The regulation, approved with a great consensus, unifies the legal framework in a single text and adapts it to the new technological and economic realities so that the Spanish securities markets continue to stand out for their competitiveness, transparency and investor protection.
The Congress of Deputies has approved with great consensus the Securities Markets and Investment Services Law, which improves the regulation of capital markets and increases their competitiveness.
The new Law improves the regulation of the securities markets, modernizing their operations and increasing their competitiveness in order to enhance their capacity to finance the economy in a transparent and efficient manner, strengthening the supervisory regime applicable to investment services companies and reinforcing the level of protection for savers and customers of financial services.
The new regulation replaces the previous recast text dating back to 2015 and adapts the financial legal framework to the new technological and economic realities, such as digitalization, new instruments and financing markets for SMEs (such as the BME Growth market) and new forms of listing. At the same time, it incorporates in a single text the EU directives and measures necessary to implement recently approved European regulations.
The parliamentary process has improved some aspects related to investor protection, combining advances in the digitalization of securities markets by allowing the tokenization of negotiable securities, with the strengthening of mechanisms to ensure the appropriate use of distributed registration technologies by specialized entities.
Measures to improve the ability of securities markets to finance Spanish companies.
The Law includes measures to improve the regulation of the securities markets, with the aim of improving the non-bank financing capacity of companies and increasing investor protection.
To this end, certain procedures are simplified and redundant administrative burdens are eliminated to facilitate the attraction of investments.
To this end, the process of issuing fixed-income securities is simplified, the CNMV fees payable by fixed-income issuers are reduced and the elimination of certain redundant reporting obligations in the securities clearing and settlement process is proposed. In this way, national regulations are brought into line with EU regulations and those of the countries around us.
Improvements are also established in the area of the BME Growth market, by providing for the application to the SME growth segment of the takeover bid regime, which will allow shareholders to receive a proportional control premium in the event of a takeover bid for the listed SME, which will improve the non-bank financing of these companies.
Likewise, the scope is extended to include companies whose debt issues in a fiscal year are less than 50 million euros, increasing the possibilities of being listed in this market and therefore improving the financing of companies.
In addition, the changes recently approved in the MIFID II Directive are incorporated into Spanish regulations as a matter of urgency, with the aim of ensuring that investment services favor the recapitalization of European companies and facilitate investments in the real economy.
To this end, the reform adjusts the information requirements and obligations which, in the current context, may be redundant, in order to facilitate the channeling of savings towards financing, while also safeguarding the protection and interests of investors.
Measures to improve investor protection
The standard modernizes the regulation and advances in the incorporation of European regulations to meet the challenges arising from the digitalization process. In this area, the necessary provisions are established to apply in Spain the European Regulation on cryptoasset markets immediately after its entry into force, by providing the CNMV with the necessary powers to guarantee investor protection and financial stability in this area.
Infringements and penalties are included, which will enable the CNMV to act in the event of non-compliance with the regulation when it enters into force. In this way, the CNMV will be able to sanction breaches of the obligations and requirements of crypto-assets that are not financial instruments and that are presented as investment objects.
In addition, any cryptoasset that is a financial instrument, i.e. financial instruments represented by means of distributed registration technologies, is included in the scope of application of the rule.
The draft Law includes the conditions and obligations that must be fulfilled in order to incorporate and register cryptoassets subject to securities market regulations. These provisions will also allow the application of the Regulation of the pilot regime for the use of distributed registry technology (blockchain) in securities market infrastructures, in order to be able to use this technology for transactions with tokenized shares and bonds for five years and without exceeding a certain volume of activity.
Secondly, a reform of the Capital Companies Act is incorporated to guarantee the protection of investors in listed companies with purpose for acquisition (those known as SPACs), guaranteeing the conditions under which the repayment of the capital invested by shareholders is carried out.
The purpose of these vehicles is to favor the IPO of companies, contributing to the diversification of sources of financing, especially for companies that are growing or in their early stages of development, and also reducing their dependence on bank credit.
Thirdly, the incorporation of Directive 2019/2034, on the prudential regime for investment services firms (ESI) improves the functioning of these firms and incorporates specific solvency obligations for these entities.
The regulation establishes a specific prudential supervisory regime for these companies, adapting it to the particularities of their business model and taking into account the principle of proportionality.
In addition, the CNMV is granted powers to establish the applicable regime according to the size, nature, scale and complexity of the activities of the ESI. A more flexible regime is also contemplated for very small companies that do not entail systemic risk, while maintaining investor protection.
In order to recognize the particularities of the provision of advisory services and to guarantee its continuity with full guarantees for investors, a regime for financial advisory firms at the national level is established. These companies will be able to maintain the same requirements as at present, although they will be required to join the Investors’ Guarantee Fund, with a proportional contribution system adapted to their level of risk (lower than in the provision of other services), which will be specified in the implementing regulations of the law.