, electronic or telematic means.

f) The operating regulations of the customer service service and, where applicable, of the customer ombudsman.

g) References to the regulations on transparency and protection of customers of financial services.

h) Hours of the customer service service.

6. In the interest of proportionality, the requirements provided in relation to customer service departments shall be adapted by regulation for their flexible application by Credit Cooperatives and Savings Banks.

Article 29 bis. Procedure for the presentation, processing and resolution of complaints and claims.

1. This procedure shall be required in the processing of complaints and claims whose knowledge is attributed to the customer ombudsman, in accordance with the provisions of each operating regulation, and provided that they have not been previously resolved by the office or service subject to the claim or by the customer service department or service.

2. Customers who present complaints and claims whose knowledge is attributed to the customer service department or service may request that they be processed in accordance with the provisions of this section.

3. In any case, the entities listed in the first paragraph of article 29 shall have a period of one month, or, in the case of payment services, the resolution period provided for in article 69 of Real Decreto-ley 19/2018, of 23 November, counted from the presentation before them of the complaint or claim, to issue a ruling.

Article 29 ter. Form, content and place of presentation of complaints and claims.

1. The presentation of complaints and claims may be made, in person or through representation, on paper or by computer, electronic or telematic means, provided that these allow the reading, printing and conservation of the documents, and complaints or claims may not be presented by telephone.

The use of computer, electronic or telematic means must comply with the requirements provided for in Ley 6/2020, of 11 November, regulating certain aspects of electronic trust services.

2. The presentation of complaints and claims may be made in Spanish, as well as in any of the co-official languages when the customer service service is directed to customers located in autonomous communities that have co-official languages.

3. The procedure shall be initiated by the presentation of a document stating:

a) Name, surnames and address of the interested party and, where applicable, of the person representing them, duly accredited; national identity document number for natural persons and data referring to the public registry for legal persons.

b) Reason for the complaint or claim, with clear specification of the issues on which a ruling is requested.

c) Office or offices, department or service where the facts object of the complaint or claim occurred.

d) That the claimant is not aware that the matter object of the complaint or claim is being substantiated through an administrative, arbitral or judicial procedure.

e) Place, date and signature.

The claimant must provide, together with the above document, the documentary evidence in their possession on which their complaint or claim is based.

4. Complaints and claims may be submitted to the customer service departments or services, to the customer ombudsman, where applicable, at any office open to the public of the entity, through any application or online service whose purpose is the provision of customer services, as well as at the email address that each entity must enable for this purpose.

Article 29 quater. Admission for processing.

1. Once the complaint or claim is received by the entity, it shall be forwarded to the customer service department or service, which, when appropriate in accordance with the operating regulations, shall in turn forward it to the customer ombudsman. If the complaint or claim had been submitted to the customer ombudsman and it is not a matter within its competence, it shall be forwarded by the latter to the customer service department or service. The complainant shall be informed about the competent body to hear their complaint or claim.

The provisions of the preceding paragraph shall be understood without prejudice to the fact that the computation of the maximum resolution period shall begin from the submission of the complaint or claim to the affected entities.

In any case, written acknowledgment of receipt shall be given, on paper or on any other durable medium, and a record shall be kept of the content, time and date of submission for the purposes of computing said period. The delivery of the receipt shall be made through the same channel through which the complaint or claim was submitted or through the one that the person initiating the communication had chosen from among those legally possible. The entity shall ensure that it has the necessary data for the delivery of the receipt, requesting them from the interested party when they have not been provided directly by the latter.

For this purpose, an identifying code shall be assigned to any complaint or claim filed by the customer, which shall be communicated to the customer. Said code shall allow the customer to track the processing status of their claim or complaint.

Once the complaint or claim is received by the competent body for its processing, a file shall be opened.

The complaint or claim shall be submitted only once by the interested party, and its reiteration before different bodies of the entity may not be required.

2. If the identity of the complainant is not sufficiently accredited, or if the facts subject to the complaint or claim cannot be clearly established, the signatory shall be required to complete the documentation submitted within a period of ten calendar days, with the warning that if they fail to do so, the complaint or claim shall be filed without further procedure.

The period used by the complainant to rectify the errors referred to in the preceding paragraph shall interrupt the computation of the period provided for in Article 29 bis.

3. The admission for processing of complaints and claims may only be rejected in the following cases:

a) When essential data for processing that cannot be rectified are omitted.

b) When attempts are made to process as a complaint or claim other appeals or actions whose knowledge falls within the competence of administrative, arbitration or judicial bodies, or when the same is pending resolution or litigation or the matter has already been resolved in those instances.

c) When the facts, reasons and request in which the issues subject to the complaint or claim are specified do not refer to specific operations.

d) When complaints and claims are filed that reiterate other previous resolved ones, submitted by the same customer in relation to the same facts.

e) When the period for the submission of complaints and claims established by the operating regulations has elapsed.

f) When the statute of limitations period for actions or rights has elapsed that, in accordance with the provisions of the contracts or the applicable regulatory regulations, may be exercised by the person submitting or on whose behalf the claim or complaint in question is submitted, and in any case when a period of 5 years has elapsed since the occurrence of the facts without the claim or complaint having been submitted.

When knowledge is had of the simultaneous processing of a complaint or claim and an administrative, arbitration or judicial proceeding on the same matter, it shall refrain from processing the former.

4. When the complaint or claim is deemed inadmissible for processing, for any of the indicated causes, it shall be made known to the interested party by means of a reasoned decision, giving them a period of ten calendar days to present their allegations. When the interested party has responded and the grounds for inadmissibility remain, the final decision adopted shall be communicated to them. Said ten-day period shall interrupt the computation of the maximum resolution period set out in Article 29 bis.

Article 29 quinquies. Processing.

1. The customer service departments or services and the customer ombudsmen may, in the course of processing the files, gather from both the complainant and the different departments and services of the affected entity, as much data, clarifications, reports or evidence as they consider pertinent to adopt their decision.

2. In the event that the matter is known to the customer ombudsman, a period shall be established, the duration of which shall be fixed in the operating regulations, for the affected entity to present its allegations.

Article 29 sexies. Acquiescence and withdrawal.

1. If, in view of the complaint or claim, the entity rectifies its situation with the complainant to the latter's satisfaction, it shall communicate this to the competent body and justify it documentary, unless there is an express withdrawal by the interested party. In such cases, the complaint or claim shall be filed without further procedure.

2. Interested parties may withdraw their complaints and claims at any time. The withdrawal shall result in the immediate termination of the procedure as regards the relationship with the interested party. However, the customer ombudsman may agree to continue it within the framework of its function of promoting compliance with the transparency and customer protection regulations and good financial practices and uses.

Article 29 septies. Completion and notification.

1. The file must be completed within a maximum period of one month, or within the resolution period provided for in Article 69 of Royal Decree-Law 19/2018, of 23 November, from the date on which the complaint or claim was submitted by the customer to the entity.

In cases where it is not possible to resolve the complaints or claims within the indicated periods, for reasons not attributable to the company that is part of the contractual relationship, the interested person shall be informed of the measures adopted for their resolution within that same period.

2. The decision shall always be duly reasoned and shall contain clear conclusions on the request raised in each complaint or claim, answering all the questions raised by the customer and based on the contractual clauses, the applicable transparency and customer protection rules, as well as good financial practices and uses.

In the event that the decision departs from the criteria expressed in similar previous files, the reasons justifying it must be provided.

If it is contrary to the customer's claims, the customer shall be expressly informed in the same decision of the possibility open to the customer of resorting to the complaints services of the Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensiones, as well as how to do so.

3. The decision shall be notified to the interested parties within ten calendar days from its date, in writing or on any other durable medium, through the channel expressly indicated for doing so in the initial communication or, if not indicated, through the one used for the submission of the claim or complaint.

4. The notification shall be made in the same language in which the complaint and claim was submitted by the customer.

Article 30. Submission of claims, complaints and queries to the Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensiones.

1. The complaints services of the Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensiones, until the creation of the entity referred to in the first additional provision of Law 7/2017, of 2 November, transposing into Spanish law Directive 2013/11/EU of the European Parliament and of the Council, of 21 May 2013, on alternative dispute resolution for consumer disputes, shall handle the complaints and claims submitted by users of financial services that are related to their legally recognised interests and rights and that derive from alleged breaches by the complained-of entities of the transparency and customer protection regulations or of good financial practices and uses.

The complaints services shall also handle the queries submitted by users of financial services regarding the rules applicable to transparency and customer protection, as well as the legal channels available for the exercise of their rights.

The organisation and operation of the complaints services shall conform to the principles of independence, transparency, adversarial procedure, effectiveness, legality, freedom and representation.

The complaints services shall operate under the one-stop-shop principle and must forward to the competent body any claims that are not within their competence.

The complaints services shall inform the corresponding supervisory services when they find indications of serious or repeated breaches of the transparency and customer protection rules or of good financial practices and uses by the same entity.

2. The complaints services of the Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensiones shall resolve the complaints and claims referred to in the previous paragraph by means of reasoned reports, which shall in no case have the status of an appealable administrative act.

3. The holder of the Ministry of Economy, Commerce and Enterprise shall develop the procedure for lodging complaints with the complaints services of the Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensions, which shall be subject to the following rules:

a) For the admission and processing of complaints, it shall be essential to prove that they have been previously submitted in writing to the customer service department or service or, where applicable, to the Customer Ombudsman of the entity against which the complaint is made. They shall acknowledge receipt in writing of the complaints submitted to them and shall likewise resolve or reject them in writing and with reasons. Furthermore, the complainant shall prove that a period of one month has elapsed since the date of submission of the complaint without it having been resolved, or that the admission of the complaint has been rejected or their request dismissed.

b) Upon receipt of the complaint by the complaints service competent by reason of subject matter, the existence of the circumstances provided for in the preceding paragraphs shall be verified and, if the necessary requirements are met, a file shall be opened for each complaint, in which all actions relating to it shall be included; otherwise, the complainant shall be required to complete the information within a period of ten calendar days, with a warning that failure to do so shall result in the complaint being deemed withdrawn.

The maximum period for resolving the file shall be 90 calendar days from the date of submission of the complaint or, where applicable, from the date on which it is recorded on a durable medium that the complete and necessary documentation for processing the procedure has been received.

c) Once the corresponding report has been drawn up, and if it is unfavourable to the entity complained against, the latter shall be obliged to inform the competent complaints service whether it has proceeded to voluntary rectification within a period of no more than one month from its notification.

4. The Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensions shall publish annually on their website a report on their respective complaints services, which shall include, at a minimum, a statistical summary of the consultations and complaints handled and the criteria maintained by said services, in relation to the subject matter of the complaints submitted, as well as the entities affected, indicating where applicable whether the report is favourable or unfavourable.

Article 31. Empowerment for regulatory development.

The holder of the Ministry of Economy, Commerce and Enterprise shall establish the requirements to be observed by the customer service department or service and the Customer Ombudsman, as well as the procedure to which the resolution of complaints shall be subject, and may for that purpose require, where applicable, the appropriate measures to separate their members from the other commercial or operational services of entities, subject the rules of operation of the service to administrative verification or any other characteristics of the service, and require the inclusion, in an annual report of the entities, of a summary of the most outstanding aspects of the actions of the customer service department or service and the Customer Ombudsman during the corresponding financial year.

