Real Decreto Legislativo 4/2015, de 23 de octubre, por el que se aprueba el texto refundido de la Ley del Mercado de Valores (Royal Legislative Decree 4/2015 of 23 October approving the consolidated text of the Securities Market Law)

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

Go to content

Consult the official gazette BOE

You are in

Consolidated document BOE-A-2015-11435

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

Help

Royal Legislative Decree 4/2015, of 23 October, approving the revised text of the Securities Market Law.

[Repealed provision]

Video tutorial on the Pan-Hispanic Dictionary of Legal Spanish of the Royal Spanish Academy

Go to the website of the Pan-Hispanic Dictionary of Legal Spanish (DPEJ)

Enter term to search in the

Pan-Hispanic Dictionary of Legal Spanish

Repealed

Royal Legislative Decree 4/2015, of 23 October, approving the revised text of the Securities Market Law.

Consolidated text : "Last update, published on 18/03/2023"

Norm repealed by sole repeal provision.1.a) of Law 6/2023, of 17 March. Ref. BOE-A-2023-7053 , with the scope established in final provision 15 thereof.

Upload

[Block 2: #preamble]

Law 20/2014, of 29 October , delegating to the Government the power to issue various revised texts, under the provisions of articles 82 et seq. of the Spanish Constitution , authorizes the Government, in its article one, paragraph a), to approve a revised text of Law 24/1988, of 28 July , on the Securities Market. This authorization, granted for a period of twelve months, shall affect the norms with the rank of law that have modified Law 24/1988, of 28 July , as well as those that, affecting its material scope, may, where appropriate, be promulgated before the approval of this royal legislative decree; and it shall also entail the integration into the text itself, duly regularized, clarified and systematized, of a series of legal provisions relating to the securities markets.

Law 24/1988, of 28 July , has been since the date of its approval the normative pillar on which the functioning of the Spanish securities market rests. In fact, its numerous amendments have been a faithful reflection of the evolution that, over the years, the securities market has undergone and which have their origin in various factors, such as the growing complexity and dynamism associated with the banking and financial system, which require constant work to adapt the regulatory system to the reality of the markets; the profound process of internationalization of securities regulations carried out in recent years, especially intense in the European internal market; and, of course, the need to respond to the consequences of the recent financial and economic crisis, which required providing the credit and financial Administration with the powers and faculties necessary to face a new and demanding scenario.

That is why, after a few years of profuse modification of the legal system, it is now appropriate to take the necessary steps to strengthen the clarity and coherence of the regulations applicable to the securities market, reduce its fragmentation and consolidate its systematization, making it a better instrument both for the use of the regulator and of the actors who intervene daily in commercial traffic; being aware that this will result in a better and more agile functioning of the financial markets and greater legal certainty. This revised text thus continues with the efforts already made by the legislator, among other norms, with Law 10/2014, of 26 June , on the organization, supervision and solvency of credit institutions and with Law 20/2015, of 14 July , on the organization, supervision and solvency of insurance and reinsurance undertakings, to simplify, clarify and harmonize the set of regulations applicable to financial markets.

This revised text has been prepared by integrating a set of norms with the rank of law relating to the securities markets, which have been duly regularized, clarified and systematized in accordance with the authorization provided in Law 20/2014, of 29 October , and in particular following the criteria set out below.

First, the more than forty amendments made to Law 24/1988, of 28 July , on the Securities Market since its approval have been incorporated. Particular mention should be made of the amendments introduced by Law 47/2007, of 19 December , which incorporated into the Spanish legal system various European Directives and in particular Directive 2004/39/EC of the European Parliament and of the Council, of 21 April 2004 , on markets in financial instruments, also known as MIFID, and which represented a true revolution in the conception of a harmonized European securities market.

Second, following the mandate of the legislator, another series of legal provisions on the matter have been integrated into the revised text. In particular, they are the third and fourteenth additional provisions and the first, second, fifth and sixth transitional provisions of Law 37/1998, of 16 November, on the reform of Law 24/1988, of 28 July, on the Securities Market; the third additional provision of Law 41/1999, of 12 November, on payment and securities settlement systems; the first, second, third and fourth additional provisions and the first, second and sixth transitional provisions of Law 44/2002, of 22 November, on Measures for the Reform of the Financial System; the third additional provision of Law 26/2003, of 17 July, amending Law 24/1988, of 28 July, on the Securities Market, and the consolidated text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December; the additional provision of Law 6/2007, of 12 April, on the reform of Law 24/1988, of 28 July, on the Securities Market; the first, second and fourth final provisions of Law 32/2011, of 4 October, amending Law 24/1988, of 28 July, on the Securities Market; the thirteenth additional provision of Law 9/2012, of 14 November, on the restructuring and resolution of credit institutions; the ninth transitional provision of Law 5/2015, of 27 April, on the promotion of business financing and the sixth and seventh transitional provisions of Law 11/2015, of 18 June, on the recovery and resolution of credit institutions and investment services companies.

As a consequence of all this, certain adjustments have been made to the structure of the text, modifying the numbering of the articles and, therefore, of the cross-references and concordances between them, a circumstance that has been taken advantage of, under the legislative delegation, to improve the systematic nature of the text and adjust some discrepancies.

Without prejudice to this consolidated text complying with the objectives of systematization and unification of the regulatory block of the securities markets, over the coming months the adaptation of Spanish regulations to a series of rules approved at European level must be addressed, such as Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, on market abuse, which will be applicable on 3 July 2016; and, above all, the new MIFID2 regulation that replaces the aforementioned MIFID, which is composed of Directive 2014/65/EU of the European Parliament and of the Council, of 15 May 2014, on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, and of Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014, on markets in financial instruments and amending Regulation (EU) No. 648/2012, rules that will bring about substantial modifications in the regime of financial instruments or the new regulation on trading venues.

In any case, this consolidation work makes it possible to prepare the securities market regulations for these imminent reforms, anticipating future modifications and creating a text that facilitates the work of the legislator at the time of transposing the European rules. With the introduction of new chapters and articles and compliance with the guidelines of regulatory technique, a regulatory structure more permeable to the incorporation of European law has been created.

In virtue thereof, on the proposal of the Minister of Economy and Competitiveness, in accordance with the Council of State and after deliberation by the Council of Ministers at its meeting on 23 October 2015,

I HEREBY PROVIDE:

[Block 3: #aunico]

Sole Article. Approval of the consolidated text of the Securities Market Law.

The consolidated text of the Securities Market Law is approved, incorporating the content of the following provisions:

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

b) The third and fourteenth additional provisions and the first, second, fifth and sixth transitional provisions of Law 37/1998, of 16 November, on the reform of Law 24/1988, of 28 July, on the Securities Market.

c) The third additional provision of Law 41/1999, of 12 November, on payment and securities settlement systems.

d) The first, second, third and fourth additional provisions and the first, second and sixth transitional provisions of Law 44/2002, of 22 November, on Measures for the Reform of the Financial System.

e) The third additional provision of Law 26/2003, of 17 July, amending Law 24/1988, of 28 July, on the Securities Market, and the consolidated text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December.

f) The additional provision of Law 6/2007, of 12 April, on the reform of Law 24/1988, of 28 July, on the Securities Market.

g) The first, second and fourth final provisions of Law 32/2011, of 4 October, amending Law 24/1988, of 28 July, on the Securities Market.

h) The thirteenth additional provision of Law 9/2012, of 14 November, on the restructuring and resolution of credit institutions.

i) The ninth transitional provision of Law 5/2015, of 27 April, on the promotion of business financing

j) The sixth and seventh transitional provisions of Law 11/2015, of 18 June, on the recovery and resolution of credit institutions and investment services companies.

[Block 4: #daunica]

Sole Additional Provision. Regulatory references.

1. The regulatory references made in other provisions to Law 24/1988, of 28 July, on the Securities Market, shall be understood as made to the corresponding provisions of the consolidated text that is approved.

2. In order to facilitate the application of this consolidated text, a correlation table with the provisions of Law 24/1988, of 28 July, on the Securities Market shall be published on the website of the General Secretariat of the Treasury and Financial Policy (www.tesoro.es), for information purposes only. This publication shall be made within 15 days following the publication in the «Boletín Oficial del Estado» of this legislative royal decree.

[Block 5: #ddunica]

Single repealing provision. Regulatory repeal.

The following provisions are repealed:

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

b) Additional provisions third and fourteenth and transitional provisions first, second, fifth and sixth of Law 37/1998, of 16 November, on the reform of Law 24/1988, of 28 July, on the Securities Market.

c) Additional provision third of Law 41/1999, of 12 November, on payment and securities settlement systems.

d) Additional provisions first, second, third and fourth and transitional provisions first, second and sixth of Law 44/2002, of 22 November, on Measures for the Reform of the Financial System.

e) Additional provision third of Law 26/2003, of 17 July, amending Law 24/1988, of 28 July, on the Securities Market, and the consolidated text of the Law on Public Limited Companies, approved by Royal Legislative Decree 1564/1989, of 22 December.

f) The additional provision of Law 6/2007, of 12 April, on the reform of Law 24/1988, of 28 July, on the Securities Market.

g) Final provisions first, second and fourth of Law 32/2011, of 4 October, amending Law 24/1988, of 28 July, on the Securities Market.

h) Additional provision tenth third of Law 9/2012, of 14 November, on the restructuring and resolution of credit institutions.

i) Transitional provision ninth of Law 5/2015, of 27 April, on the promotion of business financing.

j) Transitional provisions sixth and seventh of Law 11/2015, of 18 June, on the recovery and resolution of credit institutions and investment services companies.

[Block 6: #dfunica]

Single final provision. Entry into force.

This legislative royal decree and the consolidated text it approves shall enter into force twenty days after their publication in the «Boletín Oficial del Estado».

However, section 2 of the single additional provision of this legislative royal decree shall enter into force on the day following its publication in the «Boletín Oficial del Estado».

[Block 7: #firma]

Given in Oviedo, on 23 October 2015.

FELIPE R.

The Minister of Economy and Competitiveness,

LUIS DE GUINDOS JURADO

[Block 8: #texto]

CONSOLIDATED TEXT OF THE SECURITIES MARKET LAW

[Block 9: #ti]

TITLE I

General Provisions

[Block 10: #ci]

CHAPTER I

Scope of the law

[Block 11: #a1]

Article 1. Purpose and content.

The purpose of this law is the regulation of the securities market and investment services and activities in Spain and it refers, among other matters, to the issue and offering of financial instruments, to trading venues and systems for clearing, settlement and registration of financial instruments, to the authorization regime and operating conditions of investment services and activities companies, to the provision of investment services and activities in Spain by companies from third countries, to the authorization and operation of data supply service providers and to the supervision, inspection and sanctioning regime in charge of the National Securities Market Commission (CNMV).

Amended by the sole article.1 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 12: #a2]

Article 2. Financial instruments subject to this law.

1. The financial instruments listed in its Annex are included within the scope of this law. The Government is empowered to modify by royal decree the list of financial instruments appearing in this article in order to adapt it to the modifications established in the regulations of the European Union.

2. The rules provided in this law for transferable securities shall apply to financial instruments other than transferable securities, with the adaptations that may be necessary.

3. Paragraphs b), f), g) and j) of the annex to this law must be applied in accordance with the provisions of Commission Delegated Regulation (EU) 2017/565, of 25 April 2016, supplementing Directive 2014/65/EU as regards organizational requirements and operating conditions for investment services and activities companies, and defined terms for the purposes of that Directive.

4. Every multilateral system with financial instruments shall operate either in accordance with the provisions of Royal Decree-law 21/2017, of 29 December, on urgent measures for the adaptation of Spanish law to the regulations of the European Union on securities market matters for Multilateral Trading Facilities (MTF) or for Organized Trading Facilities (OTF), or in accordance with the provisions of said royal decree-law and of this law for regulated markets.

5. Every investment services and activities company that, in an organized, frequent and systematic manner, trades on its own account when executing client orders outside a regulated market, an MTF or an OTF, shall operate in accordance with Title III of Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014.

6. Without prejudice to the provisions of Articles 23 and 28 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014, all transactions in financial instruments of those mentioned in the preceding paragraphs that are not concluded on multilateral systems or systematic internalisers must comply with the relevant provisions of Title III of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014.

Amended by the sole article.2 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 13: #a3]

Article 3. Other provisions on financial instruments.

(Repealed)

Repealed by the sole article.3 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 14: #a4]

Article 4. Scope of application.

1. The provisions of this law shall apply to all financial instruments whose issuance, trading or marketing takes place in national territory, to investment services and activities companies domiciled in Spain, to the governing bodies of regulated markets, SMN or SOC domiciled in Spain, and to data supply providers domiciled in Spain.

2. This law and its implementing provisions shall also apply to third-country companies that provide investment services and activities or carry out investment activities through the establishment of a branch or under the freedom to provide services without a branch.

Amended by the sole article.4 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 15: #a5]

Article 5. Group of Companies.

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

[Block 16: #cii]

CHAPTER II

On negotiable securities represented by book entries

[Block 17: #a6]

Article 6. Representation of securities.

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

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

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

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

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

[Block 18: #a7]

Article 7. Issue document.

1. The representation of securities by book entries shall require the preparation by the issuing entity of a document containing the information necessary for the identification of the securities included in the issue.

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

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

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

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

c) The certification issued by the persons authorised in accordance with current regulations, in the case of issues to be admitted to trading on a multilateral trading system established in Spain, in accordance with the provisions of Article 41.4.

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

2. The issuing entity must deposit a copy of the issue document and its amendments with the entity responsible for the accounting registry. When the securities are admitted to trading on a regulated market or in a multilateral trading facility, a copy must also be deposited with its governing body.

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

4. The content of the securities represented by means of book entries shall be determined by the issuance document.

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

Amended by art. 6.1 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 19: #a8]

Article 8. Entities responsible for the accounting record.

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

2. When the securities are not admitted to trading on official secondary markets or in multilateral trading facilities, 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 article 141.a). The designation must be registered in the Registry of the National Securities Market Commission provided for in article 238, as a prerequisite for the beginning of the keeping of the accounting record. Central securities depositories may also assume said function according to the requirements that, where applicable, are established in the applicable regulations and in their bylaws.

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

4. The entities referred to in this article shall be liable to those who are harmed by the failure to make the corresponding registrations, by inaccuracies and delays in them and, in general, by intentional or negligent non-compliance with their legal obligations. Compensation for the damages caused, as far as possible, must be made in kind.

Upload

[Block 20: #a9]

Article 9. System of registration and holding of securities.

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

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

a) One or more own accounts in which the balances of securities whose ownership corresponds to the participating entity shall be recorded.

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

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

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

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

Upload

[Block 21: #a10]

Article 10. Constitution of securities represented by means of book entries.

1. Securities represented by means of book entries shall be constituted as such by virtue of their registration in the corresponding register of the entity responsible for the accounting record and from then on they shall be subject to the provisions of this chapter.

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

Upload

[Block 22: #a11]

Article 11. Transfer.

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

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

3. A third party who acquires for consideration securities represented by book entries from a person who, according to the entries in the accounting register, appears to be entitled to transfer them shall not be subject to recovery, unless at the time of acquisition they acted in bad faith or with gross negligence.

4. The issuing entity may only assert, against a bona fide acquirer of securities represented by book entries, the exceptions arising from the registration in relation to the issuance document provided for in Article 7 and those it could have raised if the securities had been represented by certificates.

5. The subscription or transfer of securities shall require for its validity the involvement of a public notary only when, not being admitted to trading on an official secondary market, they are represented by bearer certificates and said subscription or transfer is not carried out with the participation or intermediation of a securities company or agency, or a credit institution.

[Block 23: #a12]

Article 12. Creation of limited real rights and other encumbrances.

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

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

[Block 24: #a13]

Article 13. Registry legitimacy and successive chain of title.

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

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

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

[Block 25: #a14]

Article 14. Certificates of legitimacy.

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

2. These certificates shall not confer any rights other than those relating to legitimacy. Acts of disposal having the certificates as their object shall be null and void.

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

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

[Block 26: #a15]

Article 15. Transfer of securities and pro rata rule.

1. Upon the declaration of insolvency of an entity responsible for keeping the register of securities represented by book entries or of an entity participating in the registration system, the holders of securities recorded in said registers shall enjoy the right of separation with respect to the securities registered in their favor and may exercise it by requesting their transfer to another entity, all without prejudice to the provisions of Articles 102.2 and 193.2.e).

2. For the purposes of the provisions of this article, the Insolvency Judge and the bodies of the insolvency administration shall safeguard the rights arising from operations in the process of settlement at the time the insolvency of any of the entities referred to in the preceding paragraph is declared, taking into account the rules of the corresponding clearing, settlement and registration system.

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

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

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

[Block 27: #tii]

TITLE II

National Securities Market Commission

[Block 28: #ci-2]

CHAPTER I

General Provisions

[Block 29: #a16]

Article 16. Nature and legal regime.

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 complete or develop it, the National Securities Market Commission shall act in accordance with the provisions of Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations, and Law 40/2015, of 1 October, on the Legal Regime of the Public Sector.

3. The contracts entered into by the National Securities Market Commission shall be governed by the provisions of the consolidated text of the Law on Public Sector Contracts approved by Royal Legislative Decree 3/2011, of 14 November.

4. The Commission shall also be governed by those provisions of Law 47/2003, of 26 November, on General Budgets that are applicable to it.

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

6. The Government and the Ministry of Economy and Competitiveness 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.

Section 2 drafted in accordance with the correction of errors published in BOE no. 296, of 11 December 2015. Ref. BOE-A-2015-13438.

[Block 30: #a17]

Article 17. Functions of the National Securities Market Commission.

1. The National Securities Market Commission is the competent body for the supervision and inspection of the securities markets and the activity of all natural and legal persons involved in trading therein, for the exercise of sanctioning powers over them, and for the other functions attributed to it in this law.

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

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

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

The report indicated in the preceding paragraph shall include a memorandum on the supervisory function performed by the National Securities Market Commission in relation to its actions and procedures carried out in this matter and from which information on the effectiveness and efficiency of such procedures and actions can be deduced. This memorandum shall include a report from the internal control body on the adequacy of the decisions adopted by the governing bodies of the National Securities Market Commission to the procedural regulations applicable in each case. This memorandum must be approved by the Council of the National Securities Market Commission and shall be forwarded to the Cortes Generales and the Government of the Nation.

[Block 31: #a18]

Article 18. Personnel in the service of the National Securities Market Commission.

1. 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 in a managerial capacity, shall be carried out through public announcement and in accordance with systems based on the principles of equality, merit, and ability.

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

3. 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.

4. The personnel of the National Securities Market Commission 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, whether 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.

[Block 32: #a19]

Article 19. Budget and economic and financial control.

1. The National Securities Market Commission shall annually prepare a draft budget, with the structure indicated by the Ministry of Finance and Public Administrations, and shall submit 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 and Public Administrations, when their amount does not exceed 5 percent thereof, and by the Government, in all other cases.

2. 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.

[Block 33: #a20]

Article 20. Internal regime of the National Securities Market Commission and internal control.

1. The Council of the National Securities Market Commission shall approve the Internal Rules of Procedure, which shall establish:

a) The organizational structure of the Commission.

b) The distribution of powers among the different bodies.

c) The internal operating procedures.

d) The specific regime applicable to personnel when they cease to provide services therein, without prejudice, in this case, to the provisions of article 18.3 and article 29 regarding incompatibility regimes.

e) The procedures for the admission of personnel, in accordance with the principles set out in article 18.

f) As well as any matters 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.

2. The National Securities Market Commission must have an internal control body whose functional dependence and reporting capacity shall be governed by the principles of impartiality, objectivity and avoiding the occurrence of conflicts of interest.

[Block 34: #a21]

Article 21. Regulatory capacity of the National Securities Market Commission.

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

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

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

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

[Block 35: #a22]

Article 22. Appeals against provisions and resolutions of the National Securities Market Commission.

1. The provisions and resolutions issued by the National Securities Market Commission in the exercise of the administrative powers conferred upon it by this law shall put an end to the administrative remedy and shall be subject to appeal through administrative litigation proceedings.

2. Notwithstanding the foregoing, the following shall be excepted from the rule set out in the preceding paragraph:

a) The resolutions it issues in sanctioning matters, whose regime shall be that provided for in Article 273.

b) The resolutions it issues in matters of intervention and replacement of directors, whose regime shall be that provided for in Article 311.

[Block 36: #cii-2]

CHAPTER II

Organization

[Block 37: #a23]

Article 23. The Board of the National Securities Market Commission.

1. The National Securities Market Commission shall be governed by a Board, which shall be responsible for exercising all the competences assigned to it by this law and those attributed to it by the Government or the Minister of Economy and Competitiveness in the regulatory development thereof.

2. The Board of the National Securities Market Commission shall be composed of:

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

b) The Secretary General of the Treasury and Financial Policy and the Deputy Governor of the Bank of Spain, who shall be ex officio members of the Board.

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

3. The person designated by the Board from among those providing their services in the Commission shall act as Secretary, with a voice but no vote.

[Block 38: #a24]

Article 24. Powers of the Board of the National Securities Market Commission.

1. Within the framework of the functions attributed to the National Securities Market Commission by Article 17 and for the exercise of the competences conferred on the Board by Article 23, the Board of the National Securities Market Commission shall have the following powers:

a) To approve the Circulars referred to in Article 21.

b) To approve the Internal Rules of Procedure of the National Securities Market Commission referred to in Article 20.

c) To approve the draft budget of the Commission.

d) To constitute the Executive Committee, regulated in Article 26.

e) To appoint the executive officers of the National Securities Market Commission, on the proposal of its President.

f) To approve the annual reports referred to in Article 17.

g) To approve or propose all matters that legally fall within its competence.

2. Within a period of three months from the taking of office of any member of the Board, the Board shall proceed, in an extraordinary session, to expressly confirm, modify or revoke each and every one of its delegations of powers to the President and the Vice-President or to the Executive Committee.

[Block 39: #a25]

Article 25. Functions of the President and the Vice-President of the National Securities Market Commission.

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

a) To hold the legal representation of the Commission.

b) To decide on the convening of ordinary and extraordinary sessions of the Board and the Executive Committee of the National Securities Market Commission.

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

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

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

f) To exercise senior management authority over all personnel of the Commission.

g) To exercise the powers expressly delegated to him by the Board.

h) To exercise the other functions attributed to him by the applicable legal framework.

2. The Vice-President of the National Securities Market Commission shall have the following attributions:

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

b) To chair the Advisory Committee of the National Securities Market Commission referred to in Article 30.

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

d) To exercise the functions delegated to him by the President or the Board.

3. In cases of vacancy, absence or illness, the Vice-President shall be replaced by the Board Member provided for in Article 23.2.c) of this law with the longest seniority in office and, in the event of equal seniority, by the eldest.

[Block 40: #a26]

Article 26. The Executive Committee of the National Securities Market Commission.

1. The Executive Committee shall be composed of the President, the Vice-President and the Board Members provided for in Article 23.2.c). The Secretary of the Board of the National Securities Market Commission shall act as Secretary of the Executive Committee, with a voice but no vote.

2. The attributions of the Executive Committee shall be:

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

b) To study, report on and deliberate upon the matters submitted for its consideration by the President.

c) Coordinate the actions of the various governing bodies of the Commission, without prejudice to the powers that correspond to the President.

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

e) Resolve the administrative authorizations that have been assigned to it by delegation from the Council, as well as exercise those powers that the Council expressly delegates to it.

[Block 41: #a27]

Article 27. Term of Office of the President, the Vice-President and the Councillors.

1. The term of office of the President, the Vice-President and the Councillors referred to in Article 23.2.c) shall be four years, at the end of which it may be renewed only once.

2. If, during the period of their term of office, the President, the Vice-President or any of the Councillors referred to in Article 23.2.c) is removed from office, their successor shall leave office at the end of their predecessor's term. Where this latter removal from office occurs before one year has elapsed since the appointment, the limit provided for in the last clause of the preceding paragraph shall not apply, and the term of office may be renewed on two occasions

[Block 42: #a28]

Article 28. Removal from office of the President, the Vice-President and the Councillors.

1. The President and the Vice-President shall leave office for the following reasons:

a) Upon completion of the period for which they were appointed, in which case they shall continue to exercise their functions until the appointment of their successor.

b) Resignation accepted by the Government.

c) Removal from office decided by the Government for serious breach of their obligations, permanent incapacity to exercise their function, subsequent incompatibility or conviction for an intentional offence, following the opening of proceedings by the Ministry of Economy and Competitiveness.

2. The same reasons for removal from office shall apply to the Councillors referred to in Article 23.2.c), with the Minister of Economy and Competitiveness being responsible for accepting the resignation or deciding on the removal from office.

Letter a) of section 1 is amended by final provision 6.1 of Royal Decree-Law 34/2020, of 17 November. Ref. BOE-A-2020-14368

Select version:

Latest update, published on 18/11/2020, in force from 19/11/2020.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 43: #a29]

Article 29. Incompatibility regime.

1. The President, the Vice-President and the Councillors of the National Securities Market Commission shall be subject to the incompatibility regime of Senior Officials of the Administration.

2. Upon leaving office and for the two years thereafter, they may not engage in any professional activity related to the Securities Market. The economic compensation they shall receive by virtue of this limitation shall be determined by regulation.

[Block 44: #a30]

Article 30. The Advisory Committee of the National Securities Market Commission.

1. The Advisory Committee of the National Securities Market Commission is the advisory body of its Council.

2. The Advisory Committee shall be chaired by the Vice-Chairman of the Commission, who shall not have a vote in relation to its reports, with the number of its members and the manner of their appointment being those determined by regulation.

3. The members shall be appointed to represent the market infrastructures, the issuers, the investors, the credit institutions, the insurance and reinsurance undertakings, the professional groups designated by the National Securities Market Commission and the investment guarantee fund, plus one other representative designated by each of the Autonomous Communities with competences in matters of securities markets in whose territory there is an official secondary market.

[Block 45: #a31]

Article 31. Report of the Advisory Committee.

1. The Advisory Committee of the National Securities Market Commission shall report on all matters raised before it by the Council.

2. The report of the Advisory Committee shall be mandatory in relation to:

a) The provisions of the National Securities Market Commission referred to in Article 21.

b) The authorization, revocation and corporate transactions of investment services companies and of the remaining persons or entities acting under Article 145.2, when so established by regulation, taking into account their economic and legal significance.

c) The authorization and revocation of branches of investment services companies from non-member countries of the European Union, and the remaining subjects of the Securities Market, when so established by regulation, taking into account the economic and legal relevance of such subjects.

3. Without prejudice to its status as an advisory body of the Council of the National Securities Market Commission, the Advisory Committee shall report on draft general provisions on matters directly related to the securities market that are referred to it by the Government or by the Ministry of Economy and Competitiveness in order to give effect to the principle of hearing of the affected sectors in the procedure for drafting administrative provisions.

[Block 46: #a32]

Article 32. Economic resources of the National Securities Market Commission.

1. The initial patrimony of the National Securities Market Commission shall consist of an initial endowment of 3.005.060,52 euros.

2. The resources of the National Securities Market Commission shall be composed of:

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

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

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

3. The profits of each financial year may be allocated to:

a) Covering losses from previous financial years.

b) Creating the reserves necessary for financing the investments that the National Securities Market Commission must carry out for the proper fulfillment of the objectives established in Article 17.

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

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

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

[Block 47: #tiii]

TITLE III

Primary securities market

[Block 48: #ci-3]

CHAPTER I

General provisions

[Block 49: #a33]

Article 33. Freedom of issue.

1. Issues of securities shall not require prior administrative authorization and for their placement any appropriate technique may be used at the choice of the issuer.

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

Additionally, the securities must respect the legal regime to which they are subject and, in cases where the issuer is obliged to prepare a prospectus in accordance with the provisions of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council, of 14 June 2017, on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC, the placement must comply with the conditions set out therein.

Paragraph 2 is amended and paragraph 3 is deleted by Article 6.2 and 3 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select version:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 50: #a34]

Article 34. Obligation to publish an information prospectus.

Without prejudice to the provisions of paragraphs 4 and 5 of Article 1 of Regulation (EU) No. 2017/1129, securities may only be offered to the public or admitted to trading on a regulated market after prior publication of a prospectus in accordance with the aforementioned Regulation.

The prospectus referred to in the preceding paragraph shall not be required in the case of offers to the public or admissions to trading on regulated markets of notes with a maturity of less than 365 days.

In accordance with the provisions of Article 3.2 of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council, of 14 June 2017, there shall be no obligation to publish a prospectus where the offers of securities are not subject to notification in accordance with Article 25 of that Regulation, and the total amount of each of those offers in the Union is less than eight million euros, a limit which shall be calculated over a period of twelve months. In the case of credit institutions, there shall be no obligation to publish a prospectus where the offers of securities are not subject to notification in accordance with Article 25 of that Regulation, and the total amount of each of those offers in the Union is less than five million euros, a limit which shall be calculated over a period of twelve months.

Amended by art. 6.4 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Drafted in accordance with the correction of errors published in BOE no. 116, of 15 May 2021. Ref. BOE-A-2021-8031

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 51: #a35]

Article 35. Obligations relating to the placement of certain issues.

In the case of placement of issues not subject to the obligation to publish a prospectus because they are notes with a maturity of less than 365 days, are directed to fewer than one hundred and fifty investors per Member State excluding qualified investors, because a minimum investment equal to or greater than one hundred thousand euros is required or because their total amount in the European Union is less than eight million euros, calculated over a period of twelve months, which are directed to the general public using any form of advertising communication, an entity authorised to provide investment services must be involved. The action of this entity must include, at least, the validation of the information to be provided to investors and the general supervision of the marketing process. This obligation shall not apply to the exercise of the own activity of duly authorised crowdfunding platforms. Additionally, the CNMV may require that these placements, taking into account the complexity of the issuer or of the financial instrument in question, comply with the obligation to publish a prospectus.

Amended by art. 6.5 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 52: #a36]

Article 36. Information requirements for admission to trading on a regulated market.

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

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

b) The submission and registration with the CNMV of the issuer's financial statements prepared and audited in accordance with the legislation applicable to that issuer. The number of financial years that the financial statements must cover shall be determined by regulation.

c) Where required, the submission, approval and registration with the CNMV of a prospectus, as well as its publication.

2. The procedure for the admission of securities to trading on regulated markets must facilitate that the securities are traded in a fair, orderly and efficient manner. This procedure shall be regulated by regulation.

3. Advertising relating to admission to trading on a regulated market and to public offers of securities shall comply with the provisions of Article 22 of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council, of 14 June 2017 and 240 of this Law.

4. Public offers for sale or subscription of securities not exempted from the obligation to publish an information prospectus shall be subject to the provisions of paragraph 1 of this article with the adaptations and exceptions determined by regulation.

Amended by art. 6.6 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 53: #a37]

Article 37. Content of the prospectus.

(Repealed)

Repealed by art. 6.7 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 54: #a38]

Case law

Article 38. Responsibility for the prospectus.

1. Responsibility for the information contained in the prospectus shall fall, at least, on the issuer, the offeror or the person requesting admission to trading on a regulated market and the directors of the foregoing.

Likewise, the following persons shall be responsible:

a) The guarantor of the securities in relation to the information that it must prepare.

b) The managing entity with respect to the verification tasks it carries out.

c) Those other persons who agree to assume responsibility for the prospectus, provided that this is stated in said document, and those others not included among the foregoing who have authorised the content of the prospectus.

The conditions governing the responsibility of the persons mentioned in this section shall be established by regulation.

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

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

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

4. No responsibility may be demanded for reasons related exclusively to the summary note referred to in Article 7 of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council of 14 June 2017 or to the specific summary note of the EU growth prospectus contemplated in Article 15.1 of said Regulation, including its translation, unless:

a) it is misleading, inaccurate or inconsistent with the other parts of the prospectus, or

b) it does not contain, read together with the rest of the prospectus, the essential information intended to help investors decide whether or not to invest in the securities.

Amended by art. 6.8 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 55: #a39]

Article 39. Responsibility in the approval of the prospectus.

The CNMV shall be responsible for the approval of the prospectus, in the terms and with the scope provided in Article 20.9 of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council of 14 June 2017 .

Amended by art. 6.9 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 56: #a40]

Article 40. Preventive measures.

(Repealed)

Repealed by art. 6.10 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 57: #cii-3]

CHAPTER II

Issues of bonds or other securities that recognise or create debt

[Block 58: #a41]

Article 41. Exemption from requirements.

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

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

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

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

The participating securities referred to in Article 7.1, last paragraph, such as bonds convertible into shares, shall not be considered bonds or other securities that recognise or create debt, provided that they are issued by the issuer of the underlying shares or by an entity belonging to the issuer's group.

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

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

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

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

4. For the issues referred to in section 1.b), the conditions legally required for the issue and the characteristics of the securities shall be recorded in a certification issued by the persons authorised in accordance with current regulations. This certification shall be considered suitable for registering the securities in book-entry form in accordance with the provisions of Article 7.

[Block 59: #a42]

Article 42. Scope of application of the bondholders' syndicate.

Title XI, Chapter IV, of the Consolidated Text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, shall apply to issues of bonds or other securities that recognise or create debt and that have the status of public offer of subscription subject to the obligation to prepare a prospectus in accordance with the provisions of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council, of 14 June 2017 when:

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

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

Likewise, Title XI, Chapter IV, of the Consolidated Text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, shall apply to public offers of bonds or other securities that recognise or create debt that are exempt from the obligation to publish a prospectus solely by virtue of the provisions of the third paragraph of Article 34.

Amended by art. 6.11 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Drafted in accordance with the correction of errors published in BOE no. 116, of 15 May 2021. Ref. BOE-A-2021-8031

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 60: #tiv]

TITLE IV

Official secondary securities markets

[Block 61: #ci-4]

CHAPTER I

General provisions

[Block 62: #a43]

Article 43. Definition.

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

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

a) The Stock Exchanges.

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

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

d) The Fixed Income Market, AIAF.

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

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

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

[Block 63: #a44]

Article 44. Authorisation.

(Repealed).

Repealed by the sole repealing provision of Royal Decree-law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 64: #a45]

Article 45. Requirements for obtaining authorisation.

1. Official secondary markets must comply with the following requirements to obtain authorisation:

a) Designate a governing company, which shall take the form of a public limited company and whose basic functions shall be the administration and management of the market as well as the supervision of its operation.

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

c) Prepare a programme of activities detailing the organisational structure of the market, the financial instruments susceptible of being traded on it and the services that the governing company intends to provide.

d) That the members of the board of directors of the governing company and the persons who will effectively direct the activities and operations of the market have a recognised commercial and professional honour and have adequate knowledge and experience to exercise their functions.

e) That the shareholders who are to have a significant participation in the governing company of the market are suitable, in accordance with the provisions of Article 182.

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

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

2. With the exceptions established by regulation, the amendment of the articles of association of the governing company or of the market rules shall require the prior approval of the National Securities Market Commission.

3. The precise rules for the application of this article shall be developed by regulation.

[Block 65: #a46]

Article 46. Conditions for carrying on business.

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

[Block 66: #a47]

Article 47. Appointment of directors and senior officers.

1. Once authorisation to commence activity has been received, subsequent appointments of members of the board of directors and of those holding senior management positions in the governing company must be approved by the National Securities Market Commission or, where applicable, by the Autonomous Community with competence in the matter, for the purposes of verifying that the appointees meet the requirements of Article 152.1, letters f and g).

2. The National Securities Market Commission shall oppose the proposed changes where there are objective and demonstrable grounds for believing that they pose a significant threat to the sound and prudent management and operation of the market. The new appointments shall be deemed accepted if the National Securities Market Commission does not issue a decision within three months from receipt of the notification.

[Block 67: #a48]

Article 48. Holdings in companies that administer official secondary markets or regulated markets outside Spain.

1. Direct or indirect holdings in the capital of companies that administer Spanish official secondary markets shall be subject to the regime of significant holdings provided for in Chapter IV of Title V for investment services firms, under the terms determined by regulation, it being understood in all cases that any holding that reaches, directly or indirectly, at least 1 per cent of the capital or voting rights of the company, or that, without reaching that percentage, allows a notable influence to be exercised over the company, under the terms determined by regulation, shall have such character.

Without prejudice to the powers to oppose a significant holding under the terms provided for in Article 176, the National Securities Market Commission may oppose the acquisition of a significant holding in the share capital of those companies where it considers it necessary to ensure the proper functioning of the markets or to avoid distortions in them, as well as, in the case of acquirers from third countries, where equivalent treatment is not afforded to Spanish entities in their country of origin. The National Securities Market Commission shall notify the Ministry of Economy and Competitiveness of its opposition to the acquisition of the significant holding and the reasons on which it is based.

2. Direct or indirect holdings by companies that administer Spanish official secondary markets in other companies that manage regulated markets outside Spain shall require the prior authorisation of the National Securities Market Commission, which shall have a period of two months from the date on which it was informed to oppose the holding, where applicable. If the Commission does not issue a decision within that period, the application shall be deemed accepted.

[Block 68: #a49]

Article 49. Revocation of authorisation.

1. The National Securities Market Commission may revoke the authorisation granted to an official secondary market where any of the following circumstances occurs:

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

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

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

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

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

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

3. The precise rules for the application of this article shall be developed by regulation.

[Block 69: #a50]

Article 50. Replacement of the governing company.

1. The replacement of the governing company of the official secondary market shall be subject to authorisation by the National Securities Market Commission.

2. The period for resolving the procedure shall be three months from the submission of the application or from the completion of the required documentation. In the absence of an express decision within that period, the application shall be deemed rejected.

3. The National Securities Market Commission shall notify the Ministry of Economy and Competitiveness of the opening of the authorisation procedure, indicating the essential elements of the file to be processed, and of its completion, indicating the outcome of the decision adopted by the National Securities Market Commission.

[Block 70: #cii-4]

CHAPTER II

On official secondary markets in particular

[Block 71: #a51]

Article 51. Official secondary markets of autonomous community scope.

1. In the case of markets of autonomous scope, the authorization referred to in article 44 shall be granted by the Autonomous Community with competence in the matter.

2. With the exceptions established by regulation, the modification of the corporate bylaws of the governing company or of the market regulations shall require prior approval by the Autonomous Community with competence in the matter, in the case of markets of autonomous scope.

3. In the case of markets of autonomous scope, the authorization for the substitution of the governing company of an official secondary market of autonomous scope shall be granted by the Autonomous Community with competence in the matter.

4. The Autonomous Communities with competence in the matter may establish such additional organizational measures as they deem appropriate with respect to markets of autonomous scope.

[Block 72: #s1]

Section 1.ª On stock exchanges

[Block 73: #a52]

Article 52. Creation.

The creation of Stock Exchanges shall correspond to the National Securities Market Commission, in accordance with the provisions of article 44, except in the case of Stock Exchanges located in the territory of Autonomous Communities whose Statutes of Autonomy recognize competence for that purpose. In this case, the creation of Stock Exchanges shall correspond to said Autonomous Communities.

[Block 74: #a53]

Article 53. Purpose.

1. The Stock Exchanges shall have as their purpose the trading of those categories of negotiable securities and other financial instruments, of those provided for in article 2, that by their characteristics are suitable for it in accordance with the provisions of the market regulations, as established in article 45.

2. Financial instruments admitted to trading on another official secondary market may be traded on the Stock Exchanges, under the terms established in their Regulations. In this case, the necessary coordination between the respective registration, clearing and settlement systems must be provided for, where applicable.

[Block 75: #a54]

Article 54. Governing company.

1. The Stock Exchanges shall be governed and administered by a governing company, in accordance with the provisions of article 45, which shall be responsible for their internal organization and operation, and shall own the necessary means for it, this being its main corporate purpose.

2. The governing companies may carry out other complementary activities, although they shall not have the legal status of members of the corresponding Stock Exchanges nor may they carry out any financial intermediation activity, nor the activities listed in articles 140 and 141.

3. The governing companies shall have share capital represented by registered shares, and must necessarily have a board of directors composed of no fewer than five persons and, at least, one general manager.

4. The Autonomous Communities with competence in the matter and with respect to Stock Exchanges of autonomous scope may establish for them the organization they deem appropriate.

[Block 76: #a55]

Article 55. Members.

Entities that comply with the provisions of article 69 may acquire the status of members of the Stock Exchanges.

[Block 77: #a56]

Article 56. Stock Market Interconnection System.

1. The Stock Exchanges shall establish a Stock Market Interconnection System of state scope, integrated through a computer network, in which those securities agreed by the National Securities Market Commission shall be traded, from among those previously admitted to trading on at least two Stock Exchanges, at the request of the issuing entity and following a favorable report from the Stock Exchange Company referred to in the following article, in accordance with what is established by regulation.

2. The National Securities Market Commission may provide that the integration of an issue of securities into the Stock Market Interconnection System implies its exclusive trading through it and may require, as a prior condition, its inclusion in a central securities depository.

[Block 78: #a57]

Article 57. The Stock Exchange Company.

1. The management of the Stock Market Interconnection System shall correspond to the Stock Exchange Company, which shall be constituted by the governing companies of the Stock Exchanges existing at any given time.

2. The Stock Exchange Company shall own the necessary means for the operation of the Stock Market Interconnection System, and be responsible for it, with the consideration of governing body thereof, this being its exclusive corporate purpose.

3. The capital of the Stock Exchange Company shall be distributed in equal parts among said governing companies, and its Board of Directors shall be formed by one representative of each Stock Exchange and one more, who shall act as Chairman, elected by majority among them.

4. The bylaws of the Stock Exchange Company, its modifications and the appointment of the members of its Board of Directors shall require the approval of the National Securities Market Commission, following a report from the Autonomous Communities with competence in the matter.

[Block 79: #a58]

Article 58. Operations on the Stock Exchange.

1. Each of the stock exchange operations must be assigned to a single Stock Exchange or, where applicable, to the Stock Market Interconnection System.

2. The criteria to be followed for said assignment in the case of operations in which members of different Stock Exchanges concur shall be determined by regulation.

[Block 80: #s2]

Section 2.ª On the public debt market in book-entry form

[Block 81: #a59]

Article 59. Purpose.

1. The Public Debt Market in Book-Entry form shall have as its object the trading of fixed-income securities represented by book entries issued by the State, by the Official Credit Institute and, at their request, by the European Central Bank, by the National Central Banks of the European Union, by the Autonomous Communities, by multilateral development banks of which Spain is a member, by the European Investment Bank or by other public entities, in the cases established by regulation, as well as the trading of other financial instruments, in all the foregoing cases in accordance with the provisions of the market regulations as set out in article 45. In any case, the securities must comply with the technical specifications established for this purpose in the Market regulations.

2. The securities admitted to trading on this market may be traded on other official secondary markets, under the terms set out in the Regulations of the corresponding market.

[Block 82: #a60]

Article 60. Governing body.

