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I

According to the already classic definition contained in Article 1 of the Royal Legislative Decree 1298/1986 of 28 June on the Adaptation of the Law in force in the field of Credit Entities to that of the European Communities, the peculiar the nature of these credit institutions derives from their form of collection of liabilities, consisting of ' receiving funds from the public in the form of a deposit, loan, temporary disposal of financial assets or other similar assets that bear the obligation to its refund '. The application of such liabilities "on their own account for the granting of credits or similar operations" is the other side of the currency of their financial intermediation work, but is not exclusive to credit institutions, despite the name that is your own.

On the other hand, credit institutions have a key role in the economy, in so far as they facilitate the circulation of credit to other sectors of productive activity and to citizens. This aspect, in addition to the complexity of the financial system and the fact that some individually considered entities have systemic importance due to their size and the relationships they maintain within the sector, requires effective and flexible procedures to ensure the stability of the financial system, with the least possible cost to society as a whole.

These peculiarities of credit institutions require that any measure of supervision or regulation of the credit institutions is primarily aimed at giving security to the public of which the entity captures its liabilities, and thereby preserving the stability of the financial system.

In turn, these needs justify that certain situations of temporary infeasibility of credit institutions should be overcome by the injection of public funds. The main purpose of these injections is to safeguard the savings and deposits of all those customers who otherwise, in case such support is missing and which should be transferred without further to the liquidation of the credit institution, could lose an important part of their heritage.

Once the need for public financial support has been accepted in certain cases, it is necessary that the rules for regulating them keep the necessary balance between the protection of the credit institution's client and the The Commission has been able to take the necessary steps to ensure that the Commission is able to take the necessary steps to ensure that the European Parliament is able to take the necessary steps. The best balance is achieved when the injected public funds can be recovered within a reasonable time by the benefits generated by the supported entity.

For all of the above reasons, public authorities should provide a determined, albeit balanced, support for the viability of credit institutions and should regulate the form and cases in which such support occurs, which implies necessarily a modulation of the principles of universality and pars conditio creditorum governing insolvency proceedings.

There are numerous occasions in which certain transitional weaknesses of credit institutions can be overcome by the injection of public funds, thus avoiding the liquidation of the institution and the mere division of the asset between the liability and the proportional loss-taking among all creditors. These are the assumptions of restructuring of credit institutions.

There are also other occasions in which the definitive infeasibility of credit institutions should not be resolved simply by means of the said division, but it is necessary to segregate the healthy parts of the institution, and even the most disadvantaged, in order to ensure that the application of the ordinary insolvency proceedings is carried out only in respect of the remainder, if any. In such cases, we are faced with the assumptions of resolution, true neologism in our legal system, but it clearly expresses what is intended: to solve in the best possible way a situation of infeasibility of a credit.

Finally, there are other assumptions in which the difficulties experienced by credit institutions are much milder than the previous ones and can be corrected by certain measures, the basic purpose of which is to is to ensure that the credit institution reworks its stability and fully achieves all its regulatory requirements, avoiding the need to inject public funds or doing so only in an exceptional and transitory manner. This would be the case for early action scenarios.

On this triple distinction (early action, restructuring and resolution) rests the structure of the actual decree-law, aimed at regulating in a clear and effective manner each of these cases, the instruments and measures that they can be adopted in respect of each of them, and the effects of such instruments and measures.

II

All of the above has been expressed with particular intensity in the current financial crisis, which has affected credit institutions in such a significant way, and has highlighted the need for a framework to be established. robust and effective banking crisis management, so that the public authorities have the right instruments to carry out the restructuring and the orderly resolution, where appropriate, of credit institutions that are in difficulty.

There are numerous initiatives and actions that have been carried out in many areas in recent years, aimed precisely at promoting an adaptation of the restructuring and resolution mechanisms to the new ones. needs detected in the wake of the economic crisis.

In October 2011, within the framework of the G-20, the Financial Stability Board approved the document "Fundamental Elements for the Effective Resolution Regime of Financial Institutions", in which the aspects are defined essential for the establishment of an appropriate system for the resolution of institutions. The purpose of this document is to promote a legal and operational framework to facilitate the authorities ' restructuring or resolution of financial institutions in an orderly manner without exposing the taxpayer to the assumption of losses arising from the support measures, and ensuring the continuity of the entity's vital elements. It also provides for a number of resolution instruments which, as agreed by the Board, should be made available to the resolution authorities of the States.

In a similar vein, the International Monetary Fund's reports on the Spanish financial system, published throughout this year in the context of the Financial System Evaluation Program, at the time they value As a positive step in the operation of the Spanish institutional restructuring architecture, they detect the possibility of improvements and suggest that a set of restructuring instruments be made available to the public authorities. resolution to enable them to deal with potential banking crisis situations.

Already at the level of the European Union, steps have been taken to establish a common framework for the resolution of financial institutions to extend the instruments of resolution that the competent authorities have, and to establish coordination mechanisms between the authorities of the Member States. The overall nature of the financial system, and in particular of the credit activity, justifies it.

On 6 June this year, the European Commission launched a proposal for a directive establishing a framework for the rescue and resolution of credit institutions and investment firms, which contains a broad catalogue of measures to be taken, in a first instance, to prevent a credit institution from reaching a situation of infeasibility which would put at risk the stability of the financial system, and, in a second instance, to proceed to the the orderly resolution of non-viable entities. All this with the aim of minimising the risk to financial stability, and under the principle that it is the shareholders and the creditors who, in the first place, must bear the costs of the resolution.

At the time of drafting the actual decree-law, all these initiatives have been taken into account, as could not be otherwise, in such a way that their content takes up a large part of the recommendations contained in them, and implies a substantial reform of the Spanish scheme for restructuring and resolution of existing credit institutions to date.

In any case, at the moment when the work carried out in the international forums is advanced and, especially, when a final text of the directive on rescue and resolution of the European Union is agreed at the level of the European Union credit institutions, this standard shall be adapted to the new rules.

III

The approval of this rule is part of the program of assistance to Spain for the recapitalization of the financial sector, which our country has agreed within the Eurogroup and which has been translated, among others. documents, in the approval of a Memorandum of Understanding. With this real decree-law, it is appropriate to comply with those measures that are scheduled to be adopted in August of this year.

First, the regime for the restructuring and resolution of credit institutions is established, strengthening the powers of intervention of the Fund for Banking Restructuring (FROB).

Together with this, we include exercises of subordination of liabilities on a voluntary basis and compulsory for those entities for which a restructuring or resolution procedure has been opened.

Finally, the possibility of constituting a management company for assets from bank restructuring is envisaged, which will be responsible for the management of the problem assets to be transferred by the banks. credit institutions.

In addition, the fulfillment of some measures that the Memorandum of Understanding provides for later dates has been brought forward in this royal decree-law, which is due to different reasons. Firstly, the inclusion of these measures makes it easier to set up a homogeneous and coherent regulatory system, considering it inappropriate, for systematic reasons, that its regulation should be made in separate instruments. On the other hand, its entry into force in accordance with the ordinary legislative procedures within the prescribed time-limits is equally difficult to implement, and it seems advisable to include them in a single royal decree rather than approve several with Successive character. Finally, even if the measures are not due until later dates, the inclusion in this royal decree-law allows the recipients to start preparing their application. In accordance with these criteria, the following measures have been introduced, inter alia

The organizational structure of the FROB is modified to avoid conflicts of interest generated by the participation of the private sector in the Rector Commission, through the Credit Entities Deposit Guarantee Fund.

Measures are included to improve protection for retail investors who subscribe to financial products not covered by the Credit Entities Deposit Insurance Fund.

Finally, the requirements and the definition of principal capital with which the consolidable groups of credit institutions as well as the non-integrated entities in a consolidable group are to be met are modified. a single requirement of nine per cent of the risk-weighted exposure amounts to be met as of 1 January 2013.

The package of measures provided for in this royal decree represents an extraordinary and unprecedented strengthening of the mechanisms with which the Spanish public authorities will be responsible for the strengthening and consolidation of our financial system, providing them with efficient instruments to ensure the proper functioning of the credit sector.

IV

Pointed out the above, it is convenient to pass on to analyze the most novel or significant aspects of this royal decree-law, taking into account the structuring by chapters of the norm.

Chapter I contains general provisions, a reference to the object of the rule and definitions of the most relevant concepts used in the actual decree-law.

In particular, the term "resolution" is defined due to the novelty of the use of this concept in our legal system, which has traditionally opted for the concept of restructuring. This new term has been introduced for two fundamental reasons. Firstly, because the proposal for a European directive on the subject, and the reference documents at international level, use the expression 'resolution'. Second, because the real decree-law distinguishes between restructuring and resolution procedures, referring the latter to the processes in which the credit institution is not viable and it is necessary to proceed to its ordered extinction with the largest guarantees for depositors and for financial stability.

On the other hand, this chapter introduces a number of objectives and principles for the orderly restructuring and resolution of credit institutions that will have to inform the whole process, such as avoiding harmful effects for the stability of the financial system, ensure the most efficient use of public resources, or ensure that shareholders and subordinate creditors are the first to take losses taking into account the order of precedence set.

Chapter II is devoted to the procedure for early action, in line with the proposal for a European Commission directive that we are referring to. The entities that will be required to take these measures will be those that do not comply or are reasonable not to meet the solvency requirements, but it is foreseeable that they will be able to overcome this difficulty by their own means or through support. exceptional financial by means of instruments convertible into shares.

Since early action measures are clearly integrated within the supervisory functions that correspond to the Banco de España, it is this institution that has a clear role in this initial phase, and therefore, it is for it to decide on which entities to adopt the early intervention measures, for which an action plan should be drawn up to alleviate the situation of weakness in solvency.

During this phase the Banco de España may require the replacement of members of the board of directors, in the event of a significant deterioration in the situation of the entity.

Chapters III and IV regulate the processes of restructuring and orderly resolution of credit institutions, being the fundamental criterion for the application of one or the other of the entity's viability.

In both processes, it is the FROB that assumes the responsibility of determining the appropriate instruments to carry out them in an orderly manner and at the lowest possible cost to the taxpayer. This does not mean an alteration of the supervisory powers, which will continue to correspond to the Banco de España, which justifies its intervention in the restructuring and resolution procedures.

Thus, the resolution process will apply to entities that are not viable, while the restructuring process will be applied to entities that require public financial support to ensure their viability, but which have the ability to return such financial support within the time limits provided for each support instrument in the actual decree-law itself.

In both cases, it is envisaged to draw up a plan, either for restructuring or resolution, to be approved by the Banco de España, as well as a specific regulation of the instruments of restructuring or resolution that may be applied.

With regard to the resolution instruments, the proposal for a directive on the matter has been taken into account again, including the sale of the business of the entity to a third party, the the transfer of assets or liabilities to a bridge bank, or the transfer of assets or liabilities to an asset management company. In the case of the opening of the resolution process, the replacement of the administrative body must be carried out.

Chapter V provides for financial support instruments which may be granted to credit institutions, including, inter alia, recapitalisation instruments, either through the acquisition of ordinary shares or contributions to social capital or instruments convertible into ordinary shares or contributions to social capital. This chapter introduces provisions on the calculation of the economic value of the institution and on the scheme of the acquisition by the FROB of the recapitalisation instruments.

In any event, the application of Chapter V shall be carried out taking into account the principle of the minimisation of public resources in the processes of restructuring and resolution of credit institutions.

Chapter VI provides for the possibility for the FROB to order the credit institution concerned to transfer the problematic assets to an asset management company. Thus, the first of the articles of this chapter refers to the delimitation of this power and refers in a generic way to the basic characteristics that will define it to this society that would be constituted as an anonymous society. In a later article, some clarifications are made on the regime for the transmission and valuation of the assets transferred, referring to further development of the specific regulation of these extremes.

The asset management company is constituted as an instrument that will allow the concentration of those assets considered as problematic, facilitating their management.

Chapter VII introduces provisions on the management of hybrid instruments of capital and subordinated debt which clarify the question of who is to finance the restructuring and resolution measures of a banking institution. The principle of the fact that shareholders and creditors have to bear the costs of restructuring or resolution, rather than the taxpayer, by virtue of an obvious principle of liability and risk-taking.

In line with this, voluntary and mandatory mechanisms for the management of hybrid capital instruments are established, which will affect both the preference shares and the subordinated debt. It is up to the FROB to agree on the application of these actions and to implement them in the terms that the royal decree allows, valuing the suitability of their application.

It is appropriate to explain at this point that, in accordance with the principle of liability and risk-taking, the fact that a credit institution may have received financial support for reasons of urgency prior to adoption expresses a decision on its restructuring or resolution, will not prevent the FROB, subsequently, from imposing actions on the management of hybrid instruments of capital and subordinated debt, with the aim of these measures, as we have just mentioned, that the cost to be borne by the taxpayer is as low as possible.

Chapter VIII establishes the legal regime of the FROB, constituting one of the most important novelties in this respect the modification of the composition of the governing body of the fund. In the first place, the participation which the credit institutions had in accordance with the previous regulations was abolished in representation of the Deposit Guarantee Fund of Credit Entities, given the possibility of creating situations of conflict of interest, and the figure of a Director-General has been created, which will hold the executive powers of the Fund. In addition, rules on cooperation and coordination are introduced between the FROB and other competent, national or international authorities, in terms similar to those already existing for institutions such as the Banco de España.

This chapter also contains a reference to the powers of the FROB in the resolution processes, which may be of a commercial or administrative nature; and a reference is made to the executive character of the measures resolution, which will not require the consent of the general meeting or assembly, or of the shareholders, for its implementation. The public interest in the restructuring and resolution processes, which seeks to safeguard the stability of the financial system, justifies the implementation of these measures of resolution.

Chapter IX finally introduces provisions relating to the procedural arrangements for challenging the decisions taken by the FROB. It is part of the distinction between the decisions and agreements adopted by the FROB in the exercise of commercial powers, which will be contested in accordance with the rules laid down for the challenge of social agreements with the specific features of the this royal decree-law, and the acts dictated in the exercise of its administrative powers, which shall be challenged in a judicial-administrative manner with the specialties provided for in this chapter.

Finally, in its additional and final provisions, the real decree-law introduces other types of measures of a heterogeneous nature, but also of importance, required by the Memorandum of Understanding, for the improvement of the functioning of the financial market. Thus, on the one hand, investor protection measures are envisaged, so that the actual decree-law gives decisive responses in relation to the marketing of hybrid instruments and other complex products for the retail client, among which Preference shares are included in order to avoid any irregular practices that have occurred during the last few years.

In addition, the control powers that the National Securities Market Commission has in relation to the marketing of investment products by the entities, especially in relation to the aforementioned, are intensified. complex products.

On the other hand, the real decree-law contributes to a clear separation between the functions attributed to the Banco de España and the Ministry of Economy and Competitiveness regarding the authorization and sanction of the credit, transferring to the Banco de España those functions that previously corresponded to the Ministry of Economy and Competitiveness.

Another aspect of relevance contained in this royal decree is the modification of the principal capital requirements with which the consolidable groups of credit institutions and non-integrated entities must comply. in a consolidated group that establishes the Royal Decree-Law 2/2011, of February 18, for the strengthening of the financial system. In particular, the current requirements of eight per cent in general, and ten per cent for entities with difficult access to capital markets and for which wholesale funding predominates, will be transformed into a single market. a requirement of nine per cent to be met from 1 January 2013. Not only does the level of demand for principal capital be modified, but also its definition, accompanying it, both in its computable elements and in its deductions from that used by the European Banking Authority in its recent financial year recapitalization.

V

The notes of extraordinary and urgent need to accompany the approval of a royal decree-law are evident in this rule, since it is intended to comply with the measures envisaged in the the Memorandum of Understanding that is part of the financial assistance plan requested by our country and which, to a large extent, must be approved by the end of August of this year. According to this document, the measures that fundamentally reflect this royal decree must be approved by the end of August of this year.

Considering that the Memorandum was agreed at the end of last July and given the complexity of the rules to be adopted, it is clear that the ordinary procedure for the approval of legal standards will be followed, using the urgency procedure, it would not have been possible to approve the measures contained in this royal decree-law according to the schedule, so that there would have been a breach of the obligations assumed in the Memorandum.

On the other hand, the situation of difficulty in the financial sector in which we are, requires that the public authorities be able to have as soon as possible all the necessary instruments to complete the process of orderly restructuring of the banking sector that is taking place in Spain, while safeguarding overall interests.

In its virtue, making use of the authorization contained in article 86 of the Spanish Constitution, on the proposal of the Minister of Economy and Competitiveness and after deliberation of the Council of Ministers at its meeting of the 31st of August 2012,

DISPONGO:

Chapter I. General provisions.

Article 1. Object.

Article 2. Definitions

Article 3. Objectives of the restructuring and resolution.

Article 4. Principles of restructuring and resolution.

Article 5. Assessment.

Chapter II. Early action.

Article 6. Conditions for early action.

Article 7. Action plan.

Article 8. Content of the action plan.

Article 9. Early action measures.

Article 10. Provisional replacement of the administrative body as an early action measure.

Article 11. Follow-up of the action plan and information to the Banking Ordered Restructuring Fund.

Article 12. Completion of the early acting situation.

Chapter III. Restructuring.

Article 13. Conditions for restructuring.

Article 14. Restructuring plan.

Article 15. Instruments for restructuring.

Article 16. Content of the restructuring plan.

Article 17. Follow-up of the restructuring plan and information to the Banking Ordered Restructuring Fund.

Article 18. Completion of the restructuring process.

Chapter IV. Resolution.

Section 1. Quotes for resolution.

Article 19. Conditions for resolution.

Article 20. Concept of unviable entity.

Section 2. First Resolution Procedure.

Article 21. Opening of the resolution process.

Article 22. Replacement of the administrative organ as a resolution measure.

Article 23. Resolution Plan.

Article 24. Preliminary measures

Section 3. Specific Resolution Instruments.

Article 25. Resolution tools.

Article 26. Sale of the entity's business.

Article 27. Bridge Bank.

Chapter V. Financial support instruments.

Article 28. Financial support instruments.

Article 29. Recapitalisation instruments.

Article 30. Economic value of the institution and payment of the recapitalisation instruments.

Article 31. Ordinary shares or contributions to social capital.

Article 32. Instruments convertible into ordinary shares or contributions to share capital.

Article 33. Special arrangements for the subscription or acquisition by the FROB of the recapitalisation instruments.

Article 34. Conversion and divestiture of convertible instruments into ordinary shares or contributions to share capital.

Chapter VI. Asset management company.

Article 35. Asset management company.

Article 36. Regime of the transmission of assets.

Chapter VII. Management of hybrid instruments.