Section 2.ª Provisions relating to motor vehicle civil liability insurance

Article 32. Amendments to Law 30/1995, of 8 November, on the Regulation and Supervision of Private Insurance, as a consequence of the establishment of new mechanisms for the processing and settlement of claims in the State of residence of the injured party.

(Repealed)

Article 33. Amendments to the consolidated text of the Law on Civil Liability and Insurance in Motor Vehicle Traffic, approved by Decree 632/1968, of 21 March, as a consequence of the establishment of new mechanisms for the processing and settlement of claims in the State of residence of the injured party.

(Repealed)

Article 34. Amendments to the Legal Statute of the Consorcio de Compensación de Seguros as a consequence of the establishment of new mechanisms for the processing and settlement of claims in the State of residence of the injured party.

(Repealed)

Section 3.ª Other protective rules

Article 35. Infringements for deficiencies in administrative organisation and internal control.

First. The following amendments are introduced to Law 26/1988, of 29 July, on the Discipline and Intervention of Credit Institutions:

One. A new paragraph n) is added to Article 4 of Law 26/1988, of 29 July, on the Discipline and Intervention of Credit Institutions, with the following wording:

“n) Presenting, by the credit institution or the consolidable group to which it belongs, deficiencies in administrative and accounting organisation, or in internal control procedures, including those relating to risk management, where such deficiencies endanger the solvency or viability of the entity.”

Two. A new paragraph r) is added to Article 5 of Law 26/1988, of 29 July, on the Discipline and Intervention of Credit Institutions, with the following wording:

“r) Presenting, by the credit institution or the consolidable group to which it belongs, deficiencies in administrative and accounting organisation, or in internal control procedures, including those relating to risk management, once the period granted for that purpose by the competent authorities for their rectification has elapsed, and provided that this does not constitute a very serious infringement in accordance with the provisions of the preceding article.”

Second. The following amendments are made to Law 24/1988, of 28 July, on the Securities Market:

One. A new paragraph e) bis is added to Article 99 of Law 24/1988, of 28 July, on the Securities Market, with the following wording:

«e) bis. To report deficiencies in the administrative and accounting organisation or in the internal control procedures, including those relating to risk management, of entities subject to the prudential supervision of the National Securities Market Commission, where such deficiencies endanger the solvency or viability of the entity.»

Two. A new paragraph c) bis is added to Article 100 of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«c) bis. To report deficiencies in the administrative and accounting organisation or in the internal control procedures, including those relating to risk management, of entities subject to the prudential supervision of the National Securities Market Commission, once the period granted for their rectification by the competent authorities has elapsed and provided that this does not constitute a very serious infringement».

Third. (Repealed)

Article 36. Regime for currency exchange establishments.

First. The second paragraph of section 1 of Article 178 of Law 13/1996, of 30 December, on Tax, Administrative and Social Order Measures, is amended to read as follows:

«Notwithstanding the foregoing, the professional activity carried out by natural or legal persons other than credit institutions, described in the following section, shall be subject to prior administrative authorisation from the Bank of Spain.»

Second. The second paragraph of section 2 of Article 178 of Law 13/1996, of 30 December, on Tax, Administrative and Social Order Measures, is amended to read as follows:

«To obtain and retain the aforementioned authorisation, the holders or persons responsible for the activity must have recognised commercial and professional honourability and, in the case of an activity that includes the management of transfers with the outside world, the suitability of the shareholders who directly or indirectly hold holdings in the capital or voting rights of the establishment representing a percentage equal to or greater than 5 per cent thereof must be considered adequate, in accordance with the terms to be established by regulation, in order to guarantee sound and prudent management of the establishment.»

Third. The last paragraph of section 2 of Article 178 of Law 13/1996, of 30 December, on Tax, Administrative and Social Order Measures, is amended and two paragraphs are then inserted, which shall read as follows:

«In addition, regulations shall establish the requirement of special corporate requirements for establishments that carry out operations involving the sale of foreign banknotes or travellers' cheques or the management of international transfers, as well as the measures necessary to guarantee the maintenance of all the requirements required to obtain authorisation.

The Bank of Spain shall be responsible for the supervision and control of currency exchange establishments authorised for the sale of foreign banknotes or travellers' cheques or the management of international transfers. In the case of establishments authorised solely to carry out purchase operations, the monitoring and control of compliance with the provisions relating to the transparency regime for operations and information to customers regarding them shall be the responsibility of the Administration that has been assigned the powers relating to the defence of consumers and users.

The foregoing is without prejudice to the powers attributed in matters of money laundering and to the powers of the Bank of Spain to require from all establishments registered in its registers the information, including statistical information, that it considers necessary for their proper management.»

Fourth. The following new wording is given to the first paragraph of section three of article 178 of Law 13/1996, of 30 December, on Fiscal, Administrative and Social Order Measures:

«The sanctioning regime applicable to the holders of currency exchange establishments, as well as to their administrators and directors, shall be that established in Title I of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, with the adaptations established by regulation according to the special nature of their functions, as well as the sanctioning procedure established for subjects participating in the financial markets. In the event that the holder of the exchange establishment is authorised for the management of transfers with abroad, the regime provided for in this paragraph shall also extend to natural or legal persons who directly or indirectly hold a holding in its capital or in the voting rights representing a percentage equal to or greater than 10 per 100 thereof.»

Fifth. The following new wording is given to the third paragraph of section three of article 178 of Law 13/1996, of 30 December, on Fiscal, Administrative and Social Order Measures:

«Without prejudice to the foregoing, the Bank of Spain shall be competent to conduct the relevant proceedings and to impose sanctions, whatever their degree.»

Sixth. The following new wording is given to section 4 of article 178 of Law 13/1996, of 30 December, on Fiscal, Administrative and Social Order Measures:

«Natural or legal persons, other than credit institutions, who, without having obtained the required authorisation or being registered in the corresponding registers of the Bank of Spain, carry out with the public on a professional basis operations of foreign currency exchange, or offer to the public the carrying out thereof, may be sanctioned and required by the Bank of Spain, as provided in article 29 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, and the tenth additional provision of said Law shall apply to them, all with the adaptations established by regulation.»

Seventh. A new section 4 bis is introduced in article 178 of Law 13/1996, of 30 December, on Fiscal, Administrative and Social Order Measures:

«4 bis. Currency exchange establishments authorized for the management of transfers with abroad must in any case submit to the audit of accounts provided for in article 1.2 of Law 19/1988, of 12 July, on Auditing of Accounts.»

Eighth. Section five of article 178 of Law 13/1996, of 30 December, on Fiscal, Administrative and Social Order Measures, shall have the following wording:

«Five. Without prejudice to the specific authorizations contained in this article, the Government is empowered, on a general basis, to develop its provisions by regulating, to that end, the regime applicable to the activity of foreign currency exchange in Spain and, where appropriate, abroad, of holders authorized in Spain. In particular, in the case of holders authorized for the management of transfers with abroad, said regulatory regime may establish prior controls on the direct or indirect acquisition of holdings in capital or voting rights representing a percentage equal to or greater than ten percent thereof, minimum capital and own funds requirements as well as other appropriate measures to strengthen the solvency and liquidity of such holders and protect the interests of their clients ; said measures may consist, among others, of mandatory investment in low-risk and highly liquid assets as well as the immobilization of certain assets as collateral for the fulfillment of obligations arising from the exercise of their activity.

Within the framework of the regulations on the prevention of money laundering, the Minister of Economy is empowered to regulate, by Order, the following aspects of the legal regime of currency exchange establishments and their agents:

a) Maximum amounts of currency exchange or transfer management operations that they may carry out.

b) Requirements and models in which customer information is materialized in the transactions in which they intervene.

c) Development of automated systems and forms of control of risky transactions.

d) Establishment of external audit systems on the correct application of measures for the prevention of money laundering.»

Article 37. Transparency of related-party transactions.

The following paragraph is added to article 35 of Law 24/1988, of 28 July, on the Securities Market:

«Issuing companies of securities admitted to trading on any official secondary market must necessarily include in the semi-annual information referred to in the second paragraph of this article, quantified information on all transactions carried out by the company with related parties in the form determined by the Ministry of Economy or, with its express authorization, the National Securities Market Commission, indicating the type and nature of the transactions carried out and the related parties that have participated in them. However, the Ministry of Economy shall determine the transactions on which individualized information must be provided, in the event that they are significant due to their amount or relevant for an adequate understanding of the company's financial statements. Likewise, the Ministry of Economy shall determine by regulation or, with its express authorization, the National Securities Market Commission, the related-party transactions on which information need not be provided, based on legitimate cause.»

Article 38. Regime for the communication of relevant information and the use of privileged information.

First. Article 78 of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall have the following wording:

«Article 78.

1. Investment services companies, credit institutions, collective investment institutions, issuers, investment analysts in securities and financial instruments and, in general, all persons or entities that directly or indirectly carry out activities related to the securities markets, must respect the following rules of conduct:

a) The rules of conduct contained in this Title.

b) The codes of conduct that, in development of the rules referred to in the previous paragraph a), are approved by the Government or, with its express authorization, the Minister of Economy, 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, with his express authorization, the National Securities Market Commission may establish that the internal rules of conduct mentioned in paragraph c) of the previous section contain specific measures aimed at guaranteeing compliance with the provisions of the following articles of this Title.»

Second. A new wording is given to article 80 of Law 24/1988, of 28 July, on the Securities Market, with the following literal tenor:

«Article 80.

In no case shall the persons or entities referred to in the previous article:

a) Carry out practices that have as their object or produce the effect of causing an artificial evolution of quotations.

b) Multiply transactions unnecessarily and without benefit for the client.

c) Attribute to themselves one or several securities when they have clients who have requested them under identical or better conditions.

d) Prioritize the sale of their own securities over those of their clients, when the latter have ordered the sale of the same class of security under identical or better conditions.»

Third. A new wording is given to article 81 of Law 24/1988, of 28 July, on the Securities Market, with the following literal tenor:

«Article 81.

1. Inside information shall be considered any information of a specific 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 price on an organized market or 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 an organized market or trading system has been submitted.

In relation to financial instruments derived from raw materials, inside information shall be considered any information of a specific nature, which has not been made public, and which refers directly or indirectly to one or several of those derived 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 possesses 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 preceding 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 constitutes, in itself, the inside information are excepted, as well as operations carried out in compliance with an obligation, already due, 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 the applicable regulations.

b) Communicating such information to third parties, except in the normal exercise of their work, profession or position.

c) Recommending 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 paragraph apply to any person who possesses inside information when such person knows, or should have known, that it is this class of information.

3. The prohibitions established in the preceding paragraph 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. They shall also not apply to operations on own shares within the framework of buyback programs carried out by issuers, nor to the stabilization 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, they 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 financial markets shall disseminate them correctly and transparently.

6. The Minister of Economy and, with their express authorization, 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."

Fourth. Article 82 of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall read as follows:

"Article 82.

1. Relevant information shall be considered all that whose knowledge could affect a reasonably investor to acquire or transmit securities or financial instruments and therefore could influence in a sensitive manner their price on a secondary market.

2. Issuers of securities are obliged to disseminate immediately to the market, by communication to the National Securities Market Commission, all relevant information.

3. The communication to the National Securities Market Commission must be made prior to 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 required by the nature of the information, quantified, so that it does not induce confusion or deception. Issuers of securities shall also disseminate this information on their internet pages.

4. When the issuer considers that the information should not be made public because it affects its legitimate interests, it shall immediately inform the National Securities Market Commission, which may exempt it from such obligation in accordance with the provisions of article 91 of this Law.

