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Royal Decree 1309 / 2005 Of November 4, Which Approves The Regulation Of The Law 35/2003, 4 November, Collective Investment Institutions, And Adapts The Tax Regime Of Collective Investment Undertakings.

Original Language Title: Real Decreto 1309/2005, de 4 de noviembre, por el que se aprueba el Reglamento de la Ley 35/2003, de 4 de noviembre, de instituciones de inversión colectiva, y se adapta el régimen tributario de las instituciones de inversión colectiva.

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TEXT

I

Law 35/2003 of 4 November, of collective investment institutions, has been an important milestone in the sector of collective investment in Spain by repealing Law 46/1984 of 26 November, regulating the institutions of collective investment, after almost 20 years of validity, and to establish a new legal framework in which the activity of this sector in Spain in the 21st century has to be developed.

Law 35/2003 of 4 November aims at the fundamental objective of the modernization of this legal framework. To this end, the law is based on three fundamental principles. Firstly, to provide the sector with adequate flexibility to enable collective investment structures to be able to adapt to the successive and continuous changes that the market demands. Secondly, to establish the necessary measures and procedures to ensure adequate protection for investors, while recognising the existence, in certain cases, of different levels of protection depending on the nature and profile of the investor. Finally, the law makes a determined commitment to the modernization of the entire administrative regime, simplifies procedures and reduces the time of authorization.

In addition, the law incorporates into law the latest Community developments in the field, by transposing Directives 2001 /107/EC and 2001 /108/EC of the European Parliament and of the Council of 21 January 2002 amending the Council Directive 85 /611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view to the regulation of companies (a) the management and the simplified prospectuses and as regards the investments of the UCITS; respectively.

Now, without prejudice to the important novelties introduced by the law in the current legal order, one of its main characteristics is its open character. In fact, the legislator's intention was to draw up a framework law or principles, similar to its predecessor, Law 46/1984 of 26 November, with the intention that much of the aspects of the regulation of investment They are to be developed at regulatory headquarters.

In short, the regulation approved by this royal decree concretely many of the aspects that in the law are regulated with an open character. This development is based on the legislative enablement made by the legislator himself in favor of the government, both in the fifth final provision of the law and throughout its articles.

In addition, the necessary adaptations to complete the regulation of the taxation of collective investment institutions are included in this royal decree.

II

The royal decree consists of a single article approving the regulation, a transitional provision, a derogation provision and eight final provisions. The transitional provision declares the validity of the rules laid down in the development of the previous regulation in all that they do not object to Law 35/2003, of 4 November, or to the regulation that is adopted.

The first, second, third and fourth final provisions include the various changes and developments in the tax area, both in the system of the collective investment institutions themselves and in the case of the taxation of unit-holders or shareholders. The fifth final provision amends Royal Decree 867/2001 of 20 July 2001 on the legal status of investment firms to make improvements to the administrative procedure for the authorisation of statutory amendments. As regards the final provision, sixth, it amends the Regulation of credit unions, approved by Royal Decree 84/1993 of 22 January, to adapt the scheme of credit cooperatives to international accounting standards.

III

The regulation develops and gives full effectiveness to the objectives of Law 35/2003 of 4 November. As regards the principle of flexibilization of the framework for action by collective investment institutions, it is expressed in a series of measures with the aim of avoiding restrictions or the establishment of unnecessary obstacles to the The possibilities for investment and action of the Spanish collective investment institutions. Among these measures is the creation of classes of shares or series of shares within the same institution of collective investment; the regulation of the collective investment institutions of free investment, known the term 'hedge fund', or the elimination of the obligation that the shares of the collective investment companies of a financial character should be traded on stock exchanges, and the establishment, as a result, of alternative methods for granting liquidity to your shares.

The principle of investor protection is an essential element of financial policy, especially in the area of collective investment, a traditional instrument for attracting popular savings. This principle is manifested in the concreteness and development of the duties of diligence and loyalty of the management companies and the duty to monitor the performance of the management company, entrusted to the depositary. In addition, the regulation subjects management companies, depositaries, marketers and investment companies to comply with a set of rules of conduct with the aim of preventing conflicts of interest.

The principle of improving the system of administrative intervention laid down in Law 35/2003 of 4 November is based on the rules of procedure for the creation and modification of the compartments of the collective investment institutions and the establishment of the administrative intervention system.

Finally, the transposition into the Spanish legal order of Directives 2001 /107/EC and 2001 /108/EC is closed. On the one hand, the investment policy of the collective investment institutions of a financial character is definitely concrete, expanding its possibilities for investment in bank deposits, collective investment institutions, instruments financial derivatives and non-listed money market assets, among others. On the other hand, the legal status of the managing companies is completed by making the requirements for the delegation of activities or the own resources regime concrete, among other issues.

IV

The preliminary title of the regulation defines the object of the rule, the concept of collective investment institution and the form and classes of institutions. The regulation reproduces the concept of an institution of collective investment established by law and, in order to dispel possible doubts, expressly states in the scope of the regulation certain legal situations such as accounts in participation and the communities of goods and rights.

Title I regulates the legal form of collective investment institutions. Chapter I develops the forecasts of investment funds, which are set up as assets without legal personality belonging to a plurality of investors and whose management and representation corresponds to a management company. The forecast established by the law to create investment funds by compartments is developed, specifying the arrangements for the distribution of costs, obligations and expenses between the different compartments. The Regulation provides that the minimum number of unit-holders per investment fund shall be 100, and 20 in each of the compartments of the institution. However, a different threshold is established, in accordance with the law, when it comes to certain institutions of a special nature in which the requirement of such a high number of members is not justified. In addition, in this chapter, the fees applicable to investment funds are regulated, which is of particular importance for the protection of investors, since the regulation guarantees a ceiling in the funds ' commissions. On the other hand, the establishment of imputation systems for the management committees which are calculated on the basis of the results of the fund is an important development, in order to ensure that the participation only has to be met by this committee. depending on the results actually achieved.

Chapter II provides for the essential requirements to be met by investment companies. Following the structure of the previous chapter, the concept is defined, the minimum number of shareholders per company is set (100) and per compartment (20), a different threshold in the case of free investment companies and the distribution of costs, obligations and expenses between the different compartments of a company. In addition, the regulation establishes how the management of the company is to be organised and enables the delegation of asset management activity to certain entities.

V

Title II establishes common provisions for all collective investment institutions. It includes the authorisation scheme, cross-border marketing, information transfer obligations to ensure adequate investor protection and the dissolution regime and other corporate transactions.