Section 1. Shares of the management of hybrid instruments of capital and subordinated debt.

Article 37. Shares in the management of hybrid instruments of capital and subordinated debt.

Article 38. Types of equity management actions of hybrid capital and subordinated debt instruments.

Article 39. Market value.

Article 40. Disclosure of shares in the management of hybrid instruments of capital and subordinated debt.

Section 2. Shares in the management of hybrid instruments of capital and debt subordinated by the banking orderly restructuring fund.

Article 41. Management of hybrid instruments of capital and debt subordinated by the Banking Ordered Restructuring Fund.

Article 42. Content of the management actions of hybrid instruments of capital and subordinated debt as agreed by the FROB.

Article 43. Assessment criteria.

Article 44. Approval of the management of hybrid instruments of capital and subordinated debt.

Article 45. Advertisement and date of effects of the FROB agreement.

Article 46. Modification of a management action of hybrid instruments of capital and subordinated debt.

Article 47. Rights of investors affected by a management of hybrid instruments of capital and subordinated debt.

Article 48. Rights of third parties.

Article 49. Sanctioning regime.

Chapter VIII. Bank Orderly Restructuring Fund.

Section 1. Nature and legal status.

Article 50. Bank Orderly Restructuring Fund.

Article 51. Funding.

Article 52. Government of the Bank Ordered Restructuring Fund.

Article 53. Director General of the Bank Ordered Restructuring Fund.

Article 54. Parliamentary control.

Article 55. Cooperation and coordination with other national competent authorities.

Article 56. Cooperation and coordination with other competent international authorities.

Article 57. Duty of secrecy.

Article 58. Application of the competition rules.

Article 59. Adoption of international recommendations.

Section 2. First Faculties of the Banking Ordered Restructuring Fund.

Article 60. Powers of the Banking Ordered Restructuring Fund.

Article 61. Commercial faculties.

Article 62. General administrative powers.

Article 63. Executive character of the measures.

Article 64. Other applicable conditions.

Article 65. Conditions applicable to financial transactions and contractual netting agreements.

Article 66. Emergency measures.

Article 67. Advertising.

Article 68. Powers of suspension of contracts and guarantees.

Chapter IX. Procedural arrangements.

Article 69. Appeal against decisions and agreements of the Banking Ordered Restructuring Fund adopted pursuant to Article 61.

Article 70. Specialties of the appeal against decisions and administrative acts dictated in the framework of processes of early action, restructuring and resolution.

Article 71. Specialties of the appeal against decisions and administrative acts dictated in the management of hybrid instruments of capital and subordinated debt.

Article 72. Failure to execute a judgment given in the administrative and administrative proceedings referred to in Articles 70 and 71.

Additional disposition first. Envelope of the FROB.

Additional provision second. Anticipated revenues from the Banking Ordered Restructuring Fund to the Public Treasury.

Additional provision third. Constitution and regime of the actions of the Delegated Intervention of the General Intervention of the State Administration in the FROB.

Additional provision fourth. Tax benefits in the Tax on Heritage Transmissions and Documented Legal Acts for FROB operations.

Additional provision fifth. Effects of the processes of early action, restructuring and resolution on the continuity of the activities of credit institutions.

Additional provision sixth. Legal regime for the granting of guarantees in respect of the economic obligations payable to the Bank Ordered Restructuring Fund.

Additional provision seventh. Creation of the Banking Restructuring Process Asset Society.

Additional disposition octave. Assets to be transmitted to the Company of the Procurating Assets of Banking Restructuring.

Additional provision ninth. Entities required to transmit assets to the Banking Restructuring Process Assets Company.

Additional provision 10th. Separate assets.

Additional provision 13th. Consequences of the losses incurred by the credit institutions controlled by the FROB in relation to its net worth.

Additional provision twelfth. Contracting for emergency processing in the FROB.

Additional disposition thirteenth. Marketing to retailers of preferred shares, convertible debt instruments and subordinated finance as own resources.

Additional disposition fourteenth. References to Royal Decree-Law 9/2009 of 26 June 2009 on bank restructuring and the strengthening of the own resources of credit institutions.

First transient disposition. Ongoing restructuring processes.

Second transient disposition. Sanctioning and authorization procedures in progress.

Transitional provision third. Financial supports received.

Transitional disposition fourth. General feasibility plan.

Transient disposition fifth. Asset transfer scheme of Royal Decree-Law 18/2012 of 11 May on the reorganisation and sale of real estate assets in the financial sector.

Transitional disposition sixth. Principal capital requirements up to 31 December 2012.

Single repeal provision. Regulatory repeal.

Final disposition first. Amendment of Law 13/1985, of 25 May, of Investment Coefficient, Own Resources and Information Obligations of Financial Intermediaries.

Final disposition second. Amendment of Royal Decree 1298/1986 of 28 June 1986 on the adaptation of the law in force in the field of credit institutions to that of the European Communities.

Final disposition third. Amendment of the Law 24/1988, of July 28, of the Stock Market.

Final disposition fourth. Amendment of Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities.

Final disposition fifth. Amendment of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction.

Final disposition sixth. Amendment of Law 22/2003, dated July 9, bankruptcy.

Final disposition seventh. Amendment of Royal Decree-Law 2/2011 of 18 February for the strengthening of the financial system.

Final disposition octave. Amendment of Royal Decree-Law 16/2011 of 14 October establishing the Deposit Insurance Fund for Credit Entities.

Final disposition ninth. Amendment of Royal Decree-Law 2/2012 of 3 February on the consolidation of the financial sector.

Final disposition tenth. Amendment of Law 2/2012, of 29 June, of General Budget of the State for the year 2012.

Final disposition 13th. Amendment of Royal Decree-Law 21/2012 of 13 July 2012 of liquidity measures of public administrations and in the financial field.

Final disposition twelfth. Legal regime applicable to guarantees formed in favour of the Banking Ordered Restructuring Fund and the Credit Entities Deposit Insurance Fund.

Final disposition thirteenth. Competitive titles.

Final disposition fourteenth. Faculty of development.

Final disposition fifteenth. Completion of the validity of Chapter VII.

Final disposition sixteenth. Entry into force.

CHAPTER I

General provisions

Article 1. Object.

This royal decree-law aims to regulate the processes of early action, restructuring and resolution of credit institutions, as well as to establish the legal regime of the Fund for Ordered Restructuring, in "the FROB" or "the Fund", and its general framework of action, in order to protect the stability of the financial system by minimizing the use of public resources.

Article 2. Definitions.

1. For the purposes of this royal decree-law is understood by:

(a) Early performance: the procedure applicable to a credit institution where, in accordance with Chapter II, there is no breach or there are objective elements in accordance with which it is reasonably foreseeable that it does not can meet the requirements of solvency, liquidity, organisational structure or internal control, but is in a position to return to compliance by its own means, without prejudice to exceptional and limited public financial support provided for in Article 9 (f).

(b) Restructuring: the procedure applicable to a credit institution where, in accordance with Chapter III, public financial support is required to ensure its viability and it is foreseeable that such support be reimbursed or recovered in accordance with Chapter V, or where its resolution cannot be carried out without serious adverse effects on the stability of the financial system.

(c) Resolution: the procedure applicable to a credit institution where, in accordance with Chapter IV, it is unfeasible or foreseeable to be so in the near future, and for reasons of public interest and financial stability is necessary to avoid its insolvency liquidation.

2. These procedures shall aim at ensuring the continuity of the essential functions of the institution, preserving financial stability and ensuring its long-term viability in accordance with the principles and objectives set out in Articles 3 and 4.

Article 3. Objectives of the restructuring and resolution.

The processes of restructuring or resolution of credit institutions shall pursue the following objectives, weighted in an equivalent manner and according to the circumstances present in each case:

(a) Ensure the continuity of those activities, services and operations whose disruption could disrupt the economy or the financial system, and in particular the systemically important financial services and systems of payment, clearing and settlement.

b) Avoid harmful effects for the stability of the financial system, preventing the contagion of the difficulties of an entity to the whole system and maintaining market discipline.

c) Ensure the most efficient use of public resources, minimizing public financial support which, with extraordinary character, may need to be granted.

d) Protect depositors whose funds are guaranteed by the Credit Entities Deposit Guarantee Fund.

e) Protect the repayable funds and other assets of the clients of the credit institutions.

Article 4. Principles of restructuring and resolution.

1. The restructuring and resolution processes shall be based, to the extent necessary to ensure compliance with the objectives set out in the previous Article, in the following principles:

(a) The shareholders, members or partners, as appropriate, of the entities shall be the first to bear losses.

(b) The subordinated creditors of the institutions shall bear, where appropriate, losses arising from the restructuring or resolution after the shareholders, members or partners and in accordance with the order of precedence established in bankruptcy law, with the provisos established in this royal decree-law.

c) Creditors of the same rank shall be treated in an equivalent manner except where otherwise provided in this royal decree.

(d) No creditor shall bear any losses in excess of which it would have incurred if the institution was liquidated in the course of a bankruptcy procedure.

e) In the event of an entity's resolution, in accordance with Article 22, the administrators shall be replaced.

(f) In application of the provisions of the insolvency, commercial and criminal law, the administrators of the entities shall respond to the damages caused in proportion to their participation and the seriousness of those.

2. For the purposes of applying the principles referred to in the preceding paragraph, and for the purpose of determining the appropriate allocation of the restructuring or resolution costs referred to in Chapter VII, the FROB shall in no case be considered as included among the shareholders, any members, partners or creditors referred to in the previous paragraph.

Article 5. Assessment.

1. Prior to the adoption of any restructuring or resolution measure and, in particular, for the purposes of the implementation of the instruments provided for in this Royal Decree-Law, the FROB shall determine the economic value of the institution or the assets and liabilities on the basis of the valuation reports entrusted to one or more independent experts.

2. The purpose of the valuation shall be to determine the economic value of the institution or the relevant assets and liabilities in such a way as to recognise any losses arising from the application of the instruments to be used. This assessment shall serve as a basis whenever public financial support is granted to an entity.

3. The valuation shall be subject to the procedure and shall be carried out in accordance with the criteria to be determined by the FROB in general, by agreement of its Rector Commission, following commonly accepted methodologies. The valuation shall take as a basis the economic-financial projections of the institution, with the modifications and adjustments considered by the experts designated by the FROB, and shall take into account the circumstances existing at the time of implementation of the instruments to be used and the need to preserve financial stability. In no case shall the public financial support received or to be received from the FROB in the context of a restructuring or resolution process be taken into account for the determination of the economic value of the entity and that it should have been paid-up under any type of financial assistance to an entity.

4. The FROB shall request a report prior to the Banco de España on the valuation procedure and criteria referred to in the previous paragraph.

5. For the purposes corresponding to the tax rules, the market value shall mean the economic value referred to in this Article.

CHAPTER II

Early Take Action

Article 6. Conditions for early action.

1. Where a credit institution, or a consolidated group or sub-group of credit institutions, does not comply with or exist objective elements in accordance with which it is reasonably foreseeable that it cannot comply with the solvency, liquidity, organisational structure or internal control, but is in a position to return to compliance by its own means, without prejudice to the exceptional public financial support provided for in Article 9 (f), the Banco de España may adopt all or some of the measures set out in this chapter.

Reglamentarily, the objective indicators to be used to determine the presence of the conditions provided for in the preceding paragraph may be specified.

2. The measures contained in this chapter will be compatible with those laid down in the regulations in force in the field of ordination and discipline. However, the authorisation of a credit institution shall not be revoked from the moment when the credit institution has submitted an action plan, unless such revocation has a sanctioning character.

Article 7. Action plan.

1. Where a credit institution or a consolidated group or sub-group of credit institutions is in one of the circumstances described in the previous article, the entity, or the obligor of the consolidated group or sub-group, shall report the Bank of Spain immediately.

Within 15 days of the prior notification, the institution shall submit to the Banco de España an action plan setting out the actions envisaged to ensure the long-term viability of the institution, group or Consolidated sub-group without the need for public financial support. The plan shall also specify the time limit for its implementation, which may not exceed three months, from the date of its approval, unless the Bank of Spain has expressly authorised it.

2. Without prejudice to the provisions of the previous paragraph, where the Banco de España is aware that a credit institution or a consolidated group or sub-group of credit institutions is in one of the circumstances described in the The above Article shall require the entity's management body to examine the situation and to present the action plan within 15 days.

3. The action plan shall be submitted for approval by the Banco de España, which may require the additional modifications or measures deemed necessary to ensure that the deterioration situation facing the institution is overcome. The approval of the plan will require a favourable report from the FROB, in case the entity requests public financial support, which must be evacuated within the period of ten days. The time limit for the final approval of the action plan shall be one month from its submission by the institution.

Article 8. Content of the action plan.

1. The action plan shall include, in addition to an analysis of the entity's situation, a business plan which, in a proportionate and appropriate manner to the specific circumstances of the entity, includes at least the following points:

(a) Specific objectives relating to the efficiency, profitability, leverage and liquidity levels of the consolidated entity, group or sub-group.

(b) Specific commitments in the area of solvency.

c) Specific commitments to improve their efficiency, rationalisation of their management and management, improvement of their corporate governance, reduction of structure costs and resizing of their productive capacity.

(d) Where the institution requests public financial support, the terms in which it is to be provided, in accordance with Article 9 (f), and the measures to be implemented to minimise the use of resources. public.

2. The Banco de España may, by means of Circular, adopt general rules and principles by specifying the objectives and commitments referred to in the previous paragraph.

3. If, as a consequence of the evolution of the economic-financial situation of the entity or the development of the conditions of the markets, it was warned that the plan of action cannot be fulfilled in the terms in which it was approved, the entity may request the Bank of Spain to amend these terms.

The modification of the action plan shall be reported in advance by the FROB, if it has been designated as interim administrator of the institution, in accordance with the provisions of Article 10, or if the entity has requested public financial support.

Article 9. Early action measures.

From the moment the Banco de España becomes aware that a credit institution or a consolidated group or sub-group of credit institutions is in one of the situations described in Article 6.1, it may Adopt the following measures:

a) Require the entity's management body to convene, or to convene directly if the management body does not do so within the required time limit, to the board or general assembly of the entity, as well as to propose the order of the day and the adoption of certain agreements.

b) Require the cessation and replacement of members of the administrative organs or directors-general and assimilated.

c) Require the elaboration of a program for the renegotiation or restructuring of its debt to the whole or part of its creditors.

(d) Without prejudice to the following point, take any of the measures set out in the regulations in force in the field of ordination and discipline.

e) If the above measures were not sufficient, agree on the provisional replacement of the entity's management body as provided for in the following Article.

(f) By way of exception, and in compliance with the Spanish and European Union rules on competition and State aid and trying to minimise the use of public resources, require recapitalisation measures. of those provided for in Article 32, in which the time limit for the repurchase or redemption of the instruments convertible into shares does not exceed two years, in which case the action plan shall require a favourable report from the FROB and shall be subject to the provisions of Article 32. in Chapters I, V and 2. of Chapter VIII. This measure shall only apply where there are objective elements which make it reasonably foreseeable that the entity is in a position to purchase or amortise the instruments convertible into the terms committed and, in any event, in the abovementioned maximum period of two years. Any other recapitalisation measure required by the institution which is unable to comply with the above requirements may only be provided within a restructuring or resolution process as provided for in Chapters III and IV.

Article 10. Provisional replacement of the administrative body as an early action measure.

1. The Banco de España may agree to the temporary replacement of the administrative body in accordance with the procedure laid down in Title III of Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities, and with the specialties provided for in this chapter.

2. The temporary replacement agreed under this Article shall be maintained in force for a period of one year. However, this period may be renewed for equal periods until the operations in which the action plan is implemented are carried out.

Article 11. Follow-up of the action plan and information to the Banking Ordered Restructuring Fund.

1. On a quarterly basis, the institution shall send the Bank of Spain a report on the degree of compliance with the measures referred to in the action plan. The Banco de España will transfer the report to the FROB.

2. In order for the FROB to exercise the powers provided for in this royal decree, the Banco de España will inform you.

(a) Where a credit institution or a consolidated group or sub-group of credit institutions is found or there are objective elements in accordance with which it is reasonably foreseeable that it is to be found in any of the circumstances described in Article 6.1.

b) The final approval of the action plan, including, where appropriate, the additional modifications or measures required by the Banco de España.

c) Quarterly, the degree of compliance of the performance plan and the liquidity situation of the institution.

d) The completion of the early acting situation.

3. The Banco de España may require the adoption of the necessary measures to ensure compliance with the action plan.

4. The opening of the restructuring or resolution process shall take place where one of the following conditions is present:

(a) If it is ultimately not possible to overcome the deterioration situation of the entity and any of the circumstances under which the restructuring or resolution of the entity proceeds will be presented.

(b) Within the period referred to in Article 7.2, the institution does not present the required action plan or has indicated to the Bank of Spain the impossibility of finding a viable solution for its situation.

(c) The plan submitted was not viable or would be disclosed as insufficient, in the view of the Banco de España, to overcome the situation of weakness faced by the institution, or not to accept the changes or additional measures. required by the Banco de España.

(d) The entity shall be seriously violated by the execution period or by the specific measures referred to in the action plan or any of the intervention measures imposed by the Banco de España in such a way as to the achievement of the objectives of early action.

5. From the approval of the action plan, the FROB may require the Banco de España to provide all information related to the entity or its consolidated group or sub-group that is necessary to prepare for any restructuring or resolution.

The FROB may also perform during this early stage of action the actions necessary to determine the economic value of the institution for the purposes of Articles 5 and 30.

Article 12. Completion of the early acting situation.

When the credit institution ceases to be in the circumstances described in Article 6.1, the Bank of Spain shall declare the situation of early action completed.

CHAPTER III

Restructuring

Article 13. Conditions for restructuring.

The restructuring of a credit institution will proceed when public financial support is required to ensure its viability and there are objective elements that make it reasonably foreseeable that such support will be repaid or recovered within the time limits laid down for each instrument in Chapter V. The restructuring of a credit institution may be provided without the presence of the above objective elements, where the institution's resolution would produce effects which are seriously detrimental to the stability of the financial system as a whole, The way in which restructuring is preferable for the purpose of minimising the use of public resources.

The severity of the deleterious effects referred to in the preceding paragraph shall be determined by the Banco de España on the basis of criteria such as the volume of the activities, services and operations that the institution provides the financial system as a whole, its interconnection with the other entities or the possibility of spreading its difficulties to the whole of the financial system in the event of a resolution.

Article 14. Restructuring plan.