5. The Minister of Economy and, with his express authorization, the National Securities Market Commission, 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.»

Fifth. Article 83 of Law 24/1988, of 28 July, on the Securities Market, shall have the following wording:

«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 its decisions autonomously 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 held 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 National Securities Market Commission, 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.»

Sixth. A new article 83 bis is incorporated into Law 24/1988, of 28 July, on the Securities Market, with the following literal wording:

«Article 83 bis.

1. Issuers of securities, during the phases of study or negotiation of any type of legal or financial operation that may appreciably 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 of the prohibition of its use.

d) Establish security measures for the custody, archiving, access, reproduction and distribution of the information.

e) Monitor the market evolution of the securities issued by them and the news that professional disseminators of economic information and the media disseminate and that could affect them.

f) In the event that an abnormal evolution of the contracted volumes or of the negotiated prices occurs 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 found 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 carrying out of operations on their own shares or financial instruments referenced to them to measures that prevent investment or divestment decisions from being affected by the knowledge of inside information.

3. Issuers also have the obligation to subject the members of their administrative body, the directors as they are defined by regulation, and the personnel integrated in the areas related to the activities of the securities market to measures that prevent the use of inside information on the securities and financial instruments issued by the entity itself or others of its group.

4. The Minister of Economy and, with his express authorization, the National Securities Market Commission, may establish mandatory measures in development of this article. In particular, they shall determine the form and deadlines in which the administrators and directors, and those persons who have a close relationship with them, must inform the National Securities Market Commission and the general public about the acquisitions of securities and financial instruments, issued by the entity in which they hold such positions or referenced to them.»

Seventh. A new section 8 is introduced in article 84 of Law 24/1988, of the Securities Market, with the following wording:

«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 for acts carried out in Spanish territory or outside it that refer to negotiable securities or financial instruments admitted to trading on a regulated market located in Spanish territory or for which an application for admission to trading in said territory has been submitted, but also with respect to acts carried out in Spanish territory in relation to negotiable securities and financial instruments admitted to trading on a regulated market in a Member State of the European Union or for which an application for admission to trading has been submitted on a market located in any Member State of the Union.»

Eighth. Article 89 of Law 24/1988, of 28 July, on the Securities Market, is amended, and shall have the following wording:

«Article 89.

With the exceptions provided for in the following article, the National Securities Market Commission may order issuers of securities and any entity related to the securities markets to immediately bring to the attention of the public relevant facts or information that may affect the trading thereof, and may, failing that, do so itself.»

Ninth. New wording is given to paragraphs ñ) and o) of article 99 of Law 24/1988, of 28 July, on the Securities Market, which shall read as follows:

«ñ) The failure, by issuers of securities, to comply with the obligation established in article 82 when this results in serious harm to the market, the failure to comply with the requirements of the National Securities Market Commission formulated under article 89, as well as the supply to the National Securities Market Commission of inaccurate or untruthful data, or the provision to it of misleading information or information that maliciously omits relevant aspects or data.

o) The failure to comply with the obligations established in article 81.2 of this Law, when the volume of the resources, securities or financial instruments used in the commission of the infringement is relevant or the infringer has had knowledge of the information by virtue of being a member of the administrative, management or control bodies of the issuer, by the exercise of their profession, work or duties, or appears or should have appeared in the registers referred to in articles 83 and 83 bis of this Law.»

Tenth. The following wording is given to paragraph x) of article 100 of Law 24/1988, of 28 July, on the Securities Market:

«x) The failure to comply with the provisions of section 2 of article 81 of this Law when it does not constitute a very serious infringement.»

Article 39. Manipulation of quotations.

First. An article 83 ter is added to Law 24/1988, of 28 July, on the Securities Market, with the following content:

«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) Operations 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 has carried out the operations or issued the orders demonstrates the legitimacy of their reasons and that these conform to accepted market practices in the regulated market in question.

b) Operations 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 should 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 operations 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 section.

3. The Minister of Economy and, with their express authorisation, 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.»

Second. The following wording is given to paragraph i) of article 99 of Law 24/1988, of 28 July, on the Securities Market:

«i) The failure to comply with the provisions of article 83 ter of this Law, when it produces a significant alteration of the quotation.»

Third. The wording of paragraph w) of Article 100 of Law 24/1988, of 28 July, on the Securities Market, is amended to read as follows:

«w) The breach of the provisions of Article 83 ter of this Law, when it does not constitute a very serious infringement in accordance with the provisions of the preceding Article.»

Article 40. Powers of the National Securities Market Commission for the protection of investors.

New wording is given to subsection 7 of Article 64 of Law 24/1988, of 28 July, on the Securities Market, as follows:

«7. Persons or entities that fail to comply with the provisions of the two preceding subsections shall be sanctioned in accordance with the provisions of Title VIII of this Law. If required to cease immediately the use of the denominations or the offering or carrying out of the activities, they continue to use them or carry them out, they shall be sanctioned with coercive fines of up to three hundred thousand euros, which may be repeated on the occasion of subsequent requirements.

The National Securities Market Commission shall be competent to formulate the requirements and to impose the fines referred to in the preceding paragraph, and it may also issue public warnings regarding the existence of this conduct. The requirements shall be formulated 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 subsection are understood without prejudice to the other liabilities, including criminal, that may be enforceable.»

Article 41. Amendment of the legal regime of collective investment institutions.

First. The first paragraph of subsection 1 and subsection 2 of Article 8 of Law 46/1984, of 26 December, regulating collective investment institutions, are amended to read as follows:

«1. Every collective investment institution, in order to commence its activity, must obtain prior authorization of the incorporation project from the National Securities Market Commission, be incorporated as a public limited company or investment fund, as appropriate, and be registered in the Register of the National Securities Market Commission corresponding to the Institution.»

«2. In the Commercial Register, in accordance with the Commercial Code, the deeds of incorporation of commercial companies that have the status of collective investment institution or perform functions of managers or depositaries shall be registered. The registration in the Commercial Register of the deeds of incorporation of funds shall be optional.»

Second. The first paragraph of subsection 3 of Article 8 of Law 46/1984, of 26 December, regulating collective investment institutions, is amended to read as follows:

«3. The managers of collective investment institutions shall acquire such status through prior authorization of the Minister of Economy, on a proposal from the National Securities Market Commission. The depositaries of collective investment institutions shall acquire such status through prior authorization of the National Securities Market Commission. In both cases, subsequent registration in the corresponding administrative register of the National Securities Market Commission is required. This registration shall be made in accordance with the provisions of the Regulation implementing this Law.»

Third. The first paragraph of subsection 3 of Article 17 of Law 46/1984, of 26 December, regulating collective investment institutions, is amended to read as follows:

«The management company and the depositary may be authorized before the constitution of the fund and in the manner determined by regulation, to carry out a public subscription of units.»

Fourth. The second subsection of Article 23 bis of Law 46/1984, of 26 December, regulating Collective Investment Institutions, is amended to read as follows:

«Investment funds may merge either through absorption by an existing fund, or through the extinction of each of them and the transfer in block of the patrimony to a new fund.

The initiation of the procedure shall require the prior agreement of the management company and the depositary of the funds that are to merge, which, together with the merger project, shall be submitted to the National Securities Market Commission for authorization. The authorization of the merger process shall be considered a relevant fact and must be published in the “Boletín Oficial del Estado” and in two newspapers of national scope; likewise, the authorization must be communicated to the participants of all affected funds, together with the merger project, within ten days following its notification, who may, within one month, opt for the redemption of their units without commission or redemption discount or any bank charge, at the net asset value of the day on which said period ends determined in accordance with Article 20.2.

After one month from the date of the announcements or from the sending of the individualized notification, if the latter is later, the management company and the depositary of the funds shall execute the merger by granting the public deed and its registration in the appropriate Registers. The exchange ratio shall be determined on the basis of the net asset values and number of units in circulation at the close of the day prior to the granting of the deed. The financial statements incorporated into it may be approved by a duly authorized person of the management company and the depositary.

The minimum content of the fund merger project shall be developed by regulation.»

Fifth. The following final clause is added to Article 27.3, first paragraph, of Law 46/1984, of 26 December, regulating collective investment institutions:

"...provided that they hold the status of participating entity in the clearing, settlement and registration systems in the different Spanish markets."

Sixth. The following final clause is added to the last paragraph of Article 27.3 of Law 46/1984, of 26 December, regulating Collective Investment Institutions:

"... and the requirements that must be met by entities that carry out the deposit of foreign securities of collective investment institutions."

Seventh. A second paragraph is introduced in section 2 of Article 28 of Law 46/1984, of 26 December, regulating collective investment institutions, which shall have the following wording:

"Once the bankruptcy of a depositary entity of securities of any collective investment institution has been declared by a court or the request for suspension of payments has been admitted for processing, the National Securities Market Commission may immediately and at no cost to the institution order the transfer of the foreign securities, including those deposited with third entities in the name of the depositary on behalf of the collective investment institutions it manages, to another entity authorized to carry out this activity. 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 the insolvency proceedings shall not prevent the cash proceeds from the exercise of its economic rights or from their sale from being made available to the institution holding the securities."

Article 42. Extension of the requirements of business and professional integrity of the administrators and general managers and equivalent of investment services companies to their attorneys with general powers of representation.

First. A new paragraph i) is incorporated in section 1 of Article 70 of Law 24/1988, of 28 July, on the Securities Market, which shall have the following content:

"i) That all members of its Board of Directors and general managers and equivalent have a recognized business and professional integrity. With respect to attorneys who do not restrict the scope of their representation to specific areas or matters unrelated to the activity that constitutes the object of the investment services companies, the Directors shall verify, prior to the granting of the power, the concurrence of the requirement of business and professional integrity in the attorney and shall revoke the powers granted when this requirement disappears."

Second. A paragraph g) bis is created in Article 100 of Law 24/1988, of 28 July, on the Securities Market, which shall have the following content:

"g) bis. The non-observance of the provisions of paragraph i) of section 1 of Article 70 of this Law."

Third. A last paragraph is introduced in Article 103 of Law 24/1988, of 28 July, on the Securities Market, which shall have the following content:

"The commission of the infringement provided for in paragraph g) bis of Article 100 shall, in all cases, entail the cancellation of the registration of the representative or attorney in the registers of the National Securities Market Commission."

Article 43. Modification of the sanctioning regime of credit institutions and other aspects relating to these entities.

First. The wording of the introductory paragraph of paragraph a) of Article 4 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, is modified, and shall become the following:

"a) The carrying out of the acts listed below, without authorization when it is mandatory, without observing the basic conditions set forth therein, or obtaining it by means of false declarations or by another irregular means: (...)"

Second. The wording of paragraph a) of Article 5 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, is modified, and paragraphs s) and t) are introduced therein:

"a) The carrying out of acts or operations without authorization when it is mandatory, without observing the basic conditions thereof, or obtaining it by means of false declarations or by another irregular means, except in cases where this constitutes the commission of a very serious infringement in accordance with the provisions of the preceding article."

"s) The transfer or reduction of a significant shareholding in breach of the provisions of Title VI of this Law."

"t) The effective administration or direction of credit institutions by persons who do not legally hold a position of such nature therein."

Third. Article 9 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, is modified, and shall have the following literal wording:

"Article 9.