1. The Bank of Spain shall be considered the governing body of the Public Debt Market in Book-Entry form.

2. 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 in the Market regulations.

3. The replacement of the governing body of the Public Debt Market in Book-Entry form shall be governed by the provisions of article 50.

4. The Public Debt Market in Book-Entry form shall be governed by this law and its implementing regulations, as well as by Regulations, as set out in article 45.

5. The Autonomous Communities with competence in the matter may create, regulate and organize an autonomous Public Debt Market in Book-Entry form whose object is the trading of fixed-income securities issued by them and other public-law entities within their territorial scope.

[Block 83: #a61]

Article 61. Members.

1. In addition to the Bank of Spain, entities that meet the requirements of article 69 of this law may become members of the Public Debt Market in Book-Entry form, under the terms established in that article and in accordance with what is set out in the Market regulations.

2. Market members may operate on their own account or on behalf of others, with or without representation, in accordance with their legal statute of activities.

[Block 84: #a62]

Article 62. Registration of the securities.

1. The registration of the securities traded on the Public Debt Market in Book-Entry form shall correspond to the Management Company of the Securities Registration, Clearing and Settlement Systems referred to in the sixth additional provision, hereinafter, the Systems Company, and to its participating entities authorized for this purpose by virtue of their status as management entities of the Public Debt Market.

2. In addition to the Bank of Spain, the clearing and settlement systems and bodies of the official secondary markets and the interbank clearing systems may be holders of accounts in their own name in the Public Debt Market in Book-Entry form and maintain an account as participating entities in their own name in the registration system of the Systems Company, for the purpose of managing the guarantee system, as well as those who meet the requirements established for this purpose in the market regulations.

[Block 85: #a63]

Article 63. Management entities.

1. In addition to the Bank of Spain, market members that meet the requirements established for this purpose in the market regulations may be management entities.

2. The management entities, in their capacity as participants in the registration system managed by 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 in the Systems Company a global account that shall at all times constitute the exact counterpart of those.

3. When such management entities also hold the additional status of holder of an account in their own name in the Public Debt Market in Book-Entry form, these latter accounts shall be kept in the Systems Company with total separation from the global accounts mentioned in the preceding paragraph.

4. Under the terms established by regulation, the Bank of Spain may precautionarily agree to the suspension or limitation of activities of market members and management entities when their actions generate a danger or cause a serious disruption to the market, to the clearing and settlement procedures or, in the case of management entities, to the legal certainty of the book-entry securities. These measures shall be communicated by the Bank of Spain to the National Securities Market Commission and to the Ministry of Economy and Competitiveness, so that the Minister, where appropriate, proceeds to ratify them.

5. Upon the declaration of insolvency of a management entity of the Public Debt Market in Book-Entry form, the Bank of Spain may immediately and at no cost to the investor order the transfer of the book-entry securities to third-party accounts of other management entities. Likewise, the holders of the securities may request their transfer to another management entity. For these purposes, both the insolvency judge and the insolvency administration shall facilitate the access of the receiving management entity to the documentation and accounting and computer records necessary to effect the transfer, thereby ensuring the exercise of the rights of the holders of the securities. The existence of the insolvency proceedings shall not prevent the holders of the securities from receiving the cash proceeds from the exercise of economic rights or from their sale.

6. If, in accordance with the provisions of article 60.3, the Bank of Spain ceases to be the governing body of the market, the powers attributed to it in paragraphs 4 and 5 of this article shall correspond to the National Securities Market Commission.

[Block 86: #s3]

Section 3. Official secondary markets for futures and options represented by book entries

[Block 87: #a64]

Article 64. Creation.

1. Official secondary markets for futures and options may be created, at the state level, whose form of representation is that of book entries.

2. The Minister of Economy and Competitiveness, on a proposal from the National Securities Market Commission, shall be responsible for authorizing such creation in accordance with the provisions of article 44.

3. In the case of markets of autonomous scope, the authorization for the creation of the market, as well as the rest of the authorizations and approvals indicated in this article, shall correspond to the Autonomous Community with competence in the matter.

[Block 88: #a65]

Article 65. Purpose.

1. The official secondary markets for futures and options shall have as their purpose futures, options and other derivative financial instrument contracts, whatever the underlying asset, as defined by the market's governing company. The governing company shall organize the trading of said contracts.

2. The market's governing company shall ensure, through a central counterparty entity, with prior approval from the National Securities Market Commission, the counterparty in all contracts it issues.

[Block 89: #a66]

Article 66. Members.

1. The entities referred to in article 69 may be members of the official secondary markets for futures and options.

2. Entities whose main corporate purpose consists of investing in organized markets and which meet the conditions of means and solvency established by the market regulations referred to in article 68 may also become members, with capacity restricted exclusively to trading, either on their own account or on behalf of entities of their group.

3. In futures and options markets with a non-financial underlying, the acquisition of such status by entities other than those previously indicated may be determined by regulation, provided they meet the requirements of specialization, professionalism and solvency.

[Block 90: #a67]

Article 67. Governing company.

1. In the official secondary markets for futures and options, in accordance with the provisions of article 45, 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 market's activity.

2. Governing companies may not carry out any financial intermediation activity, nor the activities listed in articles 140 and 141, except as provided in this law.

3. The modification of the governing company's articles of association shall require prior approval by the National Securities Market Commission, in accordance with the provisions of article 45, with the exceptions established by regulation.

4. The governing company shall have a board of directors with at least five members, and at least one general manager. Once the initial authorization has been received, new appointments must be approved by the National Securities Market Commission or, where applicable, by the Autonomous Community with competence in the matter, in order to verify that the appointees meet the requirements of article 152.1.f).

[Block 91: #a68]

Article 68. Internal regulations.

1. The official secondary markets for futures and options, in addition to being governed by the rules provided in this Law and its implementing regulations, shall be governed by specific regulations, which shall have the character of rules of organization and discipline of the Securities Market, whose approval and modification shall follow the procedure provided in article 45.

2. Said regulations shall detail the classes of members, specifying the technical and solvency requirements they must meet in relation to the various activities they carry out in the market, the market's own contracts, the legal relationships of the governing company and market members with clients operating in the market, the supervision rules, the trading regime, as well as any other aspects required by regulation.

[Block 92: #ciii]

CHAPTER III

Participation in official secondary markets

[Block 93: #a69]

Article 69. Members of official secondary markets.

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

a) by the general rules established in this law,

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

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

1 bis. The access rules stipulated by each market shall contain at least internal operating rules with the rules applicable to the following matters:

a) The constitution and administration of the regulated market.

b) The provisions relating to transactions carried out in the market.

c) The professional rules imposed on the staff of investment services companies or credit institutions operating in the market.

d) The conditions established, in accordance with the provisions of this law, for members or participants other than investment services companies and credit institutions.

e) The rules and procedures for the clearing and settlement of transactions carried out on the regulated market.

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

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

b) Spanish credit institutions.

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

1.º Directly, by establishing branches in Spain, in accordance with article 169 of title V in the case of investment services companies, or in accordance with article 12 of Law 10/2014, of 26 June, on the organisation, supervision and solvency of credit institutions, in the case of credit institutions.

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

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

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

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

1.º are suitable,

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

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

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

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

4. The members of the official secondary market shall comply with the obligations set out in articles 209 to 218 and 221 to 224, in relation to their clients when, acting on their behalf, they execute their orders on an official secondary market. However, in the case of transactions between members, for their own account and in their own name, they shall not be obliged to impose the obligations established in the aforementioned articles on each other.

Paragraph 1 bis is added by final provision 1.1 of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 94: #a70]

Article 70. Remote access.

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

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

[Block 95: #a71]

Article 71. Transactions of members on behalf of third parties.

1. Any person holding the status of member of an official secondary market shall be obliged to execute, on behalf of its clients, the orders it receives from them for the trading of securities on the corresponding market.

2. However, it may make the fulfilment of the aforementioned obligation subject to:

a) In relation to cash transactions, that the principal's ownership of the securities is accredited, or that the principal delivers the funds intended to pay their amount.

b) In relation to forward transactions, the contribution by the principal of the guarantees or coverages deemed appropriate, which, at a minimum, must be those that, where applicable, are established by regulation.

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

[Block 96: #a72]

Case law

Article 72. Transactions by members on their own account.

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

[Block 97: #a73]

Article 73. Management of conflicts of interest of members of official secondary markets.

1. Any person holding the status of member of an official secondary market must disclose to the National Securities Market Commission those economic ties and contractual relationships with third parties that, in its activity on its own account or on behalf of third parties, could give rise to conflicts of interest with other clients.

2. Subject to the general criteria established by regulation, the National Securities Market Commission shall determine the cases and the manner in which such ties or relationships must be made public.

[Block 98: #a74]

Article 74. Members' fees.

1. The members of an official secondary market shall freely set the remuneration they receive for their participation in the trading of securities.

2. Notwithstanding the provisions of the preceding paragraph, the Government may establish maximum remuneration for transactions whose amount does not exceed a certain quantity and for those carried out in execution of judicial decisions. The publication and communication to the National Securities Market Commission or, in the case of the Public Debt Market in book-entry form, to the Bank of Spain, of the corresponding maximum remuneration fee schedules shall be a prior requirement for their application.

[Block 99: #a75]

Article 75. Development of members' activity.

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

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

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

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

d) Determine the form and content of the documents that, in the relationships 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 the trading of securities.

2. The Government may authorize the Minister of Economy and Competitiveness to develop the rules it establishes in application of this article. With reference to the provisions of letter d) of the preceding paragraph, such authorization may extend to the National Securities Market Commission or, in the case of the Public Debt Market in Book-Entry Form, to the Bank of Spain.

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

[Block 100: #civ]

CHAPTER IV

Trading and transactions in an official secondary market

[Block 101: #a76]

Article 76. Admission to trading in an official secondary market.

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

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

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

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

[Block 102: #a77]

Article 77. Special features in the admission to trading on an official secondary market from a multilateral trading facility.

1. Entities whose shares cease to be traded on a multilateral trading facility and become traded on a regulated market shall not be obliged, during a maximum transitional period of two years, to comply with the obligation to publish and disseminate the second half-yearly financial report, contained in Article 119.2.

2. In order to benefit from the exemption provided for in the preceding paragraph, the prospectus for admission to trading on the regulated market must specify the entity's intention to benefit from it in whole or in part, determining its duration. This indication shall be considered necessary information for the purposes of Article 6 of Regulation (EU) No. 2017/1129 of the European Parliament and of the Council, of 14 June 2017 .

3. Where the capitalisation of the shares being traded exclusively on a multilateral trading facility exceeds one billion euros for a continuous period of more than six months, the issuing entity must apply for admission to trading on a regulated market within nine months. The governing body of the multilateral trading facility shall ensure compliance with this obligation.

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

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

Paragraphs 1 and 2 are amended by art. 6.12 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Paragraph 3 is amended by final provision 6.2 of Royal Decree-Law 34/2020, of 17 November. Ref. BOE-A-2020-14368

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Amendment published on 18/11/2020, in force from 19/11/2020.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 103: #a78]

Article 78. Additional rules established by the markets for the admission of financial instruments to trading.

(Repealed).

Repealed by the sole repeal provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 104: #a79]

Case law

Article 79. Obligations regarding market abuse.

(Repealed).

Repealed by the sole repeal provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 105: #a80]

Article 80. Suspension of trading of financial instruments.

(Repealed).

Repealed by the sole repeal provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 106: #a81]

Article 81. Exclusion from trading.

(Repealed).

Repealed by the sole repeal provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 107: #a82]

Article 82. Exclusion from voluntary trading.

1. The exclusion from trading of a financial instrument on a regulated market may also be requested by the issuing entity.

Corporate transactions by virtue of which the shareholders of the listed company may become, totally or partially, partners of another unlisted entity shall be treated as exclusion from trading.

2. When a company agrees to the exclusion from trading of its shares on regulated markets, it must promote a public takeover bid addressed to all securities affected by the exclusion.

The case is excepted where a bid addressed to all the securities at a price equal to or higher than that required in the bids contemplated in this paragraph has been previously formulated, provided that as a result of said bid the bidder has reached at least seventy-five percent of the capital with voting rights of the affected company.

3. The exclusion agreement and those relating to the bid and the price offered must be approved by the general shareholders' meeting.

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

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

5. In the case of a bid prior to exclusion from trading, the limit for the acquisition of own shares established in the Consolidated Text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, for listed companies shall be 20 percent of the share capital. If as a consequence of the completion of the bid, the own shares exceed this limit, they must be amortized or disposed of within one year.

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

Amended by art. 6.13 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 108: #a83]

Article 83. Operations.

(Repealed).

Repealed by the sole repeal provision of Royal Decree-law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 109: #a84]

Article 84. Securities Lending.

1. Without prejudice to other forms of lending, the lending of securities traded on an official secondary market may be carried out for the purpose of disposing of them for subsequent sale, to be subject to lending or to serve as collateral in a financial transaction.

2. The borrower must ensure the return of the loan by providing sufficient guarantees. Where applicable, the National Securities Market Commission shall determine what these guarantees should be.

3. The rule requiring guarantees shall not apply to securities loans resulting from monetary policy operations, nor to those made on the occasion of a public offer for sale of securities.

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

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

b) Establish specific information obligations on the operations.

[Block 110: #cv]

CHAPTER V

Limits on positions in commodity derivatives

Amended by the sole art.5 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 111: #a85]

Article 85. Limits on positions and controls of position management in commodity derivatives.

1. The CNMV shall establish and apply, in the terms set out in Commission Delegated Regulation (EU) 2017/591 of 1 December 2016, and in the provisions implementing this law, position limits on the volume of a net position that a person may hold at any time in commodity derivatives traded on Spanish trading venues and economically equivalent contracts traded outside the trading venue.

2. The position limits referred to in the previous paragraph shall be adopted in order to:

a) Prevent market abuse, and

b) facilitate orderly price formation and settlement conditions, including the prevention of positions that distort the market, and ensuring, in particular, the convergence between the prices of derivatives in the delivery month and the spot prices of the underlying commodities, without prejudice to price formation in the market of the underlying commodities.

3. Position limits shall not apply to positions held by a non-financial entity, or on its behalf, that reduce in an objectively measurable manner the risks directly related to the commercial activity of this non-financial entity.

4. Investment firms and market operators managing a trading venue that trades commodity derivatives shall apply position management controls, for which purposes they shall have at least the following powers:

a) Monitoring of the open interest positions of persons,

b) access to information, including all relevant documentation, held by persons regarding the volume and purpose of the position or exposure taken, regarding the effective or underlying beneficiaries, regarding concerted measures and regarding the corresponding assets and liabilities of the underlying market,

c) request a person to close or reduce a position temporarily or permanently, as the case may be, and to adopt unilaterally appropriate measures to ensure the closure or reduction in the event of non-compliance by the person in question; and

d) where appropriate, request a person to temporarily provide liquidity to the market at a price and volume agreed with the express intention of reducing the effects of a large or dominant position.

Investment firms and market operators managing a trading venue shall notify the CNMV of the detailed data of the controls they intend to apply.

5. The position limits referred to in paragraphs 1 and 2 and the position management controls referred to in paragraph 4 shall comply with the following requirements:

a) They shall be transparent and non-discriminatory,

b) it shall be specified how they will be applied to persons; and

c) the nature and composition of market participants and the use they make of the contracts subject to trading shall be taken into account.

6. Any person located or operating in Spanish territory shall respect the limits established in other Member States by the competent authorities for commodity derivative contracts.

7. The CNMV shall notify the European Securities and Markets Authority (ESMA) and the other competent authorities, in accordance with Articles 244 and 245a, of the detailed data on the exact position limits it intends to set in accordance with the calculation method established by ESMA pursuant to paragraphs 1 and 2, and of the position monitoring systems referred to in paragraph 4.

Paragraph 7 is amended by final provision 9.1 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Added by art. único.5 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 112: #a86]

Article 86. Communication of positions in commodity derivatives, emission allowances or derivatives on emission allowances by category of position holders.

1. Investment services and activities firms or market operators that manage a trading venue which trades commodity derivatives, emission allowances or derivatives on emission allowances:

a) shall publish a weekly report with the aggregate positions held by the various categories of persons and entities in respect of the various commodity derivatives or emission allowances or derivatives thereof traded on their trading venue, and

b) shall provide the CNMV, at least daily, with a complete breakdown of the positions held by all persons and entities, including members or participants and their clients, on their trading venue.

2. Investment services and activities firms that trade commodity derivatives or emission allowances or derivatives thereof off a trading venue shall provide, at least daily, to the national competent authority of the trading venue in which the highest trading volume in respect of those same financial instruments is recorded, a complete breakdown of their positions, as well as those of their clients and their clients' clients, down to the last client.

3. The minimum thresholds from which the obligation to publish the weekly report provided for in paragraph 1.a) shall arise shall be those set out in Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.

4. The publication of the reports and the communication of the positions regulated in the preceding paragraphs shall be carried out in accordance with Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017 laying down implementing technical standards on the format of position reports of investment firms and market operators. The CNMV shall determine, by Resolution of its Chair, the format of the position reports of investment firms and market operators provided for in said paragraphs, in accordance with the provisions of Commission Implementing Regulation (EU) 2017/1093 of 20 June 2017.

5. For the purposes of complying with the communication obligations provided for in this Article, investment services and activities firms or market operators that manage a trading venue shall classify the persons holding positions in a commodity derivative, an emission allowance or a derivative into the categories and in accordance with the criteria determined by regulation.

6. The obligations provided for in this Article may be developed by regulation.

Paragraph 5 is amended and paragraph 6 is added by final provision 9.2 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Added by art. único.5 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 113: #a87]

Article 87. Breakdown of information.

The information referred to in the preceding Article shall distinguish between:

a) positions identified as positions that, in an objectively measurable way, reduce risks directly related to commercial activities, and

b) other positions.

Added by art. único.5 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 29/09/2018, in force from 30/09/2018.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 114: #a88]

Article 88. Supervision of position limits against the volume of a net position in commodity derivatives.

For the purposes of supervising compliance with the provisions of Article 86, members or participants of regulated markets and of SMN, as well as clients of SOC, shall communicate, at least daily to the governing body that manages the trading centre in question, the detailed data of their own positions held through contracts traded on such trading centre, as well as those of their clients and the clients of these, down to the last client.

Added by art. único.5 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 29/09/2018, in force from 30/09/2018.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 115: #a89]

Article 89. Transparency for trading centres.

The regulatory regime governing pre-trade and post-trade transparency obligations for trading centres, both for equities and similar instruments and for instruments other than them, is that contained in Regulation (EU) n.º 600/2014 of the European Parliament and of the Council, of 15 May 2014, and in the delegated and implementing acts of the European Commission that develop it.

Added by art. único.5 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 29/09/2018, in force from 30/09/2018.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 116: #a90]

Article 90. Notification procedure.

(Repealed).

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 117: #a91]

Article 91. Content of the notification.

(Repealed).

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 118: #a92]

Article 92. Retention of information and onward transmission.

(Repealed).

Repealed by the single repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Latest update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 119: #cvi]

CHAPTER VI

Compensation, settlement and registration of securities and post-trading Infrastructures

Back

[Block 120: #a93]

Article 93. Regime for compensation, settlement and registration of securities.

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

2. In order to attend to the settlement of transactions on securities executed in official secondary markets, their governing companies shall enter into agreements with at least one central securities depository and, where applicable, with one or more central counterparty entities, without prejudice to the right of issuers to provide that their securities be registered in any central securities depository in accordance with Article 49 of Regulation (EU) No. 909/2014 of the European Parliament and of the Council, of 23 July 2014, on improving securities settlement in the European Union and central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No. 236/2012, and the right of the members of the official secondary markets to designate the settlement system in accordance with the provisions of Article 112 of this Law.

Back

[Block 121: #a94]

Article 94. Settlement of transactions.

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

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

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

Back

[Block 122: #a95]

Article 95. Settlement of rights or obligations of economic content associated with the securities.

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

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

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

Back

[Block 123: #a96]

Article 96. Guarantees aimed at mitigating settlement risk.

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

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

3. The establishment and enforcement of the aforementioned pledge security right shall not require any formality, without prejudice to the duty of the beneficiary entities to keep at the disposal of their clients the information proving the fulfilment of the requirements set out in this paragraph and in the preceding ones.

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

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

[Block 124: #a97]

Article 97. Legal regime and authorisation of central securities depositories.

1. Central securities depositories shall be governed by the following provisions:

a) By Regulation (EU) No. 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No. 236/2012 and its corresponding implementing and application rules.

b) By this law and its corresponding implementing rules.

c) On a supplementary basis, by the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010 of 2 July.

d) By any other provisions of domestic law or European Union law that are applicable to them.

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

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

[Block 125: #a98]

Article 98. Requirements, obligations, powers and functions of central securities depositories.

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

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

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

4. Central securities depositories may outsource their core services, establish agreements with central counterparties, official secondary markets and multilateral trading facilities or links with other central securities depositories in accordance with the provisions of Regulation (EU) No. 909/2014 of 23 July 2014, this law, its implementing regulations and the internal rules referred to in Article 101.

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

[Block 126: #a99]

Article 99. Participation in central securities depositories.

1. Direct or indirect participation in the capital of central securities depositories shall be subject to the regime of significant holdings provided for in Chapter IV of Title V for investment services companies, under the terms determined by regulation, it being understood that any participation that reaches, directly or indirectly, at least one percent of the capital or voting rights of the central securities depository, or that, without reaching that percentage, allows significant influence to be exercised over it, under the terms determined by regulation, shall in any case have such character.

2. Without prejudice to the provisions of Article 176, the National Securities Market Commission may oppose the acquisition or transfer of a significant holding in the capital of a central securities depository when it considers it necessary to ensure the proper functioning of the markets or of the securities clearing, settlement and registration systems or to avoid distortions therein, as well as because equivalent treatment is not given to Spanish entities in the acquirer's country of origin.

[Block 127: #a100]

Article 100. Report and budget of central securities depositories.

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

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

[Block 128: #a101]

Article 101. Internal rules of central securities depositories.

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

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

3. The internal rules and the bylaws referred to in Article 98 and paragraph 1 of this Article shall have the character of market regulation and discipline rules for the securities market, and shall specify the obligations and organizational and procedural requirements necessary to comply with the provisions of Regulation (EU) No. 909/2014, of 23 July 2014. The Minister of Economy and Competitiveness or, through his express authorization, the National Securities Market Commission, may develop the structure and minimum content that the internal rules must have.

[Block 129: #a102]

Article 102. Rules applicable in the event of insolvency of a participating entity in a central securities depository.

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

2. Once insolvency proceedings are declared for a participating entity in the systems referred to in this article, the National Securities Market Commission, without prejudice to the powers of the Bank of Spain and the FROB, may order, immediately and at no cost to the investor, the transfer of its securities accounting records to another entity authorized to carry out this activity. If no entity is in a position to take over the aforementioned records, this activity shall be assumed by the corresponding central securities depository on a provisional basis, until the holders request the transfer of the registration of their securities. For these purposes, both the insolvency judge and the insolvency administration shall facilitate the access of the entity to which the securities are to be transferred to the documentation and accounting and computer records necessary to effect the transfer.

The existence of the insolvency proceedings shall not prevent the securities purchased in accordance with the rules of the clearing, settlement and registration system, or the cash proceeds from the exercise of economic rights or the sale of the securities, from being delivered to the client.

[Block 130: #a103]

Article 103. Legal regime and authorization of central counterparties.

1. Central counterparties shall be governed by the following provisions:

a) By Regulation (EU) No. 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, and its corresponding implementing and application rules.

b) By this law and its corresponding implementing rules.

c) On a supplementary basis, by the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010 of 2 July.

d) By any other provisions of domestic law or European Union law that are applicable to them.

2. The authorization to provide clearing services as a central counterparty, its revocation and its operation when such entities are established in Spain shall be governed by the provisions of Regulation (EU) No. 648/2012 of 4 July 2012, by the provisions of this law and any other applicable regulations of the legal system or European Union law.

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

[Block 131: #a104]

Article 104. Requirements, obligations, powers and functions of central counterparties.

1. Central counterparties must take the form of a public limited company and must be recognized as a system for the purposes of Law 41/1999 of 12 November on payment and securities settlement systems.

2. Central counterparties may not be authorized as a central securities depository.

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

4. Central counterparties shall keep the central accounting record corresponding to the cleared financial instruments together with, where applicable, the members authorized to keep the detailed records corresponding to their clients' contracts.

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

[Block 132: #a105]

Article 105. Participation in central counterparties.

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

[Block 133: #a106]

Article 106. Report and budget of the central counterparty.

1. Central counterparties shall prepare a report in which they must detail how they will comply with the technical, organizational, operational and risk management requirements demanded by Regulation (EU) No. 648/2012 of 4 July 2012, in order to perform their functions. The Minister of Economy and Competitiveness or, through his express authorization, the National Securities Market Commission, may regulate the model to which said report must conform. The central counterparty shall keep the aforementioned report updated, and any amendments thereto shall be sent to the National Securities Market Commission, duly justified and, where they affect risk management in accordance with the provisions of said Regulation, incorporating the mandatory report of the risk committee and of the unit or internal body that assumes the risk management function.

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

Upload

[Block 134: #a107]

Article 107. Articles of association and internal rules of central counterparties.

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

2. With the exceptions established by regulation, the amendment of the articles of association of the central counterparty or of its internal rules shall require, following a report from the Bank of Spain, authorisation from the National Securities Market Commission.

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

4. The internal rules may be supplemented by circulars approved by the central counterparty itself. Such circulars must be communicated to the National Securities Market Commission and the Bank of Spain within twenty-four hours following their adoption. The National Securities Market Commission may object to, as well as suspend or annul the circulars when it considers that they infringe applicable legislation, or harm the prudent and safe operation of the central counterparty and of the markets to which it provides services or the protection of investors.

Upload

[Block 135: #a108]

Article 108. Organisational requirements.

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

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

Upload

[Block 136: #a109]

Article 109. Members of central counterparties.

1. Only the entities referred to in Article 69.2.a) to d) and f), the Bank of Spain and other resident or non-resident entities that carry out similar activities may become members of central counterparties, under the terms and with the limitations provided for by regulation and in the central counterparty's own internal rules. The access of the latter to member status shall be subject to the provisions of this Law, its implementing regulations, and its internal rules, as well as to approval by the National Securities Market Commission.

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

3. The collateral that members and clients provide in accordance with the regime contained in the internal rules of the central counterparty and in relation to any transactions carried out within the scope of its activity shall only be available to the entities in whose favour they were provided and only for the obligations arising from such transactions towards the central counterparty or towards its members, or arising from the status of member of the central counterparty.

[Block 137: #a110]

Article 110. Rules applicable in the event of default or insolvency.

1. If a member or a client of a member fails to meet, in whole or in part, the obligations entered into towards the central counterparty or towards the member, the latter may dispose of the collateral provided by the defaulting party, and may for this purpose adopt the necessary measures for its satisfaction under the terms established in the entity's rules.

2. The internal rules of the entity and its circulars may establish the cases that determine the early termination of all contracts and positions of a member, whether on its own account or on behalf of clients, which, under the terms provided for in the aforementioned rules and circulars, shall give rise to their netting and to the creation of a single legal obligation covering all the transactions included, and by virtue of which the parties shall only be entitled to claim from each other the net balance resulting from the netting of such transactions. The foregoing cases may include the non-payment of obligations and the opening of insolvency proceedings in relation to the members and clients or to the central counterparty itself. That netting regime shall be considered a contractual netting agreement in accordance with the provisions of Real Decreto-ley 5/2005, of 11 March, on urgent reforms to boost productivity and improve public procurement, and without prejudice to the application of the specific regime contained in Ley 41/1999, of 12 November, on payment and securities settlement systems.

3. The central counterparty shall establish in its internal rules the rules and procedures for dealing with the consequences arising from defaults of its members. Such rules and procedures shall specify how the various guarantee mechanisms available to the central counterparty are to be applied and the ways to replenish them with the aim of enabling the central counterparty to continue operating in a sound and secure manner.

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

5. In the event that the clients of the members of a central counterparty are subject to insolvency proceedings, the members shall enjoy an absolute right of separation with respect to the financial instruments and cash in which the collateral that their clients had provided in their favour in accordance with the regime contained in the internal rules of the central counterparty is materialised. Without prejudice to the foregoing, any surplus remaining after the liquidation of the transactions shall be included in the insolvency estate of the client.

6. Once the insolvency of a member has been declared, the central counterparty, having previously notified the Comisión Nacional del Mercado de Valores, shall manage the transfer of the contracts and positions it had recorded on behalf of the clients, together with the financial instruments and cash in which the corresponding collateral is materialised. For these purposes, both the competent judge and the bodies of the insolvency proceedings shall provide the entity to which the contracts, accounting records and collateral are to be transferred with the documentation and computer records necessary to give effect to the transfer. In the event that such transfer cannot be carried out, the entity may agree to the liquidation of the contracts and positions that the member had open, including those held on behalf of its clients. In this case, once the actions to be carried out in relation to the positions recorded and collateral provided by the clients to the member in question have been completed, those clients shall have a right of separation with respect to any eventual surplus.

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

[Block 138: #a111]

Article 111. Choice of the clearing and settlement system or central counterparty.

(Repealed).

Repealed by the sole repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 139: #a112]

Article 112. Right to designate a settlement system.

(Repealed).

Repealed by the sole repealing provision of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 140: #a113]

Article 113. Access to central counterparty, clearing and settlement systems.

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

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

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

[Block 141: #a114]

Article 114. Information system for the supervision of trading, clearing, settlement and registration of negotiable securities.

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

2. The system provided for in the preceding paragraph shall record, at least, the transactions, events and entries likely to give rise to variations in the securities balances of each holder both in the central register and in the detail registers.

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

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

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

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

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

4. The information stored in the system may not be used or transmitted for purposes other than those provided for by law, unless authorization from the respective supplying entity is given, without prejudice to the information obligations towards the National Securities Market Commission or the Bank of Spain in the exercise of their respective powers.

[Block 142: #a115]

Article 115. Obligations of the central securities depository in relation to the information system.

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

a) Establish the necessary means for the information to be entered into the system in accordance with the established rules and to be complete.

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

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

d) Ensure the maintenance and continuity of the system.

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

2. Central securities depositories shall enter into the corresponding contracts in which they establish the legal relationships necessary for the proper functioning of the system. Likewise, they shall publish the operating rules of the information system establishing the rights, obligations and responsibilities of the persons who will manage and make use of the information stored in the system. The National Securities Market Commission shall approve these rules and their amendments. Both the rules and their amendments shall be previously examined by the users committee of the central securities depository, which may submit its observations thereon to the National Securities Market Commission.

[Block 143: #a116]

Article 116. Legal regime of the remaining agents in relation to the information system.

1. The information system shall be supplied with the information that the official secondary markets, central counterparties, central securities depositories as well as their respective members or participating entities are obliged to provide, in accordance with the provisions of the regulations. The aforementioned entities shall be responsible for the integrity and veracity of the information communicated by each of them through said system and shall retain ownership of said information.

2. With full respect for the principles of equal treatment and non-discrimination, foreign central counterparties and central securities depositories with which central securities depositories enter into agreements or establish links may access this system and shall be obliged to supply the necessary information so that the purposes thereof are fulfilled, in accordance with the provisions of articles 114 to 116. Said infrastructures must request from their members or participants the information necessary to properly perform their function.

[Block 144: #a117]

Article 117. Monitoring and control of the correct functioning of trading, clearing, settlement and securities registration systems.

1. Without prejudice to the supervisory, inspection and sanctioning powers corresponding to the National Securities Market Commission in accordance with Title VIII, the governing companies of the official secondary markets, the central counterparties and the central securities depositories that provide services in Spain must ensure, within the scope of their respective competences, the correct functioning and efficiency of the processes of trading, clearing and settlement of transactions and of securities registration.

2. The Government is empowered to develop by regulation the content of the function provided for in the preceding paragraph, including the obligations and powers for its proper exercise.

[Block 145: #cvii]

CHAPTER VII

Periodic information obligations of issuers

[Block 146: #a118]

Article 118. Annual report and audit report.

1. When Spain is the home Member State, issuers whose securities are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall submit their annual accounts to an audit of accounts and shall make public and disseminate their annual financial report and the audit report of the annual accounts.

The maximum period to comply with the obligation of publication and dissemination of this paragraph shall be four months from the end of each financial year, and issuers must ensure that said reports remain available to the public for at least ten years.

2. The annual financial report shall comprise the annual accounts and the management report reviewed by the auditor with the scope defined in article 268 of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, as well as the declarations of responsibility for their content.

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

[Block 147: #a119]

Article 119. Half-yearly financial reports.

1. When Spain is the home Member State, issuers whose shares or debt securities are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall make public and disseminate a half-yearly financial report relating to the first six months of the financial year.

The maximum period to comply with the obligation of publication and dissemination of this paragraph shall be three months from the end of the corresponding period, and issuers must ensure that said report remains available to the public for at least ten years.

2. When Spain is the home Member State and the annual financial report provided for in article 118 has not been made public within two months following the end of the financial year to which it refers, issuers whose shares are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall also be obliged to make public and disseminate a second half-yearly financial report referring to the twelve months of the financial year within a maximum period of two months from the end of the corresponding period.

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

[Block 148: #a120]

Article 120. Interim management statement.

(Repealed)

Repealed by art. 6.14 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 149: #a121]

Article 121. Cases of non-application.

1. The following shall not be subject to compliance with the provisions of articles 118 to 120 above:

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

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

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

2. When Spain is the home Member State, issuers constituted before 31 December 2003 that have exclusively debt securities admitted to trading on an official secondary market or another regulated market domiciled in the European Union shall not be subject to compliance with the provisions of article 119 when such securities have the unconditional and irrevocable guarantee of the State, its Autonomous Communities or local entities.

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

[Block 150: #a122]

Article 122. Other provisions.

1. The following shall be established by regulation:

a) The deadlines and other requirements for the submission to the National Securities Market Commission of financial information.

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

c) The deadlines for the publication of quarterly information.

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

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

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

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

2. The periodic information referred to in articles 118 to 119 above must be submitted to the National Securities Market Commission, when Spain is the home Member State under the terms established by regulation, for its incorporation into the official register regulated in article 238.

3. For the purposes of the provisions of this chapter, debt securities shall be understood as the obligations and those other negotiable securities that recognize or create a debt, except for securities that are equivalent to shares or that, by their conversion or by the exercise of the rights they confer, give the right to acquire shares or securities equivalent to shares.

Section 2 is amended by art. 6.15 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 151: #a123]

Article 123. Other information obligations.

1. Issuers whose securities are admitted to trading on an official secondary market or another regulated market domiciled in the European Union, when Spain is the home Member State, shall make public and disseminate any modification produced in the rights inherent to such securities. Issuers shall submit such information to the National Securities Market Commission for its incorporation into the official register regulated in article 238.f).

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

2. Issuers whose shares or obligations are admitted to trading on an official secondary market or another regulated market domiciled in the European Union shall ensure that all mechanisms and information necessary to allow shareholders and bondholders to exercise their rights are available in Spain when it is the home Member State and that the integrity of the data is preserved.

For these purposes, for issuers of shares listed on an official secondary market, said obligation shall be understood as fulfilled by the application of the provisions of article 539 of the consolidated text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of 2 July, and its implementing regulations. The requirements applicable to the rest of the issuers shall be established by regulation.

The provisions of this section shall not apply to securities issued by the Member States of the European Union, the Autonomous Communities, local entities and other similar entities of the Member States.

[Block 152: #a124]

Article 124. Responsibility of issuers.

1. Responsibility for the preparation and publication of the information referred to in articles 118 and 119 shall fall, at least, on the issuer and its administrators in accordance with the conditions established by regulation.

2. In accordance with the conditions determined by regulation, the issuer and its administrators shall be liable for all damages and losses caused to the holders of the securities as a result of the information not providing a true and fair view of the issuer.

3. The action to demand responsibility shall prescribe after three years from the time the claimant could have become aware that the information does not provide a true and fair view of the issuer.

[Block 153: #cviii]

CHAPTER VIII

Information obligations on significant holdings and treasury shares

[Block 154: #a125]

Article 125. Obligations of the shareholder and of the holders of other securities and financial instruments.

1. The shareholder who, directly or indirectly, acquires or transfers shares of an issuer for which Spain is the Home State, in the terms established by regulation, whose shares are admitted to trading on an official secondary market or on any other regulated market domiciled in the European Union, and which confer voting rights, and as a result of such operations, the proportion of voting rights remaining in their possession reaches, exceeds or falls below the percentages established, must notify the issuer and the National Securities Market Commission, under the conditions indicated, of the resulting proportion of voting rights.

The obligation contained in the preceding paragraph shall also apply when the proportion of voting rights exceeds, reaches or falls below the percentages referred to in the preceding paragraph as a result of a change in the total number of voting rights of an issuer on the basis of the information communicated to the National Securities Market Commission and made public.

2. The obligations established in the preceding section shall also be applicable to any person who, regardless of the ownership of the shares, has the right to acquire, transfer or exercise the voting rights conferred by them, in the cases determined by regulation.

3. Likewise, the provisions of the preceding sections shall apply to anyone who possesses, acquires or transfers, directly or indirectly, other securities and financial instruments that confer the unconditional right or discretionary power to acquire shares that confer voting rights or financial instruments that are referenced to shares that confer voting rights and have an economic effect similar to the aforementioned securities and financial instruments, regardless of whether or not they give the right to settlement by physical delivery of the underlying securities, in the terms and with the breakdown determined by regulation.

4. The obligations established in the preceding sections shall also apply when the admission to trading for the first time on an official secondary market or on another regulated market domiciled in the European Union of the shares of an issuer for which Spain is the Home State occurs.

5. (Repealed)

6. The issuer must make public and disseminate the information referred to in the preceding sections.

7. The form, deadline and other conditions for compliance with the obligations established in this article shall be determined by regulation, as well as, where applicable, the cases exempted from compliance with these obligations.

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

Section 5 is repealed by art. 6.16 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 155: #a126]

Article 126. Obligations of the issuer in relation to treasury shares.

1. When Spain is the Home Member State, issuers whose shares are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union must communicate to the National Securities Market Commission, make public and disseminate the operations on their own shares, in the terms established by regulation, when the proportion reaches, exceeds or is reduced by the percentages determined. This information shall be incorporated into the official register regulated in article 238.

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

[Block 156: #a127]

Article 127. Preventive measures.

1. When Spain is the Host Member State in the terms established by regulation, the National Securities Market Commission must inform the competent authority of the Home Member State and the European Securities and Markets Authority if it observes that the issuer, the holder of shares or other financial instruments or the natural or legal person referred to in 125.2, has committed irregularities or breached the obligations referred to in articles 118 to 123, 125 and 126.

2. In the event that, either because the authority of the Member State of origin has not adopted measures, or because, despite the measures adopted by the competent authority of the Member State of origin or because such measures have proved inadequate, the person indicated in the previous paragraph persists in the violation of the relevant legal or regulatory provisions, the National Securities Market Commission, after informing the competent authority of the Member State of origin, shall adopt all pertinent measures to protect investors. The National Securities Market Commission shall immediately inform the European Commission and the European Securities and Markets Authority of the measures adopted.

[Block 157: #cix]

CHAPTER IX

On public takeover bids

[Block 158: #a128]

Article 128. Mandatory public takeover bid.

Any person who reaches control of a listed company shall be obliged to make a public takeover bid for all shares or other securities that directly or indirectly may confer the right to their subscription or acquisition and addressed to all their holders at an equitable price, whether it is achieved:

a) Through the acquisition of shares or other securities that confer, directly or indirectly, the right to the subscription or acquisition of shares with voting rights in said company;

b) Through shareholders' agreements with other holders of securities; or

c) As a consequence of the other cases of analogous nature that are established by regulation.

[Block 159: #a129]

Article 129. Scope of application.

1. The obligations referred to in this chapter shall be understood as referring to those companies whose shares are, in whole or in part, admitted to trading on a Spanish official secondary market and have their registered office in Spain.

2. The obligations referred to in this chapter shall also apply, under the terms established by regulation, to companies that do not have their registered office in Spain and whose securities are not admitted to trading on a regulated market in the Member State of the European Union in which the company has its registered office, in the following cases:

a) When the company's securities are only admitted to trading on a Spanish official secondary market.

b) When the first admission to trading of the securities on a regulated market has been on a Spanish official secondary market.

c) When the company's securities are admitted to trading simultaneously on regulated markets of more than one Member State and on a Spanish official secondary market, and the company so decides by notification to said markets and their competent authorities on the first day of trading of the securities.

d) When on 20 May 2006 the company's securities were already admitted to trading simultaneously on regulated markets of more than one Member State and on a Spanish official secondary market and the National Securities Market Commission had so agreed with the competent authorities of the other markets in which they had been admitted to trading or, in the absence of agreement, the company had so decided.

3. Likewise, the obligations referred to in this chapter shall also apply, under the terms established by regulation, to companies that have their registered office in Spain and whose securities are not admitted to trading on a Spanish official secondary market.

[Block 160: #a130]

Article 130. Equitable price.

1. The price shall be understood to be equitable when, at a minimum, it is equal to the highest price paid by the party obliged to make the bid or by persons acting in concert with it for the same securities during a period of time prior to the bid determined by regulation and under the terms established.

2. However, the National Securities Market Commission may modify the price thus calculated in the circumstances and according to the criteria established by regulation.

Among the aforementioned circumstances, the following may be included, among others: that the highest price has been set by agreement between the buyer and the seller; that the market prices of the securities in question have been manipulated; that market prices, in general, or certain prices, in particular, have been affected by exceptional events; that it is intended to favor the restructuring of the company.

Among the aforementioned criteria, the following may be included, among others: the average market value in a given period; the net asset value of the company or other objective valuation criteria generally used.

3. In the event of modification of the price referred to in the previous paragraph, the National Securities Market Commission shall publish on its website the decision that the bid be made at a price different from the equitable one. Said decision must be reasoned.

[Block 161: #a131]

Article 131. Control of the company.

1. For the purposes of this chapter, a natural or legal person shall be understood to have control of a company, individually or jointly with persons acting in concert with it, when it reaches, directly or indirectly, a percentage of voting rights equal to or greater than 30 percent; or when it has reached a lower stake and appoints, under the terms established by regulation, a number of directors that, together, where applicable, with those already appointed, represent more than half of the members of the company's administrative body.

2. The National Securities Market Commission shall conditionally exempt, under the terms established by regulation, from the obligation to formulate the public acquisition offer established in article 128, when another person or entity, directly or indirectly, has a voting percentage equal to or greater than that of the party obligated to formulate the offer.