1. Where an institution is in one of the circumstances described in the previous Article, it shall inform the FROB and the Bank of Spain immediately and, within 15 days of the notification, shall submit to them a the restructuring plan in which the planned measures are put in place to ensure the long-term viability of the institution. The plan shall also specify the time limit for its implementation, which shall not exceed three months, from its approval, unless the FROB is authorised.

2. Without prejudice to the provisions of the previous paragraph, where the Banco de España is aware that an entity is in one of the circumstances described in the previous article, it shall require the institution's management body to examine the situation and present, within 15 days, the restructuring plan.

3. The FROB, before agreeing on the lifting of the restructuring plan to the Banco de España for approval, may require amendments to the plan submitted or any additional measures deemed necessary to ensure that the plan is exceeded. the deterioration situation to which the institution is facing and to ensure the objectives and principles set out in Articles 3 and 4.

4. The restructuring plan will be submitted for approval by the Banco de España, which will assess it in the framework of its powers as the authority responsible for the supervision of the solvency, performance and compliance of the specific regulations of the credit institutions and their powers in relation to the promotion of the smooth functioning and stability of the financial system and payment systems. The time limit for the approval of the restructuring plan shall be one month from its submission by the institution.

5. Prior to the adoption of the corresponding restructuring plan, the Bank of Spain shall request to inform the competent bodies of the Autonomous Communities that the savings banks and, where appropriate, the cooperatives are located. of the credit involved, which must be sent within ten days.

6. The approval by the Banco de España of the restructuring plan will determine that the specific operations through which the restructuring is to be carried out, including any acquisitions of significant shares and modifications (a) statutory provisions which, where appropriate, occur as a result of such operations, do not require any subsequent administrative authorisation in the field of the rules of credit institutions.

7. In addition, the FROB will raise the Minister of Finance and Public Administrations and the Minister of Economy and Competitiveness with an economic memory detailing the financial impact of the restructuring plan presented on the funds provided. from the General Budget of the State. On the basis of the reports issued by the General Secretariat of the Treasury and Financial Policy and the General Intervention of the State Administration, the Minister of Finance and Public Administrations may object, in a reasoned manner, to the Five working days from the time the memory is raised.

Article 15. Instruments for restructuring.

1. The restructuring instruments are:

(a) Financial support under the terms of Chapter V,

b) The transmission of assets or liabilities to an asset management company.

2. The FROB may adopt the above instruments individually or jointly.

Article 16. Content of the restructuring plan.

The content of the restructuring plan shall include, in addition to the elements provided for in Article 8 for the action plans, the restructuring instruments to be implemented as provided for in the Article previous. In addition, it shall include an analysis of the situation of the entity in accordance with which it is justified, or its ability to enable the requested public financial support to be recovered or reimbursed within the time limit laid down for each instrument or, in case contrary, the effects seriously detrimental to the stability of the financial system which would result in its resolution. It shall also take measures to minimise the use of public resources and, in particular, the management actions of the hybrid instruments of capital and subordinated debt to be carried out, to ensure a adequate distribution of the restructuring costs of the entity in accordance with the objectives and principles set out in Articles 3 and 4.

The restructuring plan shall contain a reference to the repayment or recovery period of the financial support that would otherwise have been provided.

The FROB may include, on a proposal from the Banco de España, any early action measures, in the restructuring plans.

Article 17. Follow-up of the restructuring plan and information to the Banking Ordered Restructuring Fund.

1. On a quarterly basis, the institution shall send to the FROB and the Bank of Spain a report on the extent to which the measures referred to in the restructuring plan and its liquidity situation are met.

2. In order for the FROB to exercise the powers provided for in this royal decree, the Banco de España will inform you:

(a) Where there is knowledge or there are objective elements in accordance with which it is reasonably foreseeable that a credit institution is not going to make the repayment of public financial support within the time limit planned or will fail to comply with any other restructuring measure.

b) The final approval of the restructuring plan.

c) The completion of the restructuring situation.

3. The Banco de España or the FROB may require the adoption of the necessary measures to ensure compliance with the restructuring plan and, in any event, to exercise the powers of Article 9, and if it is not possible to overcome the situation of deterioration of the entity or public financial support was not repaid or recovered in the terms committed or, in the view of the Banco de España, the detrimental effects on the stability of the financial system that prevented the resolution The Bank of Spain will proceed to the opening of the process of resolution of the entity in accordance with the provisions of Chapter IV.

4. During the entire restructuring process, the FROB may require the entity all the information, related to the entity or its consolidated group or sub-group, necessary to prepare an eventual resolution.

Article 18. Completion of the restructuring process.

When the credit institution ceases to be in the circumstances described in Article 13, the Banco de España will declare the restructuring process completed.

CHAPTER IV

Resolution

Section 1

Article 19. Conditions for resolution.

1. Without prejudice to the provisions of Articles 11.4 and 17.3, a credit institution shall be resolved when the following two circumstances are met, at the same time:

a) The entity is unviable or reasonably foreseeable to be so in the near future.

(b) For reasons of public interest, it is necessary or appropriate to undertake the resolution of the entity in order to achieve any of the objectives referred to in Article 3 for the dissolution and liquidation of the entity in the the framework of a court-supervised procedure would not reasonably be able to achieve those objectives to the same extent.

2. The resolution of a credit institution shall also proceed when, in addition to the circumstance referred to in point (b) of the preceding paragraph, one of the following is present:

(a) Within the period of Article 14.2, the institution does not present the required restructuring plan or has indicated to the Bank of Spain that it is unable to find a viable solution for its situation.

(b) The plan submitted was not appropriate, in the opinion of the Banco de España, in the terms provided for in Article 14, or the entity was not accepted for the additional modifications or measures required.

(c) The term of execution or any of the specific measures referred to in the restructuring plan shall be breached by the entity in such a way as to jeopardise the achievement of the objectives of the restructuring.

Article 20. Concept of unviable entity.

1. A credit institution shall be deemed to be non-viable if:

a) The entity is in any of the following circumstances:

i) the entity does not comply significantly or is reasonably foreseeable to significantly breach the solvency requirements in the near future; or,

(ii) the entity's liabilities are higher than its assets or are reasonably foreseeable to be in the near future; or,

(iii) the entity cannot or is reasonably foreseeable that in the near future it cannot fulfil its obligations in a timely manner.

(b) And it is not reasonably foreseeable that the entity may reconduct the situation within a reasonable period of time by its own means, by turning to the markets or through the financial support referred to in the Chapter V.

For the purposes of considering that a credit institution is infeasible or is reasonably foreseeable to be unfeasible in the near future, the financial position of the group of which, if any, is to be considered shall be taken into account. part.

2. The criteria set out in the previous paragraph shall be developed regulatively.

Section 2. First Resolution Procedure

Article 21. Opening of the resolution process.

When an entity is unviable as provided for in the previous article and the restructuring does not result, the Bank of Spain, either on its own initiative or on a proposal from the FROB, will agree to the immediate opening of the resolution, giving a reasoned account of its decision to the Minister of Economy and Competitiveness and to the FROB. The Bank of Spain shall also inform without delay of the decision taken to the institution and, where appropriate, the European Union authority responsible for the supervision of the group concerned and the European Banking Authority.

Article 22. Replacement of the administrative organ as a resolution measure.

1. Following the opening of the resolution process as provided for in the previous article, and as long as the FROB does not have a stake granting it control of the entity's management body, the Banco de España will agree to the replacement of the entity's management body under the provisions of Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities, with the specialties provided for in this royal decree, and shall designate as the administrator of the institution to the FROB, which, in turn, shall appoint the natural or legal person or persons who, in its name, exercise the functions and powers of that condition.

2. The previous measure will remain in effect until the resolution process is complete.

3. As the entity's administrator, the FROB shall aim to promote the solutions and take the necessary measures to ensure the interests of the entity and to resolve the situation in which it is located, in accordance with the objectives set out in the and principles provided for in Articles 3 and 4.

Article 23. Resolution Plan.

1. Within two months of his appointment as an administrator or, in the event of his/her holding a participation which gives him the control of the entity's management body, the FROB shall be notified of the opening of the resolution process. draft a resolution plan for the institution or, where appropriate, determine the source of the opening of an insolvency proceedings. In the latter case, the FROB shall immediately inform the Bank of Spain, the Minister of Economy and Competitiveness and the Deposit Insurance Fund of Credit Entities.

At the reasoned request of the FROB, the Banco de España may extend the term of two months to a maximum of six months.

2. The resolution plan shall contain at least the following content:

(a) The conditions on which the opening of the resolution process is based as provided for in Article 19.

(b) the resolution instruments already implemented or intended to implement the FROB, and the powers to use for that purpose, as well as the commitments made to minimize the use of public resources and the any distortions of competition which may result from such instruments and powers.

c) The financial support measures to be implemented by the Credit Entities Deposit Guarantee Fund in accordance with the relevant regulations. For these purposes, the FROB, in accordance with the principle of the most efficient use of public resources, may grant financing under market conditions to the Deposit Insurance Fund of Credit Entities in order to enable it to undertake the functions that you have attributed.

(d) The economic valuation of the entity or its related assets and liabilities.

e) The management actions of the hybrid instruments of capital and subordinated debt to be performed.

f) The maximum run time.

3. The Bank of Spain, prior to the adoption of the corresponding resolution plan, shall request to inform the competent bodies of the Autonomous Communities in which the savings banks have their domicile and, where appropriate, the credit unions. affected, to be referred to within ten days.

4. The resolution plan shall be submitted for approval by the Banco de España, which shall assess it in the framework of its powers as the authority responsible for the supervision of the solvency, performance and compliance of the specific rules of the institutions of the European Union. credit and its powers in relation to the promotion of the smooth functioning and stability of the financial system and payment systems. Subsequent amendments to the resolution plan which the FROB may agree on, for the implementation of new instruments or for the modification of those already included, will be subject to the same approval procedure by the Bank of Spain.

5. The approval by the Bank of Spain of the resolution plan shall determine that the specific operations by which the resolution is instructed, including any acquisitions of significant holdings and modifications (a) statutory provisions which, where appropriate, arise as a result of such operations, do not require any subsequent administrative authorisation in the field of credit institutions.

Article 24. Preliminary measures

The Bank of Spain, when it appreciates sound evidence of the possible concurrency of the conditions for the resolution, prior to the eventual opening of a resolution process and with the aim of reducing or eliminating the obstacles that may arise during the event, may agree on the following measures:

a) Require the subscription of service delivery contracts to ensure the effectiveness of the services of a critical nature, either with entities in the group or with third parties.

b) Require the limitation of the institution's exposures at an individual and aggregate level.

c) Impose additional specific or regular reporting requirements, including, inter alia, the maintenance of specific and detailed records and records of financial transactions and contractual clearing arrangements referred to in Section 2 of Royal Decree-Law 5/2005 of 11 March 2005 on urgent reforms to boost productivity and improve public procurement.

d) Require divestiture of certain assets.

e) Require the limitation or cessation of certain activities that you are developing or will project to develop in the future.

f) Restrict or impede the development or sale of new lines of business or products.

g) Require changes in the legal or operational structure of the consolidated entity, group or subgroup, reducing its complexity, with the objective that critical services may be legally and economically separate from others services by adopting resolution measures.

Section 3. Specific Resolution Instruments

Article 25. Resolution tools.

1. The resolution tools are:

a) The sale of the entity's business.

b) Transmission of assets or liabilities to a bridge bank.

c) The transmission of assets or liabilities to an asset management company.

d) Financial support to the business acquirers, bridge bank or asset management company where necessary to facilitate the implementation of the above instruments and to minimise the use of resources public.

2. The FROB may adopt the above instruments individually or jointly.

3. If the resolution instruments are partially applied, once the partial transmission of the business or the assets and liabilities has been carried out, the institution shall be dissolved and liquidated in the course of a bankruptcy procedure.

Article 26. Sale of the entity's business.

1. The FROB may agree and execute the transmission to an acquirer other than a bridge bank of:

(a) Shares, participative shares or contributions to the share capital or, as a general rule, instruments representing the capital or equivalent of the entity or convertible into them, whatever their holders.

b) All or part of the entity's assets and liabilities.

2. The transmission referred to in the preceding paragraph shall be carried out on behalf of the shareholders of the entity, but without the need to obtain their consent or the consent of the buyer, and without having to comply with them. requirements for the procedure required for structural changes in commercial companies. It shall also be carried out under market conditions taking into account the circumstances of the specific case.

3. The legal constraints or obligations referred to in Article 33.1 (a), (b) and (d) shall also not apply to persons or entities which, in accordance with the provisions of the relevant resolution plan, have acquired the shares, shares, contributions or instruments.

4. In order to determine the amount resulting from the transmission to be paid to the entity or its shareholders, the costs, administrative and any other costs incurred by the FROB, including the cost of the sale, shall be deducted from the selling price. financial support instruments which the latter could have adopted in accordance with Article 28, which shall be repaid in advance to the FROB itself from the selling price.

5. The FROB may apply this resolution instrument on one or more occasions and in favour of one or more acquirers.

6. To select the acquirer or acquirer, the FROB shall develop a competitive procedure with the following characteristics:

a) It shall be transparent, taking into account the circumstances of the specific case and the need to safeguard the stability of the financial system.

b) You will not favor or discriminate against any of the potential acquirers.

c) The necessary measures shall be taken to avoid situations of conflict of interest.

d) Take into consideration the need to apply the resolution instrument as quickly as possible.

e) You will have between your goals to maximize the selling price and minimize the use of public resources.

7. Where, under the terms of Article 66, the development of the procedure referred to in the preceding paragraph may make it more difficult to achieve one of the objectives listed in Article 3 and, in particular, where justified. adequately that there is a serious threat to the stability of the financial system as a result of the situation of the institution or it is noted that the development of such a procedure may hinder the effectiveness of the resolution instrument, the selection of the acquirer or acquirer may be carried out without the need to comply with all procedural requirements as set out in the previous paragraph. The justification for this unique selection procedure shall be communicated to the European Commission for the purposes of the rules on State aid and the defence of competition.

Article 27. Bridge Bank.

1. The FROB may agree and execute the transmission to a bridge bank of all or part of the entity's assets and liabilities.

2. For the purposes of this Article, a bridge bank shall be considered as a credit institution, including where appropriate the institution itself in resolution, which is involved in the FROB, the object of which is the development of all or part of the institution's activities. in resolution and the management of all or part of its assets and liabilities.

The bridge bank shall comply with the rules of management and discipline applicable to credit institutions and shall be subject to the same supervisory and sanction regime.

3. The total value of the liabilities transmitted to the bridge bank shall not exceed the value of the assets transmitted from the institution or from any other source, including those relating to the financial support referred to in Article 25.1 (d).

4. The FROB may apply this instrument on one or more occasions and in favour of one or more bridge banks, as well as transmit assets and liabilities of a bridge bank to the institution or to a third party.

5. The bridge bank shall be managed and managed with the aim of selling it, or selling its assets or liabilities, where the conditions are appropriate and, in any case, within a maximum of five years from its establishment or acquisition by the FROB.

The sale of the bridge bank or its assets or liabilities will be made in market conditions and will be developed in the framework of competitive, transparent and non-discriminatory procedures. The result of the sale shall be the shareholders of the bridge bank, with deduction, where appropriate, of the same expenses as referred to in Article 26.4.

6. The authorisation of the bridge bank shall be revoked as a credit institution and shall cease in its activity one year after it ceases to be involved in the FROB, or since the whole or most of its assets and liabilities are transferred to another bank. entity and, in any case, within a maximum period of six years from the date of its establishment.

In case the bridge bank ceases to be operational, the FROB will proceed to its liquidation, as long as it holds the majority of the share capital. The amount resulting from the settlement shall be paid to the entities in resolution whose assets and liabilities have been transmitted to the bridge bank.

7. The creation and management of the bridge bank will pursue the most efficient use of public resources and minimize public financial support, taking into account the need to ensure financial stability. For such purposes, this measure may be adopted on grounds of urgency, in accordance with the terms laid down in Article 66.

CHAPTER V

Financial support instruments

Article 28. Financial support instruments.

1. The FROB may adopt instruments of financial support to the extent necessary to achieve the objectives set out in Article 3, taking into account the principles listed in Article 4.

Prior to the decision to adopt instruments of financial support referred to in this article, the FROB will raise the Minister of Finance and Public Administrations and the Minister of Economy and economic memory in which the financial impact of this support on the funds provided to the FROB by the State's General Budget is detailed. On the basis of the reports issued to the effect by the General Secretariat of the Treasury and Financial Policy and the General Intervention of the State Administration, the Minister of Finance and Public Administration may object, in a reasoned manner, to the the adoption of such financial support instruments within five working days of the date of the high such memory.

2. The financial support of the FROB may be implemented, inter alia, in one or more of the following measures:

a) The granting of guarantees.

b) The granting of loans or loans.

c) The acquisition of assets or liabilities, being able to maintain its management or to entrust it to a third party.

(d) Recapitalisation in the terms of Article 29.

In the case of restructuring processes, in accordance with Chapter III, or resolution, in accordance with the provisions of Chapter IV, the abovementioned financial support measures may be adopted in relation to the institution, the entities in its group, the acquirer referred to in Article 26, a bridge bank or an asset management company.

3. Where the FROB proceeds to dispose of the assets or liabilities it has been able to acquire in accordance with paragraph 2 (c), the disposal shall be carried out through procedures that ensure competition.

4. In the event that the entities receiving financial support as provided for in this Chapter have previously issued convertible instruments subscribed by the FROB, they must proceed, if requested by the FROB, to their immediate conversion. in ordinary shares or contributions to the share capital in the terms provided for in the relevant public emission scriptures.

In case the corresponding entities are savings banks, they will necessarily adopt the scheme provided for in the fifth additional provision of Royal Decree-Law 2/2011 of 18 February for the strengthening of the system. financial, in the case of agreements relating to their participation in the bank through which they develop, where appropriate, their activity as a credit institution.

5. The use by the FROB of financial support instruments shall not reduce the losses arising from the restructuring or the resolution to be borne by shareholders, members or partners and subordinate creditors of conformity as provided for in this Royal Decree-Law and in particular, taking into account the principles listed in Article 4 (a) and (b).

6. For the purposes of the application of Law 22/2003, of July 9, Bankruptcy, the credits of the FROB will be considered credits with general privilege.

7. The granting of guarantees by the FROB will be subject to the limits that will be established in the corresponding annual laws of the State General Budget.

Article 29. Recapitalisation instruments.

1. The FROB may, under the conditions laid down in this Chapter, subscribe or acquire the following instruments issued by those entities which, within the meaning of Chapters III and IV, require support financial:

a) Ordinary shares or contributions to social capital.

(b) Convertible instruments in the instruments referred to in point (a).