For the commission of very serious infringements, one or more of the following sanctions shall be imposed on the infringing credit institution:

a) Fine of up to 1 per 100 of its own resources or up to 300,000 euros if that percentage is less than this figure.

b) Revocation of the entity's authorization. In the case of branches of credit institutions authorized in another Member State of the European Union, the sanction of revocation of the authorization shall be understood to be replaced by the prohibition of initiating new operations in Spanish territory.

c) Public reprimand with publication in the "Boletín Oficial del Estado"."

Fourth. Article 10 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, is modified, and shall become:

"Article 10.

For the commission of serious infringements, one or more of the following sanctions shall be imposed on the credit institution:

a) Fine of up to one-half of one percent of its own resources, or up to 150,000 euros if that percentage were less than this figure.

b) Public reprimand with publication in the "Boletín Oficial del Estado".»

Fifth. New wording is given to paragraph b) of article 11 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, which shall read as follows:

«b) Fine of up to 60,000 euros.»

Sixth. The wording of the first paragraph of section 1 of article 12 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, and of paragraphs a) and d) thereof, is amended, which shall read as follows:

«Regardless of the sanction that must be imposed on the infringing credit institution for the commission of very serious infringements, the following sanctions may be imposed on those who, holding administration positions, de facto or de jure, therein, are responsible for the infringement:

a) Fine on each of them of an amount not exceeding 150,000 euros.»

«d) Disqualification from holding administration or management positions in any credit institution or in the financial sector, with removal, where applicable, from the administration or management position held by the infringer in a credit institution, for a period not exceeding ten years.»

Seventh. The wording of the first paragraph of section 1 of article 13 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, and of paragraphs c) and d) thereof, is amended, which shall read as follows:

«Regardless of the sanction that must be imposed on the infringing credit institution for the commission of serious infringements, the following sanctions may be imposed on those who, holding administration positions, de facto or de jure, therein, are responsible for the infringement:

«c) Fine on each of them of an amount not exceeding 90,000 euros.»

«d) Disqualification from holding administration or management positions in any credit institution or in the financial sector, with removal, where applicable, from the administration or management position held by the infringer in a credit institution, for a period not exceeding one year.»

Eighth. New wording is given to section 1 of article 29 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions.

«1. Persons or entities that infringe the provisions of the preceding article shall be sanctioned with a fine of up to 150,000 euros. If required to cease immediately in the use of the denominations or in the carrying out of the activities, they continue to use them or carry them out, they shall be sanctioned with a fine of up to 300,000 euros, which may be repeated on the occasion of subsequent requirements.»

Ninth. A new section, which shall be 6, is introduced in article 43 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, with the following wording:

«6. The authorization granted in accordance with the provisions of this article shall expire if the authorized activities are not commenced within twelve months following the date of notification of the authorization, for reasons attributable to the interested party.»

Tenth. The following wording is given to paragraph c) of article 45 of the Law on Banking Organization, of 31 December 1946:

«c) For agreements of merger, absorption, or spin-off, as well as the global transfer of assets or liabilities in which a banking firm participates.»

Article 44. Updating of sanctions for the commission of infringements in matters of insurance.

(Repealed)

Article 45. Updating of sanctions for the commission of infringements in matters of securities.

First. The following articles of Law 24/1988, of 28 July, on the Securities Market, are amended:

One. A second paragraph is inserted following paragraph e) of article 103 of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«Sanctions for serious infringements shall be published in the "Boletín Oficial del Estado" once they become final in the administrative proceedings.»

Two. A second paragraph is inserted following paragraph d) of article 105 of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«In any case, the sanctions imposed in accordance with the provisions of the first paragraph shall be published in the "Boletín Oficial del Estado" once they become final in the administrative proceedings.»

Three. A second paragraph is added following paragraph c) of article 106 of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«In any case, the sanctions imposed in accordance with the provisions of the first paragraph shall be published in the "Boletín Oficial del Estado" once they become final in the administrative proceedings.»

Second. A paragraph k) is added to article 92 of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«k) A register in which, in accordance with the provisions of the third section of article 98, the sanctions imposed in the last five years for the commission of serious and very serious infringements on natural and legal persons subject to the scope of supervision, inspection and sanction provided for in Title VIII shall be recorded.»

Article 46. Organization and functions of the National Securities Market Commission.

One. Article 14 of Law 24/1988, of 28 July, on the Securities Market, is drafted as follows:

«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 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 complement 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 comply with 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 in 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 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 Regulations 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 with respect to 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 send it to the latter for submission 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 Regulations 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."

Two. A new wording is given to article 18 of Law 24/1988, of 28 July, with the following content:

"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) Approve the Circulars referred to in article 15 of this Law.

b) Approve the Internal Regulations of the National Securities Market Commission referred to in article 14 of this Law.

c) Approve the draft budget of the Commission.

d) Establish the Executive Committee, regulated in this article.

e) Appoint the managerial positions of the National Securities Market Commission, on the proposal of its President.

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

g) 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 the Executive Committee.

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

a) Hold the legal representation of the Commission.

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

c) Direct and coordinate the activities of all the managerial bodies of the National Securities Market Commission.

d) Authorize expenditures and order payments of the Commission.

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

f) Perform the superior leadership of all the personnel of the Commission.

g) Exercise the powers delegated to it by the Council expressly.

h) Exercise the other functions conferred on it by the applicable legal system.

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

a) Replace the Chairman in the event of vacancy, absence or illness.

b) Chair the Advisory Committee of the National Securities Market Commission referred to in Article 22 of this Law.

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

d) Exercise the functions delegated to it by the Chairman or the Council.

In the event 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 longest service in the post and, where length of service 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 Council 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) Prepare and study the matters to be submitted to the Council of the National Securities Market Commission.

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

c) Coordinate the actions of the different management bodies of the Commission, without prejudice to the powers of the Chairman.

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

e) Resolve the administrative authorisations attributed to it by delegation of the Council, as well as exercise those powers expressly delegated to it by the Council.»

Article 47. Audit Committee.

An eighteenth additional provision is added to Law 24/1988 of 28 July on the Regulation of the Securities Market, with the following wording:

«Eighteenth additional provision. Audit Committee.

“Issuer companies whose shares or bonds are admitted to trading on official secondary securities markets must have an Audit Committee, which must have a majority of non-executive directors appointed by the Board of Directors, its Chairman being chosen from among those non-executive directors, who must be replaced every four years and may be re-elected once a period of one year has elapsed since his or her departure. The number of members, the powers and the operating rules of that Committee shall be laid down in the articles of association and must favour independence in its operation. Its powers shall include, at a minimum, the following:

1. Report to the General Shareholders' Meeting on the matters raised there by shareholders in areas within its competence.

2. Propose to the Board of Directors for submission to the General Shareholders' Meeting the appointment of the external auditors referred to in Article 204 of the consolidated text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989 of 22 December.

3. Supervision of the internal audit services where such a body exists within the business organisation.

4. Knowledge of the financial information process and of the company's internal control systems.

5. Relations with the external auditors in order to receive information on those matters that may jeopardise their independence and any other matters relating to the process of carrying out the audit of accounts, as well as those other communications provided for in the legislation on auditing of accounts and in the technical auditing standards.”»

Article 48. Unified examination of the system of access to the Official Register of Auditors of Accounts.

(Repealed)

Article 49. Mandatory continuing education of auditors of accounts.

(Repealed)

Article 50. Amendment of Article 7 of Law 19/1988 of 12 July on Auditing of Accounts.

(Repealed)

Article 51. Introduction of new incompatibilities for auditors of accounts and of measures for their rotation.

(Repealed)

Article 52.

(Repealed)

Article 53. Reform of the sanctioning regime in matters of auditing of accounts.

(Repealed)

Article 54.

A subsection 5 is added to Article 65 of Law 24/1988 of 28 July on the Securities Market, with the following wording:

«5. The provisions of this Article are without prejudice to the provisions of Article 59.3 of this Law with respect to the special categories of members of the futures and options markets.»

Article 55. Strengthening of the rules of conduct in the securities market.

Three new paragraphs f), g), h) and a new paragraph are added to subsection 1 of Article 79 of Law 24/1988 of 28 July on the Securities Market, with the following content:

«f) Guarantee equal treatment among clients, avoiding giving priority to some over others when distributing recommendations and reports.

g) Refrain from taking positions on own account in securities or financial instruments on which a specific analysis is being carried out, from the time its conclusions become known until the recommendation or report prepared in that regard is disclosed.

The provisions of the preceding paragraph shall not apply where the taking of a position originates from commitments or rights acquired previously or from transactions hedging those commitments, provided that the taking of a position is not based on knowledge of the results of the report.

h) Record with clients any possible conflict of interest in relation to the advice or investment service provided.

These principles, insofar as they are compatible with the activity they carry out, shall also apply to persons or entities that carry out analysis of securities or financial instruments.»

Article 56. Review of the securities depository and administration activity.

A subsection 14 is added to Article 86 of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«14. The entities defined in accordance with Articles 62 and 65 of this Law that carry out the complementary activity provided for in paragraph a) of subsection 2 of Article 63 shall be obliged to submit half-yearly to the National Securities Market Commission a specific review report on said activity, prepared by an independent expert. The main purpose of said report shall be the verification of the balances and positions held by clients with the entity. The chapter of the report referring to the Public Debt Market in Book Entry Form must be submitted, with the same frequency, to the Bank of Spain.

The Minister of Economy is empowered, on a proposal from the National Securities Market Commission and following a report from the Bank of Spain and the Institute of Accounting and Auditing of Accounts, to develop the obligation provided for in the preceding paragraph.»

Article 57. Amendment of Article 75 of Law 24/1988, of 28 July, on the Securities Market.

Article 75 of Law 24/1988, of 28 July, on the Securities Market, shall have the following wording:

«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. Where the suspension is partial, it shall affect some activities or the scope with which they were authorised.»

Article 58. Amendment of the second additional provision of Law 37/1998, of 16 November, which in turn amended Law 24/1988, of 28 July, on the Securities Market.

A second paragraph is added to subsection 2 of the second additional provision of Law 37/1998, of 16 November, on the reform of Law 24/1988, of 28 July, on the Securities Market, with the following content:

«The competence to agree the suspension shall lie with the National Securities Market Commission.»

CHAPTER VI

Central Credit Register

Article 59. Nature and objectives of the Central Credit Register.

First. The Central Credit Register (hereinafter CIR) is a public service whose purpose is to collect from the reporting entities referred to in the first subsection of the following article data and information on credit risks, in order to provide reporting entities with the data necessary for the conduct of their business ; to enable the competent authorities for the prudential supervision of said entities to properly exercise their supervisory and inspection powers ; to contribute to the proper performance of the remaining functions legally assigned to the Bank of Spain.

Second. The administration and management of the CIR correspond to the Bank of Spain. The Bank of Spain shall be empowered to develop its operating rules in accordance with the provisions of this Law.

Third. There shall be no right of objection by the data subjects to the processing, carried out in accordance with the provisions of this Law, of their personal data.

Article 60. Reporting entities and content of the declarations.

First. The following shall be considered reporting entities for the purposes of this Law: the Bank of Spain, Spanish credit institutions, branches in Spain of foreign credit institutions, credit institutions operating under the free provision of services regime, the deposit guarantee fund, reciprocal guarantee and counter-guarantee companies, credit financial establishments, real estate lenders and such other entities as the Ministry of Economy and Business may determine, on a proposal from the Bank of Spain.