3. If, exclusively as a consequence of the variation in the total number of voting rights of the company derived from the existence of shares with loyalty voting in accordance with articles 527 ter et seq. of the Consolidated Text of the Capital Companies Act, any shareholder were to reach, directly or indirectly, a number of voting rights equal to or greater than 30 percent, said shareholder may not exercise the political rights exceeding said percentage without formulating a public acquisition offer addressed to the entirety of the share capital.

The offer shall be formulated within 3 months following the date on which the 30 percent threshold was exceeded and the rules relating to the determination of the equitable price shall apply to it.

However, the formulation of the offer shall not be mandatory when, within 3 months following the date on which the 30 percent threshold of voting rights was exceeded, the party obligated to formulate the offer disposes of the number of shares necessary to reduce the excess of voting rights over the indicated percentages or renounces the loyalty voting rights exceeding the 30 percent percentage of the company's voting rights, provided that, in the meantime, the political rights exceeding said percentage are not exercised, or an exemption is obtained from the National Securities Market Commission.

Section 3 is added by art. 6.17 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 162: #a132]

Article 132. Consequences of the failure to formulate a public acquisition offer.

1. Whoever fails to comply with the obligation to formulate a public acquisition offer may not exercise the political rights derived from any of the securities of the listed company whose exercise corresponds to them by any title, without prejudice to the sanctions provided for in Title VIII. This prohibition shall also apply to the securities held indirectly by the party obligated to present the public offer and to those corresponding to those acting in concert with them.

2. Whoever does not present it, presents it outside the maximum established period or with essential irregularities shall be understood to have failed to comply with the obligation to formulate a public acquisition offer.

3. The resolutions adopted by the bodies of a company shall be null when for the constitution of said bodies or the adoption of said resolutions it would have been necessary to count the securities whose political rights are suspended in accordance with the provisions of this article.

4. The National Securities Market Commission shall be legitimized for the exercise of the corresponding challenge actions, within a period of one year from when it becomes aware of the resolution, without prejudice to the legitimization that may correspond to other persons.

The National Securities Market Commission may challenge the resolutions of the Board of Directors of the listed company, within a period of one year from when it becomes aware of them.

[Block 163: #a133]

Article 133. Other provisions.

1. When the consideration offered consists of securities to be issued by the company obligated to formulate the offer, it shall be understood that the preemptive subscription right contemplated in article 93 of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, does not exist for former shareholders and holders of convertible obligations.

2. Without prejudice to the provisions of article 130, mandatory public acquisition offers shall be subject to the regime of article 137.2 when any of the circumstances established in section 3 of said provision concur.

3. The provisions of this chapter shall not apply in the case of use of the instruments, powers and resolution mechanisms established in Law 11/2015, of 18 June, on the recovery and resolution of credit institutions and investment services companies.

4. The following shall be established by regulation:

a) The securities to which the offer must be addressed.

b) The rules and periods for the computation of the percentage of votes that grants control of a company, taking into consideration direct and indirect holdings, as well as agreements, pacts or situations of joint control.

c) The person who shall be obligated to present the public acquisition offer in the cases of shareholders' agreements and situations of supervening control in which there exists an obligation to present it.

d) The terms under which the offer shall be irrevocable or under which it may be subject to a condition or be modified.

e) The guarantees required depending on whether the consideration offered is in cash, already issued securities or securities whose issuance has not yet been agreed by the offering company or entity.

f) The modality of administrative control in charge of the National Securities Market Commission and, in general, the procedure of public acquisition offers.

g) The regime of possible competing offers.

h) The rules of proration.

i) The operations excepted from this regime.

j) The equitable price, the forms of consideration and the exceptions, if any, applicable.

k) The information that must be made public before the presentation of an offer, once the decision to present it has been adopted, during the course thereof and once it has ended.

l) The period within which a public takeover bid must be submitted following its public announcement.

m) The rules on the lapse of bids.

n) The rules applicable to the publication of the results of bids.

o) The information to be provided by the administrative or management bodies of the affected company and of the bidder to the representatives of their respective workers or, failing that, to the workers themselves, as well as the procedure applicable to said obligation, without prejudice to the provisions of labor legislation.

p) Any other matters whose regulation is deemed necessary.

[Block 164: #a134]

Article 134. Obligations of the administrative and management bodies.

1. During the period and under the terms determined by regulation, the administrative and management bodies of the affected company or of the companies belonging to its same group must obtain prior authorization from the general shareholders' meeting in accordance with the provisions of Article 194 of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, before undertaking any action that could prevent the success of the bid, with the exception of the search for other bids, and in particular before initiating any issuance of securities that could prevent the bidder from obtaining control of the affected company.

With respect to decisions adopted before the start of the period contemplated in the preceding paragraph and not yet fully or partially applied, the general shareholders' meeting must approve or confirm, in accordance with the provisions of Article 194 of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, any decision that does not fall within the ordinary course of business of the company and whose application could frustrate the success of the bid.

In the event that the affected company has a dual administration system, the provisions of the preceding paragraphs shall also be understood to apply to the supervisory board.

2. The general shareholders' meeting referred to in this article may be convened fifteen days before the date set for its holding, by means of an announcement published in the Official Gazette of the Commercial Registry and in one of the newspapers with the largest circulation in the province, stating the date of the meeting on first call and all matters to be dealt with.

The Official Gazette of the Commercial Registry shall publish the convening notice immediately upon receipt.

3. Companies may not apply the provisions of paragraphs 1 and 2 when they are the subject of a public takeover bid made by an entity that does not have its registered office in Spain and that is not subject to such rules or equivalent ones, including those referring to the rules necessary for the adoption of decisions by the General Meeting, or by an entity controlled by that one, directly or indirectly, in accordance with the provisions of Article 42 of the Commercial Code.

Any decision adopted under the provisions of the preceding paragraph shall require authorization from the general shareholders' meeting, in accordance with the provisions of Article 194 of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, adopted at most 18 months before the public takeover bid has been made public.

4. The administrative body of the affected company must publish a detailed report on the bid under the terms and deadlines established by regulation.

[Block 165: #a135]

Article 135. Neutralization measures.

1. Companies may decide to apply the following neutralization measures:

a) The ineffectiveness, during the acceptance period of the bid, of the restrictions on the transferability of securities provided for in the shareholders' agreements referring to said company.

b) The ineffectiveness, in the general shareholders' meeting that decides on the possible defense measures referred to in Article 134.1, of the restrictions on voting rights provided for in the bylaws of the affected company and in the shareholders' agreements referring to said company.

c) The ineffectiveness of the restrictions contemplated in letter a) above and, of those being of those provided for in letter b) above, contained in shareholders' agreements, when after a public takeover bid, the bidder has reached a percentage equal to or greater than 70 percent of the capital conferring voting rights.

2. The bylaws clauses that, directly or indirectly, generally set the maximum number of votes that a single shareholder, companies belonging to the same group or those acting in concert with the foregoing may cast, shall be without effect when after a public takeover bid, the bidder has reached a percentage equal to or greater than 70 percent of the capital conferring voting rights, unless said bidder or its group or those acting in concert with the foregoing were not subject to equivalent neutralization measures or had not adopted them.

3. The decision to apply paragraph 1 of this article must be adopted by the general shareholders' meeting of the company, with the quorum and majority requirements provided for the amendment of the bylaws of public limited companies in the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, and shall be communicated to the National Securities Market Commission and to the supervisors of the Member States in which the company's shares are admitted to trading, or admission has been requested. The National Securities Market Commission must make this communication public under the terms and deadline established by regulation.

At any time the general shareholders' meeting of the company may revoke the decision to apply paragraph 1 of this article, with the quorum and majority requirements provided for the amendment of the articles of association of public limited companies in the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July. The majority required under this paragraph must coincide with that required under the previous paragraph.

4. When the company decides to apply the measures described in paragraph 1, it must provide for adequate compensation for the loss suffered by the holders of the rights mentioned therein.

5. Companies may cease to apply the neutralization measures they had in force under the provisions of paragraph 1 of this article, when they are subject to a public takeover bid formulated by an entity or group or those acting in concert with the foregoing, which have not adopted equivalent neutralization measures.

Any measure adopted under the provisions of the previous paragraph shall require authorization from the general shareholders' meeting, with the quorum and majority requirements provided for the amendment of the articles of association of public limited companies in the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, at the latest, eighteen months before the public takeover bid has been made public.

6. The other matters whose regulation is deemed necessary for the development of the provisions of this article may be established by regulation.

[Block 166: #a136]

Article 136. Forced sales.

1. When, as a result of a public takeover bid for all the securities, under the terms of articles 128 to 133 and 137, the offeror holds securities representing at least 90 percent of the capital conferring voting rights and the offer has been accepted by holders of securities representing at least 90 percent of the voting rights, other than those already held by the offeror:

a) The offeror may require the remaining holders of securities to sell such securities to it at a fair price.

b) The holders of securities of the affected company may require the offeror to purchase their securities at a fair price.

2. If, in the case regulated in this article, the securities subject to the forced purchase or sale are encumbered as a result of administrative acts or judicial decisions, or if there is any type of charge on them, including liens, limited real rights or financial guarantees, the securities shall be sold free of such charges, which shall instead be constituted on the price paid or the securities delivered by the offeror as payment of the price for the sale.

The depositary of the securities shall be obliged to hold in deposit the sale price or, as the case may be, the securities delivered, informing the judicial or administrative authority that ordered the encumbrances or the holder of any other charges of the application of this procedure.

If, once the provisions of this paragraph have been applied, there is a portion of the price that is unnecessary for the satisfaction of the obligations secured by the encumbrance or encumbrances imposed, or by the charges existing on the securities, it shall be immediately placed at the disposal of their holder.

3. The procedure and requirements applicable to the forced sale referred to in this article shall be established by regulation.

[Block 167: #a137]

Article 137. Voluntary public takeover bids.

1. Voluntary public offers to acquire shares, or other securities conferring direct or indirect voting rights in a listed company, shall be addressed to all their holders, shall be subject to the same procedural rules as the offers contemplated in this Chapter and may be carried out, under the conditions to be established by regulation, for a number of securities lower than the total.

The mandatory offer contemplated in Article 128 shall not be enforceable where control has been acquired following a voluntary offer for all the securities, addressed to all their holders and which has met all the requirements set out in this Chapter.

2. Where, within the two years prior to the announcement relating to the offer, any of the circumstances referred to in the following third paragraph occur, the offeror shall provide a report by an independent expert on the valuation methods and criteria applied to determine the offered price, which shall include the average market value over a given period, the net asset value of the company, the value of the consideration paid by the offeror for the same securities in the twelve months prior to the announcement of the offer, the theoretical book value of the company and other generally accepted objective valuation criteria which, in any event, ensure the safeguarding of shareholders' rights.

The report shall justify the respective relevance of each of the methods used in the valuation. The offered price may not be lower than the higher of the fair price referred to in Article 130 and that resulting from taking into account, with justification of their respective relevance, the methods contained in the report.

Furthermore, if the offer is formulated as an exchange of securities, in addition to the above, a consideration or cash price financially equivalent to, at least, the offered exchange shall be included as an alternative.

For the purpose of ensuring that the offer complies with the provisions of this paragraph, the National Securities Market Commission may adapt the administrative procedure, extending the time limits to the extent necessary and requiring such information and documents as it deems appropriate.

3. The circumstances referred to in the preceding second paragraph are as follows:

a) That the market prices of the securities to which the offer is addressed show reasonable indications of manipulation, which have led to the initiation of a sanctioning procedure by the National Securities Commission for infringement of the provisions of Article 231, without prejudice to the application of the corresponding sanctions, and provided that the corresponding statement of charges has been notified to the party concerned.

b) That market prices in general, or those of the affected company in particular, have been affected by exceptional events such as natural disasters, situations of war or calamity, or others arising from force majeure.

c) That the affected company has been subject to expropriations, confiscations or other circumstances of a similar nature which may entail a significant alteration of the actual value of its assets.

4. By regulation, other matters may be established whose regulation is deemed necessary for the development of the provisions of this Article.

[Block 168: #cx]

CHAPTER X

Voting advisers

Added by art. 6.18 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Text added, published on 13/04/2021, in force from 03/05/2021.

[Block 169: #a1-24]

Article 137 bis. Voting advisers.

1. This Chapter shall apply to voting advisers providing their services in relation to listed companies having their registered office in a Member State of the European Union and whose shares are admitted to trading on a regulated market or a multilateral trading facility located or operating in a Member State of the European Union, provided that the voting adviser:

a) has its registered office in Spain,

b) does not have its registered office in a Member State of the European Union but has its main establishment in Spain; or

c) has neither its registered office nor its main establishment in a Member State of the European Union but has an establishment in Spain.

2. For the purposes of the provisions of this Chapter, a voting adviser shall be understood to mean any legal person that professionally and commercially analyses the information that listed companies are legally obliged to publish and, where applicable, other types of information, in order to advise investors in the exercise of their voting rights through analysis, advice or voting recommendations.

3. Entities meeting the requirements established in the two preceding paragraphs shall notify the National Securities Market Commission thereof.

Added by art. 6.18 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Text added, published on 13/04/2021, in force from 03/05/2021.

[Block 170: #a1-25]

Article 137 ter. Code of Conduct.

1. Voting advisers shall publish the reference to the code of conduct they apply, including, where applicable, the corresponding code of ethics of the profession, and shall report on how they have done so.

Where voting advisers do not apply any code of conduct, they shall explain the reason clearly and with reasons. Furthermore, where voting advisers apply a code of conduct but depart from any of its recommendations, they shall publicly report on the recommendations they are not following, the reasons for doing so and the alternative measures adopted.

2. The information referred to in this paragraph shall be made publicly available free of charge on the voting advisers' websites and shall be updated annually.

Added by art. 6.18 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Text added, published on 13/04/2021, in force from 03/05/2021.

[Block 171: #a1-26]

Article 137 quater. Annual report.

1. Voting advisers shall publish an annual report for the purpose of ensuring that their clients are duly informed about the accuracy and reliability of their activities, which shall contain at least the following information relating to their research, advice and voting recommendations issued:

a) the important characteristics of the methods and models applied,

b) the main sources of information used,

c) the procedures implemented to ensure the quality of research, advice and voting recommendations and the qualification of the personnel assigned to those functions,

d) the degree and manner of consideration of market, legal, economic-business, regulatory conditions and the specific conditions of the listed company in question,

e) the important characteristics of the voting policies they apply to each market,

f) the degree and the manner in which they maintain channels of communication with the companies that are the subject of their research, advice or voting recommendations and with other stakeholders in the company; and

g) the policy relating to the prevention and management of potential conflicts of interest.

h) the limitations or conditions that must be taken into account in the recommendations issued.

2. Voting advisers shall make the information referred to in this Article available to the public on their websites, where it shall remain available free of charge for a minimum period of three years from the date of its publication.

Added by art. 6.18 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Text added, published on 13/04/2021, in force from 03/05/2021.

[Block 172: #a1-27]

Article 137 quinquies. Conflicts of interest.

Voting advisers shall determine and communicate without delay to their clients any actual or potential conflict of interest or any business relationships that may influence the preparation of their research, advice or voting recommendations, and the measures adopted to eliminate, mitigate or manage actual or potential conflicts of interest.

Added by art. 6.18 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Text added, published on 13/04/2021, in force from 03/05/2021.

[Block 173: #tv]

TITLE V

Investment service firms

[Block 174: #ci-5]

CHAPTER I

General provisions

[Block 175: #a138]

Article 138. Concept of investment service firm.

1. Investment service firms are those companies whose main activity consists of providing investment services, on a professional basis, to third parties in the financial instruments referred to in Article 2.

2. Investment services and activities companies, in accordance with their specific legal regime, shall carry out the investment services and activities and the ancillary services provided for in this chapter, and may be members of regulated markets if they so request in accordance with the provisions of chapter III of title IV, as well as members or users of multilateral trading facilities and organised trading facilities, in accordance with the provisions of Royal Decree-Law 21/2017, of 29 December.

3. References made in this law to investment services and activities companies and authorities of Member States of the European Union also include those belonging to other States of the European Economic Area. Likewise, references made in this law to Member States of the European Union also include the Member States of the European Economic Area.

Paragraphs 2 and 3 are amended by the sole art. 6 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 176: #a139]

Article 139. Cases of non-application.

1. This law shall not apply to the following persons:

a) Entities subject to Law 20/2015, of 14 July, on the organisation, supervision and solvency of insurance and reinsurance entities and its implementing regulations, when they carry out the activities covered by that law.

b) Persons who provide investment services and activities exclusively to their parent companies, to their subsidiaries or to other subsidiaries of their parent companies.

c) Persons who provide an investment service, when that service is provided incidentally in the context of a professional activity, and provided that the latter is regulated by legal or regulatory provisions or by a professional code of conduct that does not exclude the provision of that service, under the terms provided for in Commission Delegated Regulation (EU) 2017/565 of 25 April 2016.

d) Persons who deal on their own account in financial instruments other than derivatives on commodities, emission rights, or derivatives thereof, and who do not provide any other investment service or carry out any other investment activity in financial instruments other than derivatives on commodities or emission rights or derivatives thereof, unless such persons:

1st Are market makers,

2nd are members or participants of a regulated market or an MTF on the one hand, or have direct electronic access to a trading venue on the other, except non-financial entities that execute on a trading venue transactions that objectively reduce in a measurable manner the risks directly linked to the commercial activity or the treasury financing activity of the aforementioned non-financial entities or their groups,

3rd apply a high-frequency algorithmic trading technique, or

4th deal on their own account when executing client orders.

Persons exempt under letters a), i) or j) shall not have to comply with the conditions established in this letter d) in order to be exempt.

e) Operators with obligations under Law 1/2005, of 9 March, regulating the regime for trading in greenhouse gas emission rights, who, when trading emission rights, do not execute client orders and do not provide investment services or activities other than dealing on their own account, provided that they do not apply high-frequency algorithmic trading techniques.

f) Persons who provide investment services and activities consisting exclusively of the management of employee participation systems.

g) Persons who provide investment services and activities consisting solely of the management of employee participation systems and the provision of investment services and activities exclusively to their parent companies, to their subsidiaries or to other subsidiaries of their parent companies.

h) Members of the European System of Central Banks (ESCB), other national bodies with similar functions in the European Union, other public bodies responsible for the management of or intervening in public debt in the European Union as well as international financial institutions of which two or more Member States are members that intend to mobilise funds and provide financial assistance for the benefit of those of their members that are suffering serious financing problems or are at risk of suffering them.

i) Collective investment institutions, closed-end collective investment entities and pension funds, regardless of whether or not they are coordinated within the European Union, nor the depositaries and management companies of said institutions.

j) Persons who either trade on their own account, including market makers, in commodity derivatives or emission allowances or derivatives thereof, excluding persons who trade on their own account when executing client orders, or provide investment services and activities, on behalf of third parties, in commodity derivatives or emission allowances or derivatives of such allowances to the clients or suppliers of their main activity, provided that:

1.º On an individual and aggregate basis, it is an ancillary activity with respect to the main activity, considered in relation to the group, and said main activity does not constitute the provision of investment services and activities within the meaning of this law or an activity legally reserved for credit institutions under Law 10/2014, of 26 June, or when they act as market makers in relation to commodity derivatives,

2.º they do not apply a high-frequency algorithmic trading technique, and

3.º they inform the corresponding competent authority annually that they rely on this exception and, when requested by the latter, of the reason why they consider that their activity is ancillary with respect to their main activity.

The determination of an activity as ancillary for the purposes of this paragraph shall be made in accordance with the provisions of Commission Delegated Regulation (EU) No. 2017/592 of 1 December 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council, as regards regulatory technical standards for the criteria to determine when an activity is to be considered ancillary to the main activity.

k) Persons who provide investment advice in the exercise of another professional activity not regulated by this law, provided that the provision of such advice is not specifically remunerated.

l) Transmission system operators, as defined in Article 2(4) of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, or in Article 2(4) of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC, when performing the tasks imposed on them by those Directives, Regulation (EC) No. 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No. 1228/2003, or Regulation (EC) No. 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No. 1775/2005, or the network codes or guidelines adopted pursuant to those Regulations, persons acting on their behalf as service providers to carry out their tasks under the aforementioned directives or regulations or the network codes or guidelines adopted pursuant to those regulations, and operators or administrators of an energy balancing mechanism, a distribution network or a system designed to maintain the balance of energy supply and demand when carrying out such activities.

This exception shall only apply to persons involved in the aforementioned activities if they carry out investment activities or provide investment services and activities related to commodity derivatives in order to carry out such activities. This exception shall not apply with respect to the management of a secondary market, including secondary trading platforms in financial transmission rights.

2. The rights conferred by this law shall not be extended to the provision of services as a counterparty in transactions carried out by public bodies that trade public debt or by members of the ESCB, within the functions assigned to them under the Treaty on the Functioning of the European Union and by Protocol No. 4 on the Statute of the ESCB and of the European Central Bank (ECB) or in the exercise of equivalent functions under national provisions.

3. The provisions of articles 85 and 86 shall also apply to persons who are exempt under this article.

Amended by the sole article.7 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Drafted in accordance with the correction of errors published in BOE no. 252, of 18 October 2018. Ref. BOE-A-2018-14215

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 177: #a1-2]

Article 139 bis. Other exceptions relating to the provision of investment services and activities.

1. The following persons shall be excluded from the application of the requirements and obligations established in this law and its implementing provisions:

a) Persons and entities that are not authorised to:

1.º Hold funds or securities of clients and that, for that reason, cannot at any time be placed in a debtor position with respect to their clients, and

2.º provide investment services and activities, other than the reception and transmission of orders in transferable securities or the provision of investment advice in relation to said financial instruments.

b) Persons who provide investment services and activities exclusively in commodities, emission allowances or derivatives thereof for the sole purpose of hedging the commercial risks of their clients, provided that the latter are exclusively local electricity undertakings as defined in Article 2.35 of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009, or natural gas undertakings as defined in Article 2(1) of Directive 2009/73/EC of the European Parliament and of the Council of 13 October 2003, and provided that these clients jointly hold 100 per cent of the capital or voting rights of these persons, jointly exercise control and are exempt under Article 139.1.j), if they themselves provide these investment services and activities; or

c) persons who provide investment services and activities exclusively in emission allowances or derivatives thereof for the sole purpose of hedging the commercial risks of their clients, provided that the latter are exclusively holders as defined in Article 3(f) of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003, and provided that these clients jointly hold 100 per cent of the capital or voting rights of these persons, jointly exercise control and are exempt under Article 139.1.j), if they themselves provide these investment services and activities.

2. The persons referred to in letter a) of the preceding paragraph may transmit orders only to the following authorised entities:

a) Authorised investment firms and activities,

b) credit institutions authorised in accordance with Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC,

c) branches of investment firms or credit institutions that are authorised in a third country and that are subject to and comply with prudential rules which the competent authorities consider at least as strict as those laid down in this law, in Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 or in Law 10/2014 of 26 June,

d) collective investment undertakings authorised under the law of a Member State to sell units to the public or to the managers of such undertakings; and

e) fixed-capital investment companies, as defined in Article 17.7 of Second Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, whose obligations are listed or traded on a regulated market of a Member State.

3. The persons referred to in paragraph 1 that receive authorisation to be excluded from the application of the requirements and obligations laid down in this law and its implementing provisions:

a) Shall be subject to the requirements and the supervision regime established by regulation, and

b) may not provide investment services and activities or ancillary services, whether through the establishment of a branch, or through the free provision of services or provision of services without a branch, under the terms laid down in Chapter III of Title V.

Added by the sole article 8 of Royal Decree-Law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 178: #a140]

Article 140. Investment services and activities.

1. The following are considered investment services and activities:

a) The reception and transmission of orders from clients in relation to one or more financial instruments. This service shall be understood to include bringing two or more investors into contact with each other so that they execute transactions with each other on one or more financial instruments.

b) The execution of orders on behalf of clients.

c) Dealing on own account.

d) Portfolio management.

e) The placing of financial instruments without a firm commitment basis.

f) The underwriting of financial instruments or placing of financial instruments on a firm commitment basis.

g) Investment advice.

For the purposes of the provisions of this section, generic and non-personalised recommendations that may be made in the context of the marketing of securities and financial instruments shall not be considered to constitute advice. Such recommendations shall have the status of commercial communications. Likewise, recommendations that are disclosed exclusively to the public shall not be considered personalised recommendations either.

h) The operation of multilateral trading facilities.

i) The operation of organised trading facilities.

2. Acts carried out by an investment services and activities firm that are preparatory to the provision of an investment service must be considered an integral part of the service.

Amended by the sole article.9 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Section i) is added by final provision 1.2 of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 179: #a141]

Article 141. Ancillary services.

The following are considered ancillary investment services:

a) The custody and administration on behalf of clients of financial instruments, including custody and related services such as treasury and collateral management and excluding the maintenance of securities accounts at the highest level.

b) The granting of credits or loans to investors, so that they may carry out an operation on one or more of the instruments provided for in Article 2, provided that the undertaking granting the credit or loan is involved in said operation.

c) Advice to undertakings on capital structure, industrial strategy and related matters, as well as advice and other services relating to mergers and acquisitions of undertakings.

d) Services related to underwriting.

e) The preparation of investment reports and financial analyses or other forms of general recommendation relating to operations on financial instruments, in accordance with the provisions of Article 36 of Commission Delegated Regulation (EU) 2017/565, of 25 April 2016 .

In any case, recommendations that do not meet the two conditions established in Article 36.1 of Commission Delegated Regulation (EU) No. 2017/565, of 25 April 2016, shall be considered advertising communications, and investment services and activities undertakings that present or disseminate them must ensure that they are clearly identified as such.

Furthermore, the recommendation must contain a clear and prominent statement, or in the case of oral recommendations, a measure with equivalent effect, that it has not been prepared in accordance with the regulatory provisions aimed at promoting the independence of investment reports and that there is no prohibition preventing trading before the dissemination of the report.

f) Foreign exchange services, when related to the provision of investment services and activities.

g) Investment services and activities as well as ancillary services that refer to the non-financial underlying of the financial derivative instruments contemplated in paragraphs e), f), g) and j) of the Annex, when they are linked to the provision of investment services and activities or ancillary services. The deposit or delivery of goods that have the status of deliverables shall be understood to be included.

Amended by the sole art.9 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 180: #a142]

Article 142. Other provisions on investment services and ancillary services.

1. Investment services and activities undertakings referred to in Article 143.1.b) that execute investor orders relating to financial instruments may hold them on their own account provided that the following conditions are met:

a) That such positions derive solely from the investment firm's inability to fulfil the precise orders received from clients,

b) that the total market value of such positions does not exceed 15 per cent of the undertaking's initial capital,

c) that the undertaking satisfies the requirements established in Articles 92 to 95 and in the fourth part of Regulation (EU) No. 575/2013, of 26 June 2013 , on prudential requirements for credit institutions and investment firms, and amending Regulation (EU) No. 648/2012 ; and

d) that such positions are of a fortuitous and provisional nature and are strictly limited to the time necessary to carry out the transaction in question.

2. Investment services undertakings, under the terms established by regulation, and provided that the possible risks and conflicts of interest between them and their clients, or those that may arise between the different clients, are adequately resolved, may carry out the activities provided for in the preceding articles, referring to instruments not contemplated in Article 2 or other ancillary activities that entail the extension of their business, when this does not distort the exclusive corporate purpose of the investment services undertaking.

Investment services undertakings may not assume functions exclusive to management companies of collective investment institutions, pension funds or securitisation funds.

3. The Government may modify the content of the list of investment services and ancillary services appearing in the preceding articles to adapt it to the modifications established in European Union regulations. Likewise, the Government may also regulate the manner of providing the investment services and ancillary services mentioned in the preceding articles.

Paragraph 1 is amended by final provision 9.3 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Paragraph 1 is amended by the sole art.10 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 181: #a143]

Article 143. Classes of investment services undertakings.

1. The following are investment services undertakings:

a) Securities companies.

b) Securities agencies.

c) Portfolio management companies.

d) Financial advisory companies.

2. Securities companies are those investment services companies that may operate professionally, both on behalf of third parties and on their own account, and perform all the investment services and ancillary services provided for in articles 140 and 141, respectively.

3. Securities agencies are those investment services companies that may professionally operate only on behalf of third parties, with or without representation. They may perform the investment services and ancillary services provided for in articles 140 and 141, respectively, with the exception of those provided for in article 140.1.c) and f), and in article 141.b).

4. Portfolio management companies are those investment services and activities companies that may exclusively provide the investment services and activities provided for in article 140.1.d) and g). They may also perform the ancillary services provided for in article 141.c) and e). These companies shall not be authorised to hold clients' funds or securities, and therefore may under no circumstances be placed in a debtor position with respect to their clients.

5. Financial advisory companies are those natural or legal persons that may exclusively provide the investment services and activities provided for in article 140.1.g) and the ancillary services provided for in article 141.c) and e).

Under no circumstances shall the activities carried out by financial advisory companies be covered by the investment guarantee fund regulated in title VI. These companies shall not be authorised to hold clients' funds or securities, and therefore may under no circumstances be placed in a debtor position with respect to their clients.

Securities agencies, portfolio management companies and financial advisory companies may not carry out transactions on securities or cash on their own account, except, subject to the limitations established by regulation, to manage their own assets.

Section 3 is amended by final provision 9.4 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Sections 4 and 5 are amended by sole article 11 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Drafted in accordance with the correction of errors published in BOE no. 252, of 18 October 2018. Ref. BOE-A-2018-14215

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 182: #a144]

Article 144. Reservation of activity and name.

1. No person or entity may, without having obtained the required authorisation and being registered in the corresponding administrative registers of the CNMV or the Bank of Spain, carry out professionally or habitually the activities provided for in article 140 and in article 141.a), b), d), f) and g), in relation to the financial instruments contemplated in article 2, including, for this purpose, transactions on foreign currency.

Likewise, the marketing of investment services and activities and the solicitation of clients may only be carried out professionally, by themselves or through the agents regulated in article 146, by entities that are authorised to provide such services.

2. The names "Sociedad de Valores", "Agencia de Valores", "Sociedad Gestora de Carteras" and "Empresa de Asesoramiento Financiero", as well as their abbreviations "S.V.", "A.V.", "S.G.C." and "E.A.F." respectively, are reserved for entities registered in the corresponding registers of the CNMV, which are obliged to include them in their name. No other person or entity may use such names or abbreviations or the name "empresa de servicios y actividades de inversión" or any other name or abbreviation that may induce confusion.

Persons or entities that fail to comply with the provisions of the two preceding sections shall be required to cease immediately the use of the names or the offering or carrying out of the activities described. If, within thirty days from notification of the requirement, they continue to use them or carry them out, they shall be sanctioned with coercive fines of up to five hundred thousand euros, which may be repeated on the occasion of subsequent requirements.

4. The National Securities Market Commission shall be competent to formulate the requirements and to impose the fines referred to in the preceding section, and 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 this law.

The provisions of this section are without prejudice to the other sanctions that may apply in accordance with the provisions of title VIII or to the other liabilities, including criminal, that may be enforceable.

5. The Commercial Registry and the other public Registries shall not register those entities whose corporate purpose or whose name is contrary to the provisions of this law. When, nevertheless, such registrations have been made, they shall be null and void by operation of law, and their cancellation shall be proceeded with ex officio or at the request of the National Securities Market Commission. Such nullity shall not prejudice the rights of third parties acting in good faith, acquired in accordance with the content of the corresponding Registries.

Sections 1 and 2 are amended by sole article 12 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 183: #a145]

Article 145. Other entities authorised to provide investment services and activities and rules applicable to the marketing of structured deposits.

1. Credit institutions, even if they are not investment services and activities firms under this law, may habitually carry out all the services and activities provided for in Articles 140 and 141 provided that their legal regime, their statutes and their specific authorisation enable them to do so.

In the procedure by which credit institutions are authorised to provide investment services and activities or ancillary services, a report from the CNMV shall be mandatory.

The following provisions shall apply to credit institutions when they provide one or more investment services or carry out one or more investment activities:

a) Articles 182.1 and 2, 183.1 and 2, 193, 194, 195, 195 bis, 196, 196 bis of this law and Articles 27, 30, 31, 32, 33, 34, 38, 40 and 43 of Royal Decree-Law 21/2017, of 29 December,

b) Article 146, as well as Title VII of this law,

c) Articles 69, 164, 168, 170, 171 and 173 of this law and Articles 25 and 37 of Royal Decree-Law 21/2017, of 29 December,

d) Articles 197 and 276 bis to 276 sexies of this law; and

e) Title VIII of this law.

2. The following shall apply to management companies of collective investment institutions and management companies of closed-end collective investment entities when they provide the investment services and activities of portfolio management, advice, custody and administration and reception and transmission of orders, and they shall be subject to the following provisions:

a) Articles 139.2, 193.2.a), b), c), d), e) f) and h), 193.3.b), d) and e), 194, 203, 204, 205, 206, 207, 208, 208 bis, 208 ter, 209, 210, 211, 212, 213, 214, 215 216, 217, 218, 219, 220 bis, 220 ter, 220 quater, 220 quinquies, and 220 sexies of this law; and,

b) Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment services and activities firms and defined terms for the purposes of that Directive, under the terms set out in that Delegated Regulation.

3. The following provisions of this law shall apply to credit institutions and to investment services and activities firms when they market structured deposits to their clients or advise them thereon:

a) Articles 182.1 and 2, 183.1 and 2, Article 193.2.a), b), c), d) and e) and Article 194,

b) Articles 208 to 220 sexies,

c) Articles 146, 147 and 221.1.b),

d) Articles 197, 276 bis to 276 sexies and Title VIII of this law.

The deposit guarantee compartment of the Deposit Guarantee Fund shall guarantee the principal of the structured deposits received by the credit institution.

4. Articles 195 to 196 bis shall also apply to members or participants in regulated markets and MTFs that are not required to obtain authorisation under this law by virtue of the exceptions contained in Article 139.1, letters a), e), i) and j).

Paragraphs 1 to 3 are amended by final provision 9.5 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by sole article 13 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 184: #a146]

Article 146. Agents of investment services and activities firms.

1. Investment services and activities firms, except financial advisory firms, may appoint tied agents for the promotion and marketing of the investment services and activities and ancillary services that they are authorised to provide. Likewise, they may appoint them to solicit business and habitually carry out, vis-à-vis potential clients, on behalf of the investment services and activities firm, the investment services and activities provided for in Article 140.1.a) and e) as well as the provision of investment services and activities of investment advice under Article 140.1.g) on the financial instruments and the investment services and activities that the firm offers.

2. Agents shall act at all times on behalf of and under the full and unconditional responsibility of the investment services and activities firms that have engaged them

3. The provisions of this article and the following article shall be developed by regulation, establishing, in particular, the other requirements to which the actions of agents and of the investment services and activities firms to which they provide their services shall be subject, including, among others, their exclusive action and suitability requirements.

Amended by sole article 14 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-Law, this amendment shall enter into force at the time when the royal decree that develops it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 185: #a147]

Article 147. Registration in the register of agents.

The agents hired by investment services and activities companies must be registered in the CNMV register in order to be able to start their activity under the terms established by regulation.

It is amended by the sole article 15 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-law, this amendment will enter into force at the time when the royal decree that develops it does so. For these purposes, on 17 January 2019 Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 186: #a148]

Article 148. Contracting by electronic means.

(Repealed)

It is repealed by the sole article 16 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 187: #cii-5]

CHAPTER II

Authorization, registration, suspension and revocation

Go up

[Block 188: #a149]

Article 149. Authorization.

1. The CNMV shall be responsible for authorizing the creation of investment services and activities companies. In any case, the processing of the procedure shall be carried out through electronic means.

The authorization shall state the class of investment services and activities company concerned, the list of investment services and activities, auxiliary services and financial instruments as well as the ancillary activities referred to in article 142.2, which are authorized.

2. The administrative resolution shall be reasoned and must be notified within six months following receipt of the application or the moment when the required documentation is completed. When the application is not resolved within the aforementioned period, it may be deemed rejected.

The authorization granted by the CNMV shall be valid throughout the European Union and shall allow an investment services and activities company to provide the services or carry out the activities for which it has been authorized throughout the European Union, whether under the right of establishment, including a branch, or the freedom to provide services.

To obtain and retain the authorization, investment services and activities companies must at all times comply with the general and specific requirements for obtaining the authorization, as well as the provisions contained in this chapter and in chapters IV, V and sections 1, 2, 3 and 4 of chapter VI, in title VII, as well as in title II of Royal Decree-law 21/2017, of 29 December.

3. Investment services and activities companies may not carry out investment services and activities, nor auxiliary services on financial instruments that are not expressly stated in the authorization referred to in paragraph 1. Likewise, in no case shall authorization be granted for the provision solely of auxiliary services.

4. For the provision of the service of managing a multilateral trading system or an organized trading system, the governing bodies of regulated markets as well as entities constituted for that purpose by one or several governing bodies may also be authorized, which must have as their exclusive corporate purpose the management of the system and must be 100 percent owned by one or several governing bodies, provided that they comply, under the terms and with the adaptations established by regulation, with the requirements of investment services and activities companies to obtain the authorization established in this chapter.

5. The authorization procedure for investment services and activities companies shall be regulated by regulation.

It is amended by the sole article 17 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 189: #a150]

Article 150. Registration.

1. In order for an investment services company, once authorized, to start its activity, the promoters must incorporate the company, registering it in the Mercantile Registry and subsequently in the corresponding Registry of the National Securities Market Commission. In the case of financial advisory companies that are natural persons, registration in the registry of the National Securities Market Commission shall suffice.

2. The National Securities Market Commission shall notify every authorization granted to the European Securities and Markets Authority.

Go up

[Block 190: #a151]

Article 151. Authorization of investment services and activities companies controlled by other companies.

1. The CNMV shall previously consult with the competent authority of the corresponding European Union Member State on the authorization of an investment services and activities company when the new company is to be controlled by another entity subject to financial supervision. The provisions of this article shall be developed by regulation, including the cases in which such consultations must be carried out.

2. In the case of the creation of investment services and activities companies that are to be controlled directly or indirectly by one or more companies authorized or domiciled in a State that is not a member of the European Union, the granting of the requested authorization must be suspended, denied or its effects limited, when a decision adopted by the European Union has been notified to Spain upon verifying that the European Union investment services and activities companies do not benefit in said State from treatment offering the same conditions of competition as their national entities and that the conditions for effective market access are not met.

Amended by the sole article 18 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established in final provision 5.2 of the aforementioned Royal Decree-Law, this amendment shall enter into force at the time the royal decree that develops it does. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, constituting the implementing regulation, as established in final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 191: #a152]

Article 152. General authorization requirements.

1. Entities must comply with the corporate, financial, corporate governance requirements, adherence to the investment guarantee fund, compliance with conduct rules, procedures related to the prevention of money laundering and internal organization as determined by regulation.

2. In the regulatory development of the requirements provided for in this article, the investment services and activities and ancillary services that the companies are authorized to provide must be taken into account, especially in relation to the establishment of the minimum share capital and minimum own funds.

Amended by the sole article 19 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Section 1.d) is amended by final provision 1.3 of Royal Decree-Law 21/2017, of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Amendment published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 192: #a153]

Article 153. Specific requirements for authorization.

1. Natural persons applying for authorization to operate as financial advisory companies must comply with the specific requirements for authorization as determined by regulation.

2. When the authorization application refers to the provision of the management service of an SMN or an SOC, the investment services and activities company, the governing body or, where applicable, the entity constituted for that purpose by one or several governing bodies, must, in addition, submit to the CNMV for approval internal operating rules of the SMN or SOC under the terms determined by regulation.

Amended by the sole article 20 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 193: #a154]

Article 154. Expiry of authorization.

The authorization referred to in this chapter shall be declared expired if, after a period of one year from the day following the date of notification of the administrative resolution granting the authorization, the promoters of the investment services company do not request, after compliance with the provisions of the preceding section, its registration in the corresponding register of the National Securities Market Commission.

[Block 194: #a155]

Article 155. Denial of authorization.

The National Securities Market Commission may only deny authorization to constitute an investment services company for the following reasons:

a) When the legal and regulatory requirements provided for obtaining and maintaining authorization are not met.

b) When the CNMV has not been informed of the identity of the shareholders or partners, whether direct or indirect, natural or legal persons, who hold significant holdings and of the amounts of said holdings, and when, in view of the need to ensure sound and prudent management of the entity, the suitability of the shareholders or partners who are to hold a significant holding, as defined in article 174 and in accordance with article 9 of Commission Delegated Regulation (EU) 2017/1943 of 14 July 2016, is not considered adequate.

The CNMV shall request a report from the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences, in order to obtain an adequate assessment of the provisions of article 9(e) of Commission Delegated Regulation (EU) 2017/1943 of 14 July 2016, sending to said Executive Service all information it has received regarding the shareholders or partners who are to hold a significant holding that may be relevant to the assessment. The Executive Service shall send the report to the CNMV within a maximum period of thirty business days counting from the day following that on which it received the request with the indicated information.

The reference made to shareholders or partners in this article shall be understood as made to the entrepreneurs in the case of financial advisory firms that are natural persons.

c) The lack of transparency in the structure of the group to which the entity may eventually belong, or the existence of close links with other investment services firms or other natural or legal persons that prevent the effective exercise of the supervisory functions of the National Securities Market Commission, and, in general, the existence of serious difficulties in inspecting it or obtaining the information that the National Securities Market Commission deems necessary for the proper development of its supervisory functions.

d) When the legal, regulatory or administrative provisions of a State not a member of the European Union by which the natural or legal persons with whom the investment firm maintains close links are governed, or the difficulties involved in their application, prevent the effective exercise of supervisory functions.

e) If the CNMV is not convinced that the members of the governing body of the market's management body enjoy sufficient honour and knowledge, skills and experience and devote sufficient time to the performance of their duties; or when there are objective and demonstrable grounds for believing that the administrative body of the investment services and activities firm or the persons responsible for its effective management could pose a threat to the effective, adequate and prudent management thereof and to due consideration of market integrity.

f) When there are serious conflicts of interest between the positions, responsibilities or functions held by the members of the administrative body of the investment services and activities firm or by the entrepreneur, in the case of financial advisory firms that are natural persons, and other positions, responsibilities or functions that they hold simultaneously.

Letters b), e) and f) are amended by the sole article 21 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 195: #a156]

Article 156. Statutory amendments.

1. Amendments to the articles of association of investment services firms shall be subject to the authorisation procedure for new entities, although the authorisation application must be resolved, notifying the interested parties, within two months following its submission.

2. When the application is not resolved within this period, it shall be deemed granted.

3. All statutory amendments must be registered in the Mercantile Registry and in that of the National Securities Market Commission, within the periods and with the requirements determined by regulation.