The subscription or acquisition will be made in accordance with the principles and criteria that the FROB can establish to the effect, prior to the Bank of Spain report.

2. These instruments shall in any event be available as basic own resources and as principal capital, without prejudice to their special treatment in relation to the management actions of hybrid instruments of capital and subordinated debt. in Chapter VII. The legally established limitations for the computability of own resources and the principal capital shall not apply to them, nor shall it be mandatory for them to be involved in an organised secondary market.

3. The FROB may anticipate in the form of a loan the subscription or purchase price of the instruments referred to in this Article in the terms of paragraph 3 of the fifth additional provision of the Royal Decree-Law 21/2012 of 13 In July, liquidity measures for public administrations and in the financial sector.

Article 30. Economic value of the institution and payment of the recapitalisation instruments.

1. The price of subscription, acquisition or conversion of the recapitalisation instruments shall be determined by applying to the economic value of the institution the discount which is applicable in accordance with the European Union's competition law and state aids.

The fixing of the subscription, acquisition or conversion price shall be made after a report of the General Intervention of the State Administration concerning compliance with the applicable rules of procedure for its determination.

2. The payment of the subscription or purchase price of the instruments referred to in this Article may be made in cash or by the delivery of securities representing public debt securities issued by the European Facility for Financial stabilisation or the European Stability Mechanism, or securities issued by the FROB itself. In addition, the FROB may satisfy that price by offsetting the claims against the relevant entities.

3. In order to be beneficiaries of the performance of the FROB provided for in this Article, the savings banks must transfer their financial activity in advance to a bank in accordance with the provisions of Articles 5 or 6 of the Royal Decree-Law 11/2010, 9 of (a) July, of government bodies and other aspects of the legal system of savings banks, within the maximum period of three months from the date on which they are notified of the approval of the restructuring plan.

Also, if the entity requesting the performance of the FROB provided for in this Article was a bank jointly participated by savings banks in accordance with Article octavo.3 of Law 13/1985 of 25 May 1985, Investment coefficients, Own Resources and Information Obligations of the Financial Intermediaries shall be such as to transfer all financial activity to the bank and to carry out its business in accordance with the provisions of Articles 5 or 6 of the Royal Decree-law 11/2010 of 9 July, not later than three months from the date on which they are given notify the approval of the restructuring plan.

Article 31. Ordinary shares or contributions to social capital.

1. Prior to the acquisition by the FROB of ordinary shares or the making of contributions to the share capital, the institution shall take the necessary measures to ensure that such acquisition or contribution involves a participation in its capital social adjustment to the economic value of the entity resulting from the valuation process.

2. The legal status of the FROB shall not be extended to credit institutions by the investee in accordance with the provisions of this Article, which shall be governed by the applicable private legal system.

3. The subscription or acquisition of these instruments shall, in any event, determine by itself and without any other act or agreement, except the notification corresponding to the Commercial Register of the votes that correspond to it, the attribution to the FROB of the relevant political rights and their incorporation into the administrative body of the issuing institution. The FROB shall appoint the natural person or persons who represent its representation to that effect and shall have the authority of so many votes as those resulting from the application of the total number of votes to the percentage of the vote. entity, rounded to the nearest integer.

For the purposes of Article 5 (7) of Royal Decree-Law 11/2010 of 9 July 2010, the participation of the FROB in the share capital of an entity shall not be taken into account.

4. In order to ensure greater efficiency in the use of public resources and in compliance with the Spanish and European Union rules on competition and State aid, the divestment by the FROB of the instruments to which it is This article shall be carried out by means of its disposal through procedures that ensure competition and within a period not exceeding five years from the date of its subscription or acquisition.

The FROB may adopt any of the financial support instruments referred to in Article 28 to support the competitive divestment procedure.

The FROB may participate together with some or some of the other partners or shareholders of the entity to any process of selling securities on the same terms as these may be concluded.

5. The disposal shall be carried out after a report of the General Intervention of the State Administration, concerning compliance with the applicable rules of procedure for its implementation. Also, the divestment processes of significant holdings carried out by credit institutions controlled by the FROB, in accordance with the corresponding restructuring and resolution plans, through participations direct or indirect, and irrespective of whether these entities are subject to private law, shall be the subject of a report by the Ministry of Finance and Public Administrations as regards their suitability for the principles of advertising and concurrency. The definition of the concept of significant participation shall be the responsibility of the FROB Rector Commission.

Article 32. Instruments convertible into ordinary shares or contributions to share capital.

1. At the time of the adoption of the emission agreement for these instruments, the issuing entity shall approve the necessary arrangements for the capital increase or the subscription of capital injections in the amount necessary.

2. The institution shall undertake to purchase or write down the instruments subscribed or acquired by the FROB as soon as it is able to do so in the intended terms, and in any case not more than five years. In addition, the issuance agreement should provide for the convertibility of the securities by unilateral decision of the FROB if, before the end of the five-year period, the FROB, after reporting by the Banco de España, considers it unlikely, in view of the situation of the entity or its group, that its repurchase or redemption can be carried out within that period.

Article 33. Special arrangements for the subscription or acquisition by the FROB of the recapitalisation instruments.

1. Where the FROB subscribes or acquires any of the recapitalisation instruments referred to in the preceding Articles, it shall not apply to it:

(a) The statutory limitations of the right of assistance to general meetings or assemblies or the right to vote.

b) Limitations on the acquisition of contributions to the social capital of credit unions.

(c) The limitations that the law establishes for the computability of own resources and principal capital, or, in general, the limitations established at any time in relation to solvency requirements.

(d) The obligation to present a public procurement offer in accordance with the securities markets regulation.

2. Where the FROB subscribes or acquires contributions to the social capital of a credit union, the quorum of attendance at the assembly and the majorities necessary for the adoption of agreements shall be calculated, and the voting rights shall be attributed, in proportion to the amount of contributions to the social capital of the cooperative.

3. Should the deletion of the shareholder's right of preferential subscription be agreed, it will not be necessary to obtain the auditor's report required by the recast text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010 of 2 July.

Also, in the event that the instruments referred to in Article 29.1.b are issued, the auditor's report required by the Capital Companies Act, on the basis and modalities of the conversion.

Article 34. Conversion and divestiture of convertible instruments into ordinary shares or contributions to share capital.

1. After five years from the disbursement or acquisition without the securities being repurchased or amortized by the entity, the FROB may request its conversion. The exercise of this right shall, where appropriate, be carried out within the maximum period of six months from the end of the fifth year since the disbursement or acquisition took place.

If, as a consequence of the evolution of the economic-financial situation of the entity or the development of the market conditions, the objectives set out in the action plan cannot be met, restructuring or resolution may extend the period referred to in the preceding paragraph for up to two years.

2. The entity and its shareholders shall adopt the agreements and shall carry out the necessary actions to ensure that the conversion, in compliance with the European Union's competition and State aid rules, is carried out under conditions the market and competition and in accordance with the economic value of the institution, in accordance with Article 30, with the purpose of implementing the operations for the transmission of shares or contributions or of capital reduction, either for loss compensation, constitution or increase of reserves or return of the value of contributions, as appropriate.

The conversion will be made after a report of the General Intervention of the State Administration, regarding compliance with the applicable rules of procedure for its implementation.

3. Without prejudice to any other actions and liabilities, in the event of non-compliance by the entity or those of its shareholders who have the status of credit institution of the obligation set out in the previous paragraph, the Banco de España may agree, provided that it has not already been produced, the replacement of the administrative or management bodies of the issuing institution, and of those of its shareholders who have the status of a credit institution, until it has been complete the conversion operation. In this case, the FROB shall be appointed administrator, who shall, in turn, appoint the natural person (s) who, on his behalf and in the exercise of the functions and powers of that condition, shall adopt the arrangements and conduct the proceedings. necessary to give effect to the conversion. As an administrator, the FROB will have all the powers to adopt the agreements and to carry out the necessary actions to complete the conversion, whether or not they are provided for in the statutes of the issuing entity and those of its shareholders. they have the status of a credit institution and of which they would also have been appointed administrator.

4. Where the conversion of the instruments referred to in this Article into ordinary shares or contributions to the social capital of the institution is finally produced, the provisions of the new instruments shall apply to the new instruments. Articles 31 and 33.

CHAPTER VI

Asset Management Society

Article 35. Asset management company.

1. As provided for in this Royal Decree-Law, the FROB may, as an administrative act, require a credit institution to transmit to an asset management company certain categories of assets which are particularly damaged or whose assets are remain on the balance sheet of the institution is considered to be detrimental to its viability, in order to discharge those assets and to allow the independent management of their performance.

2. The criteria for defining the categories of assets referred to in the preceding paragraph shall be determined in accordance with, inter alia, the activity to which they are linked, their age in balance and their accounting classification. On the basis of these criteria, the Banco de España will require the assets to be transmitted for each entity.

3. The asset management company, which will be a public limited company, will be governed by the provisions of this royal decree-law and in the regulations that will develop it and, in an additional manner, by the provisions of the recast text of the Law on Capital Societies, approved by the by Royal Decree-Law 1/2010 of 2 July 2010 and other rules of private law.

4. The company may issue bonds and securities which recognise or create debt without the limit provided for in Article 405 of the Capital Companies Act being applicable to it.

5. For the purposes of the regulation contained in this Chapter, the reference to assets shall also include the liabilities to be transmitted.

Article 36. Regime of the transmission of assets.

1. The transfer of assets to the asset management company shall be carried out without the need to obtain the consent of third parties, by any legal business and without having to comply with the required procedural requirements in respect of the structural modifications of commercial companies.

2. Prior to the transfer, the credit institution shall make the valuation adjustments for the assets to be transmitted according to the criteria to be determined in a regulated manner.

With the same pre-transmission character, the Banco de España will determine the value of the assets on the basis of the valuation reports entrusted to one or more independent experts.

The valuation will be carried out through the procedure and in accordance with the criteria set out in the previous paragraph, following commonly accepted methodologies and in coherence with the valuation procedure to which refers to Article 5.

Such methodologies should be consistent and appropriate to provide a realistic estimate of assets, and should also maximize the use of observable data and limit non-observable data as much as possible.

For the purposes of the Capital Companies Act, the above valuation will replace that made by independent expert.

3. The FROB may require that, prior to its transmission to the company, the assets are grouped in a company or any kind of operation that facilitates the transmission is carried out on them.

4. The transmission of assets shall be subject to the following special conditions:

(a) The transmission may in no case be the subject of termination by application of the reintegration measures provided for in the insolvency legislation.

(b) For the transmission of credits which are considered as litigious, the provisions of Article 1535 of the Civil Code shall not apply.

(c) The acquiring company shall not be required to make a public takeover offer in accordance with the securities markets.

(d) The transfer of assets shall not constitute an assumption of succession or extension of tax liability or of social security, except as provided for in Article 44 of the recast of the Law of the Workers ' Statute, approved by Royal Legislative Decree 1/1995 of 24 March.

(e) The asset management company shall not be liable, in the event of the transfer, of the tax obligations arising prior to such transfer arising from ownership, exploitation or management. of the same by the transmitting entity.

CHAPTER VII

Managing hybrid instruments

Section 1-Equity and subordinated debt management actions of subordinated debt

Article 37. Shares in the management of hybrid instruments of capital and subordinated debt.

1. The restructuring and resolution plans referred to in Chapters III and IV shall include the carrying out of management actions for the hybrid instruments of capital and subordinated debt issued by the credit institutions. to which those plans correspond, in order to ensure an adequate distribution of the costs of restructuring or of the institution's resolution under the State aid rules of the European Union and the objectives and principles laid down in Articles 3 and 4 and in particular to protect financial stability and to minimise the use of public resources.

2. Actions including restructuring and resolution plans for the purposes of the preceding paragraph may affect the emissions of hybrid instruments such as preference shares or convertible bonds, bonds and bonds. subordinated or any other subordinated financing, with or without maturity, obtained by the credit institution, either directly or through an entity wholly owned, directly or indirectly, by the credit institution.

3. Shares in the management of hybrid instruments of capital and subordinated debt may affect all or part of the emissions or financing referred to in the preceding paragraph, but shall take account of the different order of precedence they may have one of the emissions.

Article 38. Types of equity management actions of hybrid capital and subordinated debt instruments.

1. Actions for the management of hybrid instruments of capital and subordinated debt may consist, inter alia, of:

(a) Exchange offers for equity instruments of the credit institution, whether shares, participative shares or capital injections.

(b) Repurchase offers of securities, either by their direct cash or conditional credit, in accordance with their current value, to the subscription of shares, participative shares or contributions to the capital of the institution or to the reinvestment of the repurchase price on some other banking product.

c) Reduction of the nominal value of the debt.

d) Early amortisation to value other than face value.

2. The measures in the previous paragraph shall be voluntary acceptance by investors. In particular, paragraphs (c) and (d) shall require the prior consent of investors for the modification of the relevant issue, as provided for in the terms and conditions of each. The institution shall, where appropriate, promote changes to the terms of the issue that facilitate the actions provided for in its restructuring or resolution plan, as appropriate.

The measures in the previous paragraph may be accompanied by other amendments to the terms of the emissions concerned and, in particular, the introduction of the discretionary nature of the payment of the remuneration.

3. For credit institutions referred to in Article 37.1, for which the management actions for hybrid instruments of capital and subordinated debt do not achieve a proper allocation of costs, the provisions of Section 2 of the CRR shall apply. Chapter VII.

Article 39. Market value.

1. The management of hybrid instruments of capital and subordinated debt shall take into account the market value of the debt securities to which they are directed, applying the premiums or discounts that are in accordance with Union rules. European State aid scheme.

2. For the purposes of crediting the market value, the institution shall request the development of at least one report by an independent expert.

Article 40. Disclosure of shares in the management of hybrid instruments of capital and subordinated debt.

1. Once the restructuring or resolution plan has been approved and in good time with respect to its implementation, the actions of management of hybrid instruments of capital and subordinated debt will be announced by relevant fact, published on the website of the institution and, where appropriate, in the market listing bulletin in which the securities are admitted to trading. In the event that the credit institution is not required to draw up an information prospectus in accordance with Article 30a of the Law 24/1988 of 28 July 1988 on the market for securities and regulations, it shall draw up and put to the the provision of the affected investors an information document containing all the data necessary for the latter to properly assess the appropriateness of accepting the entity's proposal.

2. In the event that the acceptance of the action for the management of hybrid instruments of capital and subordinated debt involves the hiring or subscription of new banking or financial products, the institution shall design a procedure of acceptance of the offer to enable compliance with the specific rules on investor protection.

Section 2. Shares in the management of hybrid instruments of capital and debt subordinated by the Banking Ordered Restructuring Fund

Article 41. Management of hybrid instruments of capital and debt subordinated by the Banking Ordered Restructuring Fund.

1. In the terms provided for in this Section, the FROB shall agree, as an administrative act, for the management of hybrid instruments of capital and subordinated debt in the case of credit institutions referred to in Article 37.1 for the purposes of: a restructuring or resolution plan has been drawn up, including them in such a plan, if it considers that they are necessary to achieve one of the following objectives:

(a) Ensure an appropriate allocation of the costs of the restructuring or the resolution of credit institutions, in accordance with the State aid rules of the European Union and seeking to minimise the use of the public resources.

b) Preserve or restore the financial position of credit institutions receiving financial support from the FROB.

2. The management actions of hybrid instruments of capital and subordinated debt as agreed by the FROB shall be binding on the credit institutions to whom they are addressed, for their entities wholly owned directly or indirectly. through which the issue has been issued, and for the holders of the hybrid instruments of capital and subordinated debt. To the extent that such management actions are intended to ensure an adequate distribution of the restructuring or resolution costs, hybrid capital and subordinated debt instruments shall be excluded from such management shares. the FROB itself has subscribed or acquired under this royal decree-law, regardless of whether they have been subscribed prior to such actions.

Article 42. Content of the management actions of hybrid instruments of capital and subordinated debt as agreed by the FROB.

1. The FROB shall determine which issues or items of hybrid instruments of capital and subordinated debt are within the scope of the management action, and shall respect, in that determination, the different ranking order that can have the emissions to each other. No further losses shall be attributed to the holders of securities which have a better range than others, and in any event, it shall be necessary for the shareholders, members or partners of the credit institution to bear losses to the extent that they are possible.

2. The management of hybrid instruments of capital and subordinated debt which the FROB may agree on as provided for in this Section shall be one or more of the following:

(a) The deferral, suspension, elimination or modification of certain rights, obligations, terms and conditions of all or any of the issuance of hybrid instruments of capital and subordinated debt of the entity within the meaning of Article 37.2. The amendments may affect, inter alia:

1. The interest payment.

2. # The principal refund.

3. º Non-compliance assumptions.

4. The expiration date.

5. The individual or collective rights of investors.

6. The right to request the declaration of a non-compliance.

7. º The right to demand any payment related to the securities.

b) The obligation of the entity to repurchase the affected securities at the price determined by the FROB itself.

The FROB will be empowered to design the repurchase procedure, without the total repurchase price of each of the issues being able to exceed its market value and the premiums or discounts that are in compliance with the the European Union in the field of State aid. In any event, investors shall receive an amount not less than the amount they would have received in the event of liquidation of the institution in the course of a court-supervised procedure.

The FROB may also stipulate that the payment of the repurchase price is reinvested in the subscription of shares, participative shares or contributions to the share capital, as appropriate, or that such payment is made in kind by the delivery of shares or participative shares available in direct or indirect self-portfolio of the entity.

(c) Any other performance that the credit institution concerned may have performed through a management of hybrid instruments of capital and subordinated debt.

3. For the purpose of implementing the measures corresponding to the previous paragraph, the FROB may adopt the social agreements and shall carry out the necessary actions under the provisions of Article 61. The provisions of Article 63.1 shall also apply.

Article 43. Assessment criteria.

The Banking Ordered Restructuring Fund should assess the suitability and content of the management action to be agreed on the basis of the following criteria:

(a) The proportion representing the entity's hybrid capital and subordinated debt instruments with respect to the entity's total assets.

(b) The amount of public aid received or to be received by the institution and its form of implementation, and in particular whether the institution has received or is to receive financial support in the form of social capital.

(c) The proportion representing public aid received or committed in respect of the institution's risk-weighted assets.

d) The viability of the credit institution without such aid.

e) The current and future capacity of the credit institution to capture own resources in the market.

(f) The amount that the holders of hybrid instruments of the credit institution and subordinated debt would receive in the event of dissolution and liquidation of the credit institution and in the absence of public aid.

g) The market value of the hybrid instruments of capital and subordinated debt to which the action is to be affected.

h) The effectiveness obtained or that could obtain a management action of hybrid instruments of capital and subordinated debt carried out by the entity.

i) The degree of probability that investors would voluntarily accept the measures provided for in the previous article, taking into account, in addition, the majority profile of investments in each of the issues to which will affect the action.