Second. Reporting entities shall be obliged to provide the CIR with the data necessary to identify the persons with whom credit risks are held, directly or indirectly, as well as the characteristics of said persons and risks, including, in particular, those affecting their amount and recoverability. This obligation shall extend to risks held through instrumental entities integrated in the consolidated groups of the reporting entities, and to those that have been assigned to third parties while the entity retains their administration.

The data referred to in the preceding paragraph shall include those reflecting a situation of default by the counterparty of its obligations towards the reporting entity, as well as those revealing a situation in which the entity was obliged to make a specific provision to cover credit risk, as provided for in the accounting rules applicable to it.

The data referring to the persons mentioned in this subsection shall in no case include those regulated in Article 7 of Organic Law 15/1999, of 13 December, on the Protection of Personal Data.

The data declared to the CIR by the obliged entities shall be accurate and up to date, so that they truthfully reflect the current situation of the risks and their holders at the date of the declaration.

Third. For the purposes of this Law, credit risk is considered to be the eventuality that the reporting entity may suffer a loss as a consequence of the breach of any of the obligations of its counterparties or of their guarantors in contracts such as loans, credits, discounts, issues of securities, guarantee contracts, commitments relating to financial instruments, or any other type of legal transaction typical of its financial activity. Situations in which the aforementioned obligations have been breached shall also be included as credit risk in all cases.

Fourth. The Minister of Economy and Competitiveness and, with his express authorization, the Bank of Spain, shall determine the classes of risks to be declared among those mentioned in the preceding paragraph, the periodic or supplementary declarations to be submitted so as to ensure that the data are sufficiently up to date, the dates to which they must refer, the procedure, the form and the deadline for their submission, and the scope of the data to be declared to the CIR regarding the characteristics and circumstances of the different classes of risk and of their holders. For these purposes, a distinction may be made, including by establishing different declaration thresholds, between:

a) the data to be declared exclusively in compliance with the information obligations established by the Bank of Spain in the exercise of its supervision and inspection functions and other functions legally attributed to it, including data based on the entities' own forecasts, and,

b) those other data that are also declared for the purpose of providing them to the declaring entities for the exercise of their activity.

Fifth. The declaration of risk data relating to natural persons that the declaring entities make to the CIR in accordance with the provisions of this Law does not require their consent. However, the declaring entities must inform the natural persons who are their borrowers of the aforementioned mandatory declaration of data to the CIR and of its scope, expressly stating, in the case of risks of individual entrepreneurs acting in the exercise of their business activity, that such status will be recorded. All of this shall be understood without prejudice to the information that they must provide to those persons in accordance with the provisions of paragraph 1 of Article 5 of Organic Law 15/1999, of 13 December, on the Protection of Personal Data.

Sixth. In any case, the recorded data shall be available to the Data Protection Agency, for the exercise of the functions legally attributed to it.

Article 61. Information on declared data.

First. The declared data on risks whose holders are Spanish public administrations shall be public and for this purpose shall be communicated by the Bank of Spain, with the same frequency with which they are collected, to the Ministry of Finance and, where applicable, to the Autonomous Community on which they depend, for their knowledge and publication in the manner they establish.

Second. The declaring entities and real estate credit intermediaries shall have the right to obtain reports on the risks of natural or legal persons, including public administrations, recorded in the CIR, provided that such persons meet any of the following circumstances:

a) Maintaining with the entity some type of risk.

b) Having requested from the entity a loan or any other risk operation.

c) Appearing as obligors for payment or guarantors in negotiable instruments or credit documents whose acquisition or negotiation has been requested from the entity.

The entities must inform in writing the persons in whom the situation contemplated by preceding letter b) applies of the entity's right provided for in this paragraph.

The entities shall keep the supporting documents of the applications referred to in preceding letters b) and c) that have been denied during the period established on a general basis in Article 30 of the Commercial Code.

The Bank of Spain may temporarily prevent a declaring entity's access to the CIR data when it has breached its information obligations with the quality and accuracy necessary in the judgment of the Bank of Spain.

Third. The Minister of Economy and, with his express authorization, the Bank of Spain shall determine the content, form and frequency of the reports referred to in the preceding paragraphs.

Reports relating to natural persons may only include data recorded on the basis of declarations from the last five years received from the declaring entities. However, in the case of legal persons or when dealing with risks of individual entrepreneurs acting in the exercise of their business activity, such reports may also include data relating to earlier declarations, in the manner established by the Bank of Spain. The reports may not refer solely to the data mentioned in the second paragraph of Article 57.2.o of this Law and shall necessarily include those relating to the last declaration received, all without prejudice to the provisions of the following paragraph.

Fourth. In the reports to the declaring entities referred to in the preceding paragraphs, the name of the entities that have incurred the aforementioned risks shall be omitted and, in the case of the data referred to in the second paragraph of Article 57.2.o of this Law, only situations of non-compliance with direct or guaranteed obligations shall be included, as well as those relating to insolvency proceedings.

Likewise, in the aforementioned reports, those data provided by the declaring entities exclusively in compliance with the information obligations established by the Bank of Spain in the exercise of its supervision and inspection functions and other functions legally attributed to it shall be omitted.

Article 62. Use and transfer of data by the declaring entities.

First. The information received by the declaring entities in accordance with the provisions of the preceding article shall be confidential.

Second. The information referred to in the preceding paragraph may only be used by the declaring entities in relation to the granting and management of credits as well as for the purpose of ensuring effective compliance with the regulations on risk concentration and any other that, in the field of prudential supervision to which they are subject, is applicable to them. Data concerning natural persons must be cancelled once they are no longer necessary or relevant for such purposes.

Third. Unless there is express consent from the interested party, the information referred to in this article may not be transferred by the reporting entities to any other person. Excepted from this prohibition is the transfer of data referring to legal persons carried out between financial entities that form part of the same consolidated group, as determined in Law 13/1992, of 1 June, on Own Resources and Consolidated Supervision of Financial Entities, and its implementing regulations.

Also excepted is the transfer of data concerning natural persons carried out to the assignees indicated in the previous paragraph when they are necessary to ensure effective compliance with the regulations on risk concentration, calculation of minimum own resources requirements and any other provided for in Law 13/1985, of 25 May, on Investment Ratios, Own Resources and Information Obligations of Financial Intermediaries, and provisions implementing it.

Article 63. Use and transfer of data by the Bank of Spain.

First. Without prejudice to the provisions of article 58 of this Law, the data declared to the CIR shall be confidential for the Bank of Spain.

Second. The communication or transfer of the information referred to in paragraph 1 of this article is subject to the rules of collaboration in information and professional secrecy provided for in article 6 of Royal Legislative Decree 1298/1986, of 28 June, on adaptation of current Law on credit institutions to that of the European Communities.

In addition to the requirements provided for in the article mentioned in the previous paragraph, when the data to be communicated refer to natural persons, the transfer to foreign authorities, persons or entities indicated therein not belonging to another Member State of the European Union shall require that they be subject to a data protection regime comparable to that provided for in Spanish regulations in accordance with the provisions of article 33 of Organic Law 15/1999, of 13 December, on Protection of Personal Data.

Regardless of the provisions of the previous paragraphs, the Bank of Spain, within a regime of reciprocity and under the terms it establishes, may transfer the declared data to public bodies or entities that perform functions similar to those of the CIR in a Member State of the European Union, as well as to the reporting entities or members thereof, provided that the subjection, both of the assignee and of the transferred data, to rules of use, confidentiality and data protection comparable to those established in Spanish regulations is ensured.

If such bodies or entities are located in a country not a member of the European Union, the data may only refer to legal persons and to risks of individual entrepreneurs acting in the exercise of their business activity. The data to be provided shall be subject to the limitations provided for in the fourth paragraph of article 58 of this Law.

Third. The Bank of Spain shall not be obliged to inform the holders of risks, nor the transferors of the data received, of the processing to which it subjects the said data, nor of its use or transfer in accordance with the provisions of this Law, without prejudice to the provisions of the first paragraph of article 62.

The provisions of the preceding paragraph are established without prejudice to the information obligations to natural persons holding risks that, in accordance with the provisions of the fifth paragraph of article 57 of this Law and Organic Law 15/1999, of 13 December, on Protection of Personal Data, correspond to the reporting entities.

Fourth. The Bank of Spain shall collaborate with the Ministry of Finance by supplying the information it receives related to credit operations of Local Entities and Autonomous Communities.

Article 64. Conservation of data.

First. The data recorded in the C.I.R. shall be kept for ten years counted from the date to which they refer, and shall be cancelled once said period has elapsed. However, they may be kept indefinitely by procedures that do not allow the identification of the affected party, attending to their historical, statistical or scientific values. Data that identify legal persons may also be kept indefinitely to allow the exercise of the purposes contemplated in the second and third indents of the first paragraph of article 59 of this Law.

Second. In accordance with the provisions of article 9 of Organic Law 15/1999, of 13 December, on Protection of Personal Data, the Bank of Spain shall adopt the necessary technical and organizational measures to guarantee the security of the data recorded in the CIR and prevent their alteration, loss, processing or unauthorized access, taking into account the state of technology, the nature of the data stored and the risks to which they are exposed, whether arising from human action or the physical or natural environment.

Article 65. Rights of access, rectification and cancellation.

First. Any person, natural or legal, who appears as the holder of a declarable risk to the CIR, may access all information affecting them, except for those data provided by the reporting entities exclusively in compliance with the information obligations established by the Bank of Spain in the exercise of its supervision and inspection functions and other functions legally attributed to it. Natural persons may likewise request the name and address of the assignees to whom the CIR has communicated their data during the last six months as well as the assignments of the same that are to be made. The information on the assignees shall be accompanied by a copy of the data assigned in each case.

When all the data of a data subject have been provided to the CIR exclusively in compliance with the information obligations established by the Banco de España in the exercise of its supervision and inspection functions and other functions legally attributed to it, the data subject may access only the name of the entities that have declared the risks so that they may exercise the right of access before them.

The access request may be made by any means that ensures the identification and, where applicable, title of the requester, it being incumbent upon the Banco de España to establish the procedures that ensure them and the consultation system, without prejudice, as regards natural persons, to the regime of protection of the right of access, and of the limitations to its exercise, provided for in article 15 of Ley Orgánica 15/1999, de 13 de diciembre, de Protección de Datos de Carácter Personal. The data concerned must be provided to the requester within a maximum period of ten business days from the receipt of the request at the Banco de España.

Second. Without prejudice to the rights that assist natural persons, in accordance with the provisions of Ley Orgánica 15/1999, de 13 de diciembre, de Protección de Datos de Carácter Personal, and its implementing regulations, with respect to personal data included in the files of the declaring entities, any holder of data declared to the CIR who considers that they are inaccurate or incomplete may request the Banco de España, by means of a written document indicating the reasons and scope of their request, to process the rectification or cancellation thereof before the declaring entities, except for those data provided by the declaring entities exclusively in compliance with the information obligations established by the Banco de España in the exercise of its supervision and inspection functions and other functions legally attributed to it. The Banco de España shall immediately forward the request received to the declaring entity or entities of the data supposedly inaccurate or incomplete.

The requests sent by the Banco de España must be answered and communicated by the declaring entities to the affected party and to the CIR, within a maximum period of fifteen business days from their receipt at any of its offices. The decision shall be reasoned in the event that it considers that the request should not be granted.