As regards the authorisation regime, which is regulated in Chapter I, an important novelty is established which will help to give greater flexibility to these procedures when a simplified authorisation procedure is introduced and registration in the corresponding register of the National Securities Market Commission, in the case of investment funds constituted by private document, setting a maximum period of three months for the constitution and registration in the record.

On the other hand, the exercise of the right of separation of the members of the funds is developed which allows those to request the reimbursement of their shares, without commission or associated expense, when certain assumptions (change in the investment policy, replacement of the management company, etc.). The establishment of this right constitutes a manifestation of the principle of investor protection, the basic principle of the regulation.

In addition, the system of creation and modification of the compartments is concrete, with the establishment of a simplified procedure in which the key document is the information booklet.

Chapter II establishes the cross-border marketing regime. Its most remarkable novelty is the possibility that shares and participations of Spanish collective investment institutions will be marketed abroad through foreign marketers.

The reporting obligations, developed in Chapter III, of the collective investment institutions are developed in the regulation in greater detail, as they are one of the key elements to ensure the protection of investors by requiring these institutions to be sufficiently transparent.

Chapter IV regulates corporate operations. It highlights the establishment, for the first time, of a procedure to allow merger between companies and investment funds, provided both institutions belong to the same class.

VI

Title III regulates classes of collective investment institutions. Chapter I is developing financial institutions. In Section 1, all the provisions common to these institutions are laid down. In particular, the investment policy is developed, describing the eligible assets; the rules for the use of derivative instruments or non-listed securities and the rules for the diversification of risk. Among other developments, it is worth noting the possibility that these institutions will invest up to 10 percent of their assets in venture capital entities; in companies or free investment funds, among others.

In terms of the diversification rules, special rules are foreseen, which allow for a higher concentration of investments in certain assets, for institutions that reproduce, or take as a reference, indices stock or fixed income.

Section 2 sets out a series of special provisions which provide for collective investment institutions subject to special schemes. As regards the Spanish collective investment institutions which are to be marketed in other European Union countries using the Community passport, the regulation lays down a number of special rules for the investment of all the active in securities issued or endorsed by public issuers, as well as limits on investment in other collective investment institutions and special rules to reinforce the principle that prevents collective investment institutions from exercising the control of the entities in which they invest.

One of the most significant novelties of the regulation is the collective investment investment institutions that are exempt from compliance with a large part of the performance requirements applicable to them. other institutions governed by this Chapter. This is justified by the fact that they are institutions that target a type of qualified investor and that, therefore, greater freedom can be allowed in their capacity to choose. It is a matter of collecting in the Spanish legal order the figure of the commonly known as hedge funds or alternative management funds, characterized by a great freedom in the development of their investment policy and greater flexibility in compliance with the requirements for information and liquidity. While it is appropriate to set an appropriate limit to prevent the retail investor's access to this product, it is also advisable to establish a figure which, with appropriate risk diversification, allows the investor to retailer has access to this investment scheme, which is achieved through the creation of collective investment institutions of collective investment investment institutions.

Sections 3 and 4 are the subject of the specialties of the funds and the investment companies of a financial character, respectively. As regards the funds, the establishment of a system of calculation of the value of the liquidative value and of refunds and subscriptions is emphasized in order to avoid the use of inappropriate practices that allow to carry out arbitration or speculation against the fund. To this end, it is required that the liquidative value applicable to subscriptions and repayments be that of the same day, or the next day, that of the application and, in addition, the procedure laid down for subscription and reimbursement is required to prevent the investor knows the liquidative value that will result from your application. On the other hand, the regulation regulates exchange-traded funds, setting them up as those whose holdings are admitted to trading in stock exchanges. The aim of this figure is to extend the range of products offered and allows for the existence of funds similar to the index funds, which differ by allowing the acquisition or sale of the participation not only once a day, but also during the entire daily trading period on the relevant stock exchange.

As for investment companies of a financial character, the main novelty is the disappearance of the demand that their shares be listed in stock exchange, which becomes a mere option more than the one that counts society. Thus, other methods are established to ensure liquidity: the regime of investment funds and the possibility of trading in a market or organised securities trading system.

VII

Chapter II of Title II regulates institutions for collective investment of a non-financial nature. In reality, this chapter develops real estate institutions. The development of the other non-financial institutions remains to be seen in the possible future development by ministerial order.

As for real estate institutions, new developments in their investment policy are being introduced, by unifying the limits for investment in purchase on a flat basis, and a commitment to purchase a single 40 percent of the assets. the institution or by extending the possibility of investment to companies whose assets are constituted not only by immovable property but by more than one property.

VIII

Title IV establishes the regime of the management companies of collective investment institutions. It is worth noting the establishment of a special scheme for the delegation of functions of collective investment institutions, the detailed regulation of the own resources requirements to be met by these companies and the system of administrative organisation. On the other hand, the law allows management companies to assume the management, collective or individual, of portfolios other than those of collective investment institutions. In these cases, the law itself indicates that the rules governing those activities will be applied to them, with the specificities that can be regulated. In this respect, the inclusion in the regulation of the accession regime to the Investment Guarantee Fund of the management companies when they perform the activity of individual management of portfolios is resentable.

Regarding the obligations of management companies, the regulation includes a detailed listing of such obligations. The requirement to report on the policy of exercising the voting rights associated with the shares held by the funds it manages should be highlighted. In addition, where the participation of the funds in the listed company is relevant, the management company shall be required to effectively exercise the rights of assistance and vote in the general meetings.

IX

Title V develops the figure of the depositary. This title devotes special attention to the functions of deposit and administration of securities and supervision and supervision that are entrusted to the depositary. All this reflects the regulator's willingness to have the depositary play a key role in protecting the interests of investors and, consequently, in the supervision of the performance of the management company or, where appropriate, of the managers of the investment companies.

X

Title VI lays down the rules of conduct to which the managing companies, the depositaries and, ultimately, all those involved in the activities of these institutions are to be subject. These rules include those aimed at ensuring the transparency and control of related operations. The regulation also strengthens the requirement of separation between management and depositary society by establishing a set of rules for cases where both entities belong to the same group. To ensure independence in the exercise of their respective roles, the regulation requires an independent commission to be set up to monitor compliance.

Finally, the transitional provisions of the Regulation provide for a transitional period for the adaptation of the entities to the new rules and declare the scheme of commissions of the investment funds in the money market as long as they do not change their investment policy.

In its virtue, on the proposal of the Minister of Economy and Finance, with the prior approval of the Minister of Public Administration, according to the State Council and after deliberation by the Council of Ministers at its meeting of the November 4, 2005,

D I S P O N G O:

Single item. Adoption of the Regulation.

The Regulation of Law 35/2003 of 4 November of collective investment institutions is approved, which is inserted below.