Article 44. Approval of the management of hybrid instruments of capital and subordinated debt.

The management of hybrid instruments of capital and subordinated debt will be approved by the FROB, which will forward it, together with a memory with the reasons justifying its adoption, to the Banco de España.

Article 45. Advertisement and date of effects of the FROB agreement.

1. The FROB shall immediately notify the credit institution concerned and, to the Ministry of Economy and Competitiveness, the implementation of the management action of hybrid instruments of capital and subordinated subordinated debt. The content of the relevant agreement will be published as a relevant fact, as well as in the "Official State Gazette" and on the Fund's own website.

2. The credit institution concerned shall ensure knowledge of the content of the action agreed by the FROB by the investors affected by it, by publishing the action on its website and, where appropriate, on the Commission's website National of the Securities Market and in the listing bulletin of the markets in which the securities concerned are admitted to trading.

3. The agreement shall have effect from the date of its publication in the Official Gazette of the State.

Article 46. Modification of a management action of hybrid instruments of capital and subordinated debt.

1. At any time, in the event of exceptional circumstances, the FROB may, in accordance with the procedure laid down in Article 44, amend an action for the management of hybrid instruments of capital and subordinated debt.

For these purposes, exceptional circumstances shall be understood to exist if a situation of instability of the entity persists or there is an imminent threat to its stability or to the financial system as a whole, and the Banco de España considers that it is appropriate to modify the terms of the action in order to better address this situation.

2. The amendment to be agreed shall be approved in accordance with the procedure laid down in Article 44 and shall be published in accordance with Article 40 and shall produce effects from the date of its publication in the Official Journal of the European Communities. Status ".

Article 47. Rights of investors affected by a management of hybrid instruments of capital and subordinated debt.

1. Outside the provisions of Article 69, holders of hybrid instruments of capital and subordinated debt affected shall not be able to initiate any other procedure for the claim of quantity on the basis of a breach of the terms and conditions of the corresponding issue, if those terms have been affected by a management of hybrid capital instruments and subordinated debt agreed by the FROB and the entity is complying with its content.

2. Outside the provisions of Article 71.1, holders of hybrid instruments of capital and subordinated debt affected shall not be able to claim from the institution or the FROB any kind of economic compensation for any damage they may have caused to them. cause the execution of a management action of hybrid instruments of capital and subordinated debt.

Article 48. Rights of third parties.

The management actions of hybrid instruments of capital and subordinated debt that are agreed upon by the FROB, as well as the actions of the credit institution aimed at fulfilling them, cannot be considered as a cause of default or anticipated maturity of the obligations that the credit institution maintains with third parties other than those referred to in the previous article. As a result, shares in the management of hybrid instruments of capital and subordinated debt shall not modify, suspend or terminate the credit institution's relations with third parties, nor shall they grant new rights or impose new rights. new obligations to the credit institution vis-à-vis those. In particular, the said management actions of hybrid instruments that are agreed by the FROB, as well as the actions of the credit institution aimed at the fulfilment and execution of the hybrid instruments, may not be alleged by third parties as a an alteration of the range of the order of payment of the entity's debt, for the purposes of its invocation for the exercise by the same procedural actions.

Consequently, the hybrid instrument management actions will not modify, suspend or terminate the credit institution's relations with third parties, nor will they grant new rights or impose new ones. obligations to the credit institution vis-à-vis those.

Article 49. Sanctioning regime.

This Chapter VII will have the consideration of rules of ordination and discipline for the purposes of Law 26/1988, of July 29, on Discipline and Intervention of Credit Entities.

In particular, the non-compliance or the hindering of the execution of a management action of hybrid instruments of capital and subordinated debt agreed by the FROB shall be considered to be very serious. It shall have the same rating of disclosure or disclosure by any means of the terms and conditions of a proposed management action of hybrid capital instruments and subordinated debt before it is effectively agreed by that Background.

The credit institution affected by the action shall respond to the actions of any of its fully participating entities that are broadcasters of the securities included within the scope of the action.

CHAPTER VIII

Banking Orderly Restructuring Fund

Section 1. Nature and legal status

Article 50. Bank Orderly Restructuring Fund.

1. The FROB shall aim to manage the processes of restructuring and resolution of credit institutions.

2. The FROB is an entity governed by public law with its own legal personality and full public and private capacity for the development of its purposes, which will be governed by what is established in this royal decree.

3. The FROB shall be subject to private law, unless it acts in the exercise of the administrative powers conferred by this royal decree-law or other rules of law. The measures for the restructuring or resolution of credit institutions to be adopted by the FROB shall, where appropriate, be communicated to the European Commission or to the National Competition Commission for the purposes of the provisions of the rules on aid for State and defence of competition.

4. The FROB shall not be subject to the provisions of Law 6/1997 of 14 April of the Organization and the Functioning of the General Administration of the State, nor shall it be subject to the general rules governing the budgetary procedure, economic-financial, accounting and control of public bodies dependent on or linked to the General Administration of the State, except as regards the external audit of the Court of Auditors, in accordance with the provisions of the Law Organic 2/1982 of 12 May of the Court of Auditors and the submission of the internal system of its management in the economic and financial field to the permanent financial control of the General Intervention of the State Administration as provided for in Chapter III of Title VI of Law 47/2003 of 26 November, General Budget. The FROB shall not be subject to the provisions of Law 33/2003 of 3 November of the Heritage of Public Administrations.

5. The staff of the FROB shall be selected in accordance with the principles of equality, merit, capacity and publicity, and shall be linked to it by a relationship of labour law. Without prejudice to the foregoing, the official staff who are to provide services in the FROB may do so in the situation of special services. The expenditure of staff of that fund and its managers shall be subject to the limits laid down for public sector entities.

6. The FROB shall, for tax purposes, have the same treatment as the Credit Entities Deposit Insurance Fund.

7. The FROB may contract with third parties the performance of any material, technical or instrumental activities which are necessary for the proper performance of its functions, in accordance with the principles of publicity and concurrency, except in exceptional and urgent cases.

Article 51. Funding.

1. The FROB shall have the allocations to be made from the General Budget of the State.

2. In addition, for the purpose of fulfilling its objectives, the FROB may attract financing by issuing fixed income securities, receiving loans, requesting the opening of loans and carrying out any other borrowing operations.

The foreign resources obtained by the FROB, whatever the mode of their implementation, should not exceed the limit that will be established in the corresponding annual laws of the General Budget of the Status.

3. The non-committed assets of the Fund shall be in the form of public debt or other high liquidity and low risk assets. Any profit accrued and accounted for in its annual accounts will be entered into the Treasury. The cash service of the FROB will be carried out by the Banco de España with which it will sign the appropriate agreement.

Article 52. Government of the Bank Ordered Restructuring Fund.

1. The FROB will be governed and administered by a nine-member Rector Commission:

a) Four members appointed by the Bank of Spain, one of whom will be the Deputy Governor, who will hold the Presidency of the Rector Commission.

(b) The Secretary-General of the Treasury and Financial Policy, who shall hold the Vice-Chair of the Rector Commission and shall replace the President in his/her duties in case of vacancy, absence or disease.

c) The Assistant Secretary for Economy and Competitiveness.

d) The President of the Accounting and Audit Institute of Accounts.

e) The Director General of Economic Policy.

f) The Director General of Budgets.

Attend the sessions of the Rectoring Commission, with a voice but without a vote, a representative appointed by the General Controller of the State Administration and another by the State Advocate General-Director of the Service Legal status of the State.

The Executive Board of the Bank of Spain will appoint the three members of the Rectoring Commission, other than the Subgovernor.

The Director General of the FROB will be able to attend the sessions of the Rectoring Commission, with a voice but without a vote. In addition, the Rector Commission may authorize participation in its observer sessions, provided that such participation does not create conflicts of interest that may interfere with the development by the FROB of the functions provided for in this real decree-law. The Rectoring Commission itself shall establish the terms in which the participation of these observers shall be unwrapped, which shall in any event be without a vote and shall be subject to the duty of secrecy.

2. The duties of the Registrar of the Rector's Commission shall be exercised by the person appointed in accordance with the Rules of Procedure of the FROB.

3. The members of the Rectoring Commission shall cease in their status as such for the following reasons:

a) Cese in the respective charges.

(b) Cese agreed by the Executive Board of the Bank of Spain, in the case of the members appointed by the Bank of Spain, other than the Deputy Governor.

4. The Rectoring Commission shall meet each time it is convened by its President, either on his own initiative or at the request of any of its members. It shall also be empowered to establish its own system of calls.

5. The Commission is responsible for the adoption of decisions concerning the powers and functions conferred on the FROB, without prejudice to the delegations or proxies which it considers appropriate to be adopted for the proper exercise of those decisions. In any case, the following functions will not be delegated:

(a) The functions attributed to the FROB for the approval of the plans for the restructuring and resolution of institutions and the management of hybrid instruments of capital and subordinated debt.

(b) The approval of the decision to carry out the financing operations provided for in Article 51.2.

c) The approval of the annual accounts of the FROB that will be sent annually to the Minister of Economy and Competitiveness and to the General Intervention of the State Administration for integration into the General Account of the State and its transfer to the Court of Auditors, as well as the report to be raised to the Minister for Economic Affairs and Competitiveness for referral to the Economic and Competitiveness Committee of the Congress of Deputies.

6. For the valid constitution of the Rector Commission for the purposes of the holding of meetings, deliberations and adoption of agreements, at least half of its members with the right to vote shall be required to attend. Their agreements shall be adopted by a majority of the members in attendance, with the President having a vote of quality in the event of a tie in the number of votes.

7. The Rectoring Commission shall adopt an internal rules of procedure of the FROB where the essential rules of its performance in the economic, financial, patrimonial, budgetary, accounting, organizational and procedural fields will be collected. The rules will collect the basic lines of their ownership policy on credit institutions that have provided public financial support and will include internal control mechanisms of the government of the FROB. These rules will be based on principles of good management, objectivity, transparency, competition and publicity.

Article 53. Director General of the Bank Ordered Restructuring Fund.

1. The FROB shall have a Director-General who shall carry out the Executive, Management and Ordinary Management functions of the Fund, and the number of others delegated to it by the Rector Commission.

It will be appointed and separated by royal decree of the Council of Ministers, on the proposal of the Minister of Economy and Competitiveness and after consulting the Governor of the Bank of Spain, among persons with capacity, technical preparation and sufficient experience to develop the functions of this office.

2. The Director-General of the FROB shall be responsible for the following tasks:

a) Drive and monitor all operations that conform to this actual decree-law must execute the FROB.

b) Direct the ordinary, economic and administrative management of the FROB.

c) Formulate, submit to audit by auditor and raise for approval by the Rectoring Commission the annual accounts of the FROB.

d) Propose to the Rectoring Commission the adoption of the decisions that correspond to it in accordance with the provisions of this royal decree-law, without prejudice to the fact that the Rectoring Commission may also adopt them ex officio.

e) To execute the agreements of the Rectoring Commission and how many functions it is delegated to it, in accordance with the provisions of Article 52.5.

f) To be accountable to the Governing Commission for the exercise of their duties.

Article 54. Parliamentary control.

1. On a quarterly basis, the President of the Board of the FROB will appear before the Economic and Competitiveness Committee of the Congress of Deputies, in order to report on the evolution of the activities of the FROB and on the key elements of their economic-financial performance.

Additionally, the President of the Board of the FROB will appear, under the conditions to be determined by the Economic and Competitiveness Committee of the Congress of Deputies, to specifically report on the measures taken by the restructuring or resolution implemented by that Fund.

2. The Rectoring Commission will raise a quarterly report on the management and performance of the FROB to the Ministers of Finance and Public Administration and the Economy and Competitiveness, where it will take due account, among other aspects, of the actions of the the economic and budgetary nature of the greatest impact on the FROB during that period. The Minister of Economy and Competitiveness will give the report to the Economic and Competitiveness Committee of the Congress of Deputies.

Article 55. Cooperation and coordination with other national competent authorities.

1. The FROB shall collaborate with the authorities entrusted with tasks related to the supervision, restructuring or resolution of financial institutions, in particular with the Banco de España, the National Securities Market Commission, the General Directorate of Insurance and Pension Funds, the authorities designated by the Autonomous Communities to carry out any such functions, the Insurance Compensation Consortium, the Credit Entities Deposit Insurance Fund and the Investment Guarantee Fund. For this purpose, the appropriate collaboration agreements may be concluded with them, as well as requesting all information necessary for the exercise of the powers conferred on them.

The FROB shall also provide the authorities referred to in the preceding paragraph with the information necessary for the exercise of their powers in accordance with the rules in force.

2. In the case of a resolution of credit institutions belonging to a group or financial conglomerate:

(a) The FROB, in adopting the measures and exercising the powers conferred upon it by this royal decree, will minimize the impact that such measures and powers may have on the other entities of the group or conglomerate and in the group or conglomerate as a whole.

(b) The Banco de España and the FROB, each within the framework of their respective powers, shall assume the function of the coordinators of the resolution when the Bank of Spain is entrusted with the supervision and supervision of the Bank of Spain. the consolidated group in which the dominant entity of the conglomerate is integrated or, failing that, the dominant entity itself considered individually.

Article 56. Cooperation and coordination with other competent international authorities.

1. In the exercise of its powers and in particular in the case of restructuring or resolution of credit institutions belonging to international groups, the FROB shall collaborate with the institutions of the European Union, including the Authority. European Banking, and foreign authorities which have entrusted functions related to the supervision, restructuring or resolution of financial institutions, and may be able to conclude with them the appropriate agreements of cooperation, as well as exchange of information to the extent necessary for the exercise of the powers conferred on them in relation to the planning and implementation of measures for early action, restructuring or resolution. In particular, the FROB may participate in the colleges of resolution authorities that can be established to ensure the necessary cooperation and coordination with foreign resolution authorities.

2. Where the competent foreign authorities do not belong to a Member State of the European Union, the exchange of information shall require that there be reciprocity, that the competent authorities are subject to a duty of secrecy in the conditions which, at least, are comparable to those laid down by the Spanish laws and that the information is necessary for the exercise by the foreign authority of functions related to the supervision, restructuring or resolution of financial institutions which, under their national rules, are comparable to those established by the Spanish laws.

The transmission of information reserved to the authorities referred to in the preceding paragraph shall be conditional, where the information has originated in another Member State of the European Union, to the express conformity of the the authority which has disclosed it, and the information may be communicated only for the purposes for which that authority has given its conformity.

3. In the case of a resolution of credit institutions belonging to a group or financial conglomerate operating in other Member States of the European Union and whose consolidated supervision does not correspond to Spanish authorities, before declaring the the opening of a resolution process, the Banco de España shall consult the European Union authority responsible for the consolidated supervision of the group to which the institution belongs.

The Banco de España may not carry out the consultation referred to in the preceding paragraph in case of urgency, or when it understands that the consultation may compromise the effectiveness of the corresponding measures. In such cases it shall inform the competent authority of the measures taken without delay.

The Banco de España will promote the necessary actions to facilitate the adoption of a joint decision with the resolution authorities of other Member States of the European Union.

4. In the case of a resolution of credit institutions belonging to a financial conglomerate or group operating in other Member States of the European Union, the FROB, when taking measures and exercising the powers conferred on it by the latter. royal decree-law, shall minimise the harmful effects which such measures and powers may have on the stability of the financial system of the European Union, and in particular those of the Member States of the European Union where it operates the group or conglomerate.

Article 57. Duty of secrecy.

1. The data, documents and information held by the FROB under the functions entrusted to it by this royal decree-law shall be reserved and, with the exceptions provided for in the rules in force, may not be disclosed to any of the person or authority, or used for purposes other than those for which they were obtained. This reserved character shall cease from the moment when the persons concerned make public the facts to which the data, documents and information relate.

2. The authorities and persons who, in accordance with the provisions of the foregoing Articles, may receive information from the FROB, as well as the auditors, legal advisers and other independent experts who may be appointed by the FROB in (a) relationship to the planning and implementation of early action, restructuring and resolution measures will also be required to keep secret and not to use the information received for purposes other than that for which it was supplied.

3. Without prejudice to Article 56.1, the provisions on confidentiality and secrecy applicable to the Banco de España and, in particular, those laid down in Article 6 of the Royal Decree, shall apply to the FROB as a supplement. Regulation (EC) No 1298/1986 of 28 June 1986 on the adjustment of the existing right in the field of credit institutions to that of the European Communities, and in paragraph 1 of the fifth additional provision of Royal Decree-Law 21/2012 of 13 July 2012 of liquidity of the public administrations and in the financial field.

Article 58. Application of the competition rules.

In the exercise of its powers, the FROB and the Banco de España will minimize the distortions that their measures may cause under the conditions of competition, complying with the Spanish and European Union regulations in (a) competition and State aid. To this end, the FROB and the Banco de España will collaborate with the European Commission by providing them with the necessary information in the framework of the authorisation procedures provided for in the European Union's competition and aid rules. Status.

Article 59. Adoption of international recommendations.

In the exercise of its powers and provided that they do not contradict the provisions of this royal decree-law and the current regulations, the FROB may take into consideration the recommendations, guidelines, technical standards and other initiatives to be developed at international level in the field of restructuring and resolution of credit institutions and in particular those adopted by the European Commission and the European Banking Authority.

Section 2. First Faculties of the Banking Ordered Restructuring Fund

Article 60. Powers of the Banking Ordered Restructuring Fund.

The FROB will exercise the necessary powers for the implementation of the instruments and measures foreseen in this royal decree. Such powers shall be of a commercial or administrative nature.

Article 61. Commercial faculties.

The FROB shall exercise the powers conferred by commercial law in general:

a) To the entity's management body, when assuming such a condition.

b) To shareholders or holders of any securities or financial instruments, where the FROB has subscribed or acquired such securities or instruments.

(c) to the general meeting or assembly in the cases in which it impedes or rejects the adoption of the agreements necessary for the implementation of the restructuring or resolution measures, as well as in the cases in which the reasons of extraordinary urgency it is not possible to meet the conditions required by the current regulations for the valid constitution and adoption of agreements by the general assembly or assembly. In such cases, the FROB shall be deemed to have all the powers that may be legally or legally applicable to the board or general assembly of the institution and which are necessary for the exercise of the functions provided for in this Article. real decree-law in relation to the restructuring and resolution of credit institutions.

Article 62. General administrative powers.