4. Notwithstanding the provisions of paragraph 1, amendments to the articles of association whose purpose is the following shall not require prior authorisation, although they must subsequently be communicated to the National Securities Market Commission for recording in the corresponding registry:

a) Change of registered office within the national territory as well as the change of name of the investment services firm.

b) Incorporation into the articles of association of investment services firms of mandatory or prohibitory legal or regulatory provisions, or compliance with judicial or administrative decisions.

c) Capital increases charged to reserves of investment services firms.

d) Those other amendments for which the National Securities Market Commission, in response to a prior consultation or, by means of a general resolution, has considered the authorisation procedure unnecessary due to their low relevance.

5. Amendments to the articles of association other than those provided for in the preceding paragraphs and which are unrelated to the specific nature of the company as an investment services and activities firm or to the requirements to which these entities are subject shall not require prior authorisation from the CNMV nor must they subsequently be communicated to the CNMV.

Paragraph 5 is added by the sole article 22 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 196: #a157]

Article 157. Modification of authorised investment services.

1. Any alteration of the specific investment services and ancillary services initially authorised shall require prior authorisation granted in accordance with the procedure for authorisation of new entities and registration in the registers of this Commission, in the manner determined by regulation.

2. Authorisation may be refused if the entity does not comply with the provisions of Articles 152, 153, 155, 183, 185, 190 and 193, and, in particular, if the National Securities Market Commission considers the administrative and accounting organisation of the entity, its human and technical resources, or its internal control procedures to be insufficient.

3. If, as a consequence of the authorised alteration, the investment services company restricts the scope of its activities, the outstanding transactions shall be settled or the securities, instruments and cash entrusted to it by its clients shall be transferred, as appropriate. The National Securities Market Commission may adopt the appropriate precautionary measures, including intervention in the settlement of outstanding transactions.

[Block 197: #a158]

Article 158. Appointment of new management and senior management positions.

1. In the manner and within the time limits determined by regulation, prior notification shall be given to the CNMV of the appointments of:

a) New members of the management body or senior management of investment services and activities companies.

b) New members of the management body or senior management of parent entities of investment services and activities companies other than those referred to in Article 4.1.2).c) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013, provided that such parent entities are financial holding companies or mixed financial holding companies.

2. Likewise, in the manner and within the time limits determined by regulation, notification shall be given to the CNMV, when they are not part of the management body, of the appointments of: new heads of internal control functions, new chief financial officers and other key positions, which, in accordance with a risk-based approach, have been considered as such for the daily development of the activity of investment services and activities companies and of the parent entities mentioned in letter b) of paragraph 1, which are:

a) Significant entities on a consolidated basis.

b) Significant entities that form part of a group, when the investment services company on a consolidated basis is not a significant entity.

c) Significant entities that do not form part of a group.

For the purposes of the provisions of this paragraph 2, the regulations shall specify which investment services and activities companies shall have the nature of significant.

3. The CNMV may object to such appointments, giving reasons within a period of four months from receipt of the notification, if it considers that such persons do not meet the suitability requirements, in accordance with the provisions of Article 184 bis, or when there are objective and demonstrable grounds for believing that the proposed changes may jeopardise the effective, sound and prudent management of the entity or of the group to which it belongs and for the proper consideration of market integrity and the interests of clients.

When the CNMV determines that additional documentation and information is needed to complete the assessment, the four-month period may be interrupted from the moment the additional documentation and information is requested until receipt of such documentation and information, and a decision must be taken within a maximum period of six months from the beginning of that period.

4. In the case of new members of the management body or senior management, as well as new heads of internal control functions, new chief financial officers and other key positions within the parent entity of the investment services company that are subject to authorisation by other supervisory bodies of the European Union, mere notification to the CNMV of the new appointments shall suffice.

Amended by the sole article.23 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 198: #a159]

Article 159. Structural modifications.

The transformation, merger, division and segregation of a branch of activity, as well as the other operations of corporate modification carried out by an investment services company or that lead to the creation of an investment services company, shall require prior authorisation, in accordance with the procedure established in Article 149, with the adaptations specified by regulation, and in no case may the corporate alteration entail any reduction of the requirements established by law or regulation for the incorporation of investment services companies.

[Block 199: #a160]

Article 160. Revocation of authorisation.

1. The authorisation granted to an investment services company or to one of the entities referred to in Article 145.2 or to a branch of an entity with its registered office in States not members of the European Union may be revoked in the following cases:

a) If it does not commence the authorised activities within twelve months following the date of notification of the authorisation, for reasons attributable to the interested party.

b) If it expressly waives the authorization, regardless of whether it is transformed into another entity or agrees to its dissolution.

c) If it de facto interrupts the specific authorized activities for a period exceeding six months.

d) If for one year it carries out a volume of activity lower than the normal volume established by regulation.

e) If it subsequently fails to meet any of the requirements for obtaining the authorization.

f) In the event of serious and systematic breach of the obligations set out in articles 190.1.a) and 193.2.c), e) and f).

g) When the situation provided for in article 180.1 arises.

h) If the investment services company or the person or entity is declared insolvent by a court.

i) As a sanction, as provided for in title VIII of this law.

j) If the investment services company ceases to belong to the investment guarantee fund provided for in title VI.

k) When any of the grounds for dissolution provided for in articles 360 and 363 of the consolidated text of the Capital Companies Act approved by Royal Legislative Decree 1/2010, of 2 July, arises.

l) If it had obtained the authorization by virtue of false statements or by any other irregular means

m) When the provisions relating to the operating conditions of investment services and activities companies are seriously and systematically breached, in accordance with this law, its implementing regulations or Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014.

2. The authorization may only be revoked due to the lack of suitability of a shareholder in exceptional cases, in accordance with the provisions of article 180.

Due to the lack of commercial or professional integrity of the members of the management body or senior management, revocation shall only be appropriate if the affected persons do not cease in their positions within one month counted from the request addressed to them for that purpose by the CNMV. A lack of subsequent integrity shall not be considered to exist merely because, while in the exercise of their position, a director or manager is investigated or prosecuted for a crime.

Amended by the sole article.24 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established in final provision 5.2 of the aforementioned Royal Decree-law, this amendment shall enter into force at the time when the royal decree implementing it does so. For these purposes, on 17 January 2019 Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established in final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 200: #a161]

Article 161. Procedure for revocation of authorization.

1. The revocation of the authorization shall follow the procedure provided for in Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations, with the processing and resolution being the responsibility of the CNMV.

2. The provisions of this article shall be developed by regulation, including the possibility for the CNMV to decide that the revocation entails the forced dissolution of the entity.

Amended by the sole article.25 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 201: #a162]

Article 162. Suspension of authorization.

1. The National Securities Market Commission may suspend, in whole or in part, the effects of the authorization granted to an investment services company. When the suspension is partial, it shall affect some activities or the scope with which they were authorized.

2. The suspension may be agreed when any of the following situations arises:

a) Opening of a sanctioning proceeding for a serious or very serious infringement.

b) When any of the grounds provided for in article 160.e), f), h), j), or l) arises, while the revocation procedure is being processed.

c) When the situation provided for in article 178 arises.

d) When the company does not make the contributions to the investment guarantee fund provided for in title VI to which it belongs.

e) As a sanction, as provided for in title VIII.

3. The suspension shall only be agreed when, given one of the grounds provided for in the preceding paragraph, the measure is necessary to ensure the solvency of the entity or to protect investors. The duration of the agreed suspension may not exceed one year, extendable for another year, unless it is a sanction.

4. The measure of suspension of activities shall be agreed and produce its effects as provided for in article 161, except when a situation arises that has a specific regime in this law.

Paragraph 3 is amended by the sole article.26 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 202: #a163]

Article 163. Standing to request the declaration of insolvency.

The National Securities Market Commission shall be entitled to petition for the declaration of insolvency of investment services companies, provided that, from the accounting statements submitted by the entities, or from the checks carried out by the services of the National Securities Market Commission itself, it appears that they are in a state of insolvency in accordance with the provisions of Law 22/2003, of 9 July, on Insolvency.

Go up

[Block 203: #ciii-2]

CHAPTER III

Branches and freedom to provide services

Go up

[Block 204: #s1-3]

Section 1. European Union

Added by the sole article 27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 205: #a164]

Article 164. General provisions.

1. The regime for cross-border activity in the European Union regulated in this section applies to Spanish investment services and activities companies and to those authorised and supervised by the competent authorities of other Member States of the European Union, as well as to investment services and activities companies authorised and supervised by the competent authorities of other States of the European Economic Area, which decide to provide investment services or activities, as well as ancillary services, all of them being covered by their authorisation, in Spain or in another State of the territory of the European Economic Area.

2. The provision of the services or activities referred to in the preceding paragraph may be carried out either under the freedom to provide services, through the establishment of a branch or through the use of tied agents, in the event that they do not have a branch.

Amended by the sole article 27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-law, this amendment shall enter into force at the time when the royal decree that develops it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 206: #a165]

Article 165. Branches and tied agents of Spanish investment services and activities companies in Member States of the European Union.

1. Any Spanish investment services and activities company that wishes to establish a branch in the territory of another Member State of the European Union, or to use tied agents established there in the event that the company does not have a branch established, must notify the CNMV in advance.

2. The CNMV may, in the exercise of its responsibilities and after informing the competent authority of the host Member State, carry out “on-site” inspections of the branches of Spanish investment services and activities companies that provide services in the territory of another Member State of the European Union.

3. The provisions of this article may be developed by regulation and, in particular, the content of the notification provided for in paragraph 1 and, where appropriate, the sending by the CNMV of the information submitted by the Spanish investment services and activities company to the competent authority of the host Member State.

Amended by the sole article 27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 207: #a166]

Article 166. Freedom to provide services by Spanish investment services and activities companies in Member States of the European Union.

1. Any Spanish investment services and activities company that, under the freedom to provide services, wishes to provide for the first time investment services or activities, as well as ancillary services in the territory of another Member State of the European Union, or wishes to modify the range of investment services or activities, as well as ancillary services provided under this regime, must notify the CNMV in advance.

2. The provisions of this article may be developed by regulation and, in particular, the content of the notification provided for in paragraph 1 and, where appropriate, the sending by the CNMV of the information submitted by the Spanish investment services and activities company to the competent authority of the host Member State.

Amended by the sole article 27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 208: #a167]

Article 167. Branches in Spain of investment services and activities companies from Member States of the European Union.

1. The establishment by investment services and activities companies authorised in other Member States of the European Union of branches in Spain or, the use of tied agents established in Spain, in the event that said companies do not have an established branch, shall not require prior authorisation, provided that the corresponding services and activities are covered by the authorisation granted to said companies in the home Member State.

2. Notwithstanding the provisions of the preceding paragraph, the opening of the branch in Spain or, in the absence thereof, the use of tied agents established in Spain, shall be subject to the CNMV receiving a communication from the competent authority of the home Member State of the investment services and activities company. Said communication must contain the information indicated in the corresponding regulatory provisions.

When the investment services and activities company authorised in another Member State of the European Union uses a tied agent established in Spain, said tied agent shall be treated as the branch, if one has been established, and shall be subject to the regime established in this law for branches.

3. The provisions of this article may be developed by regulation and, in particular, the procedure for opening and closing the branch and the regime to which the action of the tied agent shall be subject.

Amended by the sole article.27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-law, this amendment shall enter into force at the time the royal decree that develops it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 209: #a168]

Article 168. Supervision of branches in Spain of investment services and activities companies from Member States of the European Union.

1. The CNMV shall assume responsibility for ensuring that the investment services or activities as well as ancillary services provided in Spanish territory by the branch or, where applicable, by the tied agent established in Spain, when there is no branch, comply with the obligations established in this law and, in particular, in articles 203 to 224; in title V chapter I and in the provisions issued in development of the aforementioned precepts, as well as the obligations established in articles 14 to 26 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014 .

2. Likewise, the CNMV shall assume control of the obligation established in article 194 regarding the recording of transactions carried out by the branch or by the tied agent, when there is no branch, without prejudice to the competent authority of the home State having direct access to that record.

3. Without prejudice to the provisions of paragraphs 1 and 2, the competent authority of the home Member State may, in the exercise of its responsibilities and after informing the CNMV, carry out 'on-site' inspections of that branch or tied agent.

4. The provisions of this article may be developed by regulation, including the powers of the CNMV to ensure compliance with the provisions of this article.

Amended by the sole article.27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 210: #a169]

Article 169. Free provision of services in Spain by investment services and activities companies from Member States of the European Union.

1. The provision in Spain for the first time of investment services or activities, as well as ancillary services, under the free provision of services regime, by investment services and activities companies authorised in another Member State of the European Union, may begin once the CNMV has received a communication from the competent authority of the home Member State of the entity, with the information and in the terms established by regulation.

2. When the investment services and activities company or credit institution intends to use tied agents established in its home Member State, the CNMV and the Bank of Spain shall publish their identity, previously communicated by the competent authority of the home Member State.

Amended by the sole article.27 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 211: #a170]

Article 170. Preventive measures.

1. When the CNMV has clear and demonstrable grounds for believing that an investment services and activities firm authorised in another Member State of the European Union that operates in Spain through a branch, or, where appropriate, through a tied agent established in Spain, where there is no branch, or under the freedom to provide services, infringes obligations arising from national provisions adopted pursuant to Directive 2014/65/EU of 15 May 2014, it shall communicate the facts to the competent authority of the home Member State.

In the event that, despite the measures adopted by the competent authority of the home Member State, the investment services and activities firm persists in conduct that is clearly detrimental to the interests of investors in Spain or to the proper functioning of the markets, the CNMV, after informing the competent authority of the home Member State, shall adopt all relevant measures, including the possibility of preventing the infringing investment services and activities firms from carrying out new transactions in Spanish territory. The CNMV shall inform the European Commission and ESMA of these measures without delay. The CNMV may request ESMA to act in accordance with the powers conferred on it by Article 19 of Regulation (EU) No. 1095/2010 of 24 November 2010.

2. Notwithstanding the provisions of the preceding paragraph, when the CNMV verifies that the Spanish branch of a community investment services and activities firm or the tied agent of said firm established in Spain, where there is no branch, does not comply with the obligations established in this law, in particular: in Title V Chapter I and in Articles 203 to 224; as well as in the provisions issued in development of these precepts; and the obligations established in Articles 14 to 26 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014, it shall require the investment services and activities firm to put an end to its irregular situation.

If the investment services and activities firm does not adopt the appropriate measures, the CNMV shall take all necessary measures to put an end to this situation, and must inform the competent authorities of the home Member State of the nature of the measures adopted.

If, despite the measures adopted by the CNMV, the firm continues to infringe the provisions contained in this law and its implementing rules, the CNMV, after informing the competent authorities of the home Member State, may sanction it and, where appropriate, prohibit it from carrying out new transactions in Spanish territory. The CNMV shall inform the European Commission and ESMA of these measures without delay. The CNMV may request ESMA to act in accordance with the powers conferred on it by Article 19 of Regulation (EU) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010.

3. Any measure adopted in application of the provisions of this article that involves sanctions or restrictions on the activities of an investment firm must be duly reasoned and communicated to the affected investment services and activities firm.

4. The provisions of this article shall also apply in the case of credit institutions from other Member States of the European Union authorised to provide investment services or activities, as well as ancillary services in Spanish territory, either under the freedom to provide services or under the freedom of establishment.

Amended by the sole article 27 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-Law, this amendment shall enter into force at the time the royal decree that develops it does. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Paragraph 1 drafted in accordance with the correction of errors published in BOE No. 296, of 11 December 2015. Ref. BOE-A-2015-13438.

Select version:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 212: #s2-3]

Section 2. Third Countries

Added by the sole article 27 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 213: #a171]

Article 171. General provisions.

1. This section regulates:

a) The provision of investment services or activities and ancillary services by Spanish investment services and activities firms in States that are not members of the European Union, whether under the freedom to provide services or through the establishment of a branch, including through the creation or acquisition by the Spanish investment services and activities firm or by an entity belonging to its consolidated group supervised by the CNMV, of investment services and activities firms located there; and

b) the provision of investment services or activities and ancillary services in Spain by third-country companies, whether through the establishment of a branch or under the freedom to provide services, and provided that, in the latter case, said companies are not registered in the ESMA register of third-country companies referred to in Article 48 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014.

2. When a third-country company intends to provide investment services or activities in Spain, with or without ancillary services, to retail clients or to the professional clients referred to in Article 206 of this law, it must establish a branch in Spain and request the corresponding authorization from the CNMV, if it is an investment services and activities company, or from the Bank of Spain, if it is a credit institution, under the terms and conditions set out, for investment services and activities companies, in Article 173 of this law and its implementing provisions and, for credit institutions, in Article 13 of Law 10/2014 of 26 June, and its implementing provisions.

Likewise, based on the volume of activity, complexity of the products or services, or reasons of general interest, the CNMV may require that the third-country company that provides or intends to provide investment services or activities in Spain, with or without ancillary services, to professional clients or eligible counterparties referred to, respectively, in Articles 205 and 207, establish a branch in Spain, and must request the corresponding authorization from the CNMV, if it is an investment services company, or from the Bank of Spain, if it is a credit institution, under the terms and conditions described in the preceding paragraph.

3. The provisions of this article may be developed by regulation, including the special features arising from the provision of investment services or activities to a person established in Spain at the exclusive initiative of said person or the solicitation of clients.

The first paragraph of section 2 is amended by final provision 9.6 of Royal Decree-Law 19/2018 of 23 November. Ref. BOE-A-2018-16036

Amended by sole article 27 of Royal Decree-Law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Please note that, as established in final provision 5.2 of the aforementioned Royal Decree-Law, this amendment will enter into force at the same time as the royal decree implementing it. For these purposes, on 17 January 2019, Royal Decree 1464/2018 of 21 December enters into force, which constitutes the implementing regulation, as established in final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 214: #a172]

Article 172. Cross-border activity of Spanish investment services and activities companies in States not members of the European Union.

1. Spanish investment services and activities companies that intend to open a branch, or provide services without a branch, in a State not a member of the European Union, must first obtain authorization from the CNMV.

2. The creation by a Spanish investment services and activities company or by an entity belonging to its consolidated group, provided that the latter is a consolidated group of financial entities supervised by the CNMV, of a foreign investment services and activities company, or the acquisition of a holding in an existing company, shall also be subject to prior authorization from the CNMV, when said foreign investment services and activities company is to be incorporated or is domiciled in a State that is not a member of the European Union.

3. The authorization procedures provided for in this article, including the grounds for rejection of applications, shall be developed by regulation.

Amended by sole article 27 of Royal Decree-Law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Section 2 drafted in accordance with the correction of errors published in BOE no. 296 of 11 December 2015. Ref. BOE-A-2015-13438.

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 215: #a173]

Article 173. Cross-border activity in Spain of third-country companies.

1. Third-country companies that provide investment services or activities in Spain, with or without ancillary services, shall be subject to this law and its implementing regulations.

2. Investment services and activities firms whose central administration or registered office is located in a State that is not a member of the European Union that intend to provide investment services or activities in Spain, with or without ancillary services, whether through the establishment of a branch or under the freedom to provide services, provided that, in the latter case, they are not registered in the ESMA register of third-country firms referred to in Article 48 of Regulation (EU) No. 600/2014 of the European Parliament, of 15 May 2014, shall require authorization from the CNMV in the form and under the conditions established by regulation. Without prejudice to the meaning of the resolution that the CNMV must issue, the expiry of the maximum period without express resolution having been notified shall mean that it is negative in nature.

Likewise, in the event of a modification of the conditions of the authorization granted by the CNMV in accordance with the preceding paragraph, the investment services and activities firm shall inform the CNMV thereof in writing. What modifications shall require authorization from the CNMV and the form and conditions for their processing shall be developed by regulation.

3. Credit institutions whose central administration or registered office is located in a State that is not a member of the European Union that intend to provide investment services or activities in Spain, with or without ancillary services, whether through the establishment of a branch or under the freedom to provide services, provided that, in the latter case, they are not registered in the register of third-country firms maintained by ESMA referred to in Article 48 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014, for not complying with the conditions established for this purpose in Article 46 of the aforementioned Regulation, shall require authorization from the Bank of Spain, under the terms established in Article 13 of Law 10/2014, of 26 June, and its implementing provisions.

4. Third-country firms whose legal and supervisory framework has been recognized by the European Commission as effectively equivalent in accordance with Article 47.1 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014, while such equivalence decision is in force, and which have in Spain a branch authorized by the CNMV or the Bank of Spain to provide investment services or activities, with or without ancillary services, may provide such services or activities in other Member States of the European Union to professional clients and eligible counterparties, as defined in Articles 205 and 207 of this law, subject to compliance with the information requirements established in Article 166 of this law.

Amended by the sole article.27 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-Law, this amendment shall enter into force at the time the royal decree implementing it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 216: #civ-2]

CHAPTER IV

Significant holdings

[Block 217: #a174]

Case law

Article 174. Significant holdings.

1. For the purposes of this law, a significant holding in a Spanish investment services and activities firm shall be understood as one that reaches, directly or indirectly, at least 10 per cent of the capital or of the voting rights attached to the shares of the firm or that allows significant influence to be exercised over the management of the investment services and activities firm in which the holding is held, taking into account the conditions relating to the calculation of voting rights and their aggregation established in Articles 26 and 27 of Royal Decree 1362/2007, of 19 October, implementing Law 24/1988, of 28 July, on the Securities Market, in relation to the transparency requirements concerning information on issuers whose securities are admitted to trading on a regulated market or on another regulated market of the European Union.

2. The provisions of this title for investment services firms shall be understood without prejudice to the application of the rules on public takeover bids and information on significant holdings contained in this law and the special rules established in additional provision six and in Articles 48 and 99, as well as in their implementing rules.

Paragraph 1 is amended by the sole article.28 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 218: #a175]

Case law

Article 175. Duty of notification.

1. Any natural or legal person who, alone or acting in concert with others, has acquired, directly or indirectly, a holding in a Spanish investment services firm, such that its percentage of voting rights or capital held is equal to or greater than 5 per cent, shall immediately notify in writing the National Securities Market Commission and the corresponding investment services firm, indicating the size of the holding reached.

2. Any natural or legal person who, alone or acting in concert with others, hereinafter the potential acquirer, has decided to acquire, directly or indirectly, a significant holding in a Spanish investment services and activities firm or to increase, directly or indirectly, the holding therein in such a way that either the percentage of voting rights or capital held is equal to or greater than 20, 30 or 50 percent, or that by virtue of the acquisition control of the investment services and activities firm could be obtained, hereinafter the proposed acquisition, shall notify the CNMV in advance.

In the notification, it shall state the amount of the intended holding and shall include all the information determined in accordance with Commission Delegated Regulation (EU) No. 2017/1946 of 11 July 2017 supplementing Directives 2004/39/EC and 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards for establishing an exhaustive list of information to be included by proposed acquirers in the notification of a proposed acquisition of a qualifying holding in an investment firm. Such information must be relevant to the assessment and proportionate and appropriate to the nature of the potential acquirer and of the proposed acquisition.

3. Likewise, investment services firms shall inform the National Securities Market Commission, as soon as they become aware thereof, of acquisitions or disposals of holdings in their capital that exceed any of the levels indicated in the preceding paragraphs of this article.

4. When the National Securities Market Commission receives two or more notifications relating to the same investment services firm, it shall treat all potential acquirers in a non-discriminatory manner.

Paragraph 2 is amended by the sole article 29 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 219: #a176]

Article 176. Assessment of the proposed acquisition.

1. The CNMV, in order to ensure the sound and prudent management of the investment services and activities firm in which the acquisition is proposed, and taking into account the possible influence of the potential acquirer over it, shall assess the suitability of the latter and the financial soundness of the proposed acquisition, in accordance with the criteria set out in Article 9 of Commission Delegated Regulation (EU) No. 2017/1946 of 14 July 2016.

2. The procedure provided for in this article shall be developed by regulation, including the assessment criteria, the time limit for carrying out the assessment and the grounds on which the CNMV may, where appropriate, object.

Amended by the sole article 30 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established in final provision 5.2 of the aforementioned Royal Decree-Law, this amendment shall enter into force at the time when the royal decree implementing it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, constituting the implementing regulation, as established in final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 220: #a177]

Article 177. Collaboration between supervisory authorities.

The CNMV, when carrying out the assessment referred to in Article 176.1, shall consult the authorities responsible for the supervision of financial entities in Spain and in other Member States of the European Union in the terms determined by regulation.

Amended by the sole article 31 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 221: #a178]

Article 178. Effects of non-compliance with obligations.

When an acquisition of those regulated in Article 175 is made without prior notification to the National Securities Market Commission; or, having notified it, the period provided for in Article 176.3 has not yet elapsed, or if there is express opposition from the National Securities Market Commission, the following effects shall occur:

a) In any case and automatically, the political rights corresponding to the irregularly acquired holdings may not be exercised until the National Securities Market Commission, once it has received and assessed the necessary information on the acquirers, deems them suitable. If, nevertheless, they are exercised, the corresponding votes shall be null and the resolutions shall be challengeable in judicial proceedings, as provided in Chapter IX of the consolidated text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010, of 2 July, with the National Securities Market Commission being entitled to do so.

b) The suspension of activities provided for in Article 162 may be agreed.

c) If necessary, the intervention of the company or the replacement of its administrators shall be agreed, as provided in Title VIII.

d) The sanctions provided for in Title VIII shall be imposed.

Letter a) drafted in accordance with the correction of errors published in BOE no. 296, of 11 December 2015. Ref. BOE-A-2015-13438 .

[Block 222: #a179]

Article 179. Reduction of significant shareholdings.

1. Any natural or legal person that has decided to cease to hold, directly or indirectly, a significant shareholding in an investment services company shall first notify the National Securities Market Commission, indicating the amount of the proposed transaction and the expected timeframe for carrying it out. That person must also notify if it has decided to reduce its significant shareholding in such a way that the percentage of voting rights or capital held is less than 20, 30 or 50 percent, or that it may lose control of the investment services company.

2. Failure to comply with this duty shall be sanctioned as provided in Title VIII.

[Block 223: #a180]

Article 180. Preventive measures.

1. When there are well-founded and proven reasons that the influence exercised by persons holding a significant shareholding in an investment services company may be detrimental to its sound and prudent management, seriously damaging its financial situation, the National Securities Market Commission shall adopt one or more of the following measures:

a) Those provided for in paragraph 178.a) and b), although the suspension of voting rights may not exceed three years.

b) Exceptionally, the revocation of the authorization.

2. In addition, the appropriate sanctions may be imposed as provided in Title VIII.

3. The National Securities Market Commission shall give a reasoned account to the Ministry of Economy and Competitiveness of the decisions taken under this article.

[Block 224: #a181]

Article 181. Communication of shareholder structure.

1. Investment services companies shall inform the National Securities Market Commission, in the manner and with the frequency established by regulation, about the composition of their shareholding or about any changes therein. Such information shall necessarily include that relating to the participation of other financial entities in its capital, whatever its amount. It shall be established by regulation in which cases the information provided shall be public.

2. In addition, at least once a year, investment services companies shall inform the National Securities Market Commission of the identity of the shareholders holding significant shareholdings, indicating the volume of such shareholdings.

[Block 225: #cv-2]

CHAPTER V

Suitability, corporate governance and information requirements

[Block 226: #a182]

Article 182. Corporate governance systems.

1. Investment services and activities companies must have sound corporate governance procedures, including a clear organizational structure, appropriate and proportionate to the nature, scale and complexity of their activities, and with well-defined, transparent and coherent lines of responsibility.

For these purposes, the administrative body of the investment services and activities company must define a corporate governance system that ensures effective and prudent management of the entity, and that includes the appropriate distribution of functions within the organization and the prevention of conflicts of interest, promoting market integrity and the interest of clients. Such system must comply, at a minimum, with the following principles:

a) The overall responsibility of the entity, the approval and oversight of the implementation of its strategic objectives, its risk strategy and its internal governance, shall rest with the administrative body.

b) The administrative body shall ensure the integrity of the accounting and financial information systems, including financial and operational control and compliance with applicable legislation.

c) The administrative body shall supervise the information disclosure process and communications relating to the investment services and activities company.

d) The administrative body shall be responsible for ensuring effective oversight of senior management.

e) The chairman of the administrative body may not simultaneously hold the position of chief executive officer, unless the entity justifies it and the CNMV authorizes it.

2. The corporate governance system provided for in the previous paragraph must also ensure that the administrative body of investment services and activities companies defines, approves and supervises:

a) The organization of the company for the provision of investment services and activities and ancillary services, including the knowledge, skills and experience required of staff, resources and procedures, and the provisions applicable to the provision of services or the performance of the company's activities, taking into account the nature, scale and complexity of its activities and all the requirements it must meet.

b) The strategy relating to the services, activities, products and operations it offers, based on the company's level of risk tolerance and the characteristics and needs of its clients to whom they are offered or provided, including the conduct of appropriate stress tests, where applicable.

c) A remuneration policy for persons involved in the provision of services to clients aimed at incentivizing responsible business conduct, fair treatment of clients and the avoidance of conflicts of interest in relations with them.

3. The remaining entities that provide investment services and activities, in accordance with the provisions of this title, must have a clear, adequate organisational structure proportionate to the nature, scale and complexity of the investment services and activities they provide.

Amended by the sole article.32 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 227: #a183]

Article 183. Periodic control and evaluation of the corporate governance system.

1. The administrative body shall periodically control and evaluate the adequacy and application of the company's strategic objectives in the provision of investment services and activities and auxiliary services, the effectiveness of the corporate governance system of the investment services and activities company and the adequacy of the strategies relating to the provision of services to clients, and shall take the appropriate measures to remedy any deficiencies.

In any case, the corporate governance system shall be governed by the principles of responsibility and supervision of the administrative body, and of integrity of the accounting and financial information systems.

2. The members of the administrative body shall have adequate access to the information and documents necessary to supervise and control the decision-making process of the management.

3. Investment services and activities companies shall have a website where they shall disseminate the public information provided for in this chapter and communicate the manner in which they comply with corporate governance obligations.

Amended by the sole article.32 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 228: #a184]

Article 184. Collective requirements of the administrative body.

1. The administrative body of investment services and activities companies shall collectively possess sufficient knowledge, skills and experience to be able to understand the activities of the investment services and activities companies, the main risks and ensure the effective capacity of the administrative body to make decisions independently and autonomously in the interest of the entity.

2. Investment services and activities companies shall dedicate the appropriate human and financial resources to the integration and training of the members of the administrative body.

3. The concepts contemplated in the preceding paragraphs shall be developed by regulation.

Amended by the sole article.32 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 229: #a1-3]

Article 184 bis. Suitability policy for the selection and evaluation of positions.

1. The members of the administrative body and of the senior management of investment services and activities companies must at all times meet the following suitability requirements:

a) Possess recognised honour, honesty and integrity,

b) have sufficient knowledge, skills and experience,

c) act with independence of ideas; and

d) be in a position to exercise good governance of the entity.

These requirements shall also be applicable to natural persons who represent legal persons in the administrative bodies, in accordance with the provisions of article 236.5 of the consolidated text of the Capital Companies Act approved by Royal Legislative Decree 1/2010, of 2 July .

2. When assessing the requirements provided for in letters b) and d) of paragraph 1 of this article, the CNMV shall take into account the size, internal organisation, nature, scale and complexity of the activities of the investment services and activities company, as well as the functions performed by these persons with respect to the investment services and activities company.

3. The application of the requirements provided for in the preceding paragraphs to financial advisory companies shall be determined by regulation.

Added by the sole article.32 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 230: #a185]

Article 185. Selection and evaluation of positions.

1. Investment services and activities companies must at all times ensure compliance with the suitability requirements provided for in this law. To this end, they must have, under conditions proportionate to the size, internal organisation, nature, scale and complexity of their activities, adequate internal units and procedures to carry out the selection, monitoring and succession plan, as well as the re-election to positions, of the persons who are to occupy positions subject to compliance with the suitability requirements established in the preceding article in accordance with the provisions of this article.

2. The assessment of the suitability of the positions referred to in the preceding paragraph shall be carried out both by the investment services and activities company itself and by the CNMV, in the terms provided for by regulation.

3. In the event of non-compliance with the requirements of honour, honesty and integrity, knowledge, competence, experience, independence of ideas and good governance, the CNMV may:

a) Revoke the authorisation, on an exceptional basis, in accordance with the provisions of article 160 of this law.

b) Require the temporary suspension or definitive cessation of the person or the rectification of the deficiencies identified in the event of a lack of the required honour, honesty and integrity, knowledge, skills or experience, independence of judgement or ability to exercise good governance.

If the investment services and activities firm does not proceed to execute such requirements within the period indicated by the CNMV, the latter may agree to the temporary suspension or definitive cessation of the corresponding position, in accordance with the procedure provided for in article 311 of this law.

4. In any case, the administrative body must ensure that the selection procedures for its members favour diversity of experience and knowledge, facilitate the selection of women, seeking their balanced presence, as members of the administrative body and, in general, do not suffer from implicit biases that could entail any discrimination.

The concept of diversity for the purposes of compliance with the provisions of this paragraph shall be developed by regulation.

Amended by the sole article.32 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 231: #a1-4]

Article 185 bis. Criteria for the interpretation of the suitability requirements.

1. The honour, honesty and integrity required in this title shall be considered to be present in those who have been demonstrating personal, commercial and professional conduct that does not cast doubt on their ability to perform a sound and prudent management of the investment services and activities firm.

To assess the concurrence of honour, honesty and integrity, all available information must be considered, in accordance with the parameters determined by regulation. In any case, such information must include that relating to conviction for the commission of crimes or offences and sanction for the commission of administrative infractions.

2. Those who have the training of adequate level and profile, in particular, in the areas of securities and financial services, and practical experience derived from their previous occupations for a sufficient time, shall be considered to possess the knowledge, skills and experience required in this title to exercise their functions in investment services and activities firms.

3. For the purposes of assessing the disposition of the members of the administrative body to exercise good governance required in this title, the presence of potential conflicts of interest that generate undue influences from third parties and the ability to dedicate sufficient time to carry out the corresponding functions shall be taken into account.

The concept of sufficient time for the purposes of compliance with the provisions of this paragraph shall be developed by regulation.

Added by the sole article.32 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 232: #a186]

Article 186. Criteria for action of the members of the administrative body.

Each of the members of the administrative body of investment services and activities firms shall act with honesty, integrity and independence of judgement, evaluating and questioning, where appropriate, effectively the decisions of senior management and effectively monitoring and controlling the decision-making process of senior management.

Amended by the sole article.32 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 233: #a187]

Article 187. Investment services and activities firms subject to Regulation (EU) No. 575/2013, of the European Parliament and of the Council, of 26 June 2013 .

1. Investment services and activities firms, as well as, where applicable, their parent undertakings, other than those referred to in article 4.1.2.c) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013 , shall be subject to the provisions of this chapter with the following specialities:

a) The provisions of article 182.1 shall also apply to the consolidated groups in which they are integrated, so that the systems, procedures and mechanisms established in said article that parent and subsidiary companies must have are coherent and well integrated and that any type of relevant data and information for supervisory purposes can be provided.

b) The provisions of articles 184, 184 bis, 185 and 185 bis shall also apply to the members of the administrative body and senior management of parent undertakings of the investment services and activities firms mentioned in paragraph 1, when said parent undertaking is a financial holding company or a mixed financial holding company.

2. The provisions of letters a) and b) of article 184 bis.1 shall apply to those responsible for internal control functions, financial directors and other key positions that, in accordance with a risk-based approach, have been considered as such for the daily development of the activity of the investment services and activities firms mentioned in paragraph 1 of this article and, where applicable, of the parent undertakings referred to in letter b) of paragraph 1 of this article.

Paragraph 1.b) is amended by the final provision 9.7 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by the sole article.32 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 234: #a188]

Article 188. Significant investment services and activities firms.

1. The investment services and activities firms referred to in article 187.1 above that are significant and their parent entities must establish a nominations committee and a remuneration committee, composed of members of the administrative body who do not perform executive functions in the entity. The nominations committee shall set a target for balanced representation of the less represented sex on the administrative body and shall draw up guidelines on how to achieve that target.

2. The CNMV shall determine the maximum number of positions that the members of the administrative body or of the senior management of the investment services and activities firms that are significant may hold simultaneously, taking into account the particular circumstances and the nature, size and complexity of the entity's activities.

The members of the administrative body with executive functions and the members of the senior management of the investment services and activities firms that are significant may not simultaneously hold more positions than those provided for credit institutions in article 26 of Law 10/2014, of 26 June .

3. The CNMV may authorise the positions mentioned in the previous paragraph to hold an additional non-executive position if it considers that this does not prevent the proper performance of their activities in the investment services and activities firm. Such authorisation must be communicated to ESMA.

4. The CNMV may determine that a significant investment services and activities firm obliged to have a nominations committee and a remuneration committee may, by reason of its size, internal organisation, the nature, scope or low complexity of its activities, establish the nominations committee and the remuneration committee jointly, or be exempted from the obligation to establish one, the other or both committees.

5. The significant character of investment services and activities firms shall be established by regulation, in accordance with the following criteria:

a) Minimum amount of the total asset items,

b) minimum total amount of their annual turnover; and

c) minimum average number of workers employed during the financial year.

Paragraph 1 is amended by final provision 9.8 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by the sole article.32 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 235: #a189]

Article 189. Remuneration policies of investment services and activities firms.

1. Investment services and activities firms must have a remuneration policy that addresses the entity's risk management and the management of potential conflicts of interest, especially in relation to clients.

2. The remuneration policy shall be determined in accordance with the general principles provided for credit institutions in article 33 of Law 10/2014, of 26 June .

3. With regard to the variable elements of remuneration, the principles provided for credit institutions in article 34 of Law 10/2014, of 26 June , shall apply.

4. In the case of investment services and activities firms that receive public financial support, in addition to the rules established in article 33 of Law 10/2014, of 26 June , those contained, for credit institutions, in article 35 of that law and its implementing regulations shall apply, with the adaptations that may be necessary due to the nature of the entity.

5. Investment services and activities firms shall provide the CNMV with all information it requires for compliance with remuneration obligations.

6. The provisions of the previous paragraphs shall not apply to the investment services and activities firms referred to in article 4.1.2 c) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013 .

7. Nor shall the provisions of the previous paragraphs apply to those investment services and activities firms authorised exclusively to provide any of the services provided for in letters h) or i) of article 140.

Amended by the sole article.32 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 236: #a1-5]

Article 189 bis. Remuneration policy and risk management.

1. Investment services and activities firms shall have, under conditions proportionate to the character, scale and complexity of their activities, remuneration policies consistent with the promotion of sound and effective risk management.

2. The remuneration policy shall apply to the categories of employees whose professional activities have a significant impact on their risk profile, in relation to the group, parent company and subsidiary. In particular, it shall apply to senior managers, to employees who assume risks for the company providing services and investment activities, to those who perform control functions, as well as to any worker who receives overall remuneration that places them in the same remuneration bracket as the aforementioned, whose professional activities have a significant impact on the risk profile of the entity.

3. Companies providing services and investment activities shall at all times make available to the CNMV an updated list indicating the categories of employees whose professional activities have a significant impact on their risk profile.

Added by the sole article 32 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 237: #a1-6]

Article 189 ter. Remuneration policy and management of conflicts of interest.

1. Companies providing services and investment activities shall define and apply remuneration policies and practices in accordance with Commission Delegated Regulation (EU) 2017/565 of 25 April 2016, with the aim of avoiding conflicts of interest in the provision of services to their clients.

2. The CNMV may specify the criteria to be taken into account in defining the remuneration policies and practices of the relevant persons who directly or indirectly influence the provision of investment services and activities or ancillary services provided by the company providing services and investment activities, with the aim of avoiding conflicts of interest in the provision of services to their clients.

Added by the sole article 32 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 238: #cvi-2]

CHAPTER VI

Systems, procedures and management mechanisms

[Block 239: #s1-4]

Section 1. Financial requirements

Added by the sole article 33 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 240: #a190]

Article 190. Financial requirements.

1. The following are obligations of investment services companies:

a) Those derived from Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013, on prudential requirements for credit institutions and investment firms, and amending Regulation (EU) No. 648/2012, of 4 July.

However, the obligations of the preceding paragraph shall not apply, under the terms and with the exceptions provided for in Regulation (EU) No. 575/2013, of 26 June 2013, to investment services companies not authorised to provide the ancillary service referred to in Article 141.a), which provide only one or more of the investment services or activities listed in Article 140.a), b), d) and g) of this law, and which are not permitted to hold money or securities of their clients on deposit and which, for this reason, can never be in a debtor position with respect to said clients.

The calculations to verify compliance by investment services companies with the obligations established in this letter a) shall be carried out at least half-yearly, aligning the reference dates of the information with those of the end of the natural half-year.

Investment services companies shall communicate to the National Securities Market Commission, in the form and content it determines, the results and all necessary calculation elements.

b) Investment services companies shall maintain the minimum volumes of investment in certain categories of liquid and low-risk assets that, in order to safeguard their liquidity, are established by regulation.

c) The financing of investment services companies, when it takes forms other than participation in their capital, shall comply with the limitations established by regulation.

2. Consolidated groups of investment services companies, as well as investment services companies not integrated into a consolidated group, except those referred to in the second paragraph of letter a) of the previous section, shall specifically have sound, effective and comprehensive strategies and procedures to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider adequate to cover the nature and level of the risks to which they are or may be exposed. Such strategies and procedures shall be periodically subject to internal review to ensure that they remain comprehensive and proportionate to the nature, scale and complexity of the activities of the entity concerned.

[Block 241: #a1-7]

Article 190 bis. Combined capital buffer requirement.

1. Companies providing services and investment activities shall at all times comply with the combined capital buffer requirement, understood as the total of Common Equity Tier 1 capital as defined in Article 26 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013, necessary to comply with the obligation to have a capital conservation buffer, plus other buffers, under the terms established by regulation.

This obligation shall be fulfilled without prejudice to the own funds requirements established in Article 92 of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013, and those others that, where applicable, the CNMV may require, by virtue of the provisions of Article 261.

2. The provisions of this article shall be developed by regulation and, in particular, the cases of non-application or the particularities applicable to certain investment services and activities companies based on their size or the services provided and the particularities arising from their application to groups of companies.

Added by the sole article.34 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 242: #a191]

Article 191. Information on solvency.

1. Consolidated groups of investment services companies, as well as investment services companies not integrated into one of these consolidated groups, shall make public, as soon as possible and at least annually, duly integrated in a single document called "Information on solvency", the information referred to in Part Eight of Regulation (EU) No. 575/2013, of 26 June 2013, and in the terms established in that Part.

2. The National Securities Market Commission may require parent companies to publish annually, either in full or by reference to equivalent information, a description of their legal and governance structure and the organizational structure of the group.