Single transient arrangement. Transitional arrangements for the regulatory rules in force.

The rules laid down in the Regulation of Law 46/1984 of 26 December, regulating the institutions of collective investment, approved by Royal Decree 1393/1990 of 2 November, will remain in force in all not to oppose the provisions of Law 35/2003 of 4 November, of institutions of collective investment, and in this royal decree and in the regulation that is adopted.

Single repeal provision. Regulatory derogations.

Royal Decree 1393/1990, dated 2 November, is hereby repealed and approved by the Regulation of Law 46/1984 of 26 December, regulating collective investment institutions.

Final disposition first. Amendment of the Income Tax Regulation of the Physical Persons, approved by Royal Decree 1775/2004, of July 30.

The Income Tax Regulation of the Physical Persons, approved by Royal Decree 1775/2004 of July 30, is amended as follows:

One. Article 73 (3) (j) shall be worded as follows:

" (j) The property gains arising from the repayment or transfer of shares or shares in collective investment institutions, where, in accordance with Article 95 of the Tax Act, their (a) the calculation of the amount of the amount of the amount of the amount of the amount of the amount of the amount of the amount to be taken into account in the case of the institution of the institution of the collective investment institution, of 4 November. "

Two. Article 74 (2) (d) shall be worded as follows:

" (d) In the transmission or redemption of shares or units representing the capital or assets of the collective investment institutions, the following persons shall be required to carry out or take into account the following persons; entities:

1. In the case of repayment of the investment fund shares, the management companies.

2. In the case of repurchase of shares by a variable capital investment company whose shares are not listed on the stock market or in another market or organised securities trading system, acquired by the taxpayer directly or through the market to society, the society itself, unless a management company intervenes; in this case, it will be this.

3. In the case of collective investment institutions domiciled abroad, the trading entities or the intermediaries empowered to market the shares or units of those institutions and, subsidiary, the entity or entities in charge of the placement or distribution of the securities among the potential subscribers, when they make the reimbursement.

4. In the case of female managers operating under the freedom to provide services, the representative appointed in accordance with the provisions of Article 55.7 and the second provision of Law 35/2003 of 4 November collective investment institutions.

5. In cases where the retention practice does not apply in accordance with the preceding paragraphs, you will be obliged to make a payment to the partner or participate in the transfer or obtain the refund. The said payment shall be made in accordance with the rules laid down in Articles 94, 95 and 96 of this Regulation. "

Three. An additional fourth provision is added, with the following wording.

" Additional provision fourth. Shares in exchange-traded funds.

The deferral regime provided for in Article 95.1.a) .2. of the Tax Act shall not be applicable when the transmission or reimbursement or, where applicable, the subscription or acquisition is subject to participation. representative of the equity of the investment funds listed as referred to in Article 49 of the Regulation of Law 35/2003 of 4 November, of collective investment institutions, approved by Royal Decree 1309/2005 of 4 December 2005. November. "

Final disposition second. Amendment of the Corporate Tax Regulation, approved by Royal Decree 1777/2004 of 30 July 2004.

The Company Tax Regulation, approved by Royal Decree 1777/2004 of 30 July 2004, is amended as follows:

One. Paragraph (t) of Article 59 is worded as follows:

" (t) Income arising from the transmission or redemption of shares or shares representing the capital or equity of collective investment institutions obtained by:

1. The investment funds of a financial character and the variable capital investment companies regulated in Law 35/2003 of 4 November, of collective investment institutions, in whose management regulations or statutes have a minimum investment of more than 50% of their equity in shares or shares of several collective investment institutions as provided for in paragraphs (c) and (d) of Article 36.1 of the Regulation Law 35/2003, of 4 November, of institutions of collective investment, approved by the Royal Decree 1309/2005 of 4 November 2005.

2. The investment funds of a financial character and variable capital investment companies regulated in Law 35/2003 of 4 November, of collective investment institutions, in whose management regulations or statutes have established the investment of at least 80% of their assets in a single financial investment fund of those regulated in the first indent of Article 3.3 of the Regulation of Law 35/2003 of 4 November collective investment institutions, approved by Royal Decree-1309/2005 of 4 November 2005.

The application of the retention exclusion provided for in this paragraph shall require the investment institution to be included in the relevant category which, for the investment rates referred to in paragraphs 1 and 2. the National Securities Market Commission, which must be included in its information leaflet, is established. "

Two. A new paragraph is added to Article 59, with the following wording:

" and) The income derived from the repayment or transfer of shares in the funds regulated by Article 49 of the Regulation of Law 35/2003, of collective investment institutions, approved by Royal Decree 1309/2005, of 4 November. "

Three. Article 60 (6) is worded as follows:

" 6. In the case of transfers or repayments of shares or shares representing the capital or assets of collective investment institutions, the following persons or entities shall be subject to the following persons or entities:

1. In the case of repayment of the investment fund shares, the management companies.

2. In the case of repurchase of shares by a variable capital investment company whose shares are not in stock exchange or in another market or organized securities trading system acquired by the taxable person directly or through the market to society, the society itself, unless a management company intervenes; in this case, it will be this.

3. In the case of collective investment institutions domiciled abroad, the trading entities or the intermediaries empowered to market the shares or units of those institutions and, subsidiary, the entity or entities in charge of the placement or distribution of the securities among the potential subscribers, when they make the reimbursement.

4. In the case of female managers operating under the freedom to provide services, the representative appointed in accordance with the provisions of Article 55.7 and the second provision of Law 35/2003 of 4 November collective investment institutions.

5. In cases where the retention practice does not apply in accordance with the preceding paragraphs, you will be obliged to make a payment to the partner or participate in the transfer or obtain the refund. The said payment shall be made in accordance with the rules laid down in Articles 62.4, 63.3 and 64 of this Regulation. "

Four. An additional provision is added, with the following wording:

" Single additional disposition. Regime of collective investment institutions of a real estate.

1. For the purposes of calculating the 50 percent minimum rate of investment in housing and student residences and the third age that companies and real estate investment funds must meet to enjoy the tax rate Article 28 (5) of the Tax Law shall take into account the investments provided for in Article 56 (1) (a) and (b) of the Regulation of Law 35/2003 of 4 November, of collective investment institutions, and provided that, in addition, the cases referred to in paragraph (b) of Article 56.1 referred to are the following:

a) That the real estate under construction has an entity registrant by the corresponding registration in the Land Registry.

b) For housing, student residences, and senior living.

2. Student residence shall mean buildings designed or adapted specifically to accommodate students, who are officially recognised as such. Third-age residences shall also be understood to mean buildings designed or adapted specifically for the purpose of hosting third-age persons, who have been officially approved as such.