The FROB will have the following administrative powers, in addition to the remaining ones foreseen in this royal decree:

(a) Determine the economic value of the entity or its corresponding assets and liabilities, for the purposes of the implementation of the measures and instruments provided for in this royal decree-law.

b) Require any person any information necessary to prepare and adopt or implement a measure or instrument of restructuring or resolution.

c) Order the transfer of shares, participative shares or contributions to the share capital or, in general, instruments representing the capital or equivalent of the entity or convertible into them, are their holders, as well as the assets and liabilities of the institution.

d) Carry out capital increase or reduction operations, and total or partial issuance and amortization of obligations, participative shares and any other securities or financial instruments, as well as modifications In the case of the case-law of the Commission, the Commission may, in accordance with Article 3 (2) of the Treaty on European Union, provide for the right of the right of the right of subscription to the capital increase, even in the cases provided for in Article 343 of the Companies Act, Participatory quotas.

e) Perform management actions on hybrid instruments of capital and subordinated debt.

(f) Determine the instruments in which the restructuring or resolution measures are implemented, including, in particular, those involving structural modifications of the entity, the entity's dissolution and liquidation.

g) Dispose immediately, upon the report of the National Securities Market Commission, the transfer of the securities deposited in the entity to another entity enabled to develop this activity, even if such assets are they are deposited in third entities in the name of the entity providing the deposit service.

For these purposes, the FROB, as the entity's administrator, shall take the necessary steps to facilitate the access of the entity to which the securities deposits or their custody are to be transferred to the documentation and accounting and computer records necessary to make the assignment effective.

h) Exercise, in relation to the transmission of securities, financial instruments, assets or liabilities of the institution, all or any of the following powers:

i) Force the entity and the acquirer to provide the necessary information and assistance.

(ii) Require any entity in the group to which the entity belongs to provide the acquirer with the necessary operational services to enable the acquirer to effectively operate the transmitted business. Where the entity of the group is already providing such services to the entity, it shall continue to provide them under the same terms and conditions and, if not, provide them in market conditions.

Article 63. Executive character of the measures.

1. Without prejudice to the requirements laid down in this royal decree and the formal obligations of constancy in public writing, registration or publicity which, if any, may be required by the laws in force, the execution of the acts (a) the administrative provisions laid down by the FROB for the implementation of the instruments referred to in Chapters III and IV, as well as the agreements adopted pursuant to Article 61.c), shall not be subject to approval, ratification, consent, non-opposition or any other processing or requirement, including notification, by the board or assembly general, the shareholders of the entity, obligationists, any members, creditors, debtors, counterparties or any other third parties or authorities, being immediately effective since their adoption, and regardless of whether the process or a corresponding requirement would be imposed by the current or contractually enforceable rules.

2. The execution of such acts shall also not be affected by the rules on banking secrecy.

Article 64. Other applicable conditions.

The adoption of any measure of early, restructuring or resolution action shall not in itself constitute a default or allow any counterparty to declare maturity or resolution by itself. in advance of the relevant operation or contract, or to urge the execution or compensation of any rights or obligations arising out of the operation or the contract, with the provisions of the contract not being put in place.

By way of derogation from the preceding paragraph, the counterparty may declare, in the terms and conditions set out in the relevant contract, the maturity or early termination of the contract or the corresponding contract. operation as a result of an alleged breach before or after the adoption or exercise of the relevant measure or power and not necessarily linked to it.

Article 65. Conditions applicable to financial transactions and contractual netting agreements.

1. As regards the financial transactions and contractual netting agreements referred to in Section 2 of Chapter II of Title I of Royal Decree-Law 5/2005 of 11 March 2005, the provisions of Article 68.3 shall apply. Likewise, the provisions of the second and third paragraphs of Article 68.3 shall apply to these operations and agreements even if the FROB has not made use of the suspension option referred to in this Article.

Consequently, the adoption of resolution instruments or the exercise of the powers necessary to implement such instruments shall not themselves constitute an alleged breach or allow for themselves to be counterparties of the relevant transactions and agreements to declare their maturity or early resolution, or to urge their execution or the clearing of any rights or obligations related to such operations and agreements, except if finally the operation or agreement is not transmitted to the acquirer or bridge bank.

2. The operations by which the resolution measures are implemented, including, inter alia, the instruments listed in Article 25 and Chapter VI, as well as the management of hybrid instruments of capital and subordinated debt; be terminated under the provisions of Article 71 of Law 22/2003 of 9 July, Insolvency.

Article 66. Emergency measures.

For reasons of urgency and in order to ensure the objectives set out in Article 3, the FROB may:

(a) Adopt, in advance of the approval of the relevant restructuring or resolution plan, the instruments provided for in Article 25 (a) and (b) and the financial support instruments in the intended terms in Chapter V, as well as, within the framework of the Spanish and European Union rules on competition and State aid, and taking into account the principle of the most efficient use of public resources and the minimisation of public financial support, providing liquidity to the transitional entity until approval of the corresponding plan.

The implementation of these measures must be authorised by the Banco de España, which will assess them in the framework of the powers referred to in Articles 15 and 24, as appropriate, with the provisions of the paragraphs 6 and 5 respectively of those articles.

(b) Employing a procedure for estimating the economic value of the institution in which independent expert reports are not collected, for the purposes of the assessment referred to in Article 5 and for the implementation of measures of restructuring and resolution.

Article 67. Advertising.

1. The FROB shall carry out the necessary measures to give publicity to the measures adopted pursuant to Chapters III and IV, and in particular to the application of the instruments of resolution and the exercise of the powers concerned, with the the purpose of which they may be known to shareholders, creditors or third parties who may be affected by the relevant measures.

2. Without prejudice to the above paragraph, the FROB shall notify the measures taken to the institution, the Ministry of Economy and Competitiveness and the Bank of Spain.

In addition, where appropriate, the FROB shall report on the measures taken to the European Banking Authority and the European Union authority responsible for the supervision of the group concerned.

3. During the preparation of the restructuring and resolution measures and, in particular, while the assessment referred to in Article 5 is carried out and during the stages of the study or negotiation of any operation in which it may be If any of the resolution instruments are implemented, the entity shall be exempted from the obligation to make public and disseminate any information that may be considered relevant for the purposes of the provisions of the resolution. Article 82 of Law 24/1988 of 28 July.

Article 68. Powers of suspension of contracts and guarantees.

1. The FROB may suspend, as an administrative act, any payment or delivery obligation arising out of any contract concluded by the institution for a maximum period which starts with the publication of the exercise of this power until the five on the afternoon of the following working day.

The above paragraph does not apply to open deposits in the entity.

2. Without prejudice to Chapter VII, the FROB may, as an administrative act, prevent or limit the execution of guarantees on any of the assets of the institution for the limited period of time that the FROB considers required to achieve resolution goals.

3. The FROB may, as an administrative act, suspend the right of counterparties to declare the maturity or advance resolution or to urge the execution or compensation of any rights or obligations related to the transactions financial and contractual netting agreements referred to in Section 2. of Chapter II of Title I of Royal Decree-Law 5/2005 of 11 March 2005 as a result of the adoption of any measure of resolution, restructuring or early action, for a maximum period starting with the publication of the exercise of the the power up to 5 p.m. on the following working day.

At the end of that period, if the assets or liabilities to which the relevant financial transactions and contractual netting agreements relate have been transmitted to a third party, the counterparty may not declare the maturity or early resolution or to call for the execution or compensation of the rights or obligations relating to those transactions and arrangements if the assets and liabilities have been transmitted in accordance with the resolution instruments.

By way of derogation from the preceding paragraph, the counterparty may declare, under the terms and conditions set out in the relevant warranty or contractual compensation arrangements, the maturity or resolution the advance of such agreements or the related operations and to urge their execution or the compensation of the rights or obligations related to such operations and agreements as a result of a previous or subsequent default to the transmission and not linked to it.

CHAPTER IX

Procedural regime

Article 69. Appeal against decisions and agreements of the Banking Ordered Restructuring Fund adopted pursuant to Article 61.

1. The decisions and agreements adopted by the FROB pursuant to Article 61 shall only be contested in accordance with the rules and procedures laid down for the challenge of the social agreements of the capital companies which are contrary to the law. The action of impeachment shall, in any event, lapse within 15 days from the moment when the FROB proceeds to give publicity to the said actions in accordance with the provisions of Article 23 of this royal decree-law.

2. Shareholders, shareholders, bondholders, members, creditors or any other third parties who consider that their legitimate rights and interests have been injured by the decisions taken by the FROB in their status as administrator may request, in accordance with Article 241 of the Capital Companies Act, that they be compensated for the damages suffered. The social action of liability in respect of the actions carried out by the FROB may not be exercised in the context of the process of restructuring or resolution of the institution.

3. If, in accordance with Article 70, there has been an administrative-administrative appeal against any of the acts which the FROB may issue under this royal decree-law, the judge of the mercantile shall suspend the proceedings. initiated under this Article until the decision of the administrative-administrative appeal, where the contested administrative act covered the decisions taken by the FROB pursuant to Article 61.

Article 70. Specialties of the appeal against decisions and administrative acts dictated in the framework of processes of early action, restructuring and resolution.

1. The approval by the Banco de España of the plans for early action, restructuring and resolution will put an end to the administrative route and will be used in the Chamber of the Administrative-Administrative of the National Court. The Bank of Spain and the FROB will be jointly sued for the approval of these plans, although the procedural and eventual responsibility of each of them will be limited to the scope of the they are their own.

2. The acts and decisions of the FROB dictated in the framework of processes of early action, restructuring and resolution, will put an end to the administrative path and will be used in the Chamber of the Administrative-Administrative of the National Audience.

Article 71. Specialties of the appeal against decisions and administrative acts dictated in the management of hybrid instruments of capital and subordinated debt.

1. They shall be entitled to bring proceedings against the acts and decisions of the FROB in respect of the management of hybrid instruments of capital and subordinated debt:

(a) The shareholders or members of the credit institution issuing the hybrid capital instruments and subordinated debt instruments representing at least 5% of the share capital and, where applicable, the fully-funded entity through of which the issue has been instrumented.

(b) the holders of securities falling within the scope of the management of hybrid instruments of capital and subordinated debt.

(c) The union or assembly representative or assembly grouping the holders of the securities of a given issue affected by the action, provided that he is entitled to do so under the terms and conditions of the such issue and the rules governing the operation of such a union or assembly.

2. The order for which, if necessary, the adoption of precautionary measures is agreed must be published in the "Official State Gazette" and the credit institution, the Banco de España and the FROB will give the same publicity to the said car as to the management action of hybrid instruments of capital and subordinated debt.

3. In the event that the legal-administrative action brought by holders of securities falling within the scope of the action for the management of hybrid instruments of capital and subordinated debt or by the Commissioner or representative of the union or assembly that the group is estimated to be, the ruling will only have effects with respect to the emission or emissions in which they would have invested.

4. The credit institution and the FROB shall give the same publicity to the judgment as to the management of hybrid instruments of capital and subordinated debt.

Article 72. Failure to execute a judgment given in the administrative and administrative proceedings referred to in Articles 70 and 71.

1. The Banco de España or the FROB may plead before the judicial authority the reasons which determine the material impossibility of executing a judgment declaring contrary to one of the decisions or acts provided for in Articles 70 and 71. The Judge or the Court shall assess whether or not the reasons for such a decision are satisfied and shall, where appropriate, determine the compensation to be satisfied in accordance with the criterion of allocation of liability laid down in Article 70. The amount of the said compensation shall, at most, be the difference between the damage actually suffered by the appellant and the loss which would have been incurred if, at the time of the adoption of the relevant decision or agreement, it would have resulted in the liquidation of the entity in the framework of a court-supervised procedure.

2. In assessing the causes which determine the material impossibility of executing a judgment, as provided for in the preceding paragraph, the Judge or Court shall take particular account of:

a) The especially significant volume or complexity of the operations affected or that might be affected.

b) The existence of damages that, if the sentence is executed in its strict terms, would be derived for the entity and for the stability of the financial system.

c) The existence of legitimate rights or interests of other shareholders, partners, debenture holders, members, creditors or any other third parties, covered by the legal order.

Additional disposition first. Envelope of the FROB.

The allocation of the FROB referred to in Article 51.1, under no circumstances may the disbursement of higher amounts than initially provided for by the General Budget of the State in the Royal Decree-Law 9/2009, June 26, on the bank restructuring and strengthening of the credit institutions ' own resources, and on the fourth additional provision of Royal Decree-Law 2/2012 of 3 February, on the consolidation of the financial sector.

For the purpose of liquidating the participation of the Deposit Guarantee Fund of Credit Entities in the Fund for Bank Ordered Restructuring, for the contribution made by the Deposit Guarantee Funds in Banks, Savings and Credit Unions in the establishment of the Fund, under Royal Decree-Law 9/2009 of 26 June, shall take into account the net worth resulting from the annual accounts corresponding to the exercise 2011.

Additional provision second. Anticipated revenues from the Banking Ordered Restructuring Fund to the Public Treasury.

Without prejudice to the provisions of Article 51.3, the Treasury may apply to the FROB for the anticipated income of any resource generated during the annual financial year.

Additional provision third. Constitution and regime of the actions of the Delegated Intervention of the General Intervention of the State Administration in the FROB.

1. For the exercise of the functions of permanent financial control referred to in Article 50 (4), a Delegated Intervention of the General Intervention of the State Administration in the FROB shall be constituted. The staffing of the said Delegated Intervention will be carried out only with the staff currently available to the General Intervention of the State Administration, by means of reallocation of personnel.

2. In relation to any control actions on the operations and activities of the FROB that may correspond to the General Intervention of the State Administration pursuant to the provisions of this royal decree, the Article 145 of Law 47/2003 of 26 November, General Budget.

Additional provision fourth. Tax benefits in the Tax on Heritage Transmissions and Documented Legal Acts for FROB operations.

The derogation from the exemption provided for in Article 108.2 of the Law 24/1988 of 28 July 1988 on the Stock Market for the operations resulting from the intervention of the FROB, as provided for in Articles 26, 27 and 35, shall not apply. of this royal decree-law, including those in which the tax authorities are the bridge banks, the asset management companies or the third parties that acquire securities derived from the Fund's interventions.

Additional provision fifth. Effects of early action, restructuring and resolution processes on the continuity of the activities of credit institutions.

1. Since the opening of the restructuring and resolution processes, the judges may not accept the applications for the credit institution. Such actions shall be null and void.

2. The competition of a credit institution, the judge of the mercantile, suspending the processing of the application, will notify the FROB so that within fourteen days it will inform you if it will open a process of restructuring or of resolution of the entity. If any of these two processes are to be opened, the judge of the mercantile will admit that request.

3. The application of the resolution instruments and the actions for the management of hybrid instruments of capital and debt subordinated by the FROB shall be taken into account for reorganisation measures for the purposes of the provisions of the Act of 22 December 2005. April, on the consolidation and settlement of credit institutions.

4. The implementation by the FROB or the Banco de España of the measures and powers provided for in this royal decree will not have the condition of insolvency proceedings for the purposes of the provisions of Law 41/1999, of 12 November, on systems (a) payment and settlement of securities, and shall not by itself constitute an enforcement event within the meaning of Article 11 of the Royal Decree-Law 5/2005 of 11 March 2005 of urgent reforms to boost productivity and improve of public procurement.

5. Furthermore, the implementation of any measure or faculty of the foregoing shall not affect the operation of the Spanish payment systems and the clearing and settlement of securities and financial instruments recognized under Law 41/1999, -on 12 November, including the schemes managed by the central counterparties in the terms of Article 44b of the Law 24/1988 of 28 July 1988 on the Securities Market, and in particular the irrevocability, firmness and validity of the settlement orders or their clearing, or to the funds, securities or commitments to which they are refers to the law, or to the guarantees provided in favour of the system operators or the participating entities. It shall also not affect the exercise of the right of compensation or the execution of guarantees provided for the Bank of Spain, the European Central Bank or any national central bank of the European Union.

Additional provision sixth. Legal regime for the granting of guarantees in respect of the economic obligations payable to the Bank Ordered Restructuring Fund.

1. Under Article 114 of Law 47/2003 of 26 November, General Budget, the General Administration of the State is authorised, subject to the conditions laid down in this additional provision, to grant guarantees in respect of the guarantee of the economic obligations payable to the Fund for the orderly restructuring of the Bank, resulting from the issuance of financial instruments, the coordination of lending and lending operations, and the implementation of any other borrowing operations to be carried out by that Fund.

2. The maximum amounts for the granting of endorsements shall be those determined by the corresponding State General Budget laws.

3. The granting of the guarantees, which will not accrue any commission, will have to be agreed by the Minister of Economy and Competitiveness, in accordance with the provisions of Law 47/2003 of 26 November, and can only be carried out to date. of the extinction of the Fund.

4. In the event of the execution of the guarantee, provided that the guarantee is instated within 5 calendar days following the date of expiry of the guaranteed obligation, the State shall satisfy the legitimate holders of the securities guaranteed, without prejudice to the amounts to be paid under the guarantee. The amount of this compensation shall be the amount resulting from the application of the payment in respect of the execution of the guarantee of the interest rate Euro Over Night Average published by the Banco de España, or the one that the Minister of Economy and Competitiveness, on the day of the expiration of the guaranteed obligation for the number of days between this date and the cash payment by the guarantor, on the basis of a 360-day year.

5. The Minister for Economic Affairs and Competitiveness is authorised to lay down the conditions and procedure for making this compensation effective.

6. The Secretary-General of the Treasury and Financial Policy is authorized to make payments for both the execution of the guarantee and this compensation through operations of Treasury under the specific concepts that are believed to be end.

After completion, the General Secretariat of the Treasury and the Financial Policy shall implement the budget of expenditure for the payments made in the financial year, the payments made in the month of December each year. year will be applied to the expense budget in the immediately following quarter.

Additional provision seventh. Creation of the Banking Restructuring Process Asset Management Society.

1. Within three months of the entry into force of this royal decree-law, the FROB shall constitute, under the name of the Company for the Management of Assets Processed from the Banking Restructuring, S.A., an asset management company intended for to acquire the assets of those entities that the FROB determines, as provided for in Chapter VI.

2. This company shall have the sole purpose of holding, managing and administering directly or indirectly, acquiring and disposing of the assets transferred to it by the credit institutions which are determined in the ninth provision, as well as those that I could acquire in the future. For the purposes of compliance with its object, the company shall act at all times in a transparent manner.

3. This company shall be constituted for a limited period of time to be determined in its statutes.

4. They may acquire the status of shareholders of the company, in addition to the FROB, the Credit Entities Deposit Insurance Fund, the credit institutions, the other entities rated as financial in accordance with Article 3.3 of the Law 25/2005 of 24 November, regulating risk capital institutions and their management companies, other institutional investors and entities that are regulated by law.