3. The disclosure, in compliance with the requirements of commercial or securities market legislation, of the data referred to in paragraph 1 shall not exempt them from their inclusion in the document "Information on solvency" in the manner provided for in that paragraph.

4. The National Securities Market Commission may require entities obliged to disclose the information referred to in paragraph 1:

a) The verification by auditors or independent experts, or by other means satisfactory in its judgment, of the information not covered by the audit of accounts, in accordance with the provisions of Law 22/2015, of 20 July, on Auditing of Accounts, regarding the independence regime to which auditors are subject.

b) The disclosure of one or more of such information, either independently at any time, or more frequently than annually, and to establish maximum deadlines for disclosure.

c) The use for disclosure of means and places other than the financial statements.

5. The provisions of this article shall not apply to investment services companies referred to in article 190.1.a), second paragraph.

[Block 243: #a192]

Article 192. Annual report of investment services companies.

1. Investment services companies shall send to the National Securities Market Commission and publish annually, specifying the countries where they are established, the following information on a consolidated basis for each financial year:

a) Name, nature and geographical location of the activity.

b) Turnover.

c) Number of full-time employees.

d) Gross profit before taxes.

e) Taxes on profit.

f) Public subsidies or aid received.

2. The information referred to in the previous paragraph shall be published as an annex to the financial statements of the entity audited in accordance with the regulations governing the auditing of accounts.

3. Entities shall make public in their annual report of investment services companies, among the key indicators, the return on their assets, which shall be calculated by dividing net profit by the total balance sheet.

4. The National Securities Market Commission shall have these reports available on its website.

5. The provisions of this article shall not apply to investment services companies referred to in article 190.1.a), second paragraph.

[Block 244: #a1-8]

Article 192 bis. Risk management and risk committee.

1. The administrative body is responsible for the risks assumed by an investment services and activities company. In the exercise of its responsibility for risk management, the administrative body shall:

a) Devote sufficient time to the consideration of risk-related issues, and

b) approve and periodically review the strategies and policies for assuming, managing, supervising and reducing risks.

2. Investment services and activities companies shall establish a risk committee. Exceptions to the obligation to establish a risk committee shall be provided for by regulation.

3. The provisions of this article shall be developed by regulation and other requirements may be established to guarantee the proper management of risks by the investment services and activities company.

Added by the sole article.35 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

[Block 245: #s2-4]

Section 2. General requirements for internal organization and operation

Added by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 246: #a193]

Article 193. Internal organization requirements.

1. Investment services and activities companies shall carry out their activity in compliance with corporate governance rules and the internal organization requirements established in this law and its implementing regulations, as well as articles 21 to 43 of Commission Delegated Regulation (EU) 2017/565, of 25 April 2016, and other applicable legislation.

2. The internal organization requirements of investment services and activities companies shall be developed by regulation, which shall include, at a minimum, the following aspects:

a) Adequate and sufficient policies and procedures to ensure that it, including its directors, employees and tied agents, complies with the obligations imposed on them by this law, as well as the relevant rules applicable to the personal transactions of such persons,

b) effective administrative and organisational measures with a view to adopting all reasonable measures aimed at preventing conflicts of interest as defined in article 208 bis from harming the interests of its clients,

c) a process for the approval of each of the financial instruments and significant adaptations of existing instruments before their marketing or distribution to clients, in the case of investment services and activities firms that design financial instruments for sale to clients.

d) adequate mechanisms to obtain adequate information on the financial instruments and on the product approval process, including the defined target market of the financial instrument, and to understand the characteristics and the identified target market of each instrument, in the case of investment services and activities firms that offer or market financial instruments not designed by them,

e) keeping a record of all services, activities and transactions they carry out under the terms defined in article 194 of this law,

f) when they have at their disposal financial instruments belonging to clients, appropriate measures to safeguard the property rights of their clients,

g) for those investment services and activities firms to which it applies, a recovery plan under the terms provided in Law 11/2015, of 18 June, on the recovery and resolution of credit institutions and investment services and activities firms; and

h) robust security mechanisms to ensure the security and authentication of information systems, minimise the risk of data corruption and unauthorised access and prevent information leaks, maintaining the confidentiality of data at all times.

3. Likewise, entities providing investment services must adopt and have:

a) Reasonable measures to ensure the continuity and regularity of the performance of investment services and activities,

b) adequate administrative and accounting procedures, internal control mechanisms, effective risk assessment techniques and effective control and safeguarding mechanisms for their computer systems,

c) investment services firms to which it applies must prepare and keep updated a recovery plan under the terms provided in Law 11/2015, of 18 June.

d) when they have at their disposal funds belonging to clients, entities providing investment services shall take appropriate measures to safeguard their clients' rights. Entities may not use their clients' funds on their own account, except in the exceptional cases that may be established by regulation and always with the express consent of the client. The entity's internal records must make it possible to know, at all times and without delay, and especially in the event of insolvency of the entity, the position of funds of each client; and

e) when they entrust to a third party the exercise of operational functions crucial for the provision of a continuous and satisfactory service to their clients and the performance of investment activities on a continuous and satisfactory basis, they shall adopt reasonable measures to avoid any undue additional operational risk.

4. Credit institutions providing investment services and activities must comply with the internal organisation requirements set out in the preceding paragraph, with the specifications determined by regulation, with the Bank of Spain having the powers of supervision, inspection and sanction of these requirements. The aforementioned entities shall not be subject to the prohibition on using their clients' funds on their own account established in letter d) above.

5. The conclusion of financial collateral arrangements with transfer of title and the creation of pledges or the conclusion of set-off agreements on financial instruments or on clients' funds shall be regulated by regulation

6. Once insolvency proceedings have been initiated for a securities depositary entity, the CNMV, without prejudice to the powers of the Bank of Spain and the FROB, may immediately and at no cost to the investor order the transfer of the securities deposited on behalf of its clients to another entity authorised to carry out this activity, even if such assets are deposited with third entities in the name of the entity providing the depositary service. For these purposes, both the competent judge and the bodies of the insolvency proceedings shall facilitate the access of the entity to which the securities are to be transferred to the documentation and accounting and computer records necessary to make the transfer effective. The existence of the insolvency proceedings shall not prevent the securities purchased or the cash proceeds from the exercise of economic rights or the sale of the securities from being delivered to the client, in accordance with the rules of the clearing, settlement and registration system.

7. The provisions of this article shall be developed by regulation and, in particular, the content and requirements of the procedures, records and measures indicated in this article shall be established and the internal organisation requirements applicable to financial advisory firms that are natural persons shall be established.

Amended by the sole article.36 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-Law, this amendment will enter into force at the time when the royal decree implementing it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established by final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 247: #a194]

Article 194. Records.

1. Investment services and activities firms shall keep a record of all services, activities and transactions they carry out. Such record shall be sufficient to enable the CNMV to perform its supervisory functions and apply the appropriate enforcement measures and, in particular, to enable it to determine whether the investment services and activities firm has complied with all its obligations, including those relating to its clients or potential clients and to market integrity.

2. The record referred to in paragraph 1 shall include recordings of telephone conversations or electronic communications related to the activity of the investment services and activities firm. The obligation provided for in this article shall be developed by regulation, which shall include, at least, the following aspects:

a) The types of telephone conversations or electronic communications with clients that must be recorded,

b) the obligation to notify their clients of the fact that communications or telephone conversations will be recorded,

c) the prohibition on providing services or carrying out investment activities by telephone with those clients to whom they have not notified in advance the recording in relation to certain services,

d) the possibility for clients to communicate their orders through other channels provided that such communications can be made on a durable medium; and

e) the adoption of reasonable measures to prevent those communications that cannot be recorded or copied.

3. The records kept in accordance with the provisions of this article shall be made available to clients upon request, and shall be kept for a period of five years and, when the CNMV so requests, for a period of up to seven years.

Amended by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 248: #s3-3]

Section 3. Internal organisation and operating requirements for firms engaged in algorithmic trading

Amended by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 249: #a195]

Article 195. Algorithmic trading.

1. Investment services and activities firms engaged in algorithmic trading shall implement:

a) Risk systems and controls appropriate to their activities and effective to ensure that their trading systems are resilient, have sufficient capacity, comply with appropriate thresholds and limits and limit or prevent the sending of erroneous orders or the possibility that the systems operate in a way that may create or contribute to anomalies in the trading conditions,

b) effective risk systems and controls to ensure that the trading systems cannot be used for any purpose contrary to Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, or to the rules of the trading venue to which it is linked; and

c) effective mechanisms to ensure the continuity of activities in the event of a malfunction of their trading systems.

Likewise, they shall ensure that their systems have been fully tested and are monitored to ensure that they comply with the requirements set out in this paragraph.

2. The obligations provided for in this article shall be developed by regulation, which shall include, among others, the following elements:

a) The obligation to notify this activity to the CNMV or other supervisory authorities,

b) the powers of the CNMV to require investment services and activities firms authorised in Spain to provide it with information on their activity,

c) the obligation to keep records relating to the aspects referred to in this paragraph; and

d) the obligation for investment services and activities firms that employ high-frequency algorithmic trading techniques to keep records of their orders.

Amended by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 250: #a1-9]

Article 195 bis. Algorithmic trading as a market-making strategy.

1. For the purposes of the provisions of this article and of article 8 of Royal Decree-Law 21/2017, of 29 December, an investment services and activities firm that uses algorithmic trading shall be considered to be applying a market-making strategy if, when trading on its own account, its strategy, as a member or as a participant in one or several trading venues, includes the simultaneous posting of firm purchase and sale quotations of comparable magnitude and at competitive prices in relation to one or several financial instruments in a single trading venue or in different trading venues, thereby providing liquidity to the market regularly and frequently.

2. Investment services and activities firms that engage in algorithmic trading to apply a market-making strategy must, taking into account the liquidity, scale and nature of the specific market and the characteristics of the instrument traded:

a) Carry out these market-making activities continuously during a certain proportion of the trading hours of the trading venue, except in exceptional circumstances, so that liquidity is provided regularly and predictably to the trading venue,

b) enter into a binding written agreement with the trading venue specifying at least the obligations of the investment services and activities firm in accordance with the provisions of letter a); and

c) have effective systems and controls to ensure compliance at all times with its obligations under the agreement referred to in letter b).

3. The circumstances in which the investment services and activities firm shall be obliged to access the market by entering into the agreement referred to in the previous paragraph and the content of said agreement shall be governed by Commission Delegated Regulation (EU) No. 2017/578, of 13 June 2016, supplementing Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards specifying the requirements on market making agreements and schemes.

4. For the purposes of the provisions of paragraph 2.a), exceptional circumstances shall be understood as those provided for in Commission Delegated Regulation (EU) No. 2017/578, of 13 June 2016.

Amended by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 251: #s4]

Section 4. Requirements for the internal organisation and operation of firms that provide direct electronic access or act as general clearing members

Added by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 252: #a196]

Article 196. Direct electronic access.

1. Every investment services and activities firm that provides direct electronic access to a trading venue must implement effective systems and controls to ensure that:

a) An appropriate assessment and review of the suitability of clients using the service is carried out,

b) these cannot exceed pre-established trading and credit thresholds,

c) the trading of persons using the service is adequately monitored; and

d) there are appropriate risk controls that prevent trading that could generate risks for the trading firm itself, create or contribute to anomalies in the trading conditions or contravene Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, or the rules of the trading venue.

2. Direct electronic access to a trading venue shall be prohibited if the controls provided for in the previous paragraph are not met.

3. The investment services firm that provides direct electronic access shall be responsible for ensuring that clients using that service comply with the requirements established in this law and the rules of the trading venue. It must monitor operations to detect infringements of said rules or anomalies in the trading or conduct conditions that may constitute market abuse and that must be notified to the competent authority.

4. The investment services firm shall ensure that a binding written agreement is entered into between the firm and the client regarding the fundamental rights and obligations arising from the provision of the service and that, in the context of the agreement, the investment services firm retains responsibility under this law.

5. The provisions of this article may be developed by regulation, which shall include, among other aspects:

a) The notification obligations to the CNMV and other competent authorities,

b) the power of the CNMV to require information in relation to this activity; and

c) the retention of records relating to this activity.

Amended by the sole article.36 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 253: #a1-10]

Article 196 bis. Investment services and activities firms acting as general clearing members.

1. Investment services and activities firms acting as general clearing members for other persons must implement effective systems and controls to ensure that clearing services are applied only to suitable persons and that they comply with clear criteria, and that appropriate requirements are imposed on such persons in order to reduce the risks for them and the market. Investment services and activities firms shall ensure that a binding written agreement is concluded between them and the persons concerning the fundamental rights and obligations arising from the provision of the service.

2. Investment services and activities firms must comply with the obligations set out in this article in accordance with Commission Delegated Regulation (EU) 2017/589, of 19 July 2016 .

Added by the sole article.36 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 254: #s5]

Section 5. Procedures for notification of infringements

Added by the sole article.36 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 255: #a197]

Article 197. Notification of infringements.

1. Investment services and activities firms, market governing bodies, data supply service providers, credit institutions in relation to investment services or activities or to ancillary activities and services and branches of third-country firms; must have appropriate procedures so that their employees can notify potential or effective infringements internally through an independent, specific and autonomous channel.

2. These procedures must guarantee the confidentiality of both the person reporting the infringements and the natural persons allegedly responsible for the infringement.

3. Likewise, it must be guaranteed that employees who report infringements committed in the entity are protected against retaliation, discrimination and any other type of unfair treatment.

Amended by the sole article.36 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 256: #tv-2]

TITLE V bis

Data supply services

Added by the sole article.37 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 257: #ci-9]

CHAPTER I

Authorisation procedures for data supply service providers

Added by the sole article.37 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 258: #a1-11]

Article 197 bis. Classes of data supply providers and reservation of activity.

1. Data supply services shall be provided by data supply service providers.

2. The classes of data supply service providers and the services that each of them may provide are as follows:

a) Authorised publication agents (APA), are persons authorised to provide the service of publishing transaction reports on behalf of investment services and activities firms, in accordance with the provisions of articles 20 and 21 of Regulation (EU) No. 600/2014, of 15 May 2014 .

b) Consolidated information providers (CIP), are persons authorised in accordance with the provisions of Directive 2014/65/EU, of 15 May , to provide the service of collecting transaction reports carried out on regulated markets, MTFs, OTFs and authorised publication agents, with the financial instruments mentioned in articles 6, 7, 10, 12 and 13, 20 and 21 of Regulation (EU) No. 600/2014 , and consolidating them into a continuous live electronic data stream providing data on prices and volumes for each financial instrument.

c) Authorised information systems (AIS), are persons authorised in accordance with the provisions of this law to provide the service of notifying transaction details to the competent authorities or to ESMA on behalf of investment services and activities firms, in accordance with the provisions of article 26 of Regulation (EU) No. 600/2014, of 15 May 2014 .

3. The provision of data supply services in the field of Regulation (EU) No. 600/2014, of 15 May 2014, as a profession or habitual activity shall require prior obtaining of an authorisation as a data supply service provider (APA, CIP or AIS) in accordance with the provisions of this chapter, as well as registration in the CNMV register established for that purpose.

4. However, CIPs may provide other services not subject to authorisation, in accordance with the provisions of article 13 of Commission Delegated Regulation (EU) 2017/571, of 2 June 2016 , supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards regulatory technical standards on the authorisation, organisational requirements and the publication of transactions for data supply service providers.

5. Investment service and activity companies and the governing bodies of the market that manage a trading venue may also manage the data supply services of an APA, a PIC and a SIA, provided that the CNMV has previously verified that they comply with the provisions of this title, and obtain the corresponding authorization.

6. Data supply service providers shall provide the services under the supervision of the CNMV, which must:

a) Periodically verify that data supply service providers comply with the provisions of this title; and

b) verify that data supply service providers comply at all times with the conditions of the initial authorization established in this title.

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 259: #a1-12]

Article 197 ter. Authorization.

1. The CNMV shall be responsible for authorizing the provision of the service of data supply service providers.

2. The authorization to provide data supply services shall specify the service that the data supply service provider is authorized to provide.

The data supply service provider that decides to extend its activities to other data supply services must submit an application to extend its authorization.

3. The CNMV shall notify ESMA of every authorization granted and every authorization revoked.

4. The authorisation granted by the CNMV shall be valid throughout the European Union and shall allow the data transmission service provider to provide in the Member States the services for which it has been authorised.

5. Data transmission service providers authorised in another Member State of the European Union may provide such services in Spain without prior authorisation from the CNMV.

6. Entities not authorised in Member States of the European Union shall be subject to the authorisation procedure set out in this Chapter and the regulations implementing it.

Added by art. único.37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 260: #a1-13]

Article 197 quater. Authorisation procedure.

1. For the purpose of enabling the CNMV to assess the authorisation application and ensure that the applicant for authorisation to provide data transmission services complies with all the requirements set out in this Title as well as with the European Union legislation applicable to it, the applicant shall provide the CNMV with the information containing the following:

a) A programme of activities setting out, among other aspects, the detail of the types of services envisaged and the organisational structure.

b) The information and documentation required by Commission Delegated Regulation (EU) 2017/571 of 2 June 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards the regulatory technical standards on authorisation, organisational requirements, and the communication and publication of transactions applicable to data transmission service providers.

c) The identity of all members of the administrative body, as well as of all persons who will effectively direct the activities of the data transmission service provider.

d) Any other documents that allow verification of its compliance with all the requirements set out in the aforementioned Commission Delegated Regulation (EU) n°. 2017/571 of 2 June 2016.

2. The submission of the application and the accompanying information and documentation shall be subject to the provisions set out for that purpose in Commission Implementing Regulation (EU) n.º 2017/1110 of 22 June laying down implementing technical standards with regard to the templates for forms, templates and procedures for the authorisation of data transmission service providers and the related notifications in accordance with Directive 2014/65/EU of 15 May 2014.

3. The CNMV may require the applicant to provide any other additional information it deems appropriate to continue with the assessment of the application, in order to verify that the applicant has adopted, at the time of the initial authorisation, all the necessary measures to comply with its obligations under the provisions of this Title, as well as under the European Union legislation applicable to it.

4. The CNMV shall not grant the authorisation until it verifies that the applicant meets all the requirements contemplated in this law, its implementing regulations and the corresponding provisions of European Union law.

5. The resolution by which the authorisation is granted or denied shall be reasoned and the period for resolving the authorisation procedure shall be six months, counted from the moment the application has been registered in the CNMV's register or from the moment the documentation is completed, if it is not sufficient at the time of registration of the application. In the absence of an express resolution within the aforementioned period, the application shall be deemed rejected.

Added by art. único.37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 261: #a1-14]

Article 197 quinquies. Register of data transmission service providers.

The CNMV shall create a register of all data transmission service providers. This register shall be public and shall contain information on the services for which the data transmission service provider is authorised; and it must be updated periodically.

Added by art. único.37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 262: #a1-15]

Article 197 sexies. Requirements to obtain authorisation and carry out its activity.

The following shall be requirements for an entity to obtain and maintain its authorisation to provide data transmission services:

a) To take the form of a public limited company (sociedad anónima) and have an indefinite duration.

b) To have its registered office, as well as its effective administration and management, in national territory.

c) To have an administrative body whose members comply with the provisions of article 197 undecies.

d) To comply with the requirements for obtaining authorisation mentioned in article 197 bis.3.

e) To comply with the requirements relating to the dissemination, communication and processing of information in Chapter II of this Title.

f) To comply with the requirements for operation and internal organisation in Chapter III of this Title.

Added by art. único.37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Drafted in accordance with the correction of errors published in BOE núm. 252, of 18 October 2018. Ref. BOE-A-2018-14215

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 263: #a1-16]

Article 197 septies. Revocation of authorisations.

1. The CNMV may revoke the authorisation granted to a data transmission service provider in the following cases:

a) If it does not commence the authorised activities within the twelve months following the date of notification of the authorisation, for reasons attributable to the interested party.

b) If it expressly waives the authorisation, irrespective of whether it transforms into another entity or agrees to its dissolution.

c) If it actually interrupts the specific authorised activities for a period exceeding six months.

d) If it subsequently fails to comply with any of the requirements for obtaining the authorisation, unless otherwise provided in relation to the aforementioned requirements.

e) In the event of serious and systematic non-compliance with the obligations set out in Chapters II and III of this Title.

f) If it obtained the authorisation by means of false declarations or by any other irregular means.

g) If it commits a very serious infringement, in accordance with the provisions of Title VIII.

2. The revocation of the authorisation shall be subject to the procedure provided for in Law 39/2015, of 1 October, on the Administrative Procedure of Public Administrations, with its processing and resolution corresponding to the CNMV.

Added by art. único.37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Drafted in accordance with the correction of errors published in BOE núm. 252, of 18 October 2018. Ref. BOE-A-2018-14215

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 264: #ci-10]

CHAPTER II

Requirements relating to the dissemination, communication and processing of information by data feed service providers

Added by art. único.37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 265: #a1-17]

Article 197 octies. Dissemination and information processing requirements applicable to APAs.

1. APAs shall establish appropriate policies and mechanisms to make public the information required pursuant to Articles 20 and 21 of Regulation (EU) n.º 600/2014, of 15 May 2014, as close to real time as is technically possible and under reasonable commercial conditions.

2. The information made public by the APA in accordance with paragraph 1 shall include the details to be determined by regulation.

3. The information shall be provided free of charge fifteen minutes after the APA has published it.

4. APAs shall disclose such information efficiently and consistently, so as to guarantee rapid access to the information, under non-discriminatory conditions and in a format that facilitates the consolidation of the information with similar data from other sources, subject to the specific rules contained in Chapter III of Delegated Regulation (EU) No. 2017/571, and under the terms provided for in Article 84 of Delegated Regulation (EU) No. 2017/565, of the Commission of 25 April 2016 supplementing Directive 2014/65/EU, of 15 May, of the European Parliament and of the Council, as regards organisational requirements and operating conditions for investment firms and activities.

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 266: #a1-18]

Article 197 nonies. Requirements for dissemination and processing of information applicable to CIPs.

1. CIPs shall establish adequate policies and mechanisms to collect the information published in accordance with Articles 6, 10, 20 and 21 of Regulation (EU) No. 600/2014, of 15 May 2014, consolidate it into a continuous electronic data stream and make it available to the public as close to real time as technically possible and under reasonable commercial conditions.

2. Such information shall include the details determined by regulation:

3. The information shall be provided free of charge fifteen minutes after the CIP has published it.

4. The PICs must disclose such information efficiently and consistently, so as to guarantee rapid access to the information, under non-discriminatory conditions and in formats that are easily accessible and usable for market participants, subject to the specific implementing rules of the European Union that are applicable.

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 267: #a1-19]

Article 197 decies. Communication and information processing requirements applicable to the SIAs.

The SIAs shall establish adequate policies and mechanisms to communicate the information required under Article 26 of Regulation (EU) No. 600/2014, of 15 May 2014, as soon as possible, and no later than the end of the business day following the day on which the transaction took place.

Such information shall be communicated in accordance with the requirements established in Article 26 of Regulation (EU) No. 600/2014, of 15 May 2014.

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 268: #ci-11]

CHAPTER III

Operating and internal organisation requirements for data reporting service providers

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 269: #a1-20]

Article 197 undecies. Requirements relating to the management body of data reporting service providers.

1. All members of the management body of data reporting service providers shall at all times possess adequate good repute, as well as sufficient knowledge, skills and experience, and shall devote sufficient time to the performance of their duties.

2. The management body shall collectively possess the knowledge, skills and experience appropriate to be able to understand the activities of the data reporting service provider.

3. Each member of the management body shall act with honesty, integrity and independence, effectively challenging the decisions of senior management when necessary, and effectively monitoring and overseeing the decision-making process of the management when necessary.

4. Where a market operator requests authorisation to manage an APA, a PIC or an SIA and the members of the management body of the APA, PIC or SIA are the same as the members of the management body of the regulated market, those persons shall be deemed to comply with the requirement set out in the first paragraph.

5. Data reporting service providers shall notify the CNMV of the identity of all members of their management body and any change in its composition, together with all information necessary to assess whether the entity complies with the provisions of the preceding paragraphs.

6. The management bodies of data reporting service providers shall define and monitor the application of a governance system that ensures effective and prudent management of the organisation and that includes the allocation of functions within the organisation and the prevention of conflicts of interest, promoting market integrity and the interest of its clients.

7. The CNMV shall refuse authorisation if it does not consider that the person or persons who will effectively direct the activities of the data reporting service provider enjoy sufficient good repute, or where there are objective and demonstrable grounds for believing that the proposed structure and configuration of the company's management pose a threat to its sound and prudent management and to the proper consideration of the interest of its clients and market integrity.

8. The CNMV may object to changes or successive appointments of members of the management body where there are objective and demonstrable grounds for believing that such changes in the data reporting service provider pose a threat to its sound and prudent management and to the proper consideration of the interest of its clients and market integrity.

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 270: #a1-21]

Article 197 duodecies. Organisational requirements for the management of conflicts of interest.

1. Data reporting service providers shall apply and maintain effective administrative measures designed to prevent conflicts of interest with clients that use their services to meet their regulatory obligations and other entities that acquire data from the data reporting service providers. Such measures shall include policies and procedures to detect, manage and disclose actual and potential conflicts of interest, in accordance with the provisions of Article 5 of Delegated Regulation (EU) No. 2017/571.

2. The data reporting service provider shall treat all information collected in a non-discriminatory manner and shall manage and maintain adequate arrangements to separate the different business functions, in cases where:

a) An APA is also a market operator or an investment firm.

b) An SIA is also a market operator or an investment firm.

c) A PIC is managed by an APA or by a market operator.

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 271: #a1-22]

Article 197 terdecies. Organisational requirements to ensure system capacity, business continuity and information quality.

1. Data reporting service providers shall use secure systems and devices that are adequate and sufficiently robust to guarantee the continuity and regularity of the provision of services, guarantee the security of the means of transmission of information, minimise the risk of data corruption and unauthorised access and prevent information leaks before publication.

Data reporting service providers shall maintain adequate resources and establish backup facilities in order to provide and maintain their services at all times, under the terms set out in Articles 7, 8 and 9 of Delegated Regulation (EU) 2017/571 of 2 June 2016 .

2. Data reporting service providers shall establish systems that allow effective monitoring of the completeness of reports, detection of omissions and manifest errors and requesting the resubmission of erroneous reports and other processing, as set out in Articles 10, 11 and 12 of Delegated Regulation (EU) 2017/571 of 2 June 2016 .

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 272: #a1-23]

Article 197 quaterdecies. Organisational requirements for the management of the outsourcing of functions.

1. Where a data reporting service provider arranges for third parties to carry out certain activities on its behalf, including companies with which it maintains close links, it shall ensure that the third-party service provider has the competence and capacity to carry out the activities reliably and professionally.

2. Data reporting service providers shall inform the CNMV about the outsourcing of functions. Prior to the outsourcing, data reporting service providers shall provide the CNMV with information specifying which activities are to be outsourced, indicating the human and technical resources necessary for the performance of each of the activities.

3. Data reporting service providers that outsource activities shall comply with the provisions of Article 6 of Delegated Regulation (EU) 2017/571 of 2 June 2016 .

Added by the sole article 37 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

Go up

[Block 273: #tvi]

TITLE VI

Investment Guarantee Fund

Go up

[Block 274: #a198]

Article 198. Investment Guarantee Fund.

1. The investment guarantee fund shall be responsible for ensuring the coverage referred to in Article 201.1 on the occasion of the provision of the services provided for in Article 140, as well as the ancillary service referred to in Article 141.a).

2. The investment guarantee fund shall be constituted as a separate estate, without legal personality, whose representation and management shall be entrusted to a management company that shall take the form of a public limited company, and whose capital shall be distributed among the member entities in the same proportion in which they make their contributions to the fund.

3. The budgets of the management company, its articles of association, as well as their amendments, shall require the prior approval of the National Securities Market Commission. The estimated budget of the funds prepared by the management company shall be subject to the same approval.

In order to allow the incorporation of new shareholders into the management company as a result of the accession of investment services companies to a fund or the cessation of those holding that shareholder status, the shareholdings in the capital of each of the shareholders in the management company shall be adapted under the terms determined by regulation. The result of this adaptation process shall be communicated to the National Securities Market Commission.

4. The appointment of the members of the Board of Directors and of the General Manager or Managers of the management companies shall require the prior approval of the National Securities Market Commission.

A representative of the National Securities Market Commission shall be included in the Board of Directors, with voice and without vote, who shall ensure compliance with the rules governing the activity of the fund. Likewise and with the same functions, each Autonomous Community with competences in the matter in which an official secondary market exists shall designate a representative on said Board of Directors.

The National Securities Market Commission may suspend any resolution of the Board of Directors that is considered contrary to said rules and to the fund's own purposes.

Paragraph 2 is amended by the sole article 38 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Go up

[Block 275: #a199]

Article 199. Accession.

1. All Spanish investment services companies must join the investment guarantee fund, with the exception provided for in Article 152.1.i) for financial advisory companies.

2. Branches of foreign companies may join if they are from the European Union.

3. The regime for the accession of branches of companies from a third State shall be adjusted to the terms established by regulation.

4. The fund shall cover the transactions carried out by the companies adhering to it within or outside the territory of the European Union, as applicable to each type of company, under the terms established by regulation.

5. Likewise, the following shall be established by regulation:

a) The specific regime for the adherence of newly created investment services companies.

b) The exceptions to adherence to the fund for those investment services companies that do not incur the risks mentioned in article 198.1.

[Block 276: #a200]

Article 200. Exclusion.

1. An investment services company may only be excluded from the fund when it fails to comply with its obligations to the fund.

2. The exclusion shall entail the revocation of the authorization granted to the company.

3. The guarantee provided by the fund shall cover the clients who had made their investments up to that moment.

4. The Comisión Nacional del Mercado de Valores shall be competent to agree the exclusion, following a report from the fund's management company.

The exclusion agreement shall be given adequate dissemination so as to guarantee that the clients of the affected investment services company have immediate knowledge of the measure adopted.

5. Before adopting this decision, the necessary measures must be agreed, including the requirement of surcharges on unpaid fees, so that the investment services company complies with its obligations.

The suspension provided for in article 162 may also be agreed by the Comisión Nacional del Mercado de Valores. The fund's management company shall collaborate with the Comisión Nacional del Mercado de Valores to achieve the greatest effectiveness of the measures agreed.

[Block 277: #a201]

Article 201. Enforcement of guarantees.

1. Investors who cannot directly obtain from an entity adhering to the fund the reimbursement of amounts of money or the restitution of the securities or instruments belonging to them may request from the fund's management company the enforcement of the guarantee provided by the fund, when any of the following circumstances occurs:

a) That the entity has been declared insolvent.

b) That the declaration of insolvency of the entity is judicially deemed to have been requested.

c) That the Comisión Nacional del Mercado de Valores declares that the investment services company cannot, apparently and for reasons directly related to its financial situation, comply with the obligations contracted with the investors, provided that the investors had requested from the investment services company the return of funds or securities entrusted to it and had not obtained satisfaction from it within a maximum period of twenty-one business days.

2. Once the guarantee has been made effective by the fund, the fund shall be subrogated to the rights held by the investors against the investment services company, up to an amount equal to the amount that had been paid to them as compensation.

3. In the event that the securities or other financial instruments entrusted to the investment services company are returned by it after the payment of the amount guaranteed by the fund, the fund may be reimbursed for the amount paid, in whole or in part, if the value of those to be returned is greater than the difference between that of those entrusted to the investment services company and the amount paid to the investor. To this end, it is empowered to dispose of them in the amount that is appropriate, in accordance with the prescriptions established by regulation.

4. The Government is empowered to regulate, in all matters not provided for in this law, the operating regime of the investment guarantee fund and the scope of the guarantee to be provided. In particular, it may determine:

a) The amount of the guarantee and the form and period in which it shall be made effective.

b) The investors excluded from the guarantee, among whom shall be professional or institutional investors and those especially linked to the defaulting company.

c) The budgetary and financial regime, both of the management companies and of the investment guarantee funds, which shall regulate, among other issues, their borrowing possibilities and the manner in which the former may pass on their operating expenses to the latter.

d) The investment regime of the resources that make up the funds' assets, which shall be inspired by the principles of profitability and liquidity in order to meet its commitments quickly.

e) The rules for determining the amount of the contributions to be made by the adhering entities, which must be sufficient to cover the guarantee provided.

f) The frequency with which the contributions must be made and the regime for late payment.

[Block 278: #tvii]

TITLE VII

Rules of conduct

[Block 279: #ci-6]

CHAPTER I

Rules of conduct applicable to those who provide investment services

[Block 280: #s1-2]

Section 1.ª Obligated subjects and classification of clients

[Block 281: #a202]

Article 202. Obligated subjects.

1. Those who provide investment services must respect:

a) The rules of conduct contained in this chapter.

b) The codes of conduct that, in development of the rules referred to in letter a), are approved by the Government or, with its express authorization, by the Minister of Economy and Competitiveness, on a proposal from the Comisión Nacional del Mercado de Valores.

c) The rules of conduct contained in their own internal conduct regulations.

2. The Minister of Economy and Competitiveness and, with his express authorization, the Comisión Nacional del Mercado de Valores, shall establish the minimum content of the internal conduct regulations.

[Block 282: #a203]

Article 203. Classes of clients.

For the purposes of the provisions of this title, investment services and activities firms shall classify their clients as retail, professional and eligible counterparties. The same obligation shall apply to other firms that provide investment services and activities in respect of the clients to whom they provide or offer such services.

The category of eligible counterparty is only applicable in relation to the service of reception and transmission of orders, execution of orders on behalf of third parties or dealing on own account and ancillary services directly related to these. This categorisation is not possible when services other than the above are provided, such as portfolio management and advice.

Amended by the sole article 39 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 283: #a204]

Article 204. Retail clients.

All those who are not professional shall be considered retail clients.

[Block 284: #a205]

Article 205. Professional clients.

1. Those who are presumed to have the experience, knowledge and qualifications necessary to make their own investment decisions and properly assess their risks shall be considered professional clients.

2. The types of clients that shall in all cases be considered professional clients may be determined by regulation.

Amended by the sole article 40 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established in final provision 5.2 of the aforementioned Royal Decree-Law, this amendment shall enter into force at the time when the royal decree that develops it does so. For these purposes, on 17 January 2019, Royal Decree 1464/2018, of 21 December, enters into force, which constitutes the implementing regulation, as established in final provision 11 of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select version:

Last update, published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 285: #a206]

Article 206. Request for treatment as a professional client.

1. The remaining clients not included in Article 205, including public sector bodies, Local Entities and other retail investors, who request it in advance and expressly waive their treatment as retail clients, shall also be considered professional clients. However, in no case shall clients who request to be treated as professionals be considered to possess knowledge and market experience comparable to the categories of professional clients established by regulation pursuant to Article 205.

2. The requirements for the admission of the request and waiver provided for in the preceding paragraph may be developed by regulation.

Amended by the sole article 41 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 286: #a207]

Article 207. Transactions with eligible counterparties.

1. For the purposes of the provisions of this article, the following entities shall be considered eligible counterparties:

a) Investment services and activities firms,

b) credit institutions,

c) insurance and reinsurance undertakings,

d) collective investment institutions and management companies of collective investment institutions,

e) venture capital entities, other closed-end collective investment entities and management companies of closed-end collective investment entities,

f) pension funds and their management companies,

g) other financial entities authorised or regulated by European legislation or by the national law of a Member State; and

h) national governments and their corresponding services, including those that deal in public debt on a national scale, Central Banks and supranational organisations. Equivalent third-country entities and the Autonomous Communities shall also have such consideration.

2. Likewise, if requested, firms that meet the requirements set out in Article 71 of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016 shall also be considered eligible counterparties, in which case they shall only be recognised as an eligible counterparty in relation to the services or transactions for which they can be treated as a professional client. Third-country firms that are subject to equivalent requirements and conditions shall be understood to be included.

3. Firms that provide investment services and activities authorised to execute orders on behalf of third parties, deal on own account or receive and transmit orders may carry out these transactions and ancillary services directly related to them with the entities indicated in the preceding paragraphs without the need to comply with the obligations established in Articles 208, 208 ter, 209.2, 213, 214, 215, 216, 217, 218, 219, 220 bis to 220 sexies, 221 and 222 to 224, provided that those entities are informed beforehand and do not expressly request that they be applied to them.

4. In their relationship with eligible counterparties, investment services and activities firms shall act honestly, fairly and professionally and shall communicate information that is impartial, clear and not misleading, taking into account the nature of the eligible counterparty and its activity.

5. In the case of the entities indicated in paragraph 1, their classification as an eligible counterparty shall be understood without prejudice to the right of these entities to request, either generally or for each transaction, treatment as a client, in which case their relationship with the investment services and activities firm shall be subject to the provisions of paragraph 3. The request shall comply with the provisions of Article 71 of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016.

6. In the case of the firms indicated in paragraph 2, their classification as an eligible counterparty shall require the investment services and activities firm to obtain express confirmation that the firm agrees to be treated as an eligible counterparty, either generally or for each transaction. The procedures for obtaining such confirmation shall comply with the provisions of Article 71 of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016.

7. When the transaction is carried out in relation to a firm domiciled in another Member State of the European Union, the classification of the firm determined by the legislation of that State must be respected.

Paragraph 3 is amended by final provision 9.9 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by sole article 42 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that, as established by final provision 5.2 of the aforementioned Royal Decree-law, this amendment shall enter into force at the time the royal decree that develops it does. For these purposes, Royal Decree 1464/2018, of 21 December, enters into force on 17 January 2019, which constitutes the development regulation, as established by the eleventh final provision of the aforementioned Royal Decree. Ref. BOE-A-2018-17879

Select version:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 17/01/2019.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 287: #s2-2]

Section 2. General duties of conduct

The heading is amended by article 43 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 288: #a208]

Article 208. Duty of diligence and transparency.

Investment services and activities firms shall act with honesty, impartiality and professionalism, in the best interest of their clients, and shall in particular observe the principles established in this Section and in Sections 3, 4, 5, 6 and 7, when providing investment services and activities or, where applicable, ancillary services to clients.

Amended by article 44 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select version:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 289: #a2-2]

Article 208 bis. Conflicts of interest.

1. In accordance with the provisions of Article 193, firms providing investment services and activities shall organise themselves and adopt measures to prevent, detect and manage possible conflicts of interest between their clients and the firm itself or its group.

2. The provisions of this Article may be developed by regulation, specifying, at a minimum, the parties between which conflicts of interest may arise, the information obligations regarding the measures adopted by the investment services and activities firm in accordance with the preceding paragraph, as well as the means by which such information shall be provided.

Amended by article 45 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 290: #s3-4]

Section 3. Supervision and control of financial services

Added by article 46 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 291: #a2-3]

Article 208 ter. Design and marketing of financial products.

1. Investment services and activities firms that design financial instruments for sale to clients shall ensure that such instruments are designed to meet the needs of a defined target market of end clients within the relevant client category.

They shall also ensure that the distribution strategy of the financial instruments is compatible with the defined target market, and shall also take reasonable measures to ensure that the instrument is distributed in the defined target market.

2. Investment services and activities firms shall understand the characteristics of the financial instruments they offer or recommend, assess their compatibility with the needs of the clients to whom they provide investment services and activities, also taking into account the defined target market of the end clients referred to in the preceding paragraph, and ensure that the instruments are offered or marketed only when this is in the client's interest.

3. The obligations regarding the supervision and control of financial products provided for in this Article shall be developed by regulation for investment services and activities firms that manufacture and distribute financial instruments. The CNMV may specify the procedures and factors to be considered for determining the target market of financial instruments, as well as the processes and systems that entities shall implement to reasonably ensure that products are distributed to the identified target market.

Added by article 47 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 292: #s4-2]

Section 4. Information duties

Added by article 48 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 293: #a209]

Article 209. General duty of information.

1. Entities providing investment services and activities shall keep their clients properly informed at all times, in accordance with the provisions of this Act, its development provisions and Commission Delegated Regulation (EU) 2017/565 of 25 April 2016.

2. All information addressed to clients, including information of an advertising nature, shall be impartial, clear and not misleading. Advertising communications shall be clearly identifiable as such.

3. Clients, including potential clients, shall be provided with sufficient prior notice of appropriate information regarding the investment services and activities firm, the proposed financial instruments and investment strategies, the execution venues and all associated costs and charges.

4. The provisions of this Article shall be developed by regulation, and in particular the content of the information to be provided to clients.

Amended by art. único.49 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 294: #a210]

Case Law

Article 210. Guidelines and warnings on the risks associated with financial instruments and investment strategies.

1. The information relating to financial instruments and investment strategies provided for in Article 209.3.b) shall include appropriate guidelines and warnings on the risks associated with such instruments or strategies.

2. In the case of securities other than shares issued by a credit institution, the information provided to investors shall include additional information to highlight to the investor the differences between these products and ordinary bank deposits in terms of return, risk and liquidity.

The Minister of Economy and Competitiveness or, with their express authorisation, the National Securities Market Commission, may specify the terms of the aforementioned additional information.

3. The National Securities Market Commission may require that the information provided to investors prior to the acquisition of a product include any warnings it deems necessary relating to the financial instrument and, in particular, those highlighting that it is a product unsuitable for non-professional investors due to its complexity. Likewise, it may require that these warnings be included in advertising materials.

[Block 295: #a211]

Article 211. Duty to report on the service provided.

The investment services and activities firm shall provide the client with appropriate reports on the service provided on a durable medium. Such reports shall include periodic communications to their clients, taking into account the type and complexity of the financial instruments concerned and the nature of the service provided to the client, and shall include, where applicable, the costs of the transactions and services carried out on the client's behalf.

Amended by art. único.50 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 296: #s5-2]

Section 5. Assessment of suitability and appropriateness

Added by art. único.51 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 297: #a212]

Article 212. General duty of entities to know their clients.

Entities that provide investment services and activities must at all times ensure that they have all the necessary information about their clients, in accordance with the provisions of articles 213 to 217 and articles 54 to 57 of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016 .

Amended by the sole article 52 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 298: #a213]

Article 213. Suitability assessment.

1. When providing investment advice or portfolio management services, the investment services company shall obtain the necessary information regarding the knowledge and experience of the client or potential client in the investment field corresponding to the specific type of product or service, their financial situation, including their ability to bear losses, and their investment objectives, including their risk tolerance, so that the company can recommend investment services and financial instruments that are suitable for them and that, in particular, best fit their level of risk tolerance and their ability to bear losses.

2. When an investment services and activities company provides investment advice recommending a package of combined services or products in accordance with Article 219.2, it must ensure that the package, considered as a whole, is suitable for the client.

3. In the case of professional clients, the entity shall not have to obtain information on the client's knowledge and experience in relation to the products, transactions and services for which they have obtained the professional client classification.