3. The calculation of the investment coefficient referred to in this article shall be carried out in the same manner as provided for in Article 60 of the Regulation of Law 35/2003 of 4 November of collective investment institutions approved by the Royal Decree 1309/2005 of 4 November 2005 for the determination of the percentage of investment in real estate.

4. The rate of charge provided for in Article 28.5 of the Tax Act shall be provisionally applicable to newly created real estate investment firms and funds and shall be conditional on the fact that within two years from their date of registration in the corresponding register of the National Securities Market Commission, reach the percentage of investment required in that article. If such a condition is not met, the taxation of the Company Tax of the following financial years shall be rotated at the general rate in force in the latter, with the interest of late payment due.

5. In the case of companies and real estate investment funds by compartments, the forecasts contained in this additional provision shall be met for each of the compartments. '

Final disposition third. Amendment of the Non-Resident Income Tax Regulation, approved by Royal Decree 1776/2004, of July 30.

The Non-Resident Income Tax Regulation, approved by Royal Decree 1776/2004 of July 30, is amended as follows:

One. Article 10 (3) (3) (a) shall read as follows:

" 3. Income arising from transfers or repayments of shares or shares representing the capital or equity of collective investment institutions, other than those from shares in the regulated funds by Article 49 of Regulation 35/2003 of 4 November of 4 November 2005 on collective investment institutions, approved by Royal Decree 1309/2005 of 4 November 2005. '

Two. An additional provision is added, with the following wording:

" Single additional disposition. Cross-border marketing of shares or units of Spanish collective investment institutions.

1. The provisions of this additional provision shall apply where, in accordance with Article 20 of the Regulation of Law 35/2004 of 4 November of 4 November 2005, collective investment institutions, approved by Royal Decree 1309/2005, of 4 November, the management companies or, where appropriate, the investment companies, regulated in Law 35/2003 of 4 November, of collective investment institutions, register in global accounts in the name of resident intermediary entities (a) foreign trade by such entities of shares or units of collective investment institutions that are managed by those institutions or, in the case of investment companies, of their own shares.

2. The use of global accounts by foreign-resident trading entities shall mean that the accreditation of the identity and residence of the non-resident shareholders or members is carried out by means of the referral by the institution on the marketing, certification and relations referred to in paragraph 3, in accordance with the procedure laid down by the Minister for Economic Affairs and Finance.

3. The cross-border marketing of shares or units of Spanish collective investment institutions through the use of global accounts in the name of a foreign-resident trading entity must comply with the (a) the following requirements which, in addition, must be expressly included in the contracts:

(a) No shares or shares acquired on behalf of persons or entities having their tax residence in Spain or of permanent establishments of non-residents located in the territory may be included in the global account.

(b) Only shares or units whose actual ownership corresponds to clients of the trading entity may be included in the aggregate account, without the possibility of any shares or shares in the institution's internal breakdown shares in the name of another intermediary entity on behalf of third parties.

(c) The trading entity shall be obliged to forward to the management company or, failing that, the investment company, on the occasion of the collection of profits distributed by the institution or of reimbursements or transfers of shares or shares of the company, the certificates concerning the residence of its customers, or the transferors established by the Minister for Economic Affairs and Finance. Furthermore, the trading entity shall be obliged to refer to the Spanish tax administration, on behalf of the managing body or the investment company, the individualised relationship of the members or shareholders of the recipients or shareholders. (a) to be transmitted, as well as an individualized annual ratio of its clients with its investment position in the institution to the date determined by the Minister of Economy and Finance. Similarly, the trading entity shall communicate to the managing body or to the investment company the fulfilment of those obligations in the form and time limits laid down by the Minister for Economic Affairs and Finance.

(d) The default by the trading entity of the obligations provided for in the preceding paragraphs shall give rise to the responsibility of the managing body or the investment company to the tax administration for the purposes of the holds or payments to the account that, where appropriate, they have ceased to be entered as a result of such non-compliance or by the omission of the information that would have been due to the tax administration. In addition, the marketing contract must include a clause providing for its termination in the event of non-compliance with the obligations laid down in this additional provision by the trading entity. The marketing contract shall be without effect from the moment when the management company or the investment company is aware of any means of such non-compliance.

4. The marketing contracts referred to in the preceding paragraph shall be communicated by the management company of collective investment institutions or by the investment company, prior to the commencement of the said activity, to the National Securities Market Commission.

5. The Minister for Economic Affairs and Finance shall determine the content of the certificates and relations referred to in paragraph 3 and the time limits for the marketing institution to refer them to the managing body or to the company investment, respectively, and the Spanish tax administration on behalf of the latter, and, where appropriate, determine the models to be used.

6. By way of derogation from paragraph 2, the non-compliance by the trading entity of the requirements laid down in paragraph 3 shall determine that the identity of non-resident investors, as well as of their tax residence, shall be accredited. shall be made in accordance with the provisions of the recast text of the Non-Resident Income Tax Act, approved by the Royal Legislative Decree 5/2004 of 5 March 2004 and in its implementing rules. "

Final disposition fourth. Amendment of the Regulation on the Tax on Proprietary Transmissions and Documented Legal Acts, approved by Royal Decree 828/1995 of 29 May.

The Regulation on the Tax on Proprietary Transmissions and Documented Legal Acts, approved by Royal Decree 828/1995 of 29 May, is amended as follows:

One. The following wording is added to Article 88 (B) of Article 88:

" 18.1 The operations of the formation, capital increase, merger and division of the variable capital investment companies regulated in Law 35/2003 of 4 November, of collective investment institutions, as well as the Non-cash contributions to such entities shall be exempt in the form of corporate operations of the Tax on Proprietary Transmissions and Documented Legal Acts.

2. Investment funds of a financial character governed by the law cited above shall be exempt from the Tax on Proprietary Transmissions and Legal Acts Documented with the same scope as the previous paragraph.

3. Companies and real estate investment funds governed by the law cited above, which, with the character of non-financial collective investment institutions, have the exclusive social object of investment in any type of real estate urban nature for leasing and, in addition, housing, student residences and third age residences, in accordance with the terms set out in the following paragraph 4, together represent at least 50% of the total of the estate shall have the same tax regime as provided for in the previous two paragraphs.

Similarly, these institutions will enjoy a 95 percent bonus in the Tax on Inheritance Transmissions and Legal Acts Documented by the acquisition of housing for the lease, without prejudice to the conditions which may be laid down.

The application of the tax regime provided for in this paragraph will require that the real estate that integrates the assets of the companies and the real estate investment funds does not come to an end until three years have elapsed since its acquisition, unless, by way of exception, it mediates an express authorisation of the National Securities Market Commission.