In no case will public participation be equal to or greater than fifty percent of the capital of society. Public participation shall mean all the direct or indirect participations held by the public institutional units as defined in the European System of National Accounts.

5. In order to be a member of the board of directors, the conditions of commercial and professional repute required for the exercise of the banking activity shall be required. The statutes shall also provide for the existence of a sufficient number of independent directors, in accordance with the rules laid down by law.

6. Where appropriate management of the asset management company makes it appropriate, the FROB may constitute a management company whose object shall be the management and administration of the assets management company's assets, which shall, where appropriate, represent in the operations of its ordinary traffic, with a view to the realisation of such assets under the best possible conditions, within the term of the said asset management company. This management company will adapt its legal regime to the provisions of the Capital Companies Act and the other rules of private law. Paragraphs 4 and 5 of this additional provision shall apply to the management company.

7. The asset management company or, as the case may be, the management company, shall transmit to the FROB how much information it requires concerning its activity and the adequacy of the activity as provided for in this royal decree.

Additional disposition octave. Assets to be transferred to the Company for the Process Management of Banking Restructuring.

1. The assets to be transmitted shall be determined in accordance with the terms set out in Chapter VI of this royal decree-law by the credit institutions referred to in the ninth provision.

2. In the event that, as provided for in the previous paragraph, the assets to be transmitted fully or partially comprise assets covered by Chapter II of Royal Decree-Law 18/2012 of 11 May on the reorganisation and sale of assets real estate of the financial sector, the transfer to the asset management company in accordance with the provisions of this article will comply with the obligations laid down in article 3.1 of the Royal Decree-Law 18/2012 of 11 May.

3. The set of assets to be transmitted to the asset management company shall include the shares or social holdings in the asset management companies governed by Chapter II of Royal Decree-Law 18/2012 of 11 May 2011. the extent to which the transfer to the company is due to take place, in accordance with Article 3.1 of the Royal Decree-Law 18/2012 of 11 May.

Additional provision ninth. Entities required to transmit assets to the Company for the Process Management of Banking Restructuring.

They will be obliged to transmit the assets collected in the additional provision eighth to the society of management of assets, the credit institutions that to the entry into force of this royal decree-law are found mostly In the case of the Bank of Spain and after the independent assessment of the capital requirements and the quality of the assets in progress at the entry into force of this royal decree, they will require the opening of a process of restructuring or resolution of those foreseen in this royal decree-law.

Additional provision 10th. Separate assets.

1. In the terms that are regulated, pools of assets and liabilities of an asset management company may be set up which shall constitute separate assets, without legal personality, even if they may be beneficial. of rights and obligations under the terms of this royal decree-law and other applicable law.

2. These entities shall adapt their legal regime to this real decree-law and its development rules and, in the alternative, to the regulation of venture capital funds, securitisation and securitisation funds, as soon as possible. application. The rules on composition, quantitative or qualitative, of the assets or liabilities which may be applicable to other such entities shall not in any case be applicable to them.

Additional provision 13th. Consequences of the losses incurred by the credit institutions controlled by the FROB in relation to its net worth.

1. It shall not apply to credit institutions in which the FROB holds the position of control or to those whose management body is controlled by the FROB, the cause of compulsory dissolution provided for in paragraph 1 (e) of the Article 363 of the Capital Companies Act, which does not result in any application either to those entities or to their administrators the scheme set out in Section 2 of Chapter I of Title X of the Capital Companies Act.

2. In the same way, it will not be applicable to these entities as provided for in Article 327 of the Capital Companies Act on the compulsory nature of the reduction of capital due to losses that decrease the net worth below Two-thirds of the share capital figure.

3. The referred articles of the Capital Companies Act shall again apply, where appropriate, from the moment the FROB ceases to hold the position of control or to control the management body of the affected entity, from which the time-limits provided for in Articles 327 and 365.1 of the Capital Companies Act, respectively, shall begin to be taken into account.

Additional provision twelfth. Contracting for emergency processing in the FROB.

The FROB will be able to apply the emergency treatment regulated in Article 113 of the recast of the Law on Public Sector Contracts approved by the Royal Legislative Decree 3/2011 of 14 November for the recruitment of those services that are necessary to ensure the effectiveness of the measures taken in the processes of restructuring and resolution of credit institutions.

Additional disposition thirteenth. Marketing to retailers of preferred shares, convertible debt instruments and subordinated finance as own resources.

The placing on the market or placement between customers or retail investors of the issuance of preferred shares, convertible debt instruments or subordinated loans as own resources under the the solvency rules for credit institutions shall require compliance with the following requirements:

(a) The issue must be directed exclusively to clients or professional investors of at least fifty percent of the total of the same, without the total number of such investors being less than (a) 50, and without application of the provisions of Article 78 (3) (e) of the Law 24/1988 of 28 July 1988 on the Stock Market.

(b) In the case of issues of preference shares, or convertible debt instruments of entities other than listed companies, in the terms of Article 495 of the Capital Companies Act, the nominal value Minimum unit of securities shall be EUR 100 000. In the case of the remaining issues, the minimum unit nominal value shall be EUR 25,000.

This provision has the consideration of the standard of management and discipline of the securities market, constituting its non-compliance with a very serious infringement as provided for in Title VIII of Law 24/1988, of 28 of July.

Additional disposition fourteenth. References to Royal Decree-Law 9/2009 of 26 June 2009 on bank restructuring and the strengthening of the own resources of credit institutions.

The references in the legal order to Royal Decree-Law 9/2009 of 26 June 2009 on bank restructuring and the strengthening of the own resources of credit institutions will be understood as this royal decree-law.

First transient disposition. Ongoing restructuring processes.

1. The provisions of Chapter III of this royal decree-law will result from application to the processes of restructuring of credit institutions that, at the date of entry into force of this royal decree-law, are being developed in accordance with the previewed in Chapter II of Title I of Royal Decree-Law 9/2009 of 26 June 2009 on bank restructuring and the strengthening of the own resources of credit institutions and not concluded on that date.

2. It is understood that the entities which received financial support from the FROB in accordance with the provisions of Title II of Royal Decree-Law 9/2009 of 26 June 2009 are in a process of restructuring for the purposes of this real In the case of the Commission, the Court of State held that the Court of State held that it was not necessary for the Commission to take the necessary steps to ensure that the aid was granted to the State in which the aid was granted. effects of those foreseen in this royal decree-law. In any event, the Banco de España may at any time agree to the opening of the corresponding resolution process of an entity that has received financial support from the FROB in accordance with the provisions of Title II of the Royal Decree-Law. 9/2009, of June 26, if found in the circumstances described in article 19 of this royal decree-law.

By way of derogation from the previous paragraph, the financial supports which the FROB would have granted in accordance with the provisions of Title II of Royal Decree-Law 9/2009 of 26 June 2009 will continue to be governed by the law applicable on the date on which they were granted.

Second transient disposition. Sanctioning and authorization procedures in progress.

The administrative sanctioning and authorization procedures which at the date of entry into force of the fourth and seventh final provisions of this royal decree-law have already been initiated will be governed by the previous regulations until completion.

Transitional provision third. Financial supports received.

1. For the purposes of Articles 41 and 43, where the FROB values the public support received by the relevant credit institution in order to ensure an adequate distribution of the costs of the institution's restructuring or resolution, it shall also take into account the public support that the institution would have received from the FROB and that the entity would have paid out the cash or securities that would have been made available under the financial assistance for the recapitalisation. of the Spanish financial institutions referred to in the fifth Royal provision of the Royal Decree-law 21/2012 of July 13, of liquidity measures of public administrations and in the financial field, even if such public support had been received by the entity before the entry into force of this royal decree-law.

2. Exceptionally, the granting of support measures by the FROB to those processes of integration of credit unions initiated prior to the entry into force of this royal decree-law, under the provisions of Article 10 of the Royal Decree-Law 9/2009 of 26 June 2009 shall be governed by the provisions of that standard, excluding such measures from the financial assistance programme for the recapitalisation of the Spanish financial institutions referred to in the provision Additional fifth of Royal Decree-Law 21/2012, of July 13.

3. Financial support received by a credit institution prior to the entry into force of this royal decree will not result in the application of the provisions of article 4.2 of this royal decree-law.

Transitional disposition fourth. General feasibility plan.

The general viability plan provided for in Article 31.1 bis of Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities, in accordance with the wording established in the fourth final provision of the The actual decree-law will be required for the following entities, six months after the completion of the regulatory development in which their content will be specified.

Transient disposition fifth. Asset transfer scheme of Royal Decree-Law 18/2012 of 11 May on the reorganisation and sale of real estate assets in the financial sector.

The obligation to provide assets awarded or received in payment to the asset management companies referred to in Chapter II of Royal Decree-Law 18/2012 of 11 May on the reorganisation and sale of assets In the case of the financial sector, it shall not apply to those credit institutions which are mainly involved in the FROB or which are subject to a resolution process, or to the other credit institutions belonging to their group. or consolidable subgroup.

Transitional disposition sixth. Principal capital requirements up to 31 December 2012.

Until December 31, 2012, the credit groups and entities referred to in Article 1 of Royal Decree-Law 2/2011 of 18 February, for the strengthening of the financial system, will comply with the capital requirements. principal in accordance with the calculation requirements and procedures in force prior to the entry into force of this royal decree-law.

Single repeal provision. Regulatory repeal.

As many rules of equal or lower rank are repealed, they are opposed to the provisions of this royal decree-law, and in particular the following:

(a) Royal Decree-Law 9/2009 of 26 June 2009 on bank restructuring and the strengthening of the own resources of credit institutions.

(b) Article 3 (2a) and two (b) of Royal Decree 2606/1996 of 20 December 1996 on deposit guarantee funds of credit institutions.

(c) The third transitional provision and the third final provision of Royal Decree-Law 2/2011 of 18 February 2011 for the strengthening of the financial system.

(d) Paragraph 1.3 and Annex II to Royal Decree-Law 2/2012 of 3 February 2012 on the consolidation of the financial sector.

Final disposition first. Amendment of Law 13/1985, of 25 May, of Investment Coefficient, Own Resources and Information Obligations of Financial Intermediaries.

Points (k) and (l) are added to paragraph 1 of the second provision of Law 13/1985, of 25 May, of Investment Coefficient, Own Resources and Information Obligations of Financial Intermediaries, with the following wording:

" k) The public offering for sale must have a tranche aimed exclusively at professional customers of at least 50% of the total of the issue, without the total number of such investors being less than 50, and without (a) the provisions of Article 78a shall apply to this case. 3. (e) of the Law 24/1988, of 28 July, of the Stock Market.

l) In the case of issues of entities other than listed companies, in the terms of Article 495 of the Capital Companies Act, the minimum unit value of the preferred shares shall be EUR 100,000 and in the case of the remaining issues, the minimum unit value of the preferred shares shall be EUR 25,000. '

Final disposition second. Amendment of Royal Decree 1298/1986 of 28 June 1986 on the adaptation of the law in force in the field of credit institutions to that of the European Communities.

With effect from 1 January 2013, Article 6.1 bis (c) of the Royal Decree-Law 1298/1986 of 28 June 1986 on the Adaptation of the Law in force in the field of credit institutions to that of the Communities is amended. European, which is worded as follows:

"(c) The penalties for very serious and serious infringements that lead to public admonition or disablement of administrators or managers."

Final disposition third. Amendment of the Law 24/1988, of July 28, of the Stock Market.

Law 24/1988 of 28 July of the Stock Market is amended as follows:

One. Article 27 (3) is worded as follows:

" 3. Except for admission to trading of non-equity securities whose nominal unit value is equal to or greater than EUR 100,000, the prospectus shall contain a summary which, in a standardised format, in a concise form and in a non-technical language, provide key information to assist investors in determining whether or not they invest in such securities.

Fundamental information, the essential and properly structured information to be provided to investors to enable them to understand the nature and risks inherent in the issuer, the guarantor and the securities offered to them or which are to be admitted to trading on a regulated market, and which may decide on the offers of securities to be further examined.

Without prejudice to what is regulated by law, the following elements shall form part of the basic information:

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

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

(c) The general terms of the offer, including the estimated costs to the investor by the issuer or the offeror.

d) Information about admission to trading.

e) The reasons for the offering and the revenue destination.

In this summary, you will also notice that:

1. º Must be read as an introduction to the brochure.

2. No decision to invest in securities should be based on the investor's consideration of the prospectus as a whole.

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

Two. Article 28 (4) is worded as follows:

" 4. No liability may be required of persons referred to in the foregoing paragraphs on the basis of the summary or on their translation, unless it is misleading, inaccurate or inconsistent in relation to the other parts of the prospectus, or does not provide, in conjunction with the other parts of the prospectus, key information to assist investors in determining whether or not they invest in securities. "

Three. Article 30a (1) shall be drawn up in the following

:

" 1. A public offering for sale or subscription of securities is any communication to persons in any form or by any means that provides sufficient information on the terms of the offer and the securities on offer, so as to permit a investor to decide on the acquisition or subscription of these values.

The obligation to publish a prospectus shall not apply to any of the following types of offers, which, consequently for the purposes of this Act, shall not have the consideration of a public offering:

a) An offer of securities aimed exclusively at qualified investors.

(b) An offer of securities to less than 150 natural or legal persons per Member State, without including qualified investors.

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

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

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

In the case of the placement of emissions referred to in points (b), (c), (d) and (e) of this paragraph, addressed to the general public using any form of advertising communication, an authorised entity shall be involved. to provide investment services for the purposes of the marketing of the securities issued. '

Four. Article 35 (5) (b) is amended and a new point (c) is added, which shall be worded as follows:

" (b) Issuers issuing only debt securities admitted to trading on an official secondary market or other regulated market whose nominal unit value is at least EUR 100,000 or, in the case of debt securities not denominated in euro, the nominal value of which is, at the date of issue, equivalent to at least EUR 100,000.

(c) Without prejudice to point (b) above, issuers having only live issues of debt securities admitted to trading on an official secondary market or other regulated market domiciled in the European Union before of 31 December 2010, the nominal unit value of which is at least EUR 50 000 or, in the case of debt securities not denominated in euro, the nominal value of which was, at the date of issue, equivalent to at least EUR 50 000, all the time when such obligations are alive. "

Five. A new wording is given to the third subparagraph of Article 79a (3) and a new fourth subparagraph is added in the following terms:

" Information concerning financial instruments and investment strategies should include appropriate guidance and warnings on the risks associated with such instruments or strategies. The National Securities Market Commission may require that in the information given to investors prior to the purchase of a product, any necessary warnings concerning the financial instrument shall be included. and, in particular, those that highlight that this is a product not suitable for non-professional investors due to its complexity. It may also require that these warnings be included in the advertising elements.

In the case of securities other than shares issued by a credit institution, the information given to investors shall include additional information to highlight to the investor the differences in these products and the ordinary bank deposits in terms of profitability, risk and liquidity. The Minister of Economy and Competitiveness or, with his or her rating, the National Securities Market Commission, may specify the terms of that additional information. "

Six. Paragraphs 6 and 7 of Article 79a are worded as follows:

" 6. Where the investment advisory or portfolio management service is provided, the institution shall obtain the necessary information on the knowledge and experience of the client, including potential clients, in the field of investment or portfolio management. of investment corresponding to the particular type of product or service concerned; and the financial situation and the investment objectives of the latter, in order to enable the institution to recommend investment services and instruments The financial resources are more convincing. Where the entity does not obtain this information, it shall not recommend investment services or financial instruments to the client or potential client. In the case of professional clients the entity will not have to obtain information about the knowledge and experience of the client. The entity shall provide the client in writing or another durable medium with a description of how the recommendation made to the investor's characteristics and objectives is adjusted.

7. Where services other than those provided for in the previous paragraph are provided, the investment firm shall ask the client, including potential clients, to provide information on their knowledge and experience. in the area of investment corresponding to the specific type of product or service offered or requested, in order to enable the entity to assess whether the investment service or product is appropriate for the customer. The entity will deliver a copy to the client of the document that collects the evaluation.

When, on the basis of that information, the entity considers that the product or investment service is not suitable for the customer, it will be warned. In addition, where the customer does not provide the information referred to in this paragraph or is insufficient, the entity shall warn him that such decision prevents him from determining whether the investment service or the intended product is suitable for him.

Where the investment service is provided in relation to a complex instrument as set out in the following paragraph, the contractual document shall be required to include, together with the client's signature, an expression In accordance with Article 1 (1) of Regulation (EU) No No 1, the Commission shall, in accordance with Article 1 (1) of Regulation (EU) No thereof, provide the Commission with the information provided by the Commission on the basis of the information provided by the national Securities Market Commission. Article.

In terms determined by the National Securities Market Commission, institutions providing investment services shall at all times maintain an up-to-date record of customers and products not suitable for which they are reflect, for each customer, products whose convenience has been evaluated with negative result. "

Final disposition fourth. Amendment of Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities.

Law 26/1988 of 29 July on Discipline and Intervention of Credit Entities is amended as follows:

One. Article 4 (p) is worded as follows:

" p) The lack of referral to the Banco de España by the administrators of a credit institution of the return plan to the fulfilment of the solvency rules or the action or restructuring plans to which it is refers to Royal Decree-Law 24/2012 of 31 August of restructuring and resolution of credit institutions, where this is appropriate. It shall be understood that there is a lack of referral where the time limit for making the referral has elapsed, from the moment the administrators knew or had to know that the institution was in one of the situations that determine the existence of such an obligation. "

Two. With effect from 1 January 2013, Article 18 is worded as follows:

" Without prejudice to the provisions of Article 42 of this Law, it is for the Bank of Spain to be responsible for the instruction of the files referred to in this Title and for the imposition of sanctions. corresponding.

When the Bank of Spain imposes sanctions for very serious infringements, it will give a reasoned account of its adoption to the Minister of Economy and Competitiveness.

The Banco de España will send the Ministry of Economy and Competitiveness on a quarterly basis the essential information on the procedures in question and the resolutions adopted. "

Three. With effect from 1 January 2013, Article 25 (1) and (2) shall be worded as follows:

" 1. The penalties imposed under this Law shall not be enforceable as long as they have not put an end to the administrative route.

2. The decisions of the Bank of Spain ending the procedure shall be brought before the Minister for Economic Affairs and Competitiveness, as provided for in Articles 114 and 115 of Law No 30/1992 of 26 November 1992. Legal of public administrations and of the Common Administrative Procedure. '

Four. Article 30a (1a) is worded as follows:

" 1 bis. Credit institutions and consolidated groups of credit institutions shall have, under conditions proportionate to the nature, scale and complexity of their activities, of an appropriate organisational structure, with lines of responsibility either defined, transparent and consistent, as well as effective procedures for the identification, management, control and communication of the risks to which they are or may be exposed, together with appropriate internal control mechanisms, including sound administrative and accounting procedures and remuneration policies and practices consistent with the promotion of sound and effective risk management.