4. When the entity does not obtain the information provided for in the previous paragraph, it shall not recommend investment services and activities or financial instruments to the client or potential client.

5. When providing investment advice, the investment services and activities company shall provide the client, before the transaction is carried out, with a suitability statement on a durable medium specifying the advice provided and how this advice fits the preferences, objectives and other characteristics of the retail client.

6. When an investment services and activities company provides portfolio management services or has informed the client that it will carry out a periodic suitability assessment, the periodic report shall contain an updated statement of how the investment fits the preferences, objectives and other characteristics of the retail client.

Paragraph 1 is amended by final provision 9.10 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by sole article 52 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 299: #a214]

Article 214. Assessment of appropriateness.

1. When services other than investment advice or portfolio management are provided, the investment services company must ask the client, including where applicable potential clients, to provide information on their knowledge and experience in the investment field corresponding to the specific type of product or service offered or requested, so that the entity can assess whether the investment service or product is appropriate for the client.

2. When what is envisaged is a package of combined services and products in accordance with Article 219.2, it must ensure that the package considered as a whole is appropriate for the client.

3. The entity shall provide the client with a copy of the document recording the assessment carried out in accordance with this article

4. When, based on the information provided for in paragraph 1, the entity considers that the product or investment service is not appropriate for the client, it shall warn them.

5. When the client does not provide the information indicated in paragraph 1 or it is insufficient, the entity shall warn them that this decision prevents it from determining whether the intended investment service or product is appropriate for them.

6. In the event that the investment service is provided in relation to a complex instrument as established in Article 217, the contractual document must include, alongside the client's signature, a handwritten statement, in the terms determined by the National Securities Market Commission, by which the investor states that they have been warned that the product is not appropriate for them or that it has not been possible to assess it in the terms of this article.

Amended by sole article 52 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 300: #a215]

Article 215. Record relating to appropriateness assessment obligations.

Entities providing investment services and activities must maintain, at all times, a record of the appropriateness assessments carried out, in accordance with the provisions of Article 56 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 .

Amended by sole article 52 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 301: #a216]

Article 216. Exemption from the appropriateness assessment.

When the entity exclusively provides the service of execution or reception and transmission of client orders, with or without the provision of ancillary services, except for the granting of credits or loans under Article 141.b) that do not refer to existing credit limits of loans, current accounts and overdraft facilities of clients, it shall not have to follow the procedure described in Article 214 provided that all of the following conditions are met:

a) That the order relates to non-complex financial instruments,

b) that the service is provided at the initiative of the client or potential client,

c) that the entity has clearly informed the client or potential client that it is not obliged to assess the suitability of the financial instrument offered or the service provided and that, therefore, the client does not enjoy the protection of the conduct rules established in this law. Such warning may be made in a standardised format; and

d) that the entity complies with the provisions of article 208 bis.

Amended by the sole article 52 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 302: #a217]

Case law

Article 217. Non-complex financial instruments.

1. For the purposes of the provisions of this chapter, the following shall be considered non-complex financial instruments:

a) Shares admitted to trading on a regulated market or on an equivalent market of a third country or on an MTF, when they are shares in companies, and excluding shares in collective investment institutions other than undertakings for collective investment in transferable securities (UCITS) and shares that incorporate derivatives.

b) Money market instruments. Excluded are those that include derivatives or incorporate a structure that makes it difficult for the client to understand the risks incurred.

c) Bonds or other forms of securitised debt, admitted to trading on a regulated market, on an equivalent market of a third country as provided in letter a), or on an MTF, excluding those that incorporate derivatives or incorporate a structure that makes it difficult for the client to understand the risks incurred.

d) Units and shares in UCITS, excluding structured UCITS referred to in article 36.1, second paragraph, of Regulation (EU) No. 583/2010 .

e) Structured deposits, excluding those that incorporate a structure that makes it difficult for the client to understand the risks incurred, with respect to the return or the exit cost of the product before its maturity.

2. In addition to the instruments provided for in the previous paragraph, those in which the conditions established in article 57 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 are met shall also be considered non-complex financial instruments .

3. For the purposes of the provisions of this chapter, the following shall not be considered non-complex financial instruments:

a) Securities that give the right to acquire or sell other transferable securities or that give rise to their settlement in cash, determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures.

b) The financial instruments indicated in paragraphs d) to k) of the Annex.

c) The debt financial instruments included in the Annex.a).2.º) that are in turn eligible liabilities for internal recapitalisation in accordance with the provisions of section 4 of chapter VI of Law 11/2015, of 18 June .

Paragraph 3.c) is amended by final provision 9.11 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by the sole article 52 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Paragraph 3 is amended by article 4 of Royal Decree-law 11/2017, of 23 June. Ref. BOE-A-2017-7230

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Amendment published on 24/06/2017, in force from 25/06/2017.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 303: #s6]

Section 6. Other conduct obligations in the provision of services

Added by the sole article 53 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 304: #a218]

Article 218. Register of contracts.

Investment services and activities firms must create a register that includes the agreements in which the essential rights and obligations of the firm and the client are established, in writing and on paper or on any other durable medium, as well as the conditions under which the investment services and activities firm will provide services to the client.

The content of such agreements must comply with the provisions of article 58 of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016 .

Amended by the sole article 54 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 305: #a219]

Article 219. Investment services as part of a financial product or a precondition for a credit and tied sales.

1. In the event that an investment service is offered as part of a financial product to which other provisions on credit institutions and consumer credits relating to information requirements already apply, said service shall not additionally be subject to the obligations established in article 209 of this law.

2. In the event that an investment service is offered together with another service or product as part of a package or as a condition of the same agreement or package, the investment services and activities firm shall inform the client whether the different components can be purchased separately and shall provide separately the evidence of the costs and charges of each component.

If the risks associated with that agreement or package offered to a retail client are likely to be different from the risks associated with the components considered separately, the investment services and activities firm shall provide an adequate description of the different components of the agreement or package and of the way in which their interaction modifies the risks.

3. If a credit agreement relating to residential immovable property, which is subject to the provisions on the assessment of consumer creditworthiness laid down in the regulations implementing Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010, has as a prior condition for payment, refinancing or repayment of the credit, the provision to the same consumer of an investment service in relation to mortgage bonds issued expressly as security for the financing of the credit agreement and on the same terms as the latter, that service shall not be subject to the obligations laid down in Articles 209, 213, 214.5, 216, 217, 218, 219.3 and 220 sexies.

Amended by the sole article.54 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 306: #a220]

Article 220. Compliance with information obligations in the case of provision of services through another investment services firm.

1. When an entity provides investment services or ancillary services on behalf of a client following instructions from another investment services firm, it may rely on the information on the client transmitted to it by the latter. In this case, the firm transmitting the instructions shall be responsible for ensuring that the information on the client is complete and accurate.

2. Likewise, the firm receiving the instructions may rely on recommendations provided to the client by another investment services firm with respect to the service or transaction in question. In this case, the firm transmitting the instructions shall be responsible for the suitability for the client of the recommendations or advice provided.

3. In any case, the firm receiving the instructions or orders shall be responsible for carrying out the service or transaction, on the basis of the information or recommendations received, in accordance with the relevant provisions of this chapter.

[Block 308: #s7]

Section 7. Payments and remuneration in the provision of services

Added by the sole article.55 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

[Block 309: #a2-4]

Article 220 bis. Remuneration and conflict of interest.

Investment services and activities firms that provide investment services and activities to their clients shall ensure that they do not remunerate or assess the performance of their staff in a way that conflicts with their obligation to act in the best interest of their clients. In particular, they shall not establish any remuneration system, sales targets or other type of system that could constitute an incentive for staff to recommend a particular financial instrument to a retail client if the investment services and activities firm can offer a different financial instrument that better suits the client's needs.

Added by the sole article.55 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 310: #a2-5]

Article 220 ter. Independent advice.

1. Investment services and activities firms may only inform clients that they provide investment advice on an independent basis if they meet the following requirements:

a) Assess a range of financial instruments available on the market that is sufficiently diversified with respect to their types and their issuers or providers, in order to ensure that the client's investment objectives can be properly met and are not limited to financial instruments issued or provided by:

1. The investment services and activities firm itself or by entities that have close links with the investment services and activities firm, or

2. other entities with which the investment services and activities firm has legal or economic ties, such as contractual relationships, such that they may impair the independence of the advice provided,

b) not accept and retain fees, commissions or other monetary or non-monetary benefits paid or provided by a third party or by a person acting on behalf of a third party in relation to the provision of the service to clients; and

c) clearly communicate to the client minor non-monetary benefits that may serve to enhance the quality of the service provided to the client and whose scale and nature are such that they cannot be considered to affect the investment services and activities firm's compliance with the obligation to act in the best interest of its clients, which shall also be excluded from the provisions of the previous letter.

2. The prohibition on accepting and retaining fees, commissions or other monetary or non-monetary benefits provided for in the previous paragraph and the benefits that shall be considered minor non-monetary benefits shall be developed by regulation.

Added by the sole article.55 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 311: #a2-6]

Article 220 quater. Independence in the discretionary management of portfolios.

1. When providing the portfolio management service, the investment services and activities firm shall not accept and retain fees, commissions or other monetary or non-monetary benefits paid or provided by a third party or by a person acting on behalf of a third party in relation to the provision of the service to clients.

2. Minor non-monetary benefits that may serve to increase the quality of the service provided to the client and whose scale and nature are such that they cannot be considered to affect the investment services and activities firm's compliance with the obligation to act in the best interest of its clients shall be clearly communicated and excluded from the provisions of the preceding paragraph.

3. The prohibition on accepting and retaining fees, commissions or other monetary or non-monetary benefits provided for in paragraph 1 above shall be developed by regulation.

Paragraph 1 is amended by final provision 9.12 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Added by sole article 55 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 312: #a2-7]

Article 220 quinquies. Receipt of incentives.

1. In no case shall investment services and activities firms be considered to comply with the obligations established in Articles 208 and 208 bis if they pay or charge fees or commissions, or provide or receive any non-monetary benefit in relation to the provision of an investment service or an ancillary service, to a third party or from a third party other than the client or the person acting on behalf of the client, unless the payment or benefit:

a) Has been designed to enhance the quality of the relevant service provided to the client; and

b) does not impair compliance with the investment services and activities firm's obligation to act honestly, fairly and professionally, in the best interest of its clients.

2. The existence, nature and amount of the payments or benefits referred to in the preceding paragraph, or where such amount cannot be determined, its method of calculation, shall be clearly disclosed to the client, in a complete, accurate and comprehensible manner, before the provision of the corresponding investment service or ancillary service. Where appropriate, the investment services and activities firm shall also inform the client of the mechanisms for transferring to the client the fees, commissions or monetary and non-monetary benefits received for the provision of the investment service or ancillary service.

3. The payment or benefit that enables or is necessary for the provision of investment services and activities, such as custody costs, settlement and exchange costs, regulatory fees or legal advice costs, and which, by its nature, cannot conflict with the investment services and activities firm's duty to act honestly, fairly and professionally in the best interest of its clients shall not be subject to the requirements set out in the first paragraph.

4. The Government or, with its express authorization, the CNMV, shall develop the provisions of this article. In particular, they may establish a closed list of cases in which the requirements set out in paragraph 1 shall be deemed to be met.

Added by sole article 55 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 313: #a2-8]

Article 220 sexies. Proof of necessary knowledge and competence.

1. Investment services and activities firms shall ensure and demonstrate to the CNMV, upon request, that natural persons who provide advice or information on financial instruments, investment services and activities or ancillary services to clients on their behalf have the necessary knowledge and competence to comply with their obligations in accordance with Articles 208 ter, 209 and 211 to 220 quinquies.

2. The CNMV shall publish on its website the guidelines approved by ESMA specifying the criteria for the assessment of knowledge and competence provided for in the preceding paragraph and, where applicable, the Technical Guides it may have approved under Article 270.1 specifying the criteria it considers appropriate for entities to demonstrate that staff who provide information or advice on investment services and activities possess such necessary knowledge and competence.

Added by sole article 55 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 314: #s8]

Section 8. Management and execution of client orders

Added by sole article 56 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Text added, published on 29/09/2018, in force from 30/09/2018.

[Block 315: #a221]

Article 221. Obligations relating to the management and execution of orders.

1. Persons or entities that provide investment services and activities, when executing client orders, whether they provide this service independently or in conjunction with another, shall:

a) Adopt all sufficient measures to obtain the best possible result for the operations of its clients, taking into account price, costs, speed and likelihood of execution and settlement, volume, the nature of the operation and any other element relevant to the execution of the order.

b) Have order management procedures and systems, in accordance with the provisions of Articles 67 to 70 of Commission Delegated Regulation (EU) 2017/565 of 25 April 2016, that allow their prompt, fair and rapid execution and subsequent allocation, in such a way that no client is harmed when operations are carried out for several of them or when acting on own account. Such procedures or systems shall allow the execution of client orders that are equivalent, according to the time at which they were received by the investment services and activities firm.

c) Adopt measures to facilitate the fastest possible execution of client limit orders in respect of shares admitted to trading on a regulated market or traded on a trading venue that are not executed immediately under the existing market conditions.

2. The provisions of this section shall apply in accordance with Commission Delegated Regulation (EU) 2017/565 of 25 April 2016, supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment services and activities firms, and terms defined for the purposes of that Directive.

3. The provisions of this article may be developed by regulation.

Amended by the sole article.57 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 316: #a2-9]

Article 221 bis. Execution on trading venues.

1. Investment services and activities firms shall not receive any type of remuneration, discount or non-monetary benefit for directing client orders to a specific trading or execution venue that infringes the requirements on conflicts of interest or inducements set out in Articles 208 to 208 ter, 209, 220 bis to 220 sexies and 221.

2. For financial instruments subject to the trading obligation provided for in Articles 23 and 28 of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014, each trading venue and each systematic internaliser, and for other financial instruments, each execution venue, shall make available to the public, free of charge and at least annually, data relating to the quality of execution of operations on that venue, in accordance with Commission Delegated Regulation (EU) No. 2017/575 of 8 June 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments as regards regulatory technical standards applicable to the data to be published by execution venues on the quality of execution of operations. The periodic report shall include detailed data on price, costs, speed and likelihood of execution of the different financial instruments.

3. Investment services and activities firms shall inform the client, after the execution of the operation, of the venue where the order was executed.

Added by the sole article.58 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 317: #a222]

Article 222. Duty to inform about the order execution policy.

1. The entity shall inform its clients about its order execution policy, and must obtain their consent before applying it to them. Such information shall explain clearly, in sufficient detail and in a manner that can be easily understood by clients, how the firm will execute orders for the client. The information shall comply with the provisions of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016.

2. Where such policy allows the entity to execute orders outside a trading venue, clients must be aware of this and must give their prior express consent before proceeding to execute orders outside a trading venue. Consent may be obtained generally or for each individual operation.

3. The entity shall be able to demonstrate to its clients, at their request, that they have executed their orders in accordance with the firm's execution policy and to demonstrate to the CNMV, at its request, compliance with the provisions of Articles 221 to 224.

Amended by the sole article.59 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 318: #a2-10]

Article 222 bis. Duty to inform annually about the main execution venues.

Investment services and activities firms that execute client orders shall summarise and publish annually, in respect of each class of financial instrument, the five main order execution venues, in terms of trading volumes, where they executed client orders in the previous year, as well as information on the quality of execution obtained.

The content and format of said information shall comply with the provisions of Commission Delegated Regulation (EU) 2017/576 of 8 June 2016 .

Added by the sole article.60 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 319: #a223]

Article 223. Specific cases of execution of orders.

1. When the client gives specific instructions on the execution of their order, the firm shall execute the order following the specific instruction.

2. In the case of orders from retail clients that have not given specific instructions, the best possible result shall be determined in terms of total consideration, comprising the price of the financial instrument and the costs related to execution, which shall include all expenses incurred by the client that are directly related to the execution of the order, including the fees of the execution venue, those for clearing and settlement and any other fees paid to third parties involved in the execution of the order.

Amended by the sole article.61 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 320: #a224]

Article 224. Supervision of the order execution policy by the entities.

1. Investment services and activities firms that execute client orders shall monitor the effectiveness of their systems and their order execution policy in order to detect and, where appropriate, correct any deficiencies. In particular, they shall periodically check whether the execution venues included in the order execution policy provide the best possible results for the client or whether it is necessary to change their execution systems, taking into account, among other things, the information published pursuant to the provisions of articles 221 bis.2 and 222 bis.

2. The entities shall notify those of their clients with whom they have a stable professional relationship of any significant change in their systems or in their order execution policy.

Amended by the sole article.61 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 321: #s9]

Section 9. Engagement policy

Added by art. 6.19 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Added text, published on 13/04/2021, in force from 03/05/2021.

[Block 322: #a2-21]

Article 224 bis. Engagement policy of investment services firms.

1. Investment services firms and credit institutions that provide the service of discretionary and individualised portfolio management shall develop and make public an engagement policy that describes how they integrate their engagement as shareholders or managers of shareholders into their investment policy. This policy shall describe how they carry out the monitoring of companies admitted to trading on a regulated market that is situated or operates in a Member State in which they invest, regarding, among other issues, strategy, financial and non-financial performance and risks, capital structure, social and environmental impact and corporate governance. Said policy shall also describe the mechanisms for developing a dialogue with the companies admitted to trading on a regulated market that is situated or operates in a Member State in which they invest, exercise voting rights and other rights associated with the shares, cooperate with other shareholders, communicate with important stakeholders of the companies in which they invest and manage actual and potential conflicts of interest in relation to their engagement.

2. The entities included in the previous paragraph shall make public annually the application of their engagement policy, including a general description of their behaviour in relation to their voting rights, an explanation of the most important votes and, where appropriate, of the recourse to the services of proxy advisors.

3. The entities included in paragraph 1 shall publish the direction of their vote in the general meetings of the companies in which they hold shares. Said publication may exclude votes that are insignificant due to the subject of the vote or the size of the shareholding in the company.

4. The information mentioned in paragraphs 1, 2 and 3 shall be publicly available, and free of charge, on the website of the entities included in paragraph 1.

5. The obligations relating to conflicts of interest set out in article 208 bis shall also be applicable to engagement activities.

6. In the event that the entities included in paragraph 1 decide not to comply with one or more of the requirements set out in the previous paragraphs, a clear and reasoned explanation of the reasons for this must be published.

Added by art. 6.19 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Added text, published on 13/04/2021, in force from 03/05/2021.

[Block 323: #cii-6]

CHAPTER II

Market abuse

[Block 324: #a225]

Article 225. Competent authority.

1. The CNMV shall be the competent authority for the application of Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014 .

2. The person holding the office of Minister of Economy and Business and, with their express authorization, the CNMV, may adopt the development and implementation rules that are necessary for compliance with Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, and the rest of the provisions in force on market abuse.

3. However, the CNMV is expressly empowered to develop all those matters for which Regulation (EU) No. 596/2014 of the European Parliament and of the Council on market abuse expressly empowers the competent authority. Specifically, the CNMV may determine which are the accepted market practices, in accordance with the provisions of Article 13 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council on market abuse, through their approval by the corresponding Circular.

It is amended by final provision 9.13 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 325: #a226]

Article 226. Public dissemination by issuers of inside information.

Issuers of securities or financial instruments that are the object of trading on a Spanish regulated market, or for which admission to trading has been requested, must communicate as soon as possible to the CNMV, which shall proceed to make it public on its website, the inside information that directly concerns them to which Article 17 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 refers.

It is amended by final provision 9.13 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 326: #a227]

Article 227. Public dissemination by issuers of other relevant information.

Issuers of securities or financial instruments that are the object of trading on a regulated market shall also communicate to the CNMV, which shall likewise proceed to make them public on its website, the remaining information of a financial or corporate nature relating to the issuer itself or to its securities or financial instruments that any legal or regulatory provision obliges them to make public in Spain or that they consider necessary, due to their special interest, to disseminate among investors.

It is amended by final provision 9.13 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 327: #a228]

Article 228. Manner and terms for the publication of inside information and other relevant information.

1. The CNMV may determine the manner and terms in which the information referred to in the preceding articles shall be published through its website. In any case, when inside information is made public, such condition shall be expressly stated and on the CNMV's website said information shall be presented separately from any other information communicated by issuers.

2. The SMN and the SOC must have technical means that guarantee the public dissemination of the inside information communicated to them by issuers of securities or financial instruments that are the object of trading on them or for which admission to trading has been requested. Such technical means may also be used in relation to the remaining information of a financial or corporate nature that the aforementioned issuers must disseminate among investors.

It is amended by final provision 9.13 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 328: #a229]

Article 229. Delay in the dissemination of inside information.

The issuer or the participant in the emission allowance market who, within the framework of the provisions of Article 17.4 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, decides to delay the dissemination of inside information, shall not be obliged to submit the justification for the concurrence of the conditions that allow such delay when making the mandatory communication thereof to the CNMV, unless the latter expressly requests it.

It is amended by final provision 9.13 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 329: #a230]

Article 230. Transactions carried out by persons with managerial responsibilities and closely associated persons.

1. The obligation to notify the transactions to which Article 19.1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, refers shall arise when, within a calendar year, the sum without offsets of all transactions reaches the figure of 20,000 euros. From that first communication, the obligated subjects must communicate each and every one of the subsequent transactions carried out referred to in said article.

2. In relation to the provisions of Article 19.3, last paragraph, of Regulation (EU) No. 596/2014 of the European Parliament and of the Council, the transactions referred to in Article 19.1 of said Regulation, which have been notified by persons with managerial responsibilities in issuers that have requested the admission of their financial instruments to a regulated market or admitted to trading on a regulated market, as well as transactions notified by persons closely associated with them, shall be made public by the CNMV.

The obligation of public disclosure of transactions notified by persons with managerial responsibilities in the issuers referred to in the previous paragraph or by persons closely associated with them, established in Article 19 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014, shall be deemed fulfilled for said issuing companies if they disseminate the corresponding information through the technical means provided by the CNMV.

The CNMV is empowered to develop the procedures and forms for carrying out the public disclosure referred to in the previous paragraph.

Amended by final provision 9.13 of Royal Decree-Law 19/2018 of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 330: #a231]

Article 231. Obligations for SMNs and SOCs in relation to transactions carried out by persons with managerial responsibilities and closely associated persons.

SMNs and SOCs must have technical means that guarantee the public disclosure of the transactions referred to in Article 19.1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014, which have been notified by persons with managerial responsibilities in issuers of financial instruments traded exclusively on an SMN or on an SOC, those admitted to trading on an SMN or for which admission to trading on an SMN has been requested, as well as those notified by persons closely associated with them. Such technical means must comply with the terms established in Article 19.3 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council on market abuse, and in Commission Implementing Regulation (EU) No. 2016/1055 of 29 June 2016.

The obligation of public disclosure of transactions notified by persons with managerial responsibilities in the issuers referred to in the previous paragraph or by persons closely associated with them, established in Article 19 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014, shall be deemed fulfilled for said issuing companies if they disseminate the relevant information through the technical means provided by the SMNs or by the SOCs, as applicable.

Amended by final provision 9.13 of Royal Decree-Law 19/2018 of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 331: #a232]

Article 232. Reporting of suspicious transactions.

(Repealed).

Repealed by final provision 9.14 of Royal Decree-Law 19/2018 of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 332: #tviii]

TITLE VIII

Supervision, inspection and sanctioning regime

Upload

[Block 333: #ci-7]

CHAPTER I

General provisions

Upload

[Block 334: #a233]

Article 233. Scope of supervision, inspection and sanctioning.

1. The following are subject to the supervision, inspection and sanctioning regime established in this law, under the responsibility of the National Securities Market Commission:

a) The following persons and entities, with regard to compliance with this law and its implementing regulations, as well as with the rules of European Union Law that contain provisions specifically referring to them:

1.º The governing companies of official secondary markets, the governing entities of multilateral trading facilities and organised trading facilities, central counterparties and central securities depositories. The Bank of Spain is excluded.

2.º Sociedad de Bolsas and the companies that own all the shares or a participation that confers direct or indirect control of the entities referred to in the previous number.

3.º Spanish investment services companies, this competence extending to any office or centre within or outside the national territory.

4.º Investment services companies authorised in States not members of the European Union that operate in Spain.

5.º The agents of entities that provide investment services.

6.º The management company of the investment guarantee fund.

7.º Those who, not being included in the preceding letters, hold the status of member of an official secondary market or of the clearing and settlement systems for their operations.

8.º Data supply service providers.

9.º Voting advisors.

b) Credit rating agencies established in Spain and registered under Title III, Chapter I of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, the persons participating in rating activities, the rated entities or related third parties, the third parties to which credit rating agencies have outsourced certain of their functions or activities, and persons related to or connected in any other way with the agencies or with credit rating activities.

The National Securities Market Commission is the competent authority in Spain, for the purposes of the provisions of Regulation (EC) 1060/2009 of 16 September 2009, and shall exercise its powers in accordance with the provisions of the European Union regulations on credit rating agencies.

c) The following persons and entities, as regards their actions related to the Securities Market:

1.º The issuers of securities.

2.º Credit institutions and their agents, this competence extending to any branch opened outside the national territory, as well as credit institutions authorised in non-member States of the European Union that operate in Spain.

3.º Investment services firms authorised in another Member State of the European Union that operate in Spain, under the terms established in this law and its implementing provisions, including their tied agents and branches in the national territory, as well as, under the same terms, the branches in Spain of credit institutions authorised in another Member State of the European Union.

4.º The Management Companies of Collective Investment Institutions insofar as they provide investment services.

5.º The remaining natural or legal persons, insofar as they may be affected by the rules of this law and its implementing provisions.

6.º Credit rating agencies registered by another competent authority of the European Union under Title III, Chapter I of Regulation (EC) No. 1060/2009 of 16 September 2009, and rating agencies that have received certification by equivalence under Article 5 of the aforementioned regulation. The National Securities Market Commission shall exercise its powers in accordance with the provisions of the European Union regulations on credit rating agencies.

d) Persons resident or domiciled in Spain who control, directly or indirectly, investment services firms in other Member States of the European Union, within the framework of collaboration with the authorities responsible for the supervision of such firms, as well as the holders of significant shareholdings for the purposes of compliance with the provisions of Chapter IV of Title V.

e) Entities that form part of the consolidated groups of investment services firms referred to in Article 258, solely for the purposes of compliance at a consolidated level with own funds requirements and the limitations that may be established on investments, operations or positions that involve high risks.

f) Entities that form part of the consolidated groups dominated by the entities referred to in letter a).1.º and 2.º, solely for the purposes of compliance with the obligation to consolidate their annual accounts and the limitations that may be established in relation to their activity and financial balance.

g) Financial holding companies, mixed financial holding companies and mixed holding companies, in accordance with Article 4.1.20 and 21, respectively, of Regulation (EU) No. 575/2013 of 26 June 2013, among whose subsidiaries are investment services firms.

h) The natural persons and non-financial entities mentioned in Article 258.3, solely for the purposes provided in that paragraph.

i) Any person or entity, for the purposes of verifying whether it infringes the reservations of name and activity provided in Articles 143 to 147. In the case of legal persons, the powers corresponding to the National Securities Market Commission according to the preceding paragraphs may be exercised over those who hold administration, management or similar positions therein.

j) Natural and legal persons who carry out operations subject to Regulation (EU) No. 236/2012 of 14 March 2012.

k) Natural and legal persons who carry out operations subject to Regulation (EU) No. 648/2012 of 4 July 2012.

l) Credit institutions in the development of their activity of sale or advice related to structured deposits.

m) Natural and legal persons who carry out actions subject to Regulation (EU) No. 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products, insofar as it refers to packaged retail investment products included in the scope of this law.

n) Benchmark administrators and supervised entities in accordance with the provisions of Article 40 of Regulation (EU) No. 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds, as well as the remaining natural or legal persons, insofar as they may be affected by the rules of said Regulation and its implementing provisions.

ñ) Natural and legal persons subject to Regulation (EU) No. 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No. 648/2012.

o) Natural and legal persons subject to Regulation (EU) No. 596/2014 of 16 April 2014

2. The insolvency administration of an issuing entity of securities or of a registered entity subject to insolvency proceedings shall be responsible for complying with the obligations to submit information to the National Securities Market Commission provided for in this law for its administrators and directors, when the latter have been replaced by the former.

3. The provisions of this article shall be understood without prejudice to the supervisory, inspection and sanctioning powers corresponding to the Autonomous Communities that have been assigned such powers over the governing bodies of secondary markets of autonomous scope and, in relation to transactions on securities admitted to trading only on those markets, over the other persons or entities listed in the first two preceding paragraphs. For the purposes of exercising such powers, the corresponding provisions of this title shall have basic character, except for the references contained therein to state bodies or entities. The National Securities Market Commission may enter into agreements with Autonomous Communities with powers in matters of securities markets in order to coordinate their respective actions.

4. With respect to the provisions of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April, the CNMV shall be competent for its application in relation to the instruments, contracts, conducts, transactions, offers, orders and, in general, actions and omissions referred to in article 2 of said regulation and, specifically, of the actions carried out:

a) in Spanish territory with respect to any negotiable securities and other financial instruments,

b) outside Spanish territory in relation to negotiable securities and other financial instruments admitted to trading or for which an application for admission to trading has been submitted on a regulated market, on an MTF, on an OTF, or auctioned on an auction platform operating in Spanish territory; and

c) outside Spanish territory in relation to financial instruments not included in letters a) or b) whose price or value depends on the financial instruments mentioned in those letters or has an effect on their price or value.

5. Without prejudice to the provisions of this law, the Bank of Spain shall exercise supervisory and inspection powers over the members of the Public Debt Market in Book Entry Form, the holders of accounts in their own name and over the managing 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 145.

In all cases of concurrence of supervisory 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 protection of the functioning of the securities markets, including the internal organization matters indicated in article 193.2, corresponds to the National Securities Market Commission, and the protection of solvency as well as the remaining internal organization matters fall on the institution that maintains the corresponding register.

The National Securities Market Commission and the Bank of Spain must enter into agreements in order to coordinate their respective supervisory and inspection powers.

6. In accordance with the first paragraph of article 40 of Regulation (EU) No. 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/1481/CE and 2014/1171/EU and Regulation (EU) No. 596/2014, the National Securities Market Commission is designated as competent authority.

Without prejudice to the foregoing, the Bank of Spain shall exercise the functions of supervision, inspection and sanction in relation to the obligations provided for in article 16 of said Regulation as regards compliance with such obligations by supervised entities contributing data for indices prepared by the Bank of Spain, as well as in articles 28.2 and 29.1 of said Regulation as regards compliance with such obligations in relation to the use of benchmarks in financial contracts referred to in paragraph 18) of article 3.1 of the aforementioned Regulation by entities subject to the supervision of the Bank of Spain in matters of transparency and customer protection.

Likewise, in accordance with article 40.2 of said Regulation, the National Securities Market Commission shall be the coordination and information exchange authority.

Paragraph 9 is added to subsection 1.a) by art. 6.20 of Law 5/2021 of 12 April. Ref. BOE-A-2021-5773

Letters m) to o) are added to subsection 1, subsection 6 and subsection 4 is amended by final provision 9.15 of Royal Decree-law 19/2018 of 23 November. Ref. BOE-A-2018-16036

Subsection 1 is amended by art. único.62 of Royal Decree-law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Subsection 1.a) 1º is amended by final provision 1.4 of Royal Decree-law 21/2017 of 29 December. Ref. BOE-A-2017-15837

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Amendment published on 24/11/2018, in force from 25/11/2018.

Modification published on 29/09/2018, in force from 30/09/2018.

Modification published on 30/12/2017, in force from 03/01/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 335: #a234]

Article 234. Supervision and inspection powers.

1. The CNMV shall have all the supervision and inspection powers necessary for the exercise of its functions. It may exercise these powers:

a) Directly, without prejudice to the power to seek the collaboration of third parties under the terms established in Article 235.

b) In collaboration with other authorities, national or foreign, under the terms provided in this law and its implementing rules.

c) By request to the competent judicial authorities.

2. In the manner and with the limitations established in the legal system, the supervision and inspection powers of the CNMV shall include at least the following powers:

a) To have access to any document in any form or to other data that it considers may be relevant for the exercise of its functions and to receive or obtain a copy thereof.

b) To require or request any person, including those who intervene successively in the transmission of orders or in the execution of the operations considered, to provide information within the period reasonably set by the CNMV and, if necessary, to summon and take a statement from a person to obtain information.

c) To carry out on-site inspections or investigations at any office or premises.

d) To require the telephone and data traffic records available to the persons or entities referred to in Article 233.1 TRLMV. In accordance with the provisions of the fifteenth additional provision of the Organic Law on Data Protection, when it has not been able to obtain by other means the information necessary to carry out its supervision or inspection tasks, the CNMV may, under the terms provided in said provision, request from operators providing publicly available electronic communications services and from providers of information society services the data in their possession relating to the electronic communication or information society service provided by said providers that are different from their content and are essential for the exercise of said tasks.

To this end, the competent body of the CNMV must request the corresponding judicial authorization, when it involves a restriction of fundamental rights, from the Central Administrative Court, which shall decide within a maximum period of forty-eight hours.

e) To require the seizure and/or freezing of assets.

f) To require a temporary prohibition to carry out professional activity.

g) To require from the auditors of investment services and activities companies and of the entities referred to in Article 233.1.a).1st, 2nd and 8th any information they have obtained in the exercise of their function.

h) To require or request any person to provide information, including all relevant documentation, about the volume and purpose of a position or exposure taken through a commodity derivative, as well as the assets and liabilities of the underlying market.

i) To require the temporary or definitive cessation of any practice or conduct that it considers contrary to the provisions of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014, of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014, or to this law and its implementing provisions and to prevent the repetition of said practice or conduct.

j) To adopt any type of measure to ensure that the persons and entities subject to its supervision comply with the applicable rules and provisions, or with the remediation or correction requirements made, and may require such persons and entities, individually or collectively and for this purpose, to provide reports from independent experts, auditors or their internal control or regulatory compliance bodies.

k) To agree to the suspension or limitation of the type or volume of operations or activities that natural or legal persons may carry out in the securities market.

l) To agree to the suspension or exclusion from trading of a financial instrument, whether on a regulated market or in other trading systems.

m) To request any person to adopt measures to reduce the volume of a position or exposure.

n) To refer matters for criminal prosecution.

ñ) To limit the ability of any person to enter into a commodity derivative contract, which includes the introduction of limits on the size of positions that a person may hold at any time in accordance with Article 85.

o) To publish notices.

p) To suspend the marketing or sale of financial instruments or structured deposits when the conditions established in Articles 40, 41 or 42 of Regulation (EU) No. 600/2014/EU of the European Parliament and of the Council of 15 May 2014 are met.

q) To suspend the marketing or sale of financial instruments or structured deposits when an investment services and activities company has not developed or applied an effective product approval process or has otherwise breached the provisions of this law or its implementing rules.

r) To require that a natural person be removed from the administrative body of the investment services and activities company or from the governing body of the market.

s) To authorize auditors or experts to carry out verifications or investigations.

t) In the exercise of the function of verifying the periodic information referred to in Article 122.2, the CNMV may:

1.º To request from the statutory auditors of issuers whose securities are admitted to trading on any regulated market domiciled in the European Union, by written request, all information or documents necessary, in accordance with the provisions of Law 22/2015, of 20 July.

The disclosure by the statutory auditors of the information required by the CNMV in accordance with the provisions of this article shall not constitute a breach of the duty of secrecy.

2.º To require issuers whose securities are admitted to trading on any regulated market domiciled in the European Union to publish additional information, including quarterly information; reconciliations, corrections or, where applicable, restatements of periodic information.

u) To gather, through its employees, information on the degree of compliance with the rules affecting the securities markets by the supervised entities, without revealing their status as CNMV staff and, in particular, regarding the manner in which their financial products are being marketed, as well as on the good or bad practices that such entities might be carrying out.

v) To require, in writing or verbally, the persons and entities listed in article 230 to make public immediately the information that it deems pertinent regarding their activities related to the securities market or that may influence it. If the obligated parties do not do so directly, the CNMV itself shall do so.

w) To suspend precautionarily the exercise of voting rights associated with the acquired shares until compliance with the information obligations established in article 125 is verified, at the time of the initiation or in the course of a sanctioning proceeding.

x) In relation to derivative instruments on commodities, to require information from the participants of the related spot markets through standardized forms, to receive reports on transactions and to access directly the operators' systems.

y) To adopt all necessary measures to ensure that the public is adequately informed, through, among others, the correction of false or misleading information published, and through a request to the issuer or to another person who has published or disseminated false or misleading information to publish a rectification.

z) In relation to the marketing of packaged retail investment products, the CNMV may adopt the following measures:

1.º To prohibit the marketing of a packaged retail investment product.

2.º To suspend the marketing of a packaged retail investment product.

3.º To prohibit the provision of a key information document that fails to comply with the requirements of articles 6, 7, 8 or 10 of Regulation (EU) No. 1286/2014, of the European Parliament and of the Council, of 26 November 2014, and to require the publication of a new version of the document.

4.º Any other attributed to the competent authority designated by the corresponding Member State in Regulation (EU) No. 1286/2014, of the European Parliament and of the Council, of 26 November 2014.

3. If the persons over whom the supervision and inspection powers are exercised oppose them or there is a risk of such opposition, the competent body of the CNMV must request the corresponding judicial authorization, when this implies a restriction of fundamental rights, from the Central Administrative-Contentious Courts, which shall resolve within a maximum period of five days.

4. The verification and investigation actions, including the taking of statements, may be carried out, at the choice of the CNMV's services:

a) In any office, premises or dependency of the inspected entity or person or their representative.

b) In the CNMV's own premises or those of other administration bodies.

When the verification and investigation actions are carried out in the places indicated in letter a), their working hours shall be observed, without prejudice to the possibility of acting by mutual agreement at other hours and days.

5. The measures referred to in section 2. e), f), i), j), k), l), m), ñ), o), q), r), s), u), w), y) and z) may be adopted as a provisional measure in the course of a sanctioning proceeding, in accordance with the provisions of article 56 of Law 39/2015, of 1 October, to ensure the effectiveness of the resolution that might be issued, the proper completion of the procedure, to avoid the maintenance of the effects of the infringement and the requirements of the general interests, or as a prudential or conduct supervision measure, to guarantee the correct exercise of its supervisory function, the effective protection of investors or the correct functioning of the securities markets, remaining in force as long as the cause that motivated them persists.

6. When the measures contemplated in section 2. e), f), i), k) and t) are exercised on entities subject to the supervision of the Bank of Spain, whether on a precautionary basis in a sanctioning procedure, or outside the exercise of the sanctioning power, they must be notified in advance to the aforementioned body.

Likewise, in the case of the measures contemplated in section 2.e), the prior report of said body shall be mandatory.

7. When the measures contemplated in section 2. e), f), i), k) and t) are exercised on entities subject to the supervision of the Directorate General of Insurance and Pension Funds, whether on a precautionary basis in a sanctioning procedure, or outside the exercise of the sanctioning power, they must be notified in advance to the aforementioned body.

Likewise, in the case of the measures contemplated in section 2.e), the prior report of said body shall be mandatory.

8. The CNMV, in the exercise of the supervisory and inspection powers contemplated in this law, may communicate and request, from shareholders obliged to notify significant holdings in issuing companies, from investment services and activities companies and other entities authorised to provide investment services and activities, including their agents, from the directors referred to in Article 19 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014, from the persons and entities listed in Article 233.1, letters a) 1st to 5th and 8th; c) 1st to 3rd, and h), and from data supply service providers, by electronic means, the information and measures set out in this law and in its implementing provisions, as well as the submission by electronic means of the information and documents that those persons must send to the CNMV.

The aforementioned entities shall be obliged to make available, within the period set for that purpose, the technical means required by the CNMV for the effectiveness of its electronic notification systems, in accordance with the provisions of Article 14.3 of Law 39/2015, of 1 October.

The electronic notification system, which shall respect the principles and guarantees of Law 39/2015, of 1 October, shall make it possible to prove the date and time on which the act subject to notification is made available to the interested party, as well as access to its content, from which moment the notification shall be deemed to have been effected for all legal purposes.

When, there being evidence of the making available of the act subject to notification, ten calendar days pass without its content being accessed, the notification shall be deemed to have been rejected with the effects provided for in Article 41.5 of Law 39/2015, of 1 October.

The Electronic Register of the CNMV may accept the standardised electronic documents corresponding to the services, procedures and formalities specified in accordance with the provisions of the rule creating its register, completed in accordance with pre-established formats.

9. The facts established in the exercise of its supervisory and inspection functions by the authorised personnel of the CNMV shall have evidentiary value, without prejudice to the evidence that may be indicated or provided in defence of their respective rights or interests by the interested persons or entities.

10. The CNMV may make public any measure adopted as a consequence of the breach of the applicable rules, unless its disclosure could seriously jeopardise the securities markets or cause disproportionate harm to the persons affected.

11. The CNMV, which shall have the status of competent authority for the purposes of the provisions of Regulation (EU) No. 236/2012 of the European Parliament and of the Council, of 14 March 2012 on short selling and certain aspects of credit default swaps, and of Regulation (EU) No. 648/2012 of the European Parliament and of the Council, of 4 July 2012, shall have the powers contained in this article that are necessary to fulfil the functions and tasks assigned to it under delegation or cooperation arrangements with other competent authorities.

The Bank of Spain and the Directorate-General for Insurance and Pension Funds shall immediately inform the CNMV of any actual breach, or the existence of well-founded indications of the foreseeable breach, of the obligations established in Articles 11.3 and 11.4 of Regulation (EU) No. 648/2012 of the European Parliament and of the Council, of 4 July 2012.

12. The access, processing and transfer of personal data collected by the CNMV in the exercise of its inspection and supervision functions is covered by the legislation on the protection of personal data, as it is carried out for the fulfilment of a mission in the public interest and in the exercise of public powers conferred on it. The data shall be used solely for the exercise of the aforementioned powers under the terms provided for in this law.

The rights of data subjects regulated in the legislation on the protection of personal data shall be limited, in accordance with the provisions of that legislation, for the time that the CNMV considers necessary to safeguard the successful outcome of its inspection and supervisory actions.

13. The CNMV shall have the status of competent authority for the application of Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014. To that end, and without prejudice to the provisions of the preceding paragraphs, it may exercise each and every one of the powers that the aforementioned Regulation recognises for competent authorities, including, among others, those specifically set out in Article 23.2 by any of the means set out in Article 23.1 of that Regulation, as well as those granted in Articles 13 and 19.9 of the same Regulation.

14. Without prejudice to the provisions of the preceding paragraphs, the CNMV, as competent authority, may exercise each and every one of the powers that Regulation (EU) No. 2016/1011 of the European Parliament and of the Council, of 8 June 2016, recognises for competent authorities, including, among others, those specifically set out in Article 41.1 by any of the means set out in Article 41.2 of that Regulation.