Natural persons may file against the declaring entities the claim before the Agencia de Protección de Datos referred to in article 18 of Ley Orgánica 15/1999, de 13 de diciembre, de Protección de Datos de Carácter Personal, when the decisions adopted in accordance with the provisions of the preceding paragraph do not grant the rectification or cancellation requested by the affected party, or their request has not been answered within the period provided for that purpose.

Third. The declaring entities shall be obliged to provide legal persons holding risk with effective access to the data sent to the CIR of which they are holders, within a maximum period of one month from the date on which it is requested; they must also attend to the requests for rectification or cancellation of inaccurate or incomplete data that they submit to them; the period to answer said requests shall be twenty business days.

Fourth. Without prejudice to the powers of the Agencia de Protección de Datos provided for in Ley Orgánica 15/1999, de 13 de diciembre, de Protección de Datos de Carácter Personal, when a natural person files a claim before it for the purposes of the protection of their rights of access, rectification, cancellation or opposition in relation to their personal data included in the files of the declaring entities, the Agency must communicate it immediately to the Banco de España for the purposes of the suspension of the assignment of data provided for in the second paragraph of section one of the following article, in the event that the data subject to the claim were included among those that are mandatory to send to the CIR..

Article 66. Suspension of data assignments and rectification or cancellation of declared data.

First. While the declaring entities respond to the request for rectification or cancellation submitted through the Banco de España in accordance with the provisions of section two of the preceding article, the Banco de España shall suspend all assignment to third parties of the data to which the request refers, as well as those congruent with them that have been registered in the CIR on the occasion of previous and subsequent declarations.

The suspension shall also proceed, and with identical scope, in the event that the admission for processing of any judicial action aimed at declaring the inaccuracy of the declared data has been accredited before the Banco de España, or the communication referred to in section four of the preceding article has been received from the Agencia de Protección de Datos. In the same case, the Banco de España shall communicate the suspension to the third parties to whom, during the six months prior to the date thereof, the affected data and those congruent with them had been assigned.

Second. The suspension shall cease from the time the CIR receives from the reporting entity the communication referred to in the second paragraph of the second subsection of the preceding article, unless it concerns rejected responses, in which case the Banco de España shall extend the aforementioned suspension by two more months, without prejudice to the application of the provisions of the second paragraph of the preceding subsection.

The suspension shall also cease when the Banco de España has evidence of the final judgment or the resolution agreed in that regard by the Data Protection Agency, once the data have been rectified or cancelled, as applicable, as established in the following subsection.

Third. The rectifications or cancellations agreed by the Data Protection Agency, or those resulting from a judicial judgment, shall oblige the reporting entity to likewise rectify or cancel, in accordance with the scope of the corresponding resolution or judgment, the data consistent with the rectified or cancelled data contained in other declarations to the CIR. Such agreements or judgments shall be taken into account in subsequent declarations submitted.

Fourth. The data subject to rectification or cancellation, as well as those replacing them, shall be communicated by the Banco de España to the third parties to whom they had been transferred.

Fifth. As provided in subsection 3 of article 16 of Organic Law 15/1999, of 13 December, on the Protection of Personal Data, the cancellation shall give rise to the blocking of the data, kept solely at the disposal of public administrations, Judges and Courts, for the attention of possible liabilities arising from the processing, during the statute of limitations period for these. Once the aforementioned period has elapsed, they must be deleted.

Article 67. Sanctioning powers of the Data Protection Agency.

The sanctioning powers of the Banco de España and other financial authorities in this matter shall be understood without prejudice to those attributed to the Data Protection Agency in Organic Law 15/1999, of 13 December, on the Protection of Personal Data.

Article 68. Sanctioning regime.

First. The wording of paragraph j) of article 4 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, is amended, as follows:

"j) The breach of the duty of truthful information owed to its partners, depositors, lenders, and the general public, as well as the breach of the duty of confidentiality regarding data received from the Central Credit Register, its use for purposes other than those provided in the Law regulating it, or the request for reports on persons holding risks outside the cases expressly authorized in said Law. All of this provided that, due to the number of affected parties or the importance of the information, such breaches may be considered especially relevant."

Second. The wording of paragraph n) of article 5 of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Institutions, is amended, as follows:

"n) The breach of the duty of truthful information owed to its partners, depositors, lenders, and the general public, as well as the breach of the duty of confidentiality regarding data received from the Central Credit Register, its use for purposes other than those provided in the Law regulating it, or the request for reports on persons holding risks outside the cases expressly authorized in said Law, when the circumstances referred to in paragraph j) of the preceding article do not concur."

Article 69. Concurrence of private entities.

Without prejudice to the development by the Central Credit Register under the Banco de España of all the functions entrusted to it by this Law, the activity of providing credit institutions with the data necessary for the exercise of their credit activity may also be carried out by other private entities whose activity shall conform, in any case, to the regime provided in Organic Law 15/1999, of 13 December, on the Protection of Personal Data.

First additional provision. Regional securities clearing and settlement services.

(Repealed)

Second additional provision. Measures to improve the efficiency, effectiveness and quality of supervision procedures.

(Repealed)

Third additional provision. Restrictions relating to temporary financial investments of non-profit entities.

(Repealed)

Fourth additional provision. Submission of the internal code of conduct to the National Securities Market Commission.

(Repealed)

Fifth additional provision. Amendment of Law 8/1987, of 8 June, on the Regulation of Pension Plans and Funds.

New wording is given to the second final provision of Law 8/1987, of 8 June, on the Regulation of Pension Plans and Funds:

"Second final provision. Complementary social welfare for personnel in the service of public administrations, entities and companies.

Public Administrations, including Local Corporations, entities, bodies dependent on them and companies participated by them may promote employment pension plans and make contributions to them, as well as to collective insurance contracts, including those formalized by business social welfare mutuals, under the first additional provision of this Law, in order to instrument the commitments or obligations for pensions linked to the contingencies of article 8.o 6 of this Law referring to their civil servant or labor personnel or in a service relationship regulated by statutory administrative rules.

The foregoing shall be understood without prejudice to the corresponding budgetary authorization available to each entity or company, as well as to any prior authorizations to which such contributions may be subject, whether regulatory or administrative, in order, where appropriate, to allocate resources to the financing and implementation of complementary social welfare for personnel.

Benefits paid through pension plans or collective insurance contracts, including those formalized by company social welfare mutual societies, in accordance with the first additional provision of this Law, shall not be considered public pensions nor shall they be counted for the purposes of limiting the initial determination or setting the maximum amount of public pensions.»

Sixth additional provision. Exceptions to the duty of professional secrecy in the field of supervision of private insurance and pension funds.

First. (Repealed)

Second. A new paragraph 4 is created in article 24 of Law 8/1987, of 8 June, on the Regulation of Pension Plans and Funds:

«4. The data, documents and information held by the Ministry of Economy in the exercise of its functions of regulation and supervision of pension funds, except those contained in administrative registers of a public nature, shall be confidential.

All persons who exercise or have exercised an activity of regulation and supervision in matters of pension funds, as well as those to whom the Ministry of Economy has entrusted functions in relation thereto, are subject to the duty of professional secrecy under the same terms and with the same responsibilities and exceptions established in article 75 of Law 30/1995, of 8 November, on the Regulation and Supervision of Private Insurance.»

Seventh additional provision. Amendment of Law 30/1995, of 8 November, on the Regulation and Supervision of Private Insurance.

(Repealed)

Eighth additional provision. Conclusion of agreements for obtaining electronic certificates.

Two new paragraphs, nine and ten, are added to article 81 of Law 66/1997, of 30 December, on Fiscal, Administrative and Social Order Measures, as worded by article 51 of Law 55/1999, of 29 December, on Fiscal, Administrative and Social Order Measures, with the following content:

«Nine. The Fábrica Nacional de Moneda y Timbre-Casa Real de la Moneda may conclude agreements with persons, entities and corporations that exercise public functions, in which the conditions are established under which they may participate in the procedures necessary for obtaining electronic certificates issued by it, in particular, in the identification and registration of the applicants for said certificates.

Ten. The accreditation of the identity of the interested parties in the procedure for issuing electronic certificates may require the appearance of citizens before a public office.»

Ninth additional provision. Amendment of Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies.

The following amendments are introduced in Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies:

One. New wording is given to paragraph 1 of article 64 of Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies, which shall have the following wording:

«1. Statutory restrictions on the transferability of shares shall only be applicable to acquisitions by cause of death when expressly so established by the articles of association themselves.

In this case, in order to reject the registration of the transfer in the register of nominative shares, the company must present to the heir a purchaser of the shares or offer to acquire them itself at their fair value at the time the registration was requested, in accordance with the provisions of article 75.

Fair value shall be understood as that determined by an account auditor, other than the company's auditor, appointed for such purpose by the company's directors at the request of any interested party.»

Two. Paragraph 3 of article 68 of Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies, shall have the following literal wording:

«3. If the parties fail to reach an agreement on the amount to be paid in the cases provided for in the two preceding paragraphs, it shall be fixed, at the request of either of them and at the expense of both, by an account auditor, other than the company's auditor, designated for such purpose by the Mercantile Registry.»

Three. Paragraph 2 of article 147 of Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies, shall have the following content:

«2. If the shares are listed on an official secondary market, the redemption value shall be that of the average listing price of the last quarter. Otherwise, and in the absence of agreement between the company and the interested parties, the value of the shares shall be determined by an account auditor, other than the company's auditor, designated for such purpose by the Mercantile Registry.»

Four. Article 159 of Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies, shall have the following wording:

«Article 159. Exclusion of the pre-emptive subscription right.

1. In cases where the interest of the company so requires, the General Meeting, when deciding on the increase of capital, may agree to the total or partial suppression of the pre-emptive subscription right. For the validity of this agreement, which must respect the provisions of article 144, it shall be essential:

a) That the proposal to suppress the pre-emptive subscription right and the type of issue of the new shares have been stated in the notice of the General Meeting.

b) That at the time of the notice of the General Meeting, a report prepared by the directors, in which the proposal and the type of issue of the shares are justified in detail, indicating the persons to whom they are to be allocated, and a report prepared, under their responsibility, by an account auditor other than the auditor of the company's accounts, appointed for these purposes by the Mercantile Registry, on the fair value of the company's shares, on the theoretical value of the pre-emptive subscription rights whose exercise is proposed to be suppressed and on the reasonableness of the data contained in the directors' report, be made available to the shareholders, in accordance with the provisions of paragraph c) of section 1 of article 144.

c) That the nominal value of the shares to be issued, plus, where applicable, the amount of the share premium, corresponds to the fair value resulting from the report of the account auditors referred to in the preceding paragraph b). In the case of a listed company, fair value shall be understood as market value and this shall be presumed, unless otherwise justified, to refer to its stock market quotation.

However, in the case of listed companies, the General Meeting, once it has the directors' report and the account auditor's report required in the preceding paragraph b), which must, in this case, also refer to the net equity value of the shares, may agree to issue new shares at any price, provided that it is higher than the net equity value of the shares resulting from the report of said auditor, and said General Meeting may limit itself to establishing the procedure for its determination. Said net equity value of the shares shall be determined by the auditor referred to in the preceding paragraph b), on the basis of the last audited annual accounts of the company or, if they are later than these, on the basis of the last audited financial statements of the company in accordance with article 172, formulated, in either case, by the directors in accordance with the accounting principles set out in the Commercial Code, and any qualifications that the auditor of said annual accounts or said financial statements may have disclosed in their report must be taken into account in determining the aforementioned value. The closing date of these accounts or these statements may not be more than six months prior to the date on which the General Meeting adopts the resolution to increase capital, provided that no significant operations are carried out. In the case of listed companies that are dominant in a group of companies, the net equity value shall be determined in accordance with the data derived for the company from the consolidated accounting of the group. The accounting record of the operations referred to in this paragraph shall be made in accordance with the accounting principles and standards established in the Commercial Code.