As part of these governance and organizational structure procedures, credit institutions and consolidable groups of credit institutions will develop and maintain an updated general feasibility plan for credit institutions. measures to be taken to restore the viability and financial soundness of the institution in the event of any significant deterioration. The plan shall be submitted for approval by the Banco de España, which may require the modification of its contents and, if deemed insufficient, impose on the entity the measures provided for in Article 24 of the Royal Decree-Law 24/2012 of 31 August, for the restructuring and resolution of credit institutions. The content to be included in the general feasibility plan shall be specified in regulation.

Likewise, as part of these governance and organizational structure procedures, credit institutions and consolidable groups of credit institutions that provide investment services shall respect the requirements of internal organisation as referred to in Article 70 ter.2 of Law 24/1988 of 28 July 1988 on the Securities Market, with the specifications to be determined.

The adoption of such measures is without prejudice to the need to define and implement those other organisational policies and procedures which, in specific relation to the provision of investment services, are (a) to be required of such entities in application of the specific securities market rules. '

Five. Article 31 is worded as follows:

" Article 31.

1. Where a credit institution is in any of the situations described in Royal Decree-Law 24/2012 of 31 August of restructuring and resolution of credit institutions, the provisional replacement of its credit institution may be agreed. administration in the terms provided for in this law and with the particularities contained in the actual decree-law.

2. The intervention of a credit institution or the temporary replacement of its administrative body may also be agreed in the terms laid down in this law where there is a clear indication that it is in a situation of exceptional gravity which endangers its stability, liquidity or solvency.

3. The intervention or temporary replacement of the administrative body of a credit institution in the situations described in Articles 59 and 62 relating to non-compliance with persons holding a holding shall also proceed. significant.

4. The intervention or replacement measures referred to in this Article may be taken during the processing of a criminal case or irrespective of the exercise of the power of sanction, provided that any of the situations arise provided for in the previous two paragraphs. '

Six. With effect from 1 January 2013, Article 43 (1) is worded as follows:

" Correspond to the Banco de España (Banco de España) to authorize the creation of credit institutions, as well as the establishment in Spain of branches of credit institutions not authorized in a Member State of the European Union. The registration in the corresponding registers, as well as the management of these, will also be the responsibility of the Banco de España. "

Final disposition fifth. Amendment of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction.

A new letter g is added to Article 11 (1) of Law 29/1998 of 13 July, regulating the Legal-Administrative Jurisdiction with the following wording:

" g) Of the actions against the acts of the Banco de España and the Fund for Ordered Restructuring Banking FROB adopted in accordance with the provisions of Royal Decree-Law 24/2012 of 31 August, of restructuring and resolution of credit institutions ".

Final disposition sixth. Amendment of Law 22/2003, dated July 9, bankruptcy.

Paragraph 2 (k) of the second provision of Law 22/2003 of 9 July, which is insolvency, shall be worded as follows:

"k) Royal Decree-Law 24/2012 of 31 August of restructuring and resolution of credit institutions."

Final disposition seventh. Amendment of Royal Decree-Law 2/2011 of 18 February for the strengthening of the financial system.

Royal Decree-Law 2/2011 of 18 February, for the strengthening of the financial system, is amended in the following terms.

One. Article 1 is worded as follows:

" Article 1. Strengthening the solvency of credit institutions.

1. As from 1 January 2013, the consolidated groups of credit institutions, as well as credit institutions not integrated into a consolidated group of credit institutions, which can attract repayable funds from the public, excluding the branches in Spain of credit institutions authorised in other countries, shall have a principal capital of at least 9% of their total risk-weighted exposure amounts and calculated in accordance with the general rules on resources (a) the Commission's own resources and its own resources, as provided for in Law 13/1985 of 25 May 1985; the reporting obligations of financial intermediaries, and in their development rules, and without prejudice to the fulfilment of the own resources requirements required by such rules.

2. Once the deadlines for compliance provided for in the first transitional provision have elapsed, it will apply to the assumptions of insufficient principal capital, with the specialties resulting from this royal decree, the rules on non-compliance with own resources, and in particular the obligation to submit a plan of return to compliance and the provisions of Article 11 of Law 13/1985 of 25 May.

3. The Bank of Spain may require the entities or groups referred to in this Article to comply with a principal capital level higher than that provided for in paragraph 1 if the institution does not reach, in the most adverse scenario of a stress test of the system as a whole, the minimum level of own resources required in that test and up to the limit of that requirement.

4. Furthermore, the Bank of Spain, in the framework of the supervisory review of capital adequacy referred to in Article 10a (1) (c) of Law 13/1985 of 25 May, may require the entities or groups referred to in the this article has an additional excess of principal capital.

5. In any case, the consolidable groups of credit institutions, as well as credit institutions not integrated into a consolidated group of credit institutions subject to the principal capital requirement set out in this Article, shall not, without the subject to the authorisation of the Banco de España, to reduce the principal capital components below the figure of 31 December 2012 when that reduction was due to the distribution, reimbursement or remuneration of the components of the principal capital or of any other action which has as its object the impairment of the the commitment of the holders of the respective instruments to the issuing entity. '

Two. Article 2 is worded as follows:

" Article 2. Main capital.

1. For the purposes of Article 1, the principal capital of a credit institution shall comprise the following elements of its own

:

(a) The share capital of public limited liability companies, excluding, where appropriate, non-voting and redeemable shares; the funds and the equity shares of savings banks and equity partnership shares issued by the Spanish Confederation of Savings Banks; and contributions to the social capital of credit unions. In any event, the calculation of the shares or the securities referred to at this point which are held by the institution or any consolidable entity and those which have been the subject of any transaction or undertaking which adversely affects their effectiveness to cover losses of the entity or group.

(b) The issuance premiums paid out in the subscription of ordinary shares or other instruments provided for in the preceding subparagraph.

c) Effective and express reserves, as well as items that are classified as reserves, in accordance with the general rules on own resources, and the positive results of the exercise.

(d) The representative shares of the minority interests corresponding to the ordinary shares of the companies of the consolidable group, in accordance with the general rules on own resources.

e) The computable instruments subscribed by the Fund for Banking Restructuring, in the framework of its regulatory regulations, that are also computable as basic own resources by the regulations on requirements of applicable own resources.

f) The instruments convertible into ordinary shares, participative shares or contributions to the capital of credit unions, which the Banco de España qualifies as a principal capital. The contracts or prospectuses, as well as any modification of their characteristics, must be previously submitted to the Banco de España, in order to enable it to qualify as principal capital.

2. The result of the above sum will be deducted the amount of:

(a) The negative results of previous financial years, which are accounted for as the debtor balance of the accumulated reserve account (loss), and the loss of the current financial year, including the amount of the financial year results (loss) attributed to the minority, as well as the debtor balances of the net worth accounts.

(b) intangible assets, including goodwill from business combinations, consolidation or the application of the equity method. The value of such assets shall be calculated in accordance with the provisions of the Banco de España.

c) 50% of the amount of the following assets:

i) The holdings in financial institutions that are consolidated by their activity, but not integrated in the consolidable group, where the participation is greater than 10% of the capital of the investee.

(ii) units in insurance, reinsurance or other entities whose principal activity consists of taking shares in insurance undertakings, in the sense referred to in the first subparagraph of paragraph 3 of the Article 47 of the Trade Code, or where, directly or indirectly, 20% or more of the voting rights or the capital of the investee are available.

iii) subordinated financing or other transferable securities as own resources issued by the participating entities referred to in the two preceding paragraphs and acquired by the entity or group holding the participations.

(iv) Shares equal to or less than 10% of the capital of financial institutions that are consolidated for their activity, but not integrated in the consolidable group, and subordinated financing or other transferable securities such as own resources issued by entities of that character, whether or not participated, and acquired by the entity or group holding the shares, in the party that the sum of all shares exceeds 10% of the own resources items collected in the the net preceding paragraph 1 of the deductions referred to in point (a) and (b) of this paragraph.

v) The amount of exposures in securitisations that receive a risk weight of 1,250% in accordance with the applicable rules on own resources requirements, except where that amount has been included in the calculation of the weighted risks for the calculation of the own resources requirements for securitised assets, whether or not they are within the trading book.

vi) For institutions that calculate risk-weighted positions according to the internal ratings-based method the negative balance arising from subtracting impairment corrections and provisions for the risks and expected losses; and the expected loss amounts of the variable income risks whose exposures are calculated by the method based on the probability of default and loss in the event of non-compliance (method PD/LGD) or the simple method for the portfolio available for sale. "

Three. Article 3 is worded as follows:

" Article 3. Sanctioning regime.

1. The obligations laid down in this royal decree-law shall be regarded as rules of ordination and discipline, involving entities and persons who do not comply with administrative responsibility punishable under the provisions of Title I of the Treaty. Law 26/1988, of July 29, on Discipline and Intervention of Credit Entities.

2. Without prejudice to the provisions of the first transitional provision of this Royal Decree-Law, failure to comply with the provisions of Article 1 shall be deemed to be very serious or serious in accordance with the provisions of Article 4 (c) and Article 5 (h) of Law 26/1988 of 29 July. '

Four. The first transitional provision is worded as follows:

" First transient disposition. Strategy for meeting capital requirements.

1. The consolidated groups of credit institutions, as well as credit institutions which are not integrated into a consolidated group of credit institutions, shall comply with the provisions of the main capital requirements in paragraphs 1 and 2 of the Article 1 of this royal decree-law, January 1, 2013.

2. Those entities or groups of credit institutions that are consolidated on 1 January 2013 do not have the principal amount of capital that they are required to provide in accordance with Article 1.1 shall be required to submit to the Bank of Spain, in the deadline of 20 working days, the strategy and the timetable for compliance by 30 June 2013, without prejudice to the provisions of the following subparagraph. Within 15 working days, such measures shall be approved by the Bank of Spain, which may require the inclusion of any additional modifications or measures deemed necessary to ensure compliance with the capital figure. principal demand. However, the consolidated entities or groups of credit institutions which provide for the failure to comply with the principal capital requirement on 1 January 2013 shall communicate that forecast to the Banco de España, which shall approve the strategy and timetable for tentative compliance submitted by the entity in case of confirmation of such non-compliance, all in accordance with the deadlines set out above.

The provisions of this paragraph will not apply to those entities which, in the framework of Royal Decree-Law 24/2012 of 31 August, have submitted plans for the restructuring and resolution of institutions of credit, which provides for compliance with the principal capital requirements set out in Article 1 of this royal decree-law.

3. The sanctioning regime referred to in Article 3 shall not apply to institutions until the time limits for compliance with the principal capital requirements provided for in this provision have elapsed.

4. Entities integrated into an institutional protection system in accordance with the provisions of Article 8.3.d of Law 13/1985 of 25 May 1985 of investment coefficients, own resources and information obligations of intermediaries (a) financial institutions shall, at the individual level, adopt agreements requiring the implementation of the recapitalisation strategy and timetable. '

Final disposition octave. Amendment of Royal Decree-Law 16/2011 of 14 October establishing the Deposit Insurance Fund for Credit Entities.

Royal Decree-Law 16/2011 of 14 October, establishing the Credit Entities Deposit Insurance Fund, is amended as follows:

One. Article 2.1 is worded as follows:

" 1. The Credit Entities Deposit Guarantee Fund, hereinafter the Fund, is created to guarantee deposits in credit institutions up to the limit provided for in this royal decree. "

Two. Article 4 is worded as follows:

" Article 4. Function of the Credit Entities Deposit Insurance Fund.

The function of the Fund is the guarantee of deposits as provided for in this royal decree-law and its development regulations. "

Three. Article 8.1 (b) is worded as follows:

" (b) That, having been defaulted on deposits and as long as the opening of a resolution process of the institution has not been agreed, the Banco de España determines that the institution is unable to immediately return them for reasons directly related to their financial situation. The Bank of Spain shall make such a determination as soon as possible and in any event must resolve within the maximum period to be determined by regulation, after having verified that the institution has failed to restore the deposits. expired and enforceable. "

Four. Title III is deleted.

Five. An article 11 is inserted, which is worded as follows:

" Article 11. Measures to support the resolution of a credit institution.

1. In order to comply with the function provided for in Article 4 and in the defence of depositors whose funds are guaranteed and the Credit Entities Deposit Guarantee Fund itself, the Fund may adopt measures to support the resolution of the a credit institution.

For these purposes, when a credit institution is in a resolution process in accordance with the provisions of Royal Decree-Law 24/2012 of 31 August of restructuring and resolution of credit institutions, the Fund, within the framework of the approved resolution plan, it may implement any measure of financial support provided for in the following paragraph to facilitate the resolution of the institution.

By adopting these measures, the Credit Entities Deposit Guarantee Fund will not be able to assume a higher financial cost than the disbursements it would have had to make at the time of the opening of the resolution, for making the payment of the amounts secured in the event of liquidation of the entity.

2. The financial support measures that may be implemented by the Credit Entities Deposit Insurance Fund may be implemented in one or more of the following:

a) The granting of guarantees.

b) The granting of loans or loans.

c) The acquisition of assets or liabilities, being able to maintain its management or to entrust it to a third party.

3. The Credit Entities Deposit Insurance Fund may request the FROB Rector Commission for information regarding the resolution process necessary to facilitate its participation in accordance with the provisions of this Article. With the transfer of this information, the Credit Entities Deposit Guarantee Fund will be subject to the obligation of secrecy regime provided for in Article 57 of Royal Decree-Law 24/2012 of 31 August. "

Final disposition ninth. Amendment of Royal Decree-Law 2/2012 of 3 February on the consolidation of the financial sector.

Royal Decree-Law 2/2012 of 3 February, on the consolidation of the financial sector, is amended as follows:

One. Article 2.2 (g) is worded as follows:

" g) The shareholders ' meetings or general assemblies of the participating entities shall vote in favour of the integration agreement before 31 October 2012. In any event, the integration shall be completed no later than 1 January 2013. '

Two. Article 5 (3) (a) (4) is worded as follows:

" Remuneration fixed by all the concepts of Executive Presidents, delegated and managerial directors of the entities that, without majority participation by the FROB, receive financial support from the same: 500,000 euro. "

Three. Article 5.6 is amended as follows:

" When the entities referred to in paragraphs 1, 2 and 3 participate or have participated in an integration process, the limitations to the remuneration referred to in those paragraphs shall only apply to the institutions. managers and managers who are the managers of those entities which require public financial support or which are of origin to it, and which, for the purposes of this paragraph, must be identified as such in the relevant integration plan. In addition, the Minister for Economic Affairs and Competitiveness, in the light of the remuneration plan presented and the economic and financial situation of the entities participating in it, may amend the criteria and limits set out in paragraphs 2. and 3 of this article. "

Final disposition tenth. Amendment of Law 2/2012, of 29 June, of General Budget of the State for the year 2012.

Law 2/2012, of 29 June, of the General Budget of the State for the year 2012, is amended as follows:

One. An Article 51a is added which is worded as follows:

" In accordance with the provisions of Article 51.2 of Royal Decree-Law 24/2012 of 31 August of restructuring and resolution of credit institutions, the limit of the foreign resources obtained by the FROB during the financial year 2012 budget, will be 120 billion euros. "

Two. Article 52 (1) is worded as follows:

"The maximum amount of guarantees to be granted by the State during the year 2012 shall not exceed EUR 258,278,560 thousand."

Three. Article 52 (2) (b) is worded as follows:

" 96,235,000 thousand euros for the granting of guarantees to the economic obligations arising from the bonds and bonds issued by the credit institutions resident in Spain with a significant activity in the domestic credit market, of which 55,000,000 thousand euros are reserved for those endorsements that are granted from the entry into force of this law and which are regulated in Article 52a. "

Final disposition 13th. Amendment of Royal Decree-Law 21/2012 of 13 July 2012 of liquidity measures of public administrations and in the financial field.

Paragraph 4 of the fifth additional provision of Royal Decree-Law 21/2012 of 13 July 2012 is read as follows:

" 4. In the field of its functions and taking into account the benefit of the system of the attached entities, the Credit Entities Deposit Guarantee Fund may adopt measures to facilitate the implementation of the assistance. European financial support for the recapitalisation of Spanish credit institutions. In any event, the cost of such measures shall be lower than the disbursements that the Deposit Guarantee Fund of Credit Entities would have had to make in accordance with its regulatory regulations, to elect, at the time of opening of the restructuring or resolution process, for making the payment of the amounts secured in the event of liquidation of the institution. '

Final disposition twelfth. Legal regime applicable to guarantees formed in favour of the Banking Ordered Restructuring Fund and the Credit Entities Deposit Insurance Fund.

The legal regime established in the additional provision of Law 13/1994, of 1 June 1994, of the Autonomy of the Banco de España, will also apply to guarantees formed in favour of the FROB and the Guarantee Fund Deposits of Credit Entities in the exercise of their functions.

Final disposition thirteenth. Competitive titles.

This royal decree-law is dictated by the provisions of article 149.1.6., 8. ª, 11. ª, 13. and 14. of the Spanish Constitution, which attribute to the State jurisdiction over commercial and procedural law, civil legislation, bases for the management of credit, banking and insurance, bases and coordination of the general planning of economic activity and general finance and government debt, respectively.

Final disposition fourteenth. Faculty of development.

1. The Government may lay down the regulatory standards necessary for the development of the provisions of this royal decree-law.

2. The Bank of Spain is empowered to lay down the precise provisions for the proper implementation of the provisions of the seventh final provision and, in particular, to establish the frequency and form of the declarations of compliance with the capital ratio. (a) to define the accounting concepts to integrate the definition of principal capital as well as the way in which they are to be taken into account, and to specify the requirements for the issuance of debt instruments which are obligatorily convertible for their computability as the principal capital. It may also determine how risk-weighted exposure amounts may be adjusted so that the own resources requirement for each risk exposure does not exceed the value of the exposure itself and that consistency between the exposure is preserved. value of exposures and components of principal capital.

Final disposition fifteenth. Completion of the validity of Chapter VII.

The provisions of Chapter VII of this royal decree-law shall apply until 30 June 2013.

Final disposition sixteenth. Entry into force.

This royal decree-law will take effect from the time of its publication in the "Official State Gazette."

Given in Madrid, on August 31, 2012.

JOHN CARLOS R.

The President of the Government,

MARIANO RAJOY BREY