4. For the purposes of calculating the 50 percent minimum rate of investment in housing and student residences and the third age that companies and real estate investment funds must meet to enjoy the exemptions and the the bonus referred to in paragraph 3 above, the provisions of paragraphs 1, 2, 3 and 5 of the first provision of the Company Tax Regulation, as approved by Royal Decree 1777/2004 of 30 July 2004, shall apply.

The exemptions and the allowance referred to in the preceding paragraph shall be provisionally applicable to newly created funds and real estate investment companies and shall be conditional on the fact that within two months of the years, counted from their registration in the corresponding register of the National Securities Market Commission, reach the percentage of investment required in the previous paragraph 3. If such a condition is not met, the income of the entire tax due shall be made on the basis of the operations carried out, with their corresponding interest on late payment. "

Two. Article 88 (1) (c), paragraph 8. is deleted.

Final disposition fifth. Amendment of Royal Decree 867/2001 of 20 July 2001 on the legal status of investment firms.

Article 20 (2) of Royal Decree 867/2001 of 20 July 2001 on the legal status of investment firms is drawn up in the following

:

" 2. They shall not require prior authorization, even if they must be communicated to the National Securities Market Commission for their record in the register, the amendments to the social statutes which are intended to:

(a) The change of the registered office within the national territory.

b) The increase in social capital.

c) The naming change.

d) The incorporation into the social statutes of legal or regulatory precepts of an imperative or prohibitive nature, or to comply with judicial or administrative decisions.

e) The reduction of social capital by loss compensation.

(f) Those other amendments for which the National Securities Market Commission, in response to a prior consultation made for the purpose by the entity concerned, or by a decision of a general nature, has considered unnecessary, because of its limited relevance, the processing of the authorization.

The communication to the National Securities Market Commission shall be made within 15 working days of the adoption of the statutory modification agreement. If, upon receipt of the notification, such modification exceeds the scope of this paragraph, or will adversely affect the conditions for the authorisation, the National Securities Market Commission shall notify it within the period of 30 days for interested parties to review the amendments or, where appropriate, to comply with the ordinary authorisation procedure.

The public writings concerning the modifications of statutes made in accordance with this article shall be sent to the National Securities Market Commission for their constancy in the corresponding registration, not later than one month after registration in the Trade Register. '.

Final disposition sixth. Amendment of Royal Decree 84/1993 of 22 January, approving the Regulation of the Development of Law 13/1989, of 26 May, credit unions.

Article 10 of the Law of the Development of Law 13/1989, of 26 May, credit unions, approved by Royal Decree 84/1993, of 22 January, is worded in the following terms:

" Article 10. Contributions to social capital: requirements and limits.

1. In order to integrate the social capital of credit unions, the contributions of the partners and partners must meet the following requirements:

(a) Any remuneration shall be subject to the existence of net results or reserves of sufficient freedom to satisfy it; in the latter case, they shall comply with the provisions of Article 12 (5).

b) Its duration will be indefinite.

(c) Your eventual reimbursement shall be subject to the conditions required by Article 7.4 of Law 13/1989 of 22 January, as well as to the provisions of Articles 13 and 14 of this Regulation.

2. The statutes may provide that where, during an economic year, the amount of the return of the contributions exceeds the percentage of the share capital established in them, the new repayments are conditional on the favourable agreement of the governing council.

Likewise, the statutes may regulate the existence of contributions to the social capital whose reimbursement can be unconditionally refused by the governing council. The compulsory conversion of contributions from the partners with the right to reimbursement, in contributions the reimbursement of which can be refused unconditionally by the governing council, shall require the agreement of the general assembly, the disagreeable partner may Unsubscribe and shall be qualified as justified.

3. The limits to the concentration of contributions laid down in Article 7 (3) of Law No 13/1989 of 22 January 1989 shall cover those which, directly or indirectly, involve the ownership or control of the maximum percentages of capital set to that section.

In the event that, by way of transmission of contributions free of charge or mortis causes or by reimbursement of contributions to other partners, the corresponding to some partner or to the set of partners legal persons that are not cooperatives will exceed the legal limits referred to in the previous paragraph, the Directorate General of the Treasury and Financial Policy, at the request of the interested parties and after report of the Bank of Spain, will resolve, without ending the administrative, on the time limit and the procedure requested for the restoration of compliance with those limits, within a maximum period of three months from the request; the proposal shall be deemed to have been accepted if an express resolution has not been passed in that period.

4. The acquisition by the credit unions of their own contributions or their acceptance in garment or other form of guarantee shall be subject to the same restrictions and limitations as provided for in the legal regulations for the actions of private banking, and to those resulting from this regulation.

Credit unions will also not be able to anticipate funds, grant loans or provide guarantees of any kind for the acquisition of their contributions, except in the case that the accredited or guaranteed is employed by the credit unions. cooperative, as employee, work partner or professional services provider of civil nature to the cooperative. "

Final disposition seventh. Competence title.

In accordance with the provisions of the fourth final provision of Law 35/2003 of 4 November, of institutions of collective investment, this royal decree is issued under the jurisdiction of the jurisdiction of the article. 14th and 11th of the Constitution.

Final disposition octave. Entry into force.

This royal decree will enter into force on the day following its publication in the "Official State Gazette".

Given in Madrid, 4 November 2005.

JOHN CARLOS R.

The Second Vice President of the Government and Minister of Economy and Finance,

PEDRO SOLBES MIRA

REGULATION BY LAW 35/2003 OF NOVEMBER 4, OF INSTITUTIONS OF COLLECTIVE INVESTMENT

PRELIMINARY TITLE

Scope, concept, form, and classes

Article 1. Scope, concept, form, and classes.

1. The purpose of this regulation is to regulate collective investment institutions (IICs), as well as their management companies, their depositaries and other entities providing services to IICs, in the established terms In Law 35/2003 of November 4, of collective investment institutions, and in this regulation.

2. For the purposes of the provisions of this regulation, as well as in Law 35/2003 of 4 November, of institutions of collective investment (hereinafter the law), they shall be considered as those which are intended to attract funds, goods or services. rights of the public to manage and invest in goods, rights, securities or other instruments, financial or not, provided that the return of the investor is established on the basis of the collective results.

The persons or entities which, with the requirements of advertising and determination of results provided for in the preceding paragraph, will be subject to the Law and this Regulation shall be subject to the law and to this Regulation. participating accounts and any form of community of goods and rights.

3. Collective investment institutions shall take the form of an investment company or an investment fund.

4. IICs may be of a financial nature, which shall have as their object the investment or management of financial assets, or non-financial assets, which shall operate primarily on assets of another nature.