15. The CNMV shall have the status of competent authority for the application of Regulation (EU) No. 1129/2017 of the European Parliament and of the Council, of 14 June 2017. To that end, and without prejudice to the provisions of the preceding paragraphs, it may exercise each and every one of the powers that the aforementioned regulation recognises for competent authorities, including, among others, those specifically set out in Article 32.1 by any of the means set out in Article 32.2 of that regulation.

Letter t) of section 2 is amended and section 15 is added by art. 6.21 and 22 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Sections 2 and 5 are amended and section 14 is added by final provision 9.16 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Amended by sole art. 63 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Please note that the provisions of sections 2.d) and 12 shall not apply until the amendment of the Organic Law on Data Protection has been approved and its eighteenth additional provision has entered into force, as established by final provision 5.2, second paragraph, of the aforementioned Royal Decree-law.

Letter p) is added to section 2 by art. 2 of Royal Decree-law 9/2017, of 26 May. Ref. BOE-A-2017-5855

Seleccionar redacción:

Last update, published on 13/04/2021, in force from 03/05/2021.

Amendment published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Amendment published on 27/05/2017, in force from 27/05/2017.

Original text, published on 24/10/2015, in force from 13/11/2015.

Subir

[Bloque 336: #a2-19]

Artículo 234 bis. Other powers to strengthen macroprudential supervision.

The CNMV may introduce limits and conditions on the activity of its supervised entities in order to prevent excessive indebtedness of the private sector that could affect financial stability.

Added by art. 5 of Royal Decree-law 22/2018, of 14 December. Ref. BOE-A-2018-17294

Added text, published on 18/12/2018, in force from 19/12/2018.

Subir

[Bloque 337: #a235]

Article 235. Collaboration of external agents in supervision and inspection functions.

1. For the better exercise of the supervisory functions legally assigned to it, the National Securities Market Commission may, in cases of duly justified need, use the background information derived from the collaboration that it requests for this purpose from auditors, consultants or other independent experts, who must in any case comply with the rules and instructions determined by said body.

2. In particular, the National Securities Market Commission, in order to assess the degree of compliance with the rules affecting the securities markets by the supervised entities and, in particular, on the marketing practices of financial instruments, may request the collaboration of experts by issuing reports.

For the preparation of these reports, the designated experts as well as their employees may act anonymously, without revealing their action on behalf of the National Securities Market Commission.

3. Acting in a collaboration regime with the National Securities Market Commission in accordance with the provisions of this section shall in no case entail the exercise of administrative powers.

Subir

[Bloque 338: #a236]

Article 236. Obligations of collaboration with the National Securities Market Commission.

1. By virtue of the provisions of article 234, the natural and legal persons listed in article 233.1 are obliged to make available to the National Securities Market Commission all books, records and documents, whatever their medium, that it considers precise, including computer programs and magnetic, optical or any other kind of files, including telephone conversations of a commercial nature that have been recorded with the prior consent of the client or investor.

2. Natural persons are obliged to appear before summonses of the National Securities Market Commission for the taking of statements.

3. The organs and bodies of any Public Administration; the chambers and corporations, professional associations, councils of associations and professional associations; the other public entities, including the managing entities and common services of the Social Security and those who, in general, exercise public functions, shall be obliged to collaborate and provide to the National Securities Market Commission all data, documents, records, reports and background information necessary for the exercise by the National Securities Market Commission of the functions set out in article 17, whatever their medium, through specific requirements and within the indicated period, and to provide it with the assistance, aid and protection for the exercise of its functions.

4. The auditors of investment services companies are obliged to the duty of communication to the National Securities Market Commission referred to in the seventh additional provision of Law 22/2015, of 20 July .

5. To the extent necessary for the effective exercise by the National Securities Market Commission of its supervision and inspection functions, the persons or entities that provide any type of professional service to the persons included in article 233.1 are obliged to provide all data and information required by it, in accordance with the provisions, where applicable, of the specific regulations governing their profession or activity.

Subir

[Bloque 339: #a237]

Article 237. Publication of relevant information.

With the exceptions provided in article 248, the National Securities Market Commission may order the issuers of securities and any entity related to the securities markets to proceed to immediately bring to the public's knowledge relevant facts or information that may affect their trading, and may, failing that, do so itself.

Subir

[Bloque 340: #a238]

Article 238. Public registries in relation to the securities markets.

The National Securities Market Commission shall maintain, with the character of official registries, to which the public shall have free access:

a) A registry of the entities entrusted with keeping the accounting record corresponding to each of the issues of securities represented by book entries.

b) A registry that will contain the prospectuses approved by the Commission by virtue of the provisions of this law.

c) A registry of the documents referred to in article 7 and, in general, those referred to in article 36.1.a) and b).

d) A registry of the investment services companies operating in Spain and, where applicable, of their administrators, directors and equivalent personnel.

e) A registry of the agents or representatives who habitually act on behalf of investment services companies.

f) A registry of regulated information, which must include the information indicated in articles 118 to 122, 123.1, 125, 126 and 228. It will also include the official requests of the National Securities Market Commission for the submission, extension or review of the content of the information referred to in articles 118 to 122.

g) A registry of the listed companies provided for in article 77.1.

h) A registry in which, in accordance with the provisions of article 275.2, the sanctions imposed in the last five years for the commission of serious and very serious infractions on natural and legal persons subject to the scope of supervision, inspection and sanction provided for in this title will be recorded.

i) A registry of the official secondary markets, of whose content and modifications the supervisory bodies of the other Member States of the European Union and the European Securities and Markets Authority will be informed.

j) A registry of the Spanish multilateral trading facilities.

j bis) A registry of the Spanish organized trading facilities (OTF).

k) A registry of the credit institutions and investment services companies that carry out the activity regulated in title X, chapter III.

l) A registry of credit rating agencies established in Spain and that have been registered in accordance with the provisions of Regulation (EC) no. 1060/2009, of 16 September 2009 .

m) The clearing, settlement and registration systems and the central counterparties referred to in articles 97 and 103 respectively.

n) A registry of bank asset funds referred to in the tenth additional provision of Law 9/2012, of 14 November , on the restructuring and resolution of credit institutions, in which the facts and acts subject to registration with the National Securities Market Commission in accordance with the applicable regulations will be recorded.

ñ) A registry of crowdfunding platforms.

o) A registry of securitization funds, in which the facts and acts subject to registration with the National Securities Market Commission in accordance with the applicable regulations will be recorded.

p) A registry of privileged information relating to issuers of financial instruments that have been admitted to trading on regulated markets or for which admission to a regulated market has been requested.

q) A registry of data supply service providers.

r) A registry of corporate governance information and other information that issuing companies must send to the CNVM in compliance with regulatory provisions and that are not defined in the previous registries.

s) A registry of the prospectuses for public offers for the acquisition of shares approved by the CNMV by virtue of the provisions of this law, as well as the exceptions to the formulation of public offers for the acquisition of shares.

The incorporation into the CNMV Registries of periodic information and prospectuses will only imply recognition that they contain all the information required by the rules that set their content and will in no case determine responsibility of the CNMV for the lack of veracity of the information contained therein.

The official registry provided for in section f) will be considered the central mechanism for the storage of the information referred to in this article, in the terms established by regulation.

Letter p) is added by the ninth final provision 9.17 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Letters j bis), q), r) and s) are added by the sole article 64 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Modification published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 341: #a239]

Article 239. Complaints services.

1. The Ministry of Economy and Competitiveness shall regulate, without prejudice to the powers in the matter of the Autonomous Communities, the establishment by the National Securities Market Commission and, if deemed necessary, by the governing bodies of the official secondary securities markets, by the central counterparties and by the central securities depositories, of services intended to handle complaints that, in matters within their competence, the public may submit, as well as to advise the public on their rights and the legal channels available for their exercise.

2. The National Securities Market Commission shall notify the European Securities and Markets Authority of the existence of a complaints procedure for out-of-court resolution of disputes of users of financial services in relation to the provision of investment services and ancillary services by investment firms.

[Block 342: #a240]

Article 240. Advertising.

The Minister of Economy and Competitiveness and, with his express authorization, the National Securities Market Commission, shall determine the cases in which the advertising of the activities covered by this law shall be subject to authorization or to another form of administrative control by the National Securities Market Commission and shall approve, in general, the special rules to which it must be subject.

The National Securities Market Commission shall exercise the appropriate actions in order to achieve the cessation or rectification of advertising that is contrary to the provisions referred to in the preceding paragraph or that in general must be considered unlawful in accordance with the general rules on advertising, without prejudice to the sanctions that are applicable in accordance with the following chapter.

[Block 343: #a2-20]

Article 240 bis.

The CNMV may subject to authorization or other forms of administrative control, including the introduction of warnings about risks and characteristics, the advertising of crypto-assets or other assets and instruments presented as an object of investment, with comparable advertising dissemination, even if they are not activities or products provided for in this Law. The CNMV shall develop by circular, among other issues, the subjective and objective scope and the specific forms of control to which such advertising activities shall be subject.

For these purposes, the provisions of the second paragraph of article 240 of this Law shall apply.

Added by final provision 2.1 of Royal Decree-Law 5/2021, of 12 March. Ref. BOE-A-2021-3946

Added text, published on 13/03/2021, in force from 13/03/2021.

[Block 344: #a241]

Article 241. Accounting information obligations.

1. The individual and consolidated accounts and management reports corresponding to each financial year of the entities cited in article 233.1.a) must be approved, within four months following the close of that year, by their corresponding general meeting, following the completion of the audit of accounts.

2. Without prejudice to the provisions of Book I, Title III of the Commercial Code, the Minister of Economy and Competitiveness and, with his express authorization, the National Securities Market Commission, the Bank of Spain or the Institute of Accounting and Auditing of Accounts, are empowered to establish and modify, in relation to the entities cited in the preceding paragraph, the accounting rules and the models to which their financial statements must conform, as well as those referring to compliance with the coefficients that are established, providing for the frequency and detail with which the corresponding data must be supplied to the National Securities Market Commission or made public in general by the entities themselves. This power shall have no restrictions other than the requirement that the publicity criteria be homogeneous for all entities of the same category and similar for the various categories.

The ministerial order establishing the authorization shall determine the reports that, where appropriate, shall be mandatory for the establishment and modification of the aforementioned rules and models, as well as for the resolution of queries on that regulation.

Likewise, the Minister of Economy and Competitiveness, and with his express authorization, the National Securities Market Commission, are empowered to regulate the registers, internal or statistical databases and documents that must be kept by the entities listed in article 233.1.a) as well as, in relation to their securities market operations, the other entities contemplated in article 145.

3. The Minister of Economy and Competitiveness and, with his express authorization, the National Securities Market Commission, the Bank of Spain or the Institute of Accounting and Auditing of Accounts, shall have the same powers provided for in the preceding paragraph in relation to the consolidated groups of investment services companies and the consolidated groups whose parent entity is one of those cited in article 233.1.a) 1 and 2. The exercise of these powers shall require the mandatory reports that, where appropriate, are determined in the ministerial order of authorization.

[Block 345: #cii-7]

CHAPTER II

Cooperation with other authorities

[Block 346: #a242]

Article 242. Cooperation with other national supervisory authorities.

1. The Bank of Spain, the National Securities Market Commission and the Ministry of Economy and Competitiveness, within their respective legal competences over the control and inspection of financial entities, shall cooperate closely in order to harmonize, as appropriate, and improve, based on their mutual experience, the criteria and programs that support the supervision techniques and practices they use in the exercise of those competences.

2. To this end, they shall periodically exchange information that is relevant, in particular, that referred to ensuring the highest quality of the techniques employed, and may enter into one or several agreements aimed at standardizing such exchanges, homogenizing specific procedures or practices and, where appropriate, articulating the instruments that allow monitoring of the aforementioned objectives.

[Block 347: #a243]

Article 243. Request for prior report and information.

1. The National Securities Market Commission must request a prior report from the Bank of Spain or the Directorate General of Insurance and Pension Funds, as appropriate, for the adoption of any of the following decisions in relation to counterparties subject to their respective prudential supervision:

a) Decisions relating to the existence of risk management procedures and the sufficiency of the capital of financial counterparties for the purposes of the provisions of Article 11.3 and 4 of Regulation (EU) No. 648/2012 of 4 July 2012.

b) The application of the exemptions to intragroup transactions referred to in Article 4.2 and Article 11.5 et seq. of the aforementioned regulation.

2. The decisions that the National Securities Market Commission may adopt as referred to in letter a) above must be based, in any case, on the report issued by the authority responsible for the prudential supervision of the corresponding entity.

3. The National Securities Market Commission may request from the Bank of Spain and the Directorate General of Insurance and Pension Funds whatever information is necessary for the exercise of the supervisory, inspection and sanctioning powers relating to the application of Regulation (EU) No. 648/2012 of 4 July 2012.

[Block 348: #a244]

Article 244. Cooperation with other supervisory authorities of the European Union.

1. The CNMV shall cooperate with other competent authorities of the European Union whenever necessary to carry out the functions established in this law and in Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014, making use for this purpose of all the powers conferred on it by the same and those established in Regulation (EC) No. 1060/2009 of 16 September 2009.

2. Likewise, the CNMV shall provide assistance to other competent authorities of the European Union. In particular, it shall exchange information, collaborate in investigation or supervision activities and cooperate in facilitating the collection of pecuniary sanctions.».

The National Securities Market Commission may exercise its powers for cooperation purposes, even in cases where the conduct under investigation does not constitute an infringement of the regulations in force in Spain.

3. The National Securities Market Commission shall cooperate with the European Securities and Markets Authority. In particular, it shall provide it without delay with all the information it requires for the performance of the functions assigned to it in accordance with Article 35 of Regulation (EU) No. 1095/2010 of 24 November 2010.

4. When exercising its sanctioning and investigative powers, the National Securities Market Commission shall cooperate with other competent authorities of the European Union to ensure that sanctions or measures produce the desired results and shall coordinate its action with other authorities in the case of cross-border cases.

5. In relation to emission rights, the CNMV shall cooperate with the Spanish Office for Climate Change, the public bodies competent in the supervision of spot and auction markets, the National Registry of Emission Rights and other public bodies responsible for supervising compliance with Law 1/2005 of 9 March, which regulates the regime for trading in greenhouse gas emission rights, in order to ensure an overview of the emission rights markets.

6. In relation to derivatives on agricultural commodities, the CNMV shall inform and cooperate with the Ministry of Agriculture, Fisheries and Food and the competent regional public bodies in matters of supervision, management and regulation of physical agricultural markets under Regulation (EU) No. 1308/2013 of the European Parliament and of the Council of 17 December 2013, establishing a common organisation of the markets in agricultural products and repealing Regulations (EEC) No. 922/72, (EEC) No. 234/79, (EC) No. 1037/2001 and (EC) No. 1234/2007.

7. In the exercise of its supervisory function, the National Securities Market Commission shall request from the competent authorities of other Member States any information relating to the application of methods and methodologies established in this law and its implementing regulations resulting from the transposition of Directive 2013/36/EU of 26 June, or in Regulation (EU) No. 575/2013 of 26 June, that may be previously available to the supervisor in another Member State.

8. In the event that, in the exercise of its supervisory function over any person referred to in Article 233, the National Securities Market Commission becomes aware of information that, even if not corresponding to its scope of supervision, could be of interest for the exercise of the supervisory function of a supervisory authority of a Member State of the European Union, it shall immediately communicate such information to the authority of the corresponding Member State without this being understood in any case as the exercise of the supervisory function by the National Securities Market Commission.

Paragraphs 7 and 8 are added by final provision 9.18 of Royal Decree-Law 19/2018 of 23 November. Ref. BOE-A-2018-16036

Amended by sole article 65 of Royal Decree-Law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 349: #a245]

Article 245. Exchange of information.

1. The CNMV shall immediately provide ESMA, the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the competent authorities of other Member States of the European Union with the information necessary for the performance of their functions that they request from it.

2. The National Securities Market Commission shall not transmit the information received from competent authorities of other countries to other bodies or natural and legal persons without the express consent of the competent authorities that have disclosed it.

In any case, the information received by the National Securities Market Commission or transmitted by it may only be used for the purposes for which said authorities have given their consent in the exercise of their functions, in particular:

a) To verify compliance with the conditions governing access to the activity of investment services companies and to facilitate supervision, on an individual or consolidated basis, of the exercise of said activity, especially with regard to the capital adequacy requirements imposed by the applicable regulations, administrative and accounting procedures and internal control mechanisms.

b) To supervise the proper functioning of trading venues.

c) To impose sanctions.

d) In the case of an administrative appeal against decisions of the competent authorities.

e) In judicial proceedings.

f) In out-of-court mechanisms for resolving investor complaints.

3. Likewise, the National Securities Market Commission may transmit the information received from other competent authorities to the Bank of Spain and the Directorate-General for Insurance and Pension Funds.

4. Notwithstanding the provisions of paragraph 2, in duly justified circumstances the National Securities Market Commission may transmit the information to other bodies or natural and legal persons without the express consent of the competent authorities that have disclosed it and only for the purposes for which said authorities have given their consent. In this case, the National Securities Market Commission shall immediately inform the competent authority of the State that sent the information.

5. The provisions of the preceding paragraphs shall apply, as regards the regime applicable to requests for the supply or exchange of information, in accordance with the provisions of Article 15 of Regulation (EC) No. 1287/2006 of 10 August 2006 .

6. The provisions of this article shall not prevent the National Securities Market Commission from transmitting the confidential information necessary for the exercise of its functions to the following bodies:

a) To the European Securities and Markets Authority and the European Systemic Risk Board, observing the limitations relating to specific information on specific companies and the effects on non-member States of the European Union provided for in Regulation (EU) No. 1095/2010 of 24 November 2010 , and in Regulation (EU) No. 1092/2010 of the European Parliament and of the Council of 24 November 2010 on macroprudential oversight of the financial system in the European Union and establishing a European Systemic Risk Board, respectively.

b) To the European System of Central Banks and the European Central Bank, in their capacity as monetary authorities.

c) To the Bank of Spain and the Directorate-General for Insurance and Pension Funds.

Similarly, these bodies shall not be prevented from communicating to the National Securities Market Commission the information it may need to perform the functions incumbent upon it under this law.

Paragraph 1 is amended by the sole article 66 of Royal Decree-Law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 350: #a2-11]

Article 245 bis. Notification of data to ESMA and the competent authorities.

1. The CNMV shall notify ESMA and other competent authorities of the detailed data on:

a) Any requirement to reduce the volume of a position or exposure in accordance with Article 234.2.m); and

b) any limit imposed on the ability of persons to enter into an instrument in accordance with Article 85.

2. The notification shall include, where appropriate, detailed data on the requirement or request under Article 234.2.h), including the identity of the person or persons to whom it was addressed and the corresponding reasons, as well as the scope of the limits imposed in accordance with Article 234.2.ñ), including the person affected, the financial instruments concerned, the thresholds on the volume of positions that the person may subscribe at any time, and the applicable exceptions in accordance with Article 85, as well as the corresponding reasons.

3. The CNMV shall notify the actions or measures adopted at least 24 hours before their scheduled date of entry into force. If, due to exceptional circumstances, the CNMV cannot make the notification within that period, it may do so with less advance notice.

4. When the CNMV receives a notification as provided for in this article from another competent authority, it may adopt measures in accordance with Article 234.2. m) and ñ), when it has evidence that the measure is necessary to achieve the objective of the other competent authority. The CNMV shall also proceed with the notification in accordance with this paragraph if it intends to adopt measures.

5. When an action adopted in accordance with paragraph 1 relates to wholesale energy products, the CNMV shall also send the notification to the Agency for the Cooperation of Energy Regulators established in accordance with Regulation (EC) No. 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing the Agency for the Cooperation of Energy Regulators.

Added by the sole article 67 of Royal Decree-Law 14/2018 of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 351: #a246]

Article 246. Prior consultation with other competent authorities of the European Union.

The National Securities Market Commission, prior to adopting decisions that may affect the exercise of supervisory functions by the interested competent authorities of another Member State of the European Union, shall consult them, providing the information that is essential or pertinent, in view of the importance of the matter in question.

In particular, the appropriate consultation must be carried out before adopting the following decisions:

a) Those contemplated in Title V, Chapter IV in relation to the acquisition of significant holdings, regardless of the scope of the change in shareholding affected by the corresponding decision.

b) The reports that must be issued in merger, demerger or any other relevant modification operations in the organization or management of an investment services company.

c) Sanctions for the commission of very serious and serious infringements that, in the opinion of the National Securities Market Commission, are considered of special relevance.

d) The intervention and substitution measures referred to in Article 311.

e) The request for additional own funds, in accordance with the provisions of Article 260.2, as well as the imposition of limitations on the use of internal methods for measuring operational risk.

In the cases set out in letters c), d) and e), the European Union authority responsible for the consolidated supervision of the group eventually affected by the decision must be consulted in all cases.

Exceptionally, the National Securities Market Commission may omit prior consultation with the interested competent authority of another Member State of the European Union, when urgent circumstances arise or when such consultation could compromise the effectiveness of the decisions to be adopted, and must inform the aforementioned authorities without delay, as soon as the decision has been adopted.

[Block 352: #a247]

Article 247. Cooperation with the competent authorities of non-member States of the European Union.

1. The National Securities Market Commission may enter into cooperation agreements providing for the exchange of information with the competent authorities of non-member States of the European Union, provided that the information disclosed enjoys a guarantee of professional secrecy at least equivalent to that required under Article 90 and reciprocity exists. This exchange of information must be intended for the performance of the tasks entrusted to the competent authorities. The National Securities Market Commission shall notify the European Securities and Markets Authority of the conclusion of the cooperation agreements referred to in this paragraph.

2. The National Securities Market Commission may transfer personal data to non-member States of the European Union in accordance with Title V of Organic Law 15/1999, of 13 December.

3. The National Securities Market Commission may enter into cooperation agreements providing for the exchange of information with authorities, bodies and natural and legal persons of third countries responsible for:

a) The supervision of credit institutions, insurance or reinsurance undertakings, other financial organizations and financial markets.

b) The insolvency proceedings in which the liquidation phase of investment services companies and other similar procedures has been opened.

c) The carrying out of statutory audits of accounts of investment services companies, credit institutions, insurance or reinsurance undertakings and other financial entities, in the exercise of their supervisory functions, or the administration of compensation schemes, in the exercise of their functions.

d) The supervision of the bodies involved in the insolvency proceedings in which the liquidation phase of investment services companies and other similar procedures has been opened.

e) The supervision of persons operating in emission allowance markets, in order to ensure an overview of financial and spot markets.

f) The supervision of persons operating in agricultural commodity derivatives markets, in order to ensure an overview of financial and spot markets.

g) The supervision of persons responsible for carrying out statutory audits of accounts of investment services and activities companies, credit institutions, insurance or reinsurance undertakings and other financial entities.

Such exchange of information must be intended for the performance of the tasks of said authorities or bodies or natural or legal persons.

The cooperation agreements referred to in this paragraph shall require compliance with the requirements set out in the preceding paragraphs.

4. When the information to be transmitted by the National Securities Market Commission comes from another Member State of the European Union, it may only be disclosed with the express agreement of the competent authorities that transmitted it and, where appropriate, only for the purposes for which said authorities have given their consent. The same provision shall apply to information provided by the competent authorities of non-member States of the European Union.

Letters e), f) and g) and the last paragraph in paragraph 3 are added by the sole article 68 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 353: #a248]

Article 248. Professional secrecy.

1. Confidential information or data that the CNMV or other competent authorities have received in the exercise of their functions related to the supervision and inspection provided for in this or other laws or in European regulations may not be disclosed to any person or authority. The reservation shall be understood to be lifted from the moment the interested parties make public the facts to which it refers.

Without prejudice to the provisions of this article and to the cases contemplated by criminal or tax law, no confidential information that it may receive in the exercise of its functions may be disclosed to any person or authority, except in a generic or collective form that prevents the specific identification of the investment services and activities firms, market governing bodies, regulated markets or any other person to which this information refers.

2. Access by the Cortes Generales to information subject to the duty of secrecy shall be carried out through the Chairman of the National Securities Market Commission, in accordance with the provisions of the parliamentary Regulations. For this purpose, 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.

The members of a Parliamentary Investigation Commission who receive information of a reserved nature shall be obliged to adopt the pertinent measures to guarantee its confidentiality.

3. All persons who perform or have performed an activity for the National Securities Market Commission and have had knowledge of data of a reserved nature are obliged to keep secrecy. Failure to comply with this obligation shall determine criminal liabilities and the others provided for by law. These persons may not give statements or testimony, nor publish, communicate, exhibit reserved data or documents, even after having ceased in service, except with express permission granted by the competent body of the National Securities Market Commission. If such permission is not granted, the affected person shall maintain secrecy and shall be exempt from the liability arising therefrom.

4. Excepted from the obligation of secrecy regulated in this article are:

a) When the interested party expressly consents to the dissemination, publication or communication of the data.

b) The publication of aggregated data for statistical purposes, or communications in summary or aggregated form such that individual entities cannot be identified even indirectly.

c) Information required by the competent judicial authorities or by the Public Prosecutor's Office in a criminal proceeding, or in a civil trial, although in the latter case the obligation of secrecy shall be maintained in all matters relating to the prudential requirements of an investment services firm.

d) Information that, in the framework of insolvency proceedings of an investment services firm, is required by the judicial authorities, provided that it does not concern third parties involved in the refloating of the entity.

e) Information that, in the framework of administrative or judicial appeals filed against administrative resolutions issued in matters of regulation and discipline of the securities markets, is required by the competent administrative or judicial authorities.

f) Information that the National Securities Market Commission must provide, for the fulfillment of their respective functions, to the Autonomous Communities with competences in matters of Stock Exchanges; to the Bank of Spain; to the Directorate General of Insurance and Pension Funds; to the Institute of Accounting and Auditing of Accounts, to the governing companies of the official secondary markets in order to guarantee their regular functioning; to investor guarantee funds; to the receivers or trustees of an investment services firm or of an entity of its group, appointed in the corresponding administrative or judicial proceedings, and to the account auditors of investment services firms and their groups.

g) Information that the National Securities Market Commission must provide to the authorities responsible for the fight against money laundering in application of Law 10/2010, of 28 April, on the prevention of money laundering and the financing of terrorism, as well as communications that, exceptionally, may be made by virtue of the provisions of articles 93 and 94 of Law 58/2003, of 17 December, General Tax Law, with prior non-delegable authorization of the Minister of Economy and Competitiveness. For these purposes, the collaboration agreements formalized by the National Securities Market Commission with supervisory authorities of other countries must be taken into account.

h) Information required by a Parliamentary Investigation Commission, under the terms established by its specific legislation.

i) Information that the National Securities Market Commission decides to provide to a clearing and settlement system or chamber of a Spanish market, when it considers that they are necessary to guarantee the correct functioning of said systems in the event of any breach, or possible breach, occurring in the market.

j) The information that the National Securities Market Commission must provide, for the fulfilment of its functions, to the European Securities and Markets Authority, the European Systemic Risk Board, the bodies or authorities of other countries that have the public function of supervising credit institutions, insurance or reinsurance undertakings, other financial institutions and financial markets, or the management of deposit guarantee or investor compensation schemes, provided that reciprocity exists, and that the bodies and authorities are subject to professional secrecy under conditions that are at least equivalent to those established by Spanish laws.

k) The information that, for reasons of prudential supervision or sanction of investment services companies and financial entities or institutions and markets subject to the scope of this law, the National Securities Market Commission must disclose to the Ministry of Economy and Competitiveness or to the authorities of the Autonomous Communities with powers in matters of securities markets.

l) The information that the National Securities Market Commission publishes in accordance with the provisions of article 176.8.

m) The information that the National Securities Market Commission provides to the Spanish supervisory authorities in energy matters and to the supervisory authorities of the Iberian Electricity Market and that is necessary for the fulfilment of their supervision functions of said markets. For these purposes, the collaboration agreements formalised by the National Securities Market Commission with other authorities must be taken into account. The information communicated may only be disclosed with the express consent of the Commission.

n) The information communicated to the European Banking Authority by virtue of current regulations, and in particular, that established in articles 31 and 35 of Regulation (EU) No. 1093/2010 of the European Parliament and of the Council, of 24 November 2010, establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC. Notwithstanding the foregoing, said information shall be subject to professional secrecy.

ñ) The information provided to the European Systemic Risk Board, when this information is relevant for the performance of its statutory functions in accordance with Regulation (EU) No. 1092/2010, of 24 November 2010.

o) The information that, in relation to emission rights, and by virtue of current regulations, the CNMV provides to the Spanish Office of Climate Change, the public bodies competent in matters of supervision of spot and auction markets, the National Registry of Emission Rights and other public bodies responsible for supervision in accordance with Law 1/2005, of 9 March, regulating the regime for trading greenhouse gas emission rights.

p) The information that, in relation to derivatives on agricultural raw materials, the CNMV provides to the Ministry of Agriculture, Fisheries and Food and the competent autonomous public bodies in matters of supervision, management and regulation of physical agricultural markets under Regulation (EU) No. 1308/2013 of the European Parliament and of the Council, of 17 December 2013.

q) The information that the CNMV must provide for the fulfilment of its functions, and by virtue of this law, to other competent authorities of the European Union.

r) The information that, by virtue of cooperation and information exchange agreements referred to in article 247, the CNMV provides to the competent authorities of non-member states of the European Union, or to other authorities, bodies, or natural and legal persons thereof.

5. Judicial authorities that receive confidential information from the National Securities Market Commission shall be obliged to adopt the pertinent measures that guarantee confidentiality during the conduct of the process in question. The remaining authorities, persons or entities that receive confidential information shall be subject to the professional secrecy regulated in this article and may not use it except within the framework of the fulfilment of the functions legally established for them.

6. The transmission of confidential information to the bodies and authorities of countries not belonging to the European Economic Area referred to in section 4.j) shall be conditioned, when the information has originated in another Member State, on the express consent of the authority that transmitted it, and may only be communicated to the cited recipients for the purposes for which said authority has given its consent. The same limitation shall apply to the information to the chambers and bodies mentioned in section 4.i) and to the information required by the Court of Auditors and the Investigation Commissions of the Cortes Generales.

7. The National Securities Market Commission shall communicate to the European Banking Authority the identity of the authorities or bodies to which it may transmit data, documents or information in accordance with section 4.d) and f) in relation to the Institute of Accounting and Auditing of Accounts.

Section 1 is amended and letters o), p), q) and r) are added in section 4 by the sole art.69 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 354: #a249]

Article 249. Refusal to cooperate or exchange information.

The National Securities Market Commission may refuse to act on a request for cooperation in an investigation, an on-site verification or supervision pursuant to Article 253.4 to 6 or to exchange information pursuant to Article 245.1 to 5 and 253.1 only where:

a) Judicial proceedings have been initiated for the same facts and against the same persons.

b) A final judicial decision has already been issued with respect to the same persons and the same facts.

In the event of refusal, the National Securities Market Commission shall duly notify the requesting competent authority and the European Securities and Markets Authority, providing as much information as possible in this regard.

Amended by the sole article.70 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 355: #a250]

Article 250. Cooperation with judicial authorities.

The National Securities Market Commission shall provide whatever collaboration is required of it by the Judicial Authority or by the Public Prosecutor's Office in order to clarify facts related to the securities markets that may be of a criminal nature.

[Block 356: #a251]

Article 251. Cooperation in the prudential supervision of investment services companies.

The National Securities Market Commission, in its capacity as the authority responsible for the supervision of the solvency of consolidated groups of investment services companies, shall collaborate with the supervisory authorities of the European Union. To this end:

a) It shall coordinate the collection of information and shall disseminate among the other authorities responsible for the supervision of investment services companies of the group the information it considers important in both normal and urgent situations.

b) It shall plan and coordinate supervisory activities in normal situations, in relation, among others, to the activities contemplated in Articles 190, 196, 260 and 261 linked to consolidated supervision, and in the provisions relating to technical criteria concerning the organisation and treatment of risks, in collaboration with the competent authorities involved.

c) It shall plan and coordinate supervisory activities, in collaboration with the competent authorities involved and, where appropriate, with the central banks in urgent situations or in anticipation of such situations, and in particular, in those cases in which there is an adverse development of investment services companies or of the financial markets, availing itself, whenever possible, of the specific communication channels existing to facilitate crisis management. The content of this planning and coordination may be determined by regulation.

d) It shall cooperate closely with other competent authorities with supervisory responsibility over foreign investment services companies, parent companies, subsidiaries or participations, of the same group under the terms provided in Article 247.

e) It shall enter into coordination and cooperation agreements with other competent authorities aimed at facilitating and establishing effective supervision of the groups entrusted to its supervision and assuming the additional tasks resulting from such agreements and with the content established by regulation.

In particular, the National Securities Market Commission may enter into a bilateral agreement in accordance with Article 28 of Regulation (EU) No. 1093/2010, of 24 November 2010, to delegate its responsibility for the supervision of a subsidiary entity to the competent authorities that have authorised and supervise the parent company, in order for them to take charge of the supervision of the subsidiary in accordance with the provisions set out in this law, in its implementing regulations and in Regulation (EU) No. 575/2013, of 26 June 2013. The National Securities Market Commission shall inform the European Banking Authority of the existence and content of such agreements.

f) It shall cooperate with the European Banking Authority for the purposes of Regulation (EU) No. 575/2013, of 26 June 2013, in accordance with Regulation (EU) No. 1093/2010, of 24 November 2010.

[Block 357: #a252]

Article 252. Cooperation in the supervision of official secondary markets.

1. The CNMV shall establish proportionate cooperation mechanisms with the competent authority of the host Member State when trading venues establish mechanisms in other Member States of the European Union to allow remote access and the operations of that venue and when, given the situation of the securities markets in the host Member State, the trading venues have become of substantial importance for the functioning of the markets and the protection of investors in that State.

2. Likewise, the CNMV and the competent authority of a trading venue of another Member State of the European Union shall establish proportionate cooperation mechanisms when said venue has established mechanisms in Spanish territory to guarantee remote access, and the operations carried out in Spain and when, given the situation of the Spanish securities markets, they have become of substantial importance for the functioning of the markets and the protection of investors in Spain.

3. For the purposes of the provisions of this article, operations shall be understood to be of substantial importance when the provisions of article 90 of Commission Delegated Regulation (EU) No. 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive are met.

Amended by the sole article 71 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 358: #a253]

Article 253. Cooperation in matters of Directive 2014/65/EU of the European Parliament and of the Council, of 15 May 2014 and Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014.

1. The CNMV may communicate to the competent authorities of other Member States of the European Union information related to the matters regulated in the national rules that transpose Directive 2014/65/EU, of 15 May 2014, and in Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014.

In such cases, the CNMV must indicate whether the information may only be disclosed with its express consent.

Likewise, when the CNMV receives information from the competent authorities of other Member States and those authorities have indicated that the information may only be disclosed with their express consent, the CNMV must use that information exclusively for the purposes authorised by that authority.

When a request for information from the CNMV to other competent authorities of other Member States of the European Union has been rejected or has not been answered, the CNMV shall inform ESMA, which may act in accordance with the powers conferred on it by article 19 of Regulation (EU) No. 1095/2010, without prejudice to the possibilities of rejecting a request for information provided for in article 83 of Directive 2014/65/EU of 15 May 2014 and the power of ESMA to take the measures provided for in article 17 of Regulation (EU) No. 1095/2010.2.

2. When the CNMV has reasonable grounds to suspect that entities not subject to its supervision are carrying out or have carried out in the territory of another Member State of the European Union activities contrary to the national provisions transposing Directive 2014/65/EU of 15 May 2014; or to Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014, it shall notify the competent authority of that Member State and ESMA as specifically as possible. This communication shall be understood without prejudice to the powers that the CNMV may exercise.

3. Likewise, when the CNMV receives a notification from the competent authority of another Member State of the European Union that has reasonable grounds to suspect that entities not subject to its supervision are carrying out or have carried out in Spanish territory activities contrary to this law, and its implementing provisions, it must adopt the appropriate measures to correct this situation. In addition, it shall communicate to the notifying competent authority and to ESMA the result of its intervention and, as far as possible, significant intermediate progress.

4. The CNMV may request the cooperation of other competent authorities of the European Union in a supervisory activity, for an on-site verification or an investigation related to the matters regulated in the national rules that transpose Directive 2014/65/EU of 15 May 2014, as well as with matters related to Regulation (EC) No. 1060/2009 of the European Parliament and of the Council, of 16 September 2009.

When this request for cooperation has been rejected or has not been answered, the CNMV shall inform ESMA, which may act in accordance with the powers conferred on it by article 19 of Regulation (EU) No. 1095/2010, without prejudice to the possibilities of rejecting a request for information provided for in article 83 of Directive 2014/65/EU of 15 May 2014 and the power of ESMA to take the measures provided for in article 17 of Regulation (EU) No. 1095/2010.

5. In the case of investment services and activities firms, authorised in another Member State, which are remote members of a regulated market, the CNMV may choose to address them directly, in which case it shall duly inform the competent authority of the Member State of origin of the remote member.

6. In the event that the CNMV receives a request relating to an on-site verification or an investigation, within the framework of its powers:

a) It shall carry out the verification or investigation itself,

b) allow the authorities that have submitted the request to carry it out; or

c) allow auditors or experts to carry it out.

Amended by the sole article 72 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 359: #a254]

Article 254. Cooperation in matters of market abuse.

(Without content).

Left without content by final provision 9.20 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Select wording:

Last update, published on 24/11/2018, in force from 25/11/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 360: #a255]

Article 255. Cooperation in the field of securities clearing, settlement and registration systems.

1. In accordance with international standards and with European Union law relating to central counterparties, central securities depositories and other financial market infrastructures, the National Securities Market Commission and the Bank of Spain shall ensure that the operation of national securities clearing, settlement and registration systems preserves the stability of the financial system as a whole. To this end, said authorities shall assess the degree of adaptation of the procedures of Spanish market infrastructures to best international practices and recommendations, and shall prepare and publish a biennial report.

2. The National Securities Market Commission and the Bank of Spain shall enter into a collaboration agreement for the purpose of carrying out the work provided for in the preceding paragraph. This agreement shall determine their respective functions and responsibilities in this area, as well as the system for exchanging information between both authorities.

3. The provisions of this article shall not alter the respective powers granted to each of these authorities by their regulatory legislation.

[Block 361: #ciii-3]

CHAPTER III

Prudential supervision

[Block 362: #a256]

Article 256. Supervisory programme.

1. The National Securities Market Commission shall approve, at least once a year, a supervisory programme in relation to the following investment services companies:

a) Those whose results in the stress tests referred to in Article 257, or in the supervisory review and evaluation process, reveal the existence of significant risks to their financial soundness or reveal non-compliance with solvency regulations.

b) Those that pose a systemic risk to the financial system.

c) Any others that the National Securities Market Commission considers necessary in the exercise of its supervisory functions.

2. This programme shall contain at least the information referred to in Article 5.2 of Law 10/2014, of 26 June, and the National Securities Market Commission, in view of the results of the programme, may adopt the measures it considers appropriate in each case, including those established in Article 55.3 of the aforementioned law.

3. The National Securities Market Commission shall take into account, when establishing its supervisory programme, the information received from the authorities of other Member States in relation to the branches of investment services companies established there. For these same purposes, it shall also take into consideration the stability of the financial system of said Member States.

4. This Article 256 and Article 257 shall not apply to investment services companies not authorised to provide the ancillary service referred to in Article 141.a), which provide only one or more of the investment services or activities listed in Article 140.a), b), d) and g), and which are not permitted to hold money or securities of their clients in deposit and which, for this reason, can never be in a debtor position with respect to said clients.

[Block 363: #a257]

Article 257. Stress tests.

1. At least once a year, the National Securities Market Commission shall subject the investment services companies under its supervision to stress tests, in order to facilitate the review and evaluation process provided for in Article 256.

2. To this end, the National Securities Market Commission may adopt and transmit as such to the entities and groups the guidelines approved by the European Banking Authority for these purposes.

[Block 364: #a258]

Article 258. Consolidation obligations.

1. For the fulfilment of the minimum levels of own funds and limitations required under Regulation (EU) No. 575/2013, of 26 June 2013, investment services companies shall consolidate their financial statements with those of the other investment services companies and financial entities that form with them a decision-making unit, as provided for in Article 42 of the Commercial Code and in accordance with the provisions of said regulation.

2. The National Securities Market Commission may require from the entities subject to consolidation all information necessary to verify the consolidations carried out and to analyse the risks assumed by the set of consolidated entities, as well as, for the same purpose, inspect their books, documentation and records.

When from the economic, financial or managerial relations of an investment services company with other entities it may be presumed that a control relationship exists within the meaning of this article, without the entities having proceeded to consolidate their accounts, the National Securities Market Commission may request information from those entities or inspect them, in order to determine whether consolidation is appropriate.

3. The National Securities Market Commission may request information from natural persons and inspect non-financial entities with which a control relationship exists in accordance with the provisions of Article 42 of the Commercial Code, in order to determine their impact on the legal, financial and economic situation of the investment services companies and their consolidated groups.

4. The duty of consolidation established in Article 42 of the Commercial Code shall be understood to be fulfilled by the consolidation referred to in the preceding paragraphs by those groups of companies whose parent entity is an investment services company, or by those others whose parent is a company whose main activity is the holding of shares in investment services companies. This duty shall also be understood as fulfilled for the groups of the governing bodies of official secondary markets, central counterparties and central securities depositories.

This is without prejudice to the obligation to consolidate with each other that may exist for subsidiaries that are not financial entities, in the cases that apply in accordance with the aforementioned Article 42 of the Commercial Code.

Upload

[Block 365: #a259]

Article 259. Prudential supervision of investment services companies and their consolidated groups.

1. The National Securities Market Commission, in its capacity as the authority responsible for the supervision of investment services companies and their consolidated groups, shall:

a) Review the systems, whether agreements, strategies, procedures or mechanisms of any kind, applied to comply with the solvency regulations contained in this law and its implementing provisions, as well as in Regulation (EU) No. 575/2013, of 26 June 2013.

b) Determine whether the systems, own resources and liquidity maintained by investment services companies guarantee sound and prudent management and solid coverage of their risks.

c) Determine, based on the review and assessment mentioned in the preceding paragraphs, whether the systems mentioned in letter a) and the own funds and liquidity maintained guarantee sound management and coverage, respectively, of their risks.

The analyses and assessments mentioned in the preceding paragraphs shall be updated at least annually.