2. In the case of listed companies, when the General Meeting delegates to the directors the power to increase the share capital in accordance with the provisions of section 1.b) of article 153, it may also confer on them the power to exclude the pre-emptive subscription right in relation to the issues of shares that are the subject of delegation when the interest of the company so requires. For these purposes, said proposal for exclusion must expressly appear in the notice of the General Meeting and a report by the directors justifying the proposal shall be made available to the shareholders. Likewise, on the occasion of each capital increase resolution carried out under that delegation, the directors' report and the account auditor's report required in the preceding section 1.b) must be prepared, referring to each specific capital increase, and the nominal value of the shares to be issued, plus, where applicable, the amount of the share premium, must correspond to the fair value resulting from the report of said account auditor. Said reports shall be made available to the shareholders and communicated to the first General Meeting held after the capital increase resolution.

3. When the company has issued convertible obligations with a fixed conversion ratio and their holders are affected by the exclusion of the pre-emptive subscription right, a formula for adjusting said ratio must be provided that allows compensating for the eventual dilution of the amount of the conversion right.

4. There shall be no pre-emptive subscription right when the capital increase is due to the conversion of obligations into shares or to the absorption of another company or of part of the assets spun off from another company."

Five. Section 2 of article 292 of Royal Legislative Decree 1564/1989, of 22 December, approving the consolidated text of the Law on Public Limited Companies, shall have the following wording:

"2. The directors must prepare, prior to the notice of the General Meeting, a report explaining the bases and modalities of the conversion, which must be accompanied by another report by an account auditor, other than the company's auditor, designated for this purpose by the Mercantile Registry."

Tenth additional provision. Amendment of Law 2/1995, of 23 March, on Limited Liability Companies.

The following amendments are introduced in the wording of Law 2/1995, of 23 March, on Limited Liability Companies:

One. The second paragraph of paragraph d) of section 2 of article 29 of Law 2/1995, of 23 March, on Limited Liability Companies, shall have the following wording:

"In cases in which the projected transfer is for consideration other than a sale or gratuitous, the acquisition price shall be that fixed by common agreement of the parties and, failing that, the fair value of the shares on the day on which the intention to transfer was communicated to the company. Fair value shall be understood as that determined by an account auditor, other than the company's auditor, designated for that purpose by the company's directors."

Two. Article 100 of Law 2/1995, of 23 March, on Limited Liability Companies, shall have the following literal wording:

"Article 100.

1. In the absence of agreement on the fair value of the shares or on the person or persons who are to value them and the procedure to be followed for their valuation, the shares shall be valued by an account auditor, other than the company's auditor, designated by the Mercantile Registrar of the registered office at the request of the company or of any of the shareholders holding the shares that are to be valued.

2. For the exercise of his function, the auditor may obtain from the company all information and documents he considers useful and carry out all verifications he deems necessary. Within a maximum period of two months from his appointment, the auditor shall issue his report, which he shall notify immediately to the company and to the shareholders affected by notarial means, attaching a copy, and shall deposit another copy in the Mercantile Registry.

3. The auditor's remuneration shall be borne by the company. However, in cases of exclusion, from the amount to be reimbursed to the excluded shareholder the company may deduct what results from applying to the fees paid the percentage that the excluded shareholder held in the share capital."

Eleventh additional provision. Amendment of Law 4/1997, of 24 March, on Employee-Owned Companies.

The following amendments are introduced in article 8 of Law 4/1997, of 24 March, on Employee-Owned Companies, which shall have the following content:

"Fair value. The price of the shares or holdings, the form of payment and other conditions of the transaction shall be those agreed and communicated to the governing body by the transferring shareholder.

If the projected transfer is for consideration other than a sale or gratuitous, the acquisition price shall be that fixed by common agreement of the parties or, failing that, the fair value thereof on the day on which the intention to transfer was communicated to the company's governing body. Fair value shall be understood as that determined by an account auditor, other than the company's auditor, designated for this purpose by the directors.

The audit expenses shall be borne by the company. The fair value fixed shall be valid for all disposals taking place within each annual financial year. If in subsequent disposals during the same annual financial year, the transferor or acquirer does not accept such fair value, a new valuation may be carried out at their expense."

Twelfth additional provision. Rounding regime in certain credit operations.

In credits and loans secured by mortgage, surety, pledge or other equivalent guarantee that, from the entry into force of this Law, are formalized at a variable interest rate, the rounding of said rate may be agreed. In the above case, the rounding of the interest rate must be made to the nearest end of the agreed interval, and it may not exceed one eighth of a point.

Thirteenth additional provision. Amendment of the maximum limits of contributions to the Social Welfare Mutual Fund for professional athletes.

The amount of 15,025.30 euros referred to in the twenty-third additional provision of Law 40/1998, of 9 December, on Personal Income Tax and other Tax Rules, is raised to that set for participants aged sixty-five or over in articles 5.3.a) of Law 8/1987, of 8 June, on the Regulation of Pension Plans and Funds, and 46.1.5.o a) of Law 40/1998, of 9 December, on Personal Income Tax and other Tax Rules.

Fourteenth additional provision. Transparency in the remuneration of auditors.

(Repealed)

Fifteenth additional provision. Transitional regime for the adaptation of certain pension commitments linked to retirement through jointly promoted employee plans.

The period for the adaptation of companies' pension commitments with personnel to the first additional provision of Law 8/1987, of 8 June, on the Regulation of Pension Plans and Funds, extended until 16 November 2002 by the twenty-fifth additional provision of Law 14/2000, of 29 December, on Fiscal, Administrative and Social Order Measures, is extended until 31 December 2006 for the integration into jointly promoted employee pension plans of those commitments, established in collective agreements of supra-company scope, linked to the worker's permanence in the company or sector until retirement, which, under the name "retirement bonuses" or others, consist of a benefit payable as a single payment at the time of cessation due to retirement.

For the purposes of the preceding paragraph, the representation of companies and workers at the supra-company level may promote one or more jointly promoted pension plans, in which the companies affected by the collective agreement may be included, without prejudice to the necessary adaptations that must be agreed in order to adjust the configuration of the aforementioned commitments to the basic principles of pension plans established in the regulations on pension plans.

Other commitments of the companies linked to contingencies other than retirement may be integrated into said jointly promoted plans.

Companies that join the aforementioned jointly promoted plans within the indicated period may avail themselves of the provisions of transitional provisions fifteenth and sixteenth of Law 30/1995, of 8 November, on the Organization and Supervision of Private Insurance, for the recognition of rights for past service through the corresponding rebalancing plans.

In any case, during the period granted in this provision, companies eligible to avail themselves of it may adapt the retirement commitment through any of the instruments provided for in additional provision one of Law 8/1987.

Additional provision sixteenth. Amendment of Law 19/1993, of 28 December, on Measures for the Prevention of Money Laundering.

Section 2 of Article 16 of Law 19/1993, of 28 December, on Measures for the Prevention of Money Laundering, is amended, to which a second paragraph is added.

«2. When exercising its functions in relation to financial entities subject to special legislation, the Executive Service must request from the Bank of Spain, the National Securities Market Commission or the General Directorate of Insurance and Pension Funds, or the corresponding regional body, as applicable, all the information and collaboration necessary to carry them out.

Without prejudice to the provisions of the preceding paragraph, the Executive Service shall have direct access to statistical information on capital movements and economic transactions with abroad communicated to the Bank of Spain in accordance with the provisions of the legislation applicable to such operations.»

Additional provision seventeenth. New additional provision of Law 26/1988, of 29 July, on Discipline and Intervention of credit entities in relation to the duty to keep confidential information about their clients.

An additional provision one is added to Law 26/1988, of 29 July, on Discipline and Intervention of Credit Entities, with the following content:

«Additional provision one.

1. Entities and other persons subject to the organization and discipline of credit entities are obliged to keep confidential information relating to the balances, positions, transactions and other operations of their clients, and the same may not be communicated to third parties or subject to disclosure.

2. Excepted from this duty are information in respect of which the client or the laws permit its communication or disclosure to third parties or which, as the case may be, are required of them or must be sent to the respective supervisory authorities. In this case, the transfer of information must comply with the provisions of the client itself or the laws.

3. Also excepted from the duty of confidentiality are exchanges of information between credit entities belonging to the same consolidable group.

4. Failure to comply with the provisions of this provision shall be considered a serious infringement and shall be sanctioned in the terms and in accordance with the procedure provided for in Title I of Law 26/1988, of 29 July, on Discipline and Intervention of Credit Entities.»

Additional provision eighteenth. Externalization in Pension Plans of commitments acquired in collective agreement.

Paragraph 6 of section 4 of transitional provision fifteenth of Law 30/1995, of 8 November, on the Organization and Supervision of Private Insurance, is amended, and shall be worded as follows:

«The maximum amount of recognized past service corresponding to annual periods beginning on 1 January 1988 until the formalization of the Pension Plan may not exceed, for each of these years, the amount of the annual financial limit in force in each of such periods. However, past service shall be integrated in full when the pension commitments assumed by companies with their employees or workers derive from a collective agreement. For such purposes, the corresponding rebalancing plans shall be amended, where appropriate, for their approval or verification by the General Directorate of Insurance and Pension Funds.»

Additional provision nineteenth. Carrying out financial leasing operations by autonomous public law entities.

Entities that, within the framework of the respective statutes of autonomy, have been created by the Autonomous Communities for the exercise of the powers corresponding to them in relation to financial policy and in matters of public credit may, in cases of acquisition of goods by public administrations, entities dependent on them and majority-owned companies, carry out the activities provided for in section 8 of additional provision seventh of Law 26/1988, of 29 July, on discipline and intervention of credit entities.

Transitional provision first. Transitional regime for the management of securities clearing and settlement systems.

(Repealed)

Transitional provision second. Transitional regime for the functions assumed by the Systems Company.

(Repealed)

Transitional provision third. Transitional regime of the Liquidating Commission of Insurance Entities.

First. The Consorcio de Compensación de Seguros shall succeed the Comisión Liquidadora de Entidades Aseguradoras in all its rights and obligations, continuing the liquidations entrusted to it and maintaining all its legal relationships and its staff.

Second. Until the Government issues the regulatory provisions referred to in the second final provision of this Law, the following shall remain in force: the Reglamento de Funcionamiento de la Comisión Liquidadora de Entidades Aseguradoras, approved by Real Decreto 2020/1986, de 22 de agosto; Real Decreto 2226/1986, de 12 de septiembre, by which the functions attributed to the Commission created by Real Decreto-ley 11/1981, de 20 de agosto, are entrusted to the Comisión Liquidadora de Entidades Aseguradoras; Real Decreto 312/1988, de 30 de marzo, by which Entidades de Previsión Social are subject to the provisions of Real Decreto-ley 10/1984, de 11 de julio, and the Orden del Ministerio de Economía y Hacienda de 25 de marzo de 1988, by which Real Decreto 2020/1986, de 22 de agosto, is supplemented. All of them shall remain in force exclusively to the extent that they do not conflict with the provisions contained in this Law, it being understood that the functions that said regulatory provisions entrust to the «Comisión Liquidadora de Entidades Aseguradoras» and its Junta Rectora are attributed to the Consorcio de Compensación de Seguros and its Consejo de Administración.