TITLE I

Legal form of collective investment institutions

CHAPTER I

Investment funds

Article 2. Investment funds.

1. Investment funds are IICs which are set up as separate assets without legal personality, belonging to a plurality of investors, including other IICs, whose management and representation corresponds to an IIC management company (in (SGIIC), which exercises the powers of the domain without being the owner of the fund, with the contest of a depositary, and whose object is the collection of funds, goods or public rights to manage and invest in goods, rights, securities or other instruments, financial or not, provided that the return of the investor is established on the basis of the collective results. In no event shall the powers of administration and provision of the acts and contracts made by the SGIIC with third parties in the exercise of the privileges that correspond to them, in accordance with the law and in the law, be challenged by default. this regulation.

2. Investment funds may be set up by compartments where, under a single constituent contract and management regulation, two or more compartments are grouped together, which shall be expressly reflected in those documents. Each compartment will receive a specific name that must necessarily include the name of the fund.

Each compartment shall give rise to the issuance of its own shares, which may be of different classes, representative of the part of the equity of the fund that is attributed to them. The part of the assets of the fund allocated to each compartment shall be exclusively responsible for the costs, expenses and other obligations expressly attributed to that compartment and for the costs, expenses and obligations that have not been incurred. expressly attributed to a compartment in the proportional part to be established in the fund's rules of procedure. In any event, each compartment shall be liable solely for the commitments entered into in the course of its business and for the risks arising from the assets of its investments. Creditors in a compartment of an investment fund may only make their claims against the equity of that compartment effective, without prejudice to the equity liability of the investment fund arising from their assets. tax obligations. The compartments shall be individually applicable to all the provisions of the law with the specificities to be established in this Regulation.

Each compartment, or each investment fund in the event that it lacks compartments, will have a single investment policy.

In no case can there be financial compartments in IIC of a non-financial character, or vice versa.

Article 3. Minimum number of members.

1. The number of members of an investment fund shall not be less than 100.

2. In the case of investment funds per compartment, the minimum number of unit-holders in each compartment shall not be less than 20, without, in any event, the total number of unit-holders in the fund being less than 100.

3. However, the requirements referred to in the preceding paragraphs shall not be met by the funds whose members are exclusively other IICs covered by Article 45 whose investment policy is based on the investment in that single fund of investment, nor the free investment funds provided for in Article 43.

4. The funds not constituted by the procedures for the successive foundation and the public subscription of shares shall have a one-year period, counted from their registration in the corresponding register of the National Market Commission Values (hereinafter, CNMV), to reach the minimum number of participants.

Article 4. Participation.

1. The participation is each of the aliquot parts in which the patrimony of a fund is divided. Within the same fund or, where applicable, in the same compartment, different classes of units may exist which shall be differentiated by the fees applicable to them. The different commissions will derive from both the marketing policy itself and from other aspects such as the investment volume, the profit distribution policy or the denomination currency, among others. Each class of participation shall receive a specific name, including the name of the fund and, where appropriate, the name of the compartment.

2. The units shall have no nominal value. They will have a negotiable value condition, and they can be represented by any of the following ways:

(a) By means of nominative certificates with no nominal value, which may document one or more units, and to which the members shall be entitled to issue. These certificates shall contain their serial number, the number of units they comprise, the name of the fund and, where appropriate, the compartment and the class to which it belongs, the SGIIC and the depositary and their respective addresses, as well as the data indicating the registration of the two in the Mercantile Register, the date of conclusion of the contract of incorporation of the fund or, where appropriate, the date of the granting of the writing of the constitution and the data relating to the registration in the administrative registration and, where applicable, in the Trade Register.

(b) By means of notes, which shall be subject to the arrangements laid down in Chapter II of Title I of Law 24/1988 of 28 July 1988 on the Securities Market. Any participant in a fund whose holdings are represented by an account shall have the right to obtain from the SGIIC, where necessary, a certificate as provided for in Article 12 of Law 24/1988 of 28 July 1988, referred to, at the option of the latter, to all or any of the holdings of which it is a holder.

3. Whatever the form of representation of the units:

(a) The SGIIC or the depositary shall forward to each participant, at a frequency not exceeding one month, a status of its position in the fund. If there is no movement for subscriptions and refunds in that period, the submission of the position of position may be postponed to the following period and, in any event, the transfer of the position of the participant at the end of the financial year shall be compulsory. Where the party expressly requests it, the document may be sent to it by telematic means.

(b) The SGIIC of an investment fund may, without prejudice to the right of the unit-holders to obtain the certificates referred to in subparagraph (a) of the previous paragraph, use, as a management document, a guarantee by means of which the unit-holders are informed of the position they hold in the fund after each of their operations.

The CNMV will determine the content and model to be adjusted, in each case, the position status and the mentioned guards.

4. The liquidative value of each holding shall be the value of dividing the equity of the fund by the number of shares in the fund. Where there are several classes of shares, the value of each holding class shall be the value of dividing the value of the equity part of the fund corresponding to that class by the number of units in circulation corresponding to that class.

5. The number of shares in the fund will not be limited and your subscription or refund will depend on the demand or the offer made from them.

6. The transfer of shares, the establishment of limited rights or other types of charges and the exercise of the rights inherent in them shall be governed by the general provisions for marketable securities.

7. Where this is provided for in the management regulation, the equity of the fund may be denominated in a currency other than the euro. In this case, it shall be calculated in that currency and the value of the equity and the value of the shares and the subscriptions and repayments shall be made in that currency.

8. The SGIIC, once the investment funds for it managed in the corresponding administrative records of the CNMV, must be provided in the form determined by the Minister of Economy and Finance, and with its express rating, the CNMV, the data relating to the liquidative value of its units, its assets and the number of members. The dissemination of such data shall be carried out by means which shall ensure reliable, rapid and non-discriminatory access to them, and no specific expenditure on the provision of information shall be charged to the unit-holders or the general public. For these purposes, the bulletins of the stock exchanges, the website of the SGIIC, as well as any other that, in the light of the requirements identified, are considered to be the means of dissemination shall be determined by the CNMV.

The SGIIC shall supply such data to the chosen broadcast medium, as at a later date, the day following that in which it carries out the calculation of the liquidative value.

9. For those funds which guarantee the repayment of their holdings on a daily basis, the fulfilment of the reporting obligation referred to in the preceding paragraph shall determine that the shares in the relevant funds have the consideration of securities admitted to trading for the purposes of those provisions governing specific investment schemes. Where the relevant SGIIC does not provide the necessary information referred to in the previous paragraph and, as a result, cannot be disseminated for three consecutive days or six alternate days within one month, it shall be made record thus. From that time on, and until the following 30 days of regular dissemination of such data elapse, investments made in the shares in question may not be regarded as securities admitted to trading for the purposes of the provisions on specific investment schemes.