2. The National Securities Market Commission, in the performance of its functions as the authority responsible for the supervision of investment services companies and their consolidated groups:

a) Shall duly take into account the possible impact of its decisions on the stability of the financial system of all other affected Member States, in particular in emergency situations, based on the information available at the time.

b) Shall take into account the convergence of supervisory instruments and practices in the European Union.

c) Shall cooperate with the competent authorities of other Member States of the European Union, as parties to the European System of Financial Supervision (ESFS), with trust and full mutual respect, in particular to ensure the flow of relevant and reliable information between them and other parties to the ESFS, in accordance with the principle of sincere cooperation established in Article 4.3 of the Treaty on European Union.

d) Shall participate in the activities of the European Banking Authority and, where appropriate, in colleges of supervisors.

e) Shall make every effort to comply with the guidelines and recommendations issued by the European Banking Authority in accordance with Article 16 of Regulation (EU) No. 1093/2010, of 24 November 2010, and to adhere to the warnings and recommendations issued by the European Systemic Risk Board in accordance with Article 16 of Regulation (EU) No. 1092/2010, of 24 November 2010.

f) Shall cooperate closely with the European Systemic Risk Board.

Upload

[Block 366: #a260]

Article 260. Prudential supervision measures.

1. The National Securities Market Commission shall require investment services companies or consolidated groups of investment services companies to promptly adopt the necessary measures to return to compliance in the following circumstances:

a) When they fail to comply with the obligations contained in the solvency regulations or when serious deficiencies are identified in the organisational structure or in the internal control, accounting or valuation procedures and mechanisms, including those provided for in Article 190.2 of the law.

b) When the National Securities Market Commission itself has data according to which it is reasonably foreseeable that the entity will breach the obligations referred to in the preceding paragraph in the next twelve months.

2. In the circumstances provided for in the preceding paragraph, the National Securities Market Commission may adopt one or more of the following measures that it considers most appropriate based on the situation of the investment services company or the group:

a) Require investment services companies to maintain own resources higher than the capital requirements established in Article 196 and in Regulation (EU) No. 575/2013, of 26 June, in relation to risks and risk elements not covered by Article 1 of said regulation.

b) Require investment services companies and their groups to strengthen or modify the internal control, accounting or valuation procedures, the mechanisms and strategies adopted for compliance with the applicable rules, including those established to comply with the provisions of Article 190.2.

c) Require investment services companies and their groups to submit a plan to restore compliance with the supervisory requirements established in this law and in Regulation (EU) No. 575/2013, of 26 June 2013, setting a deadline for its execution and introducing in the plan the necessary improvements regarding its scope and execution deadline.

d) Require investment services companies and their groups to apply a specific policy for provisioning or a specific treatment of assets in terms of own resources requirements.

e) Restrict or limit the businesses, operations or network of investment services companies or request the abandonment of activities that pose excessive risks to the soundness of an investment services company.

f) Require the reduction of the risk inherent in the activities, products and systems of investment services companies.

g) Require investment services companies and their groups to limit variable remuneration as a percentage of net revenues, when it is incompatible with maintaining a sound capital base.

h) Require investment services companies and their groups to use net profits to strengthen their own funds.

i) Prohibit or restrict the distribution by the investment services company of dividends or interest to shareholders, partners or holders of additional tier 1 capital instruments, provided that the prohibition does not constitute a case of breach of the investment services company's payment obligations.

j) Impose additional or more frequent reporting obligations, including information on the capital and liquidity situation.

k) The obligation to have a minimum amount of liquid assets that allow it to cope with potential outflows of funds arising from liabilities and commitments, including in the event of serious events that could affect the availability of liquidity, and to maintain an adequate structure of funding sources and maturities in its assets, liabilities and commitments in order to avoid potential imbalances or liquidity tensions that could harm or jeopardize the financial situation of the investment services company.

3. The provisions of the preceding paragraph are without prejudice to the application of the sanctioning regime provided for in this law.

[Block 367: #a261]

Article 261. Additional own funds requirements.

1. The National Securities Market Commission shall require investment services companies to maintain own funds higher than those established, in accordance with the provisions of article 260.2.a), at least in the following cases:

a) If the investment services company does not comply with the requirements established in article 190.2 or in article 393 of Regulation (EU) No. 575/2013, of 26 June 2013 .

b) If there are risks or risk elements that are not covered by the own funds requirements established in article 196 or in Regulation (EU) No. 575/2013, of 26 June 2013 .

c) If it is likely that the application of other measures will not by itself be sufficient to adequately improve the systems, procedures, mechanisms and strategies within an appropriate timeframe.

d) If the review referred to in article 259.1 reveals that non-compliance with the requirements for the application of a method of calculating own funds requirements that requires prior authorization in accordance with part three of Regulation (EU) No. 575/2013, of 26 June 2013 , could lead to insufficient own funds requirements, or if the valuation adjustments with respect to specific positions or portfolios within the trading portfolio, in accordance with the provisions of article 105 of Regulation (EU) No. 575/2013, of 26 June 2013 , do not allow the investment services company to sell or hedge its positions in a short period of time without incurring significant losses under normal market conditions.

e) If there are well-founded reasons to consider that the risks could be underestimated despite compliance with the applicable requirements of Regulation (EU) No. 575/2013, of 26 June 2013 , and of this law and its implementing rules.

f) If the investment services company notifies the National Securities Market Commission, in accordance with article 377.5 of Regulation (EU) No. 575/2013, of 26 June 2013 , that the results of the stress test referred to in that article significantly exceed the own funds requirements derived from the correlation trading portfolio.

2. For the purposes of determining the appropriate level of own funds on the basis of the review and evaluation carried out in accordance with article 259.1, the National Securities Market Commission shall assess the following:

a) The quantitative and qualitative aspects of the assessment process of investment services companies referred to in article 190.2.

b) The systems, procedures and mechanisms related to the recovery and resolution plans of investment services companies.

c) The results of the review and evaluation carried out in accordance with article 259.1.

d) Systemic risk.

[Block 368: #a262]

Article 262. Supervision of mixed financial holding companies and mixed holding companies.

1. When a mixed financial holding company subject to the supervision of the National Securities Market Commission is subject to equivalent provisions under this law and Law 5/2005, of 22 April , on the supervision of financial conglomerates and amending other laws of the financial sector, in particular in terms of risk-based supervision, the National Securities Market Commission, after consulting the other authorities responsible for the supervision of the subsidiaries of the mixed financial holding company, may decide that only the provisions of Law 5/2005, of 22 April , and its implementing regulations apply to that company.

2. Likewise, when a mixed financial holding company subject to the supervision of the National Securities Market Commission is subject to equivalent provisions under this law and under Law 20/2015, of 14 July, on the organisation, supervision and solvency of insurance and reinsurance undertakings, in particular in terms of risk-based supervision, the National Securities Market Commission, after consulting the other authorities responsible for the supervision of the subsidiaries of the mixed financial holding company, may decide that only the provisions of Law 20/2015, of 14 July, shall apply to that company.

3. The National Securities Market Commission must inform the European Banking Authority and the European Insurance and Occupational Pensions Authority of the decisions adopted under the preceding paragraphs.

4. Without prejudice to the provisions of Part Four of Regulation (EU) No. 575/2013, of 26 June 2013, when the parent undertaking of one or more Spanish investment services companies is a mixed financial holding company, the National Securities Market Commission shall carry out general supervision of the operations between the investment services company and the mixed financial holding company and its subsidiaries.

5. Investment services companies that are subsidiaries of a mixed financial holding company must have adequate risk management systems and internal control mechanisms, including sound reporting and accounting procedures, in order to properly identify, measure, monitor and control operations with their parent mixed financial holding company and the latter's subsidiaries. The National Securities Market Commission shall require the investment services company to report any other significant operation with said entities other than that mentioned in Article 394 of Regulation (EU) No. 575/2013, of 26 June 2013. Such procedures and significant operations shall be subject to the supervision of the National Securities Market Commission.

Upload

[Block 369: #a263]

Article 263. Supervision of investment services companies from States that are not members of the European Union.

1. The obligations established in the solvency regulations shall not be enforceable against branches of investment services companies headquartered in a State that is not a member of the European Union, provided that they are subject to equivalent obligations under the terms determined by regulation.

2. Investment services companies whose parent entity is a financial entity domiciled outside the European Union shall not be subject to supervision on a consolidated basis, provided that they are already subject to such supervision by the corresponding competent authority of the third country, which is equivalent to that provided for in this Law and its implementing regulations, and in Part One, Title II, Chapter 2 of Regulation (EU) No. 575/2013, of 26 June 2013.

The National Securities Market Commission must verify this equivalence, for which it must take into account the guidelines drawn up by the European Banking Authority for this purpose, which it shall consult before adopting a decision in this regard.

In the event that the existence of an equivalent supervision regime is not appreciated, the consolidated supervision regime provided for in the solvency regulations shall apply to the investment services companies mentioned in the first paragraph of this section.

Notwithstanding the provisions of the preceding paragraph, the National Securities Market Commission may establish other methods for the consolidated supervision of the groups referred to in this section. Among these methods shall be the power of the National Securities Market Commission to require the establishment of a dominant financial entity with its registered office in the European Union. The methods must comply with the objectives of consolidated supervision defined in this law and be communicated to the other competent authorities involved, to the European Commission and to the European Banking Authority.

[Block 370: #a264]

Article 264. Requests for designation of branches as significant.

1. The National Securities Market Commission may submit requests to the competent authorities for the supervision of an investment services company authorised in the European Union with branches in Spain for these to be considered significant branches, as well as, in cases where there is no joint decision in this regard, to rule on their significant nature.

In these cases, in accordance with the procedure to be determined by regulation, the National Securities Market Commission shall promote the adoption of a joint decision on the request, with the other competent authorities of other Member States responsible for the supervision of the various entities integrated in the group.

2. Likewise, it shall be for the National Securities Market Commission, in accordance with the procedure to be determined by regulation, to rule by joint decision on equivalent requests submitted by the competent authorities of the countries where branches of Spanish investment services companies are located, as well as, in the absence of a joint decision in this regard, to recognise the ruling on their significant nature by said competent authority.

3. The parameters that the National Securities Market Commission must take into account to consider whether or not a branch is significant shall be specified by regulation, which shall in any case include the market share of the branch, the potential impact of the suspension or cessation of the entity's operations on market liquidity and the size and importance of the branch.

[Block 371: #a265]

Article 265. Relations with other supervisors in the field of supervision on a consolidated basis.

1. Any rule issued in implementation of the provisions of this law that may affect financial entities subject to the supervision of the Bank of Spain or the Directorate-General for Insurance and Pension Funds shall be issued after a report from them.

2. Whenever in a consolidated group of investment services companies there are entities subject to supervision on an individual basis by a body other than the National Securities Market Commission, the latter, in the exercise of the powers conferred on it by this law over such entities, must act in coordination with the supervisory body that corresponds in each case. The Minister of Economy and Competitiveness may issue the necessary rules to ensure adequate coordination.

3. The Minister of Economy and Competitiveness, after a report from the National Securities Market Commission, on a proposal from the Bank of Spain, may agree that a group of investment services companies in which one or more credit institutions capable of adhering to a deposit guarantee system are integrated shall be considered a consolidated group of credit institutions and shall therefore be subject to supervision on a consolidated basis by the Bank of Spain.

[Block 372: #a266]

Article 266. Colleges of supervisors.

1. The National Securities Market Commission, as supervisor on a consolidated basis, shall establish colleges of supervisors in order to facilitate the performance of the tasks determined by regulation within the framework of the cooperation referred to in Article 244 and, in accordance with the confidentiality requirements laid down in applicable legislation and with European Union law, shall ensure, where appropriate, that adequate coordination and cooperation is established with the competent authorities of non-member States of the European Union.

2. The colleges of supervisors shall constitute the framework in which the following tasks are carried out:

a) Exchange information between competent authorities and with the European Banking Authority in accordance with Article 21 of Regulation (EU) No. 1093/2010 of 24 November 2010.

b) Agree on the voluntary attribution of tasks and voluntary delegation of responsibilities where appropriate.

c) Establish prudential examination programmes based on a risk assessment of the group, in accordance with Article 259.

d) Increase the efficiency of supervision by eliminating all duplication of unnecessary prudential requirements, specifically in relation to requests for information referred to in Article 246.

e) Apply consistently the prudential requirements laid down in Regulation (EU) No. 575/2013 of 26 June 2013, in all entities of a group of investment services companies, without prejudice to the options and discretions offered by European Union legislation.

f) Plan and coordinate supervisory activities, in collaboration with the competent authorities involved and, where appropriate, with central banks, in emergency situations or in anticipation of such situations, taking into account the work carried out in other forums that may be constituted in this field.

3. When the National Securities Market Commission holds the status of supervisor of an investment services company with branches considered significant in accordance with the criteria of Article 264, it shall also establish and chair a college of supervisors to facilitate the exchange of information referred to in Article 246.

4. The establishment and functioning of the colleges shall be based on provisions set down in writing and determined, after consultation with the affected competent authorities, by the National Securities Market Commission as the authority responsible for supervision on a consolidated basis or as the competent authority of the home Member State.

The National Securities Market Commission shall keep all members of the college fully informed, in advance, of the organisation of the college meetings, the main issues to be discussed and the issues to be considered.

The National Securities Market Commission shall also fully inform all members of the college regarding the actions adopted at the meetings or the measures implemented. The characteristics that such colleges must have may be developed by regulation, and their composition shall be determined by the National Securities Market Commission.

5. The National Securities Market Commission, as a member of a college of supervisors, shall collaborate closely with the other competent authorities that form it. The confidentiality requirements laid down in this law shall not prevent the exchange of confidential information between the National Securities Market Commission and the other competent authorities within the colleges of supervisors.

6. The establishment and functioning of colleges of supervisors shall not affect the rights and duties of the National Securities Market Commission set out in this law and its respective regulatory developments.

[Block 373: #a267]

Article 267. Joint decisions.

Within the framework of the cooperation referred to in Article 244, the National Securities Market Commission, as supervisor on a consolidated basis of a group, or as the competent authority responsible for the supervision of the subsidiaries of an EU parent investment services company or of an EU parent financial holding company or of an EU parent mixed financial holding company in Spain, shall do everything within its power to reach a joint decision on:

a) The application of Article 190.2 and Article 259.1 to determine the adequacy of the consolidated level of own resources held by the group in relation to its financial situation and risk profile and the level of own resources necessary for the application of Article 259.2 to each of the entities of the group of investment services companies and on a consolidated basis.

b) The measures to resolve any significant issues and important findings related to liquidity supervision.

The joint decision shall be adopted in accordance with the procedure provided for by regulation.

[Block 374: #a268]

Article 268. Disclosure obligations of the National Securities Market Commission.

1. The National Securities Market Commission shall periodically disclose the following information relating to the solvency regulations for investment services companies:

a) Aggregate statistical data on the fundamental aspects of the application of the prudential framework in Spain, including the number and nature of supervisory measures adopted in accordance with Articles 190, 196, 260 and 261 and the administrative sanctions imposed; all in accordance with the professional secrecy regime established in Article 248.

b) The general criteria and methods adopted to verify compliance with the provisions of Articles 405 to 409 of Regulation (EU) No. 575/2013, of 26 June 2013 .

c) A brief description of the outcome of the supervisory review and the description of the measures imposed in cases of non-compliance with the provisions of Articles 405 to 409 of Regulation (EU) No. 575/2013, of 26 June 2013 , on an annual basis, and without prejudice to the secrecy obligations established in Article 248.

d) The results of the stress tests carried out in accordance with Article 257 or Article 32 of Regulation (EU) No. 1093/2010, of 24 November 2010 .

When the European Banking Authority so determines, the information referred to in this paragraph shall be transmitted to this authority for subsequent publication of the result at the European Union level.

e) Other information to be determined by regulation.

2. The information published in accordance with paragraph 1 must be sufficient to allow a meaningful comparison of the approaches adopted by the National Securities Market Commission with those of the counterpart authorities of the different Member States of the European Union. The information shall be published in the format determined by the European Banking Authority and shall be updated periodically. It shall be accessible on the electronic headquarters of the National Securities Market Commission.

[Block 375: #a269]

Article 269. Information obligations of the National Securities Market Commission in emergency situations.

The National Securities Market Commission shall notify, as soon as possible, the Minister of Economy and Competitiveness, the remaining affected national or foreign supervisory authorities, the European Banking Authority and the European Systemic Risk Board of the emergence of an emergency situation, including a situation as defined in Article 18 of Regulation (EU) n.º 1093/2010, of 24 November 2010, and, in particular, in those cases in which there is an adverse development of the financial markets that may compromise market liquidity and the stability of the financial system of any Member State of the European Union in which investment services firms of a group subject to the consolidated supervision of the National Securities Market Commission have been authorised or in which significant branches of a Spanish investment services firm are established, as contemplated in Article 264.

[Block 376: #a270]

Article 270. Drawing up of guidelines in supervisory matters.

1. The National Securities Market Commission may draw up technical guidelines, addressed to the entities and persons subject to its supervision, indicating the criteria, practices or procedures it considers appropriate for compliance with securities market regulations. Such guidelines, which shall be made public, may include the criteria that the National Securities Market Commission itself will follow in the exercise of its supervisory activities.

2. To that end, the National Securities Market Commission may adopt as its own, and transmit as such, as well as develop the guidelines that, addressed to the subjects under its supervision, are approved by active international bodies or committees, relating to the criteria, practices or procedures convenient to promote the best compliance with the rules on the regulation and discipline of the securities markets and the supervision of their compliance.

[Block 377: #civ-3]

CHAPTER IV

General provisions on offences and sanctions

[Block 378: #a271]

Article 271. General matters.

1. Natural persons and entities to which the provisions of this Law apply, as well as those who hold, de facto or de jure, management or directorship positions in the latter, who breach rules on the regulation or discipline of the Securities Market shall incur administrative liability punishable in accordance with the provisions of this Chapter.

Credit rating agencies established in Spain and registered pursuant to Title III, Chapter I of Regulation (EC) n.º 1060/2009, of 16 September 2009, the persons involved in rating activities, the rated entities or related third parties, the third parties to which the credit rating agencies have subcontracted some of their functions or activities, and the persons related or connected in any other way with the agencies or with credit rating activities shall also incur administrative liability punishable in accordance with the provisions of this Chapter.

2. The following shall be considered as holding management or directorship positions in the entities referred to in the preceding paragraph, for the purposes of the provisions of this Chapter and subsequent ones, their directors or members of their collegiate management bodies, as well as their general managers and equivalent persons, understanding as such those persons who, de facto or de jure, perform senior management functions in the entity.

3. Whoever holds management or directorship positions in the entity shall be liable for very serious or serious offences when these are attributable to their wilful or negligent conduct.

Notwithstanding the provisions of the preceding paragraph, those who hold management or directorship positions in the entities shall be considered liable for the very serious or serious offences committed by the entities, except in the following cases:

a) When those who are members of collegiate management bodies have not attended the corresponding meetings for a justified reason or have voted against or recorded a dissenting vote in relation to the decisions or agreements that gave rise to the offences.

b) When such offences are exclusively attributable to executive committees, chief executive officers, general managers or equivalent bodies, or other persons with similar functions in the entity.

4. The rules on the regulation and discipline of the Securities Market shall be considered to be the laws and provisions of a general nature containing provisions specifically referring to the entities covered in Article 233.1.a) and b) or to the securities market-related activity of the persons or entities referred to in Article 233.1.b) and c) and which are mandatory for them. Among the aforementioned provisions shall be understood those approved by bodies of the State, of the Autonomous Communities that have been assigned competences in the matter, the regulations of the European Union and other rules approved by the institutions of the European Union that are directly applicable, as well as the Circulars approved by the National Securities Market Commission provided for in Article 21.

In particular, the following shall be considered rules on the regulation and discipline of the securities market:

a) Commission Regulation (EU) n.º 1031/2010, of 12 November 2010.

b) Regulation (EU) n.º 236/2012 of the European Parliament and of the Council, of 14 March 2012.

c) Regulation (EU) n.º 648/2012 of the European Parliament and of the Council, of 4 July 2012.

d) Regulation (EU) n.º 575/2013 of the European Parliament and of the Council, of 26 June 2013.

e) Regulation (EU) n.º 596/2014 of the European Parliament and of the Council, of 16 April 2014.

f) Regulation (EU) n.º 600/2014 of the European Parliament and of the Council, of 15 May 2014.

g) Regulation (EU) n.º 909/2014 of the European Parliament and of the Council of 23 July 2014.

h) Regulation (EU) n.º 1286/2014 of the European Parliament and of the Council of 26 November 2014.

i) Regulation (EU) n.º 2365/2015 of the European Parliament and of the Council of 25 November 2015.

j) Regulation (EU) n.º 2016/1011 of the European Parliament and of the Council of 8 June 2016.

k) Regulation (EU) n.º 2017/1129 of the European Parliament and of the Council of 14 June 2017.

l) The delegated or implementing regulations adopted by the European Commission in development or execution of the European rules on the regulation and discipline of the securities market.

Paragraph 4 is amended by art. 6.23 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Paragraph 4 is amended by final provision 9.19 of Royal Decree-Law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Letters d) and e) are added to paragraph 4 by art. único.73 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Latest update, published on 13/04/2021, in force from 03/05/2021.

Amendment published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 379: #a272]

Article 272. Criminal law precedence.

1. The exercise of the sanctioning power referred to in this law shall be independent of the possible commission of crimes or offences of a criminal nature.

2. Notwithstanding the provisions of the preceding paragraph, when criminal proceedings are being conducted for the same facts or for others whose separation from those sanctionable under this law is rationally impossible, the procedure shall be suspended in respect of the same until a final ruling is handed down by the judicial authority. Once the file is resumed, where applicable, the decision issued shall respect the assessment of the facts contained in said ruling.

[Block 380: #a273]

Article 273. Rules for initiation, instruction and sanctioning.

1. Competence for the initiation, instruction and sanctioning in the sanctioning procedures referred to in this chapter shall be subject to the following rules:

a) The initiation and instruction of files shall correspond to the National Securities Market Commission. The initiation of files, where it affects investment services firms authorised in another Member State of the European Union, shall be communicated to their supervisory authorities, so that, without prejudice to the precautionary measures and sanctions applicable under this law, they may adopt those they consider appropriate to bring the infringing conduct to an end or to prevent its repetition in the future.

b) The imposition of sanctions for very serious, serious and minor infringements shall correspond to the National Securities Market Commission. The National Securities Market Commission shall give a reasoned account to the Minister of Economy and Competitiveness of the imposition of sanctions for very serious infringements and, in any case, shall send him quarterly the essential information on the procedures in progress and the resolutions adopted.

When the infringing entity is a Spanish credit institution or a branch of a credit institution of a State that is not a member of the European Union, the report of the Bank of Spain shall be mandatory for the imposition of the corresponding sanction for serious or very serious infringements.

2. The period for resolving and notifying the resolution shall be one year, extendable in accordance with the provisions of articles 23 and 32 of Law 39/2015, of 1 October .

3. When the sanctioning competence corresponds to the Autonomous Communities, the competent bodies for the initiation, instruction and sanctioning shall be established in the organic rules that distribute competences in the internal sphere of the respective Autonomous Community.

[Block 381: #a274]

Article 274. Legislation applicable to the sanctioning procedure.

1. In matters of sanctioning procedure, Law 39/2015, of 1 October and Law 40/2015, of 1 October and their regulatory development shall be applicable, with the specialities set out in articles 108, 110 and 112 of Law 10/2014, of 26 June , as well as in this law and its regulatory development.

2. Likewise, in the exercise of the sanctioning power attributed to the National Securities Market Commission, the provisions of article 106 of Law 10/2014, of 26 June , shall be applicable to the entities included in article 233.1.a).

[Block 382: #a275]

Article 275. Enforceability of sanctions.

The resolutions imposing sanctions in accordance with the provisions of this law shall be enforceable when they bring the administrative proceedings to an end. In the same, where appropriate, the necessary precautionary provisions shall be adopted to guarantee their effectiveness until they are enforceable.

Amended by the sole article 74 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 383: #a276]

Article 276. Remission of sanctions.

1. The Minister of Economy and Competitiveness, following a report from the National Securities Market Commission, may remit, in whole or in part, or defer the payment of fines imposed on legal persons when they have come to be controlled by other shareholders after the infringement was committed, are involved in insolvency proceedings, or other exceptional circumstances arise that make compliance with the sanction in its own terms contrary to equity or detrimental to the general interest.

2. The provisions of the preceding paragraph shall in no case extend to sanctions imposed on those who held administration or management positions in said legal persons when the infringement was committed.

3. In no case shall there be grounds for remission or deferral if, in the event of transmission of shares of the sanctioned entity, a price has been involved or, once the insolvency situation has been overcome, the sanction could be met.

[Block 384: #ci-12]

CHAPTER IV bis

Communication of infringements

Added by the sole article 75 of Royal Decree-Law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 385: #a2-12]

Article 276 bis. Types and channels of communication of infringements.

1. Any person who has knowledge or well-founded suspicion of the commission of possible infringements or actual infringements provided for in this Law; in Law 35/2003, of 4 November , on Collective Investment Institutions; in Regulation (EU) No. 575/2013 of the European Parliament and of the Council, of 26 June 2013 as regards investment services companies; in Regulation (EU) No. 596/2014 of the European Parliament and of the Council, of 16 April 2014 ; in Regulation (EU) No. 600/2014 of the European Parliament and of the Council, of 15 May 2014 ; in Regulation (EU) No. 1286/2014 of the European Parliament and of the Council, of 26 November 2014 ; and in Regulation (EU) No. 2017/1129 of the European Parliament and of the Council, of 14 June 2017 ; may communicate it to the National Securities Market Commission in the form and with the guarantees established in this article.

2. Communications may be made:

a) In writing, in electronic or paper format,

b) orally, by telephone, which could be recorded,

c) through a physical meeting with the specialised staff of the CNMV; or

d) in any of the forms established by the holder of the Ministry of Economy and Business.

3. The CNMV shall enable the channels, technical means and personnel necessary to receive and manage the communications indicated in paragraph 1 in the most appropriate way to achieve the maximum usefulness of the information received in the detection and handling of infringements. The channels shall be adapted to the form in which the information is presented.

4. Before receiving the communication or, at the latest, at the time of receiving it, the CNMV shall provide the communicator with:

a) Basic information on the reporting of infringements, including, in particular, the possibility of anonymity and measures to protect identity, in the event that the person wishes to identify themselves, and

b) written acknowledgement of receipt of the information received at the postal or electronic address chosen by the person providing it, unless that person expressly requests otherwise or the acknowledgement would endanger the protection of their identity.

Section 1 is amended by art. 6.24 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Section 1 is amended by final provision 9.21 of Royal Decree-law 19/2018, of 23 November. Ref. BOE-A-2018-16036

Added by sole art. 75 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Amendment published on 24/11/2018, in force from 25/11/2018.

Amendment published on 29/09/2018, in force from 30/09/2018.

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 386: #a2-13]

Article 276 ter. Minimum content of communications.

1. The communications referred to in the preceding article may be anonymous or include the identification of the person making them. In any case, they must present factual elements from which at least a well-founded suspicion of infringement reasonably derives.

2. Within 20 days following receipt of the information, the CNMV shall determine whether or not there is a well-founded suspicion of infringement. If there is none, it shall require the person sending the information to clarify its content or supplement it with new information within a reasonable period in order to obtain it.

3. Once the period set for clarification or submission of new information has elapsed, without a well-founded suspicion being able to be determined, such circumstance shall be notified in a reasoned manner to the person sending the information.

4. In any case, the CNMV shall inform the person sending the communication of the initiation, where applicable, of sanctioning proceedings based on the reported facts or of the referral of the facts to other Authorities, within or outside Spain.

5. The CNMV's requests and communications with the person making an anonymous communication shall be carried out in such a way that anonymity is maintained in all cases, unless the reporting person expressly decides otherwise.

Added by sole art. 75 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 387: #a2-14]

Article 276 quater. Confidentiality guarantees.

1. The CNMV shall keep a register with all the information received through the channels indicated in article 276 bis.3. The register shall ensure the full confidentiality of the information received, with access limited exclusively to the specialised personnel responsible for the processing and management of these communications.

The communications received shall have no evidentiary value and may not be directly incorporated into judicial or administrative proceedings.

2. Any transmission of the communication, within or outside the CNMV, shall be carried out without revealing, directly or indirectly, the personal data of the reporting person, if known, or of the persons included in the communication, except in the following cases:

a) The personal data of the person allegedly infringing that are necessary for the performance of preliminary actions, the initiation, instruction and resolution of administrative sanctioning proceedings, or of judicial proceedings, which shall in any case have a level of protection equivalent to that of persons under investigation or sanction by the competent body;

b) the personal data of the reporting person when known and expressly requested by a competent judicial body of the criminal order in the course of investigative proceedings or criminal proceedings, when it constitutes an essential element for said proceedings; and

c) all personal data included in the communication that are necessary for authorities equivalent to competent national authorities in the scope of the European Union, after compliance with the requirements established in the community or national rules that are applicable, or of third States, provided that the level of protection of the confidentiality of personal data is equivalent to that in force in Spain.

Added by sole art. 75 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 388: #a2-15]

Article 276 quinquies. Protection in the workplace and contractual sphere.

1. The communication of any of the infringements referred to in article 276 bis.1:

a) Shall not constitute a violation or breach of the restrictions on disclosure of information imposed by contract or by any legal, regulatory or administrative provision that could affect the reporting person, persons closely linked to them, the companies they administer or of which they are the beneficial owner,

b) shall not constitute an infringement of any kind in the field of labour regulations by the reporting person, nor may it derive from it unfair or discriminatory treatment by the employer; and

c) shall not generate any right to compensation or indemnity in favour of the company to which the reporting person provides services or of a third party, even if the obligation of prior communication to said company or to a third party had been agreed.

2. The CNMV shall inform the reporting person precisely about the available legal remedies and procedures for protection against possible damages that could arise from any of the situations provided for in the preceding paragraph and in a way that allows them in practice to easily use said remedies and procedures. It shall also provide effective assistance by informing the reporting person of their rights, issuing, where appropriate, the corresponding certification of their status as a whistleblower to make it effective before the labor jurisdiction. Likewise, it shall provide the necessary means to assist the reporting person who requests it against real risks arising from the communication, which shall include, in particular, the accreditation of the existence, content and material value that may have derived from the communication.

Added by the sole article 75 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 389: #a2-16]

Article 276 sexies. Authorization to the holder of the Ministry of Economy and Business.

The holder of the Ministry of Economy and Business and, with their express authorization, the CNMV, may:

1. Establish the content of the information to be published by the CNMV on its website regarding the reporting of infringements.

2. Develop the specific procedure to be followed in the receipt and processing of communications, as well as the content of the basic information to be provided to the reporting person in accordance with article 276 bis.4.

3. Establish the characteristics and requirements of the channels for receiving information from communications in order to ensure their independence, security and confidentiality.

4. Establish the criteria, deadlines and indicators for evaluating the effectiveness of the communication system referred to in the preceding articles.

Added by the sole article 75 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Added text, published on 29/09/2018, in force from 30/09/2018.

[Block 390: #cv-3]

CHAPTER V

Very serious infringements

[Block 391: #a277]

Article 277. Responsible subjects.

The natural and legal persons referred to in article 271 are responsible subjects for very serious infringements, when they incur in the actions or omissions typified in this chapter.

[Block 392: #a278]

Article 278. Infringements for breach of the reservation of activity and the obligation to obtain required authorizations.

The following actions or omissions are very serious infringements:

1. The exercise, not merely occasional or isolated, by the entities listed in article 233.1.a).1.º and 2.º or by the management companies of investment guarantee funds of activities without authorization or, in general, unrelated to their corporate purpose.

2. Breach of the reservation of activity provided for in articles 144, 145, 146, 147 and 197 bis, as well as the performance by investment services and activities companies, data supply service providers or by any natural or legal person of activities for which they are not authorized, and the serious or repeated non-observance by an investment services company or by its agents, of the rules established under articles 146 and 147.

3. The breach by the entities listed in article 233.1.a).1.º, 2.º and 3.º of the obligations related, in each case, to the authorization, approval or non-opposition to their statutes, regulations, or with any other matter subject to the aforementioned regime, provided for in this law, its development norms or European Union Law.»

4. The establishment of an official secondary market, multilateral trading system or registration, clearing and settlement system for securities or central counterparty entities without having obtained any of the authorizations required in this law.

5. The breach by investment services and activities companies and by the entities referred to in the sixth additional provision of their authorization regime.

6. Obtaining authorization as an investment services company through false declarations or by another irregular means.

7. Obtaining authorization as a data supply service provider through false declarations or by another irregular means.

8. The performance of investment services or activities, as well as auxiliary services, under the free provision of services regime in another Member State of the European Union, by investment services and activities companies authorized in Spain, without having sent to the CNMV the communications referred to in article 166.

9. The establishment of a branch by a Spanish investment services and activities company in another Member State of the European Union, without having sent to the CNMV the notifications referred to in article 165.1.

Modified by the sole article 76 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

[Block 393: #a279]

Article 279. Infringements for breach of the obligations required for the correct functioning of the primary securities market and the trading of financial instruments in the secondary securities markets.

The following actions or omissions are very serious infringements:

1. The placement of issues referred to in article 35 without complying with the requirement of intervention of an authorized entity provided for in said provision, without adhering to the basic advertised conditions, omitting relevant data or including inaccuracies, falsehoods or data that induce error in said advertising activity.

2. The carrying out of public offers for sale or subscription or the admission to trading without complying with the requirements of articles 33.2, 36.1, 76 or 77, the placement of the issue without adhering to the basic conditions established in the prospectus, in the event that said document must be prepared in accordance with the provisions of Regulation (EU) No. 2017/1129, of 14 June 2017, or the omission of relevant data or the inclusion of inaccuracies, falsehoods or data that induce misleading in said document, when, in all these cases, the amount of the offer or of the admission, or the number of investors affected, are significant.

3. The admission of financial instruments to trading in the official secondary markets by their governing companies without the prior verification, contemplated in article 76, as well as their suspension or exclusion from trading by agreement of the governing companies in breach of the provisions of articles 80, 81 and 82.

4. The breach, not merely occasional or isolated, by the entities listed in article 233.1.a).1.º and 2.º of the rules governing said markets or systems, including their corresponding regulations, or of the rules governing their own activities.

5. The non-issuance by the members of the official secondary markets or of the multilateral trading systems of the documents certifying the operations referred to in article 75.1.c, or the failure to deliver them to their clients, unless they are merely occasional and isolated, as well as the circumstance of not reflecting in those their real terms.

6. The non-merely occasional breach of the obligations provided in article 71.3.

7. The breach of the obligations established in the following articles of Regulation (EU) No. 2017/1129, of the European Parliament and of the Council, of 14 June 2017, when the proper functioning of the primary securities market has been seriously jeopardized:

a) articles 3, 5 and 6 on the obligation to publish a prospectus, the obligation to publish a prospectus in the event of subsequent resale of securities and on the information that the prospectus must contain,

b) article 7, paragraphs 1 to 11, on the obligation, content and composition of the summary note of the prospectus,

c) article 8 on the information that the base prospectus must contain,

d) article 9 on the obligations relating to the universal registration document,

e) article 10 on the obligations of the issuer when the prospectus consists of separate documents,

f) article 11 paragraphs 1 and 3 on the responsibilities inherent to the prospectus,

g) article 14 paragraphs 1 and 2 on the obligations under the simplified disclosure regime for secondary issues,

h) article 15.1 on the obligations relating to the growth union prospectus,

i) article 16 paragraphs 1, 2 and 3 on the obligations to describe the risk factors described in the prospectus,

j) article 17 on the obligations relating to the final price of the offer and the amount of securities offered,

k) article 18 on the obligations in case of omission of information in the prospectus,

l) article 19 paragraphs 1 to 3 on the conditions for the incorporation of information by reference in the prospectus,

m) article 20.1 on the obligation of approval of the prospectus,

n) article 21 paragraphs 1 to 4 and 7 to 11 on the publication of the prospectus,

ñ) article 22 paragraphs 2 to 5 on the obligations regarding advertising relating to the offer of securities or admission to trading,

o) article 23 paragraphs 1, 2, 3 and 5 on the supplement to the prospectus,

p) article 27 on the language regime.

q) the lack of cooperation or contempt with an investigation or an inspection or a request in accordance with article 32 on the powers of the competent authorities.

Paragraph 2 is amended and 7 is added by art. 6.25 of Law 5/2021, of 12 April. Ref. BOE-A-2021-5773

Select wording:

Last update, published on 13/04/2021, in force from 03/05/2021.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 394: #a280]

Article 280. Infractions relating to the public offer of acquisition.

The following actions or omissions are very serious infractions:

1. The breach of the obligations established in articles 128 to 133, and 137 and in the regulations issued under the provisions of these articles. In particular:

a) The breach of the obligation to present a public offer of acquisition of securities; its presentation outside the maximum established period or with essential irregularities that prevent the National Securities Market Commission from considering it presented or authorizing it; or the carrying out of the public offer without the due authorization.

b) The lack of publication or of remission to the National Securities Market Commission of the information and documentation that must be published or sent to it, as a consequence of actions that oblige the presentation of a public offer of acquisition of securities, in the course of the same or once finalized, when the information or documentation affected is relevant, or the amount of the offer or the number of investors affected is significant.

c) The publication or supply of information or documentation relating to a public offer of acquisition with omission of data or with inclusion of inaccuracies, falsehoods or data that induce misleading, when the information or documentation affected is relevant, or the amount of the offer or the number of investors affected is significant.

2. The breach by the administration and management bodies of the obligations established in article 134 and in its regulatory development.

3. The breach of the obligations established in articles 82 and 135 and in their regulatory development.

Upload

[Block 395: #a281]

Article 281. Infringements relating to compensation, settlement and securities registration systems.

The following actions or omissions are very serious infringements:

1. The failure by the members of central counterparty entities to fulfil their obligations regarding the contribution of guarantees when the failure endangers the risk management of the central counterparty entities, except when such failure is a consequence of their insolvency or bankruptcy situation.

2. The failure, by the members of official secondary markets and the members of multilateral trading systems, to fulfil the obligations referred to in Article 93.1 and Article 328.4 respectively or their inadequate coordination with the central counterparty entities and their members, when such conduct is not merely occasional or isolated.

3. The failure by central securities depositories to fulfil the obligations established in Article 115, when such conduct is not merely occasional or isolated.

4. The failure by central securities depositories and by entities participating in registration systems to comply with the rules on securities registration of Title I, Chapter II and Title IV, Chapter I, when it causes patrimonial damage to a plurality of investors.

5. The failure by official secondary markets, multilateral trading systems, central counterparty entities and central securities depositories as well as their respective members and participating entities to fulfil the obligations established in Article 116.1, when it is not a merely occasional or isolated failure or when it seriously affects the operation of the information system referred to in that Article.

6. The infringement of the prohibition established in Article 15.4 by the members of official secondary markets, multilateral trading systems and the entities responsible for accounting records, as well as the keeping, by the latter, of accounting records corresponding to securities represented by book entries with delay, inaccuracy or another substantial irregularity.

7. The failure by entities participating in systems managed by central securities depositories or in other compensation and settlement systems of official secondary markets or multilateral trading systems to comply with the rules governing their relations with the corresponding central accounting records.

8. The serious or repeated failure by the central counterparty, compensation and settlement systems existing in Spanish territory to recognise the right of investment services and activities firms and credit institutions of other Member States of the European Union to access them under the terms provided in Article 113.

Paragraph 8 is added by the sole article.77 of Royal Decree-law 14/2018, of 28 September. Ref. BOE-A-2018-13180

Select wording:

Last update, published on 29/09/2018, in force from 30/09/2018.

Original text, published on 24/10/2015, in force from 13/11/2015.

Upload

[Block 396: #a282]

Article 282. Infringements for breach of transparency and market integrity obligations.

The following actions or omissions are very serious infringements:

1. The failure to comply with the consolidation obligation set out in Article 258.

2. The failure by the entities referred to in Articles 118 to 122, 241 and 258 to comply with the obligation to submit their annual accounts and individual and consolidated management reports to the review defined in Article 118 by the accounts auditor; the failure to comply with the obligations to submit the regulated information provided for in Articles 118 to 122, when there is an interest in concealment or serious negligence, taking into account the relevance of the communication not made and the delay incurred, as well as the supply to the National Securities Market Commission of regulated financial information with inaccurate or untruthful data, or of misleading information or information that omits relevant aspects or data.

3. The failure to observe the duty of information provided for in Articles 123, 125, 126 or in Article 19 of Regulation (EU) No. 596/2014, of the European Parliament and of the Council, of 16 April 2014, when there is an interest in concealment or serious negligence, taking into account the relevance of the communication not made and the delay incurred.

4. Failure to publish the required information thereby breaching Article 431.1 to 3 or Article 451.1 of Regulation (EU) No. 575/2013, of 26 June, as well as the publication of such information in an incomplete or inaccurate manner.

5 to 8. (Repealed).

9. The failure, not merely occasional or isolated, by investment services and activities firms, the governing bodies managing a trading venue or any other entity or person to comply with the position limits on the volume of a net position in commodity derivatives established in accordance with Article 85.

10. The failure, not merely occasional or isolated, by investment services and activities firms and the governing bodies managing a trading venue to establish and apply the position management controls referred to in Article 85 or the communication and classification obligations established in Articles 86 to 88.

11. The non-merely occasional or isolated breach of the obligations of information, of transmission and conservation of data, and of information for the purposes of the volume limitation mechanism and the obligation to negotiate derivatives, imposed on APAs and PICs in Commission Delegated Regulation 2017/577 of 13 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the volume limitation mechanism and information for the purposes of transparency and other calculations.

12. The breach of the obligations established in Article 22.2 of Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014, where the transparency and integrity of the market have been seriously jeopardised, on the storage of data relating to information for the purposes of transparency and other calculations by APAs and PICs.

13. The failure to comply with the duty of information or notification provided for in Articles 109, 111, 112 or in Article 19 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014, where there is an interest in concealment or serious negligence, taking into account the relevance of the communication not made and the delay incurred.

14. Failure to publish the required information, thereby breaching Article 431.1 to 3 or Article 451.1 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June, as well as the publication of such information in an incomplete or inaccurate manner.

15. The breach of the provisions of Article 15 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014, where any of the following circumstances concur:

a) the conduct produces a significant alteration of the price,

b) the amount of the funds used or the volume or value of the financial instruments used in the commission of the infringement is relevant, or

c) the actual or potential profit or the losses avoided as a consequence of the commission of the infringement is relevant.

16. The breach of any of the prohibitions established in Article 14 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014, where any of the following circumstances concur:

a) the amount of the funds used or the volume or value of the financial instruments used in the commission of the infringement is relevant,

b) the actual or potential profit or the loss avoided as a consequence of the commission of the infringement is relevant, or

Lineage: No known changes

Timeline

Similar documents from other regulators