Third. The amounts that, upon the entry into force of this Law, had already been collected by the Consorcio de Compensación de Seguros as a surcharge intended to make subsidies to the Comisión Liquidadora de Entidades Aseguradoras and that had not yet been transferred to said Organism shall be allocated, from the very moment the entry into force of this Law occurs, to the performance by the Consorcio of its functions as liquidator of insurance entities, in accordance with the provisions of articles 23 and 24 of its Estatuto Legal, contained in the fourth article of Ley 21/1990, de 19 de diciembre, for adapting Spanish law to Directive 88/357/CEE on freedom of services in insurance other than life and updating the legislation on private insurance.

Fourth transitional provision. Appointment by authorized insurance entities of the representative for the handling and settlement of claims, referred to in paragraph g) of section 2 of article 6 and paragraph g) of section 1 of article 87 of Ley 30/1995, de 8 de noviembre, de Ordenación y Supervisión de los Seguros Privados.

First. Spanish insurance entities that have been granted administrative authorization in the branch of civil liability for land motor vehicles, excluding carrier liability, must appoint representatives for the handling and settlement of claims in each of the Member States other than Spain.

Said appointment must be communicated to the Dirección General de Seguros y Fondos de Pensiones from the entry into force of this Law and, in any case, before 19 January 2003.

Second. Branches of insurance entities domiciled in third countries, not members of the European Economic Area, that have been granted administrative authorization in the branch of civil liability for land motor vehicles, excluding carrier liability, must proceed with the appointment and communication of the representatives referred to in the preceding paragraph within the same period.

Fifth transitional provision. Transitional regime of the Servicio Central de Información de Riesgos del Banco de España.

Until the provisions implementing chapter VI of this Law are approved, which shall enter into force in accordance with the provisions of the third final provision thereof, the provisions issued in implementation of the sixteenth article of Decreto-ley 18/1962, de 7 de junio, de Nacionalización y Reorganización del Banco de España, shall remain in force, provided they do not conflict with them.

Sixth transitional provision. Transitional regime for the creation and operation of organized trading systems.

(Repealed)

Seventh transitional provision. Transitional regime for certain modifications of the legal regime of collective investment institutions.

Collective investment institutions shall have a period of twelve months to adjust their operation to this Law, without the eventual change of depositary occurring within this period to comply with the new requirements conferring on participants the right of separation provided in article 28 of Ley 46/1984, de 26 de diciembre, reguladora de las instituciones de inversión colectiva.

Eighth transitional provision. References in insolvency matters.

All references to suspension of payments and bankruptcy and, in general, to insolvency matters, contained in this Law, shall apply without prejudice to the provisions of the Ley Concursal provided in the nineteenth final provision of Ley 1/2000, de 7 de enero, de Enjuiciamiento Civil, upon whose entry into force the provisions thereof shall apply.

Ninth transitional provision.

Until the appointment of the commissioners for the defense of financial services clients provided in article 22 of this Law occurs, the complaints services or equivalent administrative units of the Banco de España, the Comisión Nacional del Mercado de Valores and the Dirección General de Seguros y Fondos de Pensiones shall continue to perform the functions entrusted to them upon the entry into force of this Law in accordance with their applicable regulations.

Tenth transitional provision. Transitional regime for certain aspects of the legal regime of Cajas de Ahorros.

The new regime of non-removability of the General Councilors and the members of the Boards of Directors of the Savings Banks, established in paragraphs sixth and eleventh of article 8 of this Law, by which articles 10 and 18 of Law 31/1985, of 2 August, on Regulation of the Basic Rules on Governing Bodies of Savings Banks, are amended, shall be applicable to positions appointed after 1 June 2003.

The General Councilors and the members of the Board of Directors who currently hold office, even if they have completed the maximum period established in paragraph 1 of article 9 and in paragraph 1 of article 17 of Law 31/1985, of 2 August, on Regulation of the Basic Rules on Governing Bodies of Savings Banks, which has been amended by paragraph tenth of article 8 of this Law, or who complete it during the electoral period in force as of 31 December 2003, may remain in office during the current term and one more, provided that they are elected for this by the representation they hold.

The clause highlighted in bold is declared unconstitutional and void by Judgment of the TC 118/2011, of 5 July. Ref. BOE-A-2011-13308 .

The requirements that the General Councilors and the members of the Board of Directors must meet shall be applicable from the day of entry into force of this Law in accordance with the provisions of the first paragraph of the third final provision.

Eleventh transitional provision. Adaptation of the Statutes of the Savings Banks.

The Savings Banks must, within six months from the entry into force of this Law, adapt their Statutes to the amendments introduced in their applicable basic regulations.

For the purposes of the provisions of the preceding paragraph, the Savings Banks shall adapt their Statutes to comply with the provisions of article 2.3 of Law 31/1985, so that the representation of the public Administrations and Entities and Corporations of public law, including that corresponding to the Founding Entity when it has the same nature, does not exceed as a whole the maximum limit of 50 percent of the total voting rights of each of the bodies. When said representation is higher, the distribution of percentages within the aforementioned maximum shall be carried out proportionally among all the public Entities and Corporations represented in accordance with regional legislation, allocating, where appropriate, the surplus percentage among the other representation groups of the Entity in accordance with the maximum and minimum intervals established by article 2.3 of Law 31/1985.

If necessary, in application of the foregoing, the designation of new members of the depositors' group in the General Assembly until their corresponding renewal takes place, their assignment shall be made respecting the percentages corresponding to each territorial demarcation according to the last election from among the alternates appointed in the aforementioned group by virtue of the highest number of votes obtained in the election or, in the case of having voted for lists or candidacies, proportionally to the results obtained by each one and, within it, in the order in which they appear in it. If even then, all vacant positions are not filled, the unfilled ones shall remain vacant until the corresponding renewal of the group.

After the period referred to in the following transitional provision has elapsed, and the regulatory adaptation provided therein has been completed, the Savings Banks must adjust their Statutes to the regional regulatory amendments, within six months from their entry into force.

In the case of the Savings Banks referred to in the second additional provision of Law 31/1985, of 2 August, on Regulation of the Basic Rules on Governing Bodies of Savings Banks, the reform of their Statutes must respect the principle of representativeness of all groups.

Twelfth transitional provision. Adaptation of the legislation of the Autonomous Communities regarding Savings Banks.

Within six months the Autonomous Communities shall adapt their legislation on Savings Banks to the provisions of this Law.

Thirteenth transitional provision. Transitional regime for participating quotas.

During the two years following the entry into force of the provisions relating to participating quotas established in article 14 of this Law, the volume in circulation of those issued by a savings bank may not exceed 25 percent of its equity.

Single repealing provision. Regulatory repeal.

All provisions of equal or lower rank that oppose, contradict or are incompatible with the provisions of this Law are repealed and, in particular, the following:

a) Paragraph 3 of article 55, paragraphs 6 and 7 of article 58, paragraph 5 of article 98 and paragraphs n) and r) of article 100 of Law 24/1988, of 28 July, on the Securities Market.

b) Article 54 of Law 24/1988, of 28 July, on the Securities Market, in the terms established by the second transitional provision of this Law.

c) Paragraph 6 of the sixth additional provision and paragraph 2 of the twelfth additional provision of Law 37/1998, of 16 November, on the reform of Law 24/1988, of 28 July, on the Securities Market.

d) The third additional provision of Law 46/1998, of 17 December, on the introduction of the euro.

e) Articles 29 to 34, constituting subsections 1 and 2 of section 3 of chapter III of Title II, paragraph 5 of article 35, the second, third and fourth paragraphs of paragraph 2, paragraph 3 and paragraph 4 of article 62 and article 63 of Law 30/1995, of 8 November, on the Organization and Supervision of Private Insurance.

f) Article 15 of the Legal Statute of the Insurance Compensation Consortium, contained in the fourth article of Law 21/1990, of 19 December, to adapt Spanish law to Directive 88/357/EEC on freedom of services in insurance other than life and to update private insurance legislation.

g) Paragraph c) of Article 38, section 2, of Law 1/1999, of 5 January, regulating Venture Capital Entities and their Management Companies.

h) Article 16 of Decree-Law 18/1962, of 7 June, on Nationalization and Reorganization of the Bank of Spain, in the terms of the third final provision, paragraph c), of this Law.

i) Paragraph a) of section 1 of Article 57 bis of the Banking Ordinance Law, of 31 December 1946.

First final provision. Basic nature.

This Law has a basic nature under the provisions of Article 149.1.11.ª and 13.ª of the Constitution, which attribute to the State exclusive competence over the bases of the organization of credit, banking and insurance, and over the bases and coordination of the general planning of economic activity.

Second final provision. Authorization for regulatory development.

Without prejudice to the specific authorizations to other bodies provided in the articles of this Law, the Government is authorized to develop by regulation the provisions of this norm.

Third final provision. Entry into force.

This Law shall enter into force on the day following its publication in the «Boletín Oficial del Estado».

The following are excepted from the foregoing:

a) The provisions of Article 1, section five, which shall enter into force at the time when the Systems Company assumes the functions entrusted to it by Law 24/1988, of 28 July, on the Securities Market, in accordance with the first transitional provision of this Law.

b) The provisions of section 2 of chapter V, relating to civil liability insurance for motor vehicle traffic, which shall enter into force on 19 January 2003.

c) Chapter VI, relating to the Central Credit Information Office, which shall enter into force six months after the publication of this Law in the «Boletín Oficial del Estado».

d) The coverage of loss of profits derived from extraordinary events referred to in the new wording of Article 6 of the Legal Statute of the Insurance Compensation Consortium, contained in the fourth article of Law 21/1990, of 19 December, to adapt Spanish law to Directive 88/357/EEC on freedom of services in insurance other than life and to update private insurance legislation, as well as the inclusion as an insurance line with mandatory surcharge of that of miscellaneous pecuniary losses, established in Article 7 of the same norm, shall enter into force on the date determined by the regulatory provision referred to in the second paragraph of section 1 of the aforementioned Article 6.

e) In the case of the Credit Cooperatives and Savings Banks referred to in section 6 of Article 29, the provisions of the stipulations of sections 3 and 4 of Article 29 septies shall not apply as long as the regulatory development of the norm that adapts its content to this precept does not enter into force, and until then the notification referred to therein shall be made in the same language in which the contract was concluded or the commercial offer was addressed personally to the consumer and user, or the complaint and claim was submitted by the latter.

Fourth final provision. Preparation of consolidated texts.

First. The Government is authorized to prepare, within one year from the entry into force of this Law, the corresponding consolidated texts of Law 24/1988, of 28 July, on the Securities Market, Law 26/1988, of 29 July, on Discipline and Intervention of Credit Entities, and Law 30/1995, of 8 November, on Organization and Supervision of Private Insurance.

Second. This delegation includes the power to regularize, clarify and harmonize the legal texts that are to be consolidated.

Therefore, I command all Spaniards, individuals and authorities, to keep and enforce this Law.

Madrid, 22 November 2002.

JUAN CARLOS R.

The President of the Government in office,

MARIANO RAJOY BREY

Related information

See Constitutional Court Judgment 138/2011, of 14 September. Ref. BOE-A-2011-16026, regarding disputed competences of the Autonomous Communities.

This document is for informational purposes and has no legal value.

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