10. The SGIIC shall issue and refund the shares at the request of any participant, in accordance with the terms set out in this Regulation. However, the CNMV may, on its own initiative or at the request of the SGIIC, temporarily suspend the subscription or redemption of units where the determination of its price is not possible or another cause of force majeure is present.

Article 5. Commissions and expenses.

1. The SGIIC and the depositaries may receive from the funds management and deposit commissions, respectively, and the SGIICs may receive from the unit-holders fees for subscription and reimbursement. The prospectus shall include the form of calculation, the ceiling of the commissions referred to both the compartment and each of the classes, the fees that are actually to be applied and the entity benefiting from its collection.

2. Different commissions may be applied to the different classes of shares issued by the same fund. In any event, the same management and deposit fees shall apply to all units of the same class. Subscription and redemption fees for units of the same class may be distinguished only by objective and non-discriminatory conditions, which shall be included in the IIC prospectus.

3. In the case of investment funds of a financial nature, the management committee shall be established on the basis of its assets, income or both variables. In general, management fees may not be collected which, in annual terms, exceed the following limits:

a) When the commission is calculated solely on the basis of the fund's equity, 2.25 percent of the fund.

b) When calculated solely on the basis of results, 18 percent of these.

c) When both variables are used, 1.35 percent of the equity and nine percent of the results.

When all or part of the management fee is calculated on the basis of the results, all net yields, both materialised and dormant, shall be considered and the limit set shall be applied once discounted. the commission itself.

The management company must articulate a system of imputation of commissions on results that prevents a participant from supporting commissions when the liquidative value of its units is less than a previously reached value by the fund and by which it has supported commissions on results. For this purpose, you may choose one of the following alternatives, specifying in the prospectus the chosen system:

1. To impose on the fund the results management commission only in those exercises in which the liquidative value is superior to any other previously achieved in exercises in which there is a commission on results. However, the maximum settlement value reached by the fund shall only be linked to the SGIIC for maximum periods of three years.

2. A system of individual charge to each member of the commission on results, so that they bear the cost according to the result of their investment in the fund, respecting the maximum limits established in the paragraphs (b) and (c). The SGIIC may carry out liquidations on behalf of the commission on receivables while the investor maintains its participation in the fund.

The prospectus and the quarterly and half-yearly reports, as well as any publication relating to the fund, should note prominently that the settlement value of the fund and therefore its profitability do not reflect the effect of the individual charge to the member of the management committee on results. The prospectus and the quarterly and half-yearly reports shall also include information on the payments to be made by the investor. The status of the participant shall collect detailed information on such extremes in terms determined by the CNMV.

The Minister of Economy and Finance and, with his express rating, the CNMV will be able to modify the duration of the period referred to in the first alternative. They may also lay down the conditions and conditions in which the duration laid down may exceptionally not be respected. They may also set maximum periods for the implementation of the individual charge system, as well as the requirements for its amendment. In the same way, they shall set the reporting obligations to the unit-holders that the SGIICs shall comply with, such as the possibility of exercising the right of separation or the information included in the investment fund prospectus.

The Minister of Economy and Finance is authorized to vary the above percentages up to a maximum of 25 percent of the respective limits.

4. In the case of investment funds of a financial nature, neither the fees for subscription and reimbursement, nor the discounts for the fund to be used for subscriptions and repayments, nor the sum of both, may be higher than five per cent of the the liquidative value of the units.

5. In investment funds of a financial nature, the depositary's commission may not exceed two per 1,000 annual assets. The Commission shall provide the depositary with the remuneration for carrying out all the tasks assigned to it by the rules, without the funds being able to bear any additional costs where the depositary has delegated to third parties the performance of any of such functions. Exceptionally, and subject to the authorisation of the CNMV, that commission may be higher in the case of depositaries who are primarily responsible for their duties abroad. Independently of this commission, the depositaries may receive from the funds commissions for the settlement of transactions, provided that they are in accordance with the general rules governing the corresponding tariffs.

6. In real estate investment funds, the SGIICs may receive from the funds a management fee, as remuneration for their services, which may not exceed four per cent of the equity of the fund or 10 per cent of its results if is calculated on the basis of these; or 1.50 per cent of the equity and five per cent of its results if calculated on the basis of both. Where all or part of the management fee is calculated on the basis of the results, it shall apply as set out in paragraph 3 in relation to the form of calculation of the commission.

7. In real estate investment funds, the subscription fee may not exceed five per cent of the settlement value of the holding, nor the repayment value of more than five per cent of the settlement value of the holding.

8. In real estate investment funds the depositary's commission may not exceed four per 1,000 annual assets of the fund. The Commission shall provide the depositary with the remuneration for carrying out all the tasks assigned to it by the rules, without the funds being able to bear any additional costs where the depositary has delegated to third parties the performance of any of such functions. Exceptionally, and subject to the authorisation of the CNMV, that commission may be higher in the case of depositaries who are primarily responsible for their duties abroad. Independently of this commission, the depositaries may receive from the funds commissions for the settlement of transactions, provided that they are in accordance with the general rules governing the corresponding tariffs.

9. In the case of real estate investment funds, account shall be taken of the fund, at least, the costs of valuation, repairs, rehabilitation and storage of buildings and those relating to the acquisition and sale of immovable property must be paid to a third for the provision of a service.

10. Where an investment fund invests in another IIC which is managed by the same SGIIC or by a company belonging to its same group, the management and depositary commissions accumulated and supported directly or indirectly by its members shall not be may exceed the percentage to which the prospectus of the fund is set within the limits of this Article.

Also, this investment fund will not be able to support subscription and reimbursement fees for IICs in which it invests when it is managed by its same SGIIC or by a company belonging to its same group. Those funds that invest a substantial proportion of their assets in other IICs shall include in the prospectus the maximum level of management and depositary fees that they may support directly or indirectly.

11. The other expenditure to be incurred by the investment funds shall be expressly provided for in the information leaflet. In any event, such expenditure must be in response to services actually provided to the fund which are essential to the normal development of their activity. Such expenditure may not entail an additional cost for services inherent in the work of its SGIIC or its depositary, which are already paid by their respective commissions, as provided for in the preceding paragraphs of this Article.

12. Likewise, the Minister of Economy and Finance and, with his express rating, the CNMV will dictate the other necessary provisions for the development of this article.

CHAPTER II

Investment companies

Article 6. Concept and minimum number of shareholders.

1. Investment companies are those IICs that take the form of a public limited company and whose social object is the collection of funds, goods or public rights to manage and invest in assets, rights, securities or other instruments, financial or not, provided that the return of the investor is established on the basis of the collective results.

2. Investment companies may be set up by compartments in which two or more compartments are grouped under a single constituent contract and social statutes, which shall be expressly reflected in those documents. Each compartment shall be given a specific name which must necessarily include the name of the investment company. Each compartment shall give rise to the issue of shares or of different series of shares representing the share of the share capital allocated to them.

The share of the share capital attributed to each compartment shall be exclusively liable to the costs, expenses and other obligations expressly attributed to that compartment and to the costs, expenses and obligations that have not been incurred. been allocated to a compartment in the proportional part to be established in the social statutes. The compartments shall be individually applicable to all the provisions of the law with the specific characteristics laid down in this Regulation. Each compartment or investment company, in the event that it has no compartments, shall have a single investment policy.

In no case can there be financial compartments in IIC of a non-financial character, or vice versa.

3. The number of shareholders in an investment company shall not be less than 100.

4. In the case of investment companies by compartments, the minimum number of shareholders in each of the compartments may not be less than 20, without, in any case, the number of total shareholders that are part of the company is less than 100.

5. However, they shall not have to comply with the requirements referred to in the previous paragraphs, those free investment companies governed by Article 43.

6. Companies not formed by the procedures of a successive foundation and a public subscription of shares shall have a one-year period, counted from their registration in the corresponding register of the CNMV, in order to reach the minimum number of shareholders.

7. The shares of an investment company shall also be subject to the provisions of Article 4 (3), (8), (9) and (10). For the purposes of paragraph 8, the website of the investment company shall be considered as a means of dissemination.

Article 7. The administration of society.

1. They shall be the bodies of management and representation of the investment company as determined in their statutes, in accordance with the requirements of the law on public limited liability companies. The investment company shall have a board of directors.

2. Where the social statutes, the general meeting or, by its delegation, provide for the management board, the management board may agree that the management of the company's assets, either in its entirety or in part, is entrusted to one or more of the SGIIC or one or more entities which are entitled to carry out the investment service provided for in Article 63.1 (d) of the Law 24/1988 of 28 July. The eventual agreement must be raised to public deed and be entered in the Commercial Register and in the registration of the CNMV.

The entities referred to in the preceding paragraph may, in turn, delegate the management of the assets whose management would have been entrusted to them in another financial institution in the form and with the requirements laid down in Article 68. In the event that this delegation has been imposed by the investment company, which shall be credited by the corresponding agreement of the general meeting of shareholders or, by the express delegation of the shareholders, of the management board, the the entity that delegates shall not be liable to the shareholders for any damages that may arise from such procurement.

3. The agreement referred to in the previous paragraph shall not relieve the management bodies of the company of any of the obligations and responsibilities imposed on them.

TITLE II

Common Provisions

Chapter I

Activity access and exercise conditions

Article 8. Authorization and registration.

1. Those who intend to create an IIC should:

(a) Obtain from the CNMV the prior authorisation of the draft constitution of the investment fund or, where appropriate, of the investment company.

When the IIC is going to perform a management aimed at achieving a concrete objective of profitability that has the guarantee of a third party and, to this end, it is essential to contract operations previously at the end of the initial marketing period, it shall be specified in the memory provided for in Article 10.2 of the law that the institution shall assume the positions that the IIC will not ultimately contract, for exceeding the size required to achieve the guaranteed profitability considering the equity of the IIC at the end of the period initial marketing which shall be unrenewable and shall not exceed three months.

(b) Constituency, after obtaining the authorisation, an anonymous company or an investment fund, as appropriate. In the case of investment companies, such a constitution shall be made, in any case, by means of public deed and registration in the Commercial Registry. The incorporation of the investment funds by the granting of public deed, as well as its consequent registration in the Commercial Registry, will be of a potential nature.

(c) Register the IIC in the register of the CNMV concerned, as well as proceed with the registration of the information leaflet of the institution which, in the case of IICs by compartments, shall include an annex concerning each compartment. The CNMV shall resolve the application for registration within one month of its receipt or, if applicable, from the time of completion of the required documentation. If the project submitted for registration has been removed from the previously authorized registration, the registration shall be refused by means of a communication to the promoters in which the ends which have been the subject of modification shall be detailed, and the parties concerned shall may amend, within one month, the changes or errors introduced, or expressly request a new authorisation in the terms provided for in this Article, without prejudice to the administrative resources which may be correspond to the legislation in force. No entries shall be made in the relevant records where the date of prior authorisation and the date of application for registration of the CNMV has elapsed more than six months, and the registration of the date of application for registration of the CNMV authorization.

In the case of investment funds, the CNMV may agree in a single act on the institution's authorization and its registration in the corresponding registry of the CNMV. In this case, the application must be accompanied by the constitutive contract, the information leaflet and the data, reports or background information the CNMV may consider necessary. The CNMV shall proceed to the authorisation and registration of the IIC in the relevant register within three months of receipt of the request or from the time the required documentation is completed.

2. Authorisations may be refused only for the reasons laid down in the law, in this Regulation and in the other applicable provisions. In no case shall the IIC be granted the authorisation which, in accordance with the terms of its contract, in its management rules or in its statutes, may not market its shares or shares in Spanish territory.

Article 9. Content of the constitutive contract.

1. The contract establishing the investment funds shall necessarily contain:

(a) The name of the fund, which must be followed, in any case, by the expression "investment fund" or "FI", in the case of funds of a financial character, or "real estate investment fund" or 'FII' in the case of investment funds of a real estate character, or, where appropriate, that which corresponds in accordance with what is established for other special types of investment funds.

b) The object, limited exclusively to the activities mentioned in article 1.1 of the law.

c) The equity of the fund at the time of its constitution.

(d) The name and address of the SGIIC and the depositary, and the data relating to the registration of the SGIIC and the depositary in the Mercantile Register and the corresponding registration of the CNMV.

e) The fund management regulation, with the minimum mentions detailed in the following article.

2. The CNMV shall establish the form and time limit for the referral of the contract.

Article 10. Content of the management regulation.

1. The management regulation constitutes the set of rules which, in accordance with the legislation in force at any time, will govern the fund and must contain, in addition to the aspects provided for in the law, at least the following specifications:

a) The name of the fund. Where different references are to be used for the purposes of marketing the fund, all of them shall be provided for in the management regulation. In any case, in the case of advertising and in any publication of the fund, in addition to the reference to the marketing effects, the name of the fund shall be included.

b) The declaration, if any, of the possibility of creating compartments.

(c) The name and address of the SGIIC and the depositary, as well as the data indicating the registration of both in the Mercantile Register and the rules for the management, administration and representation of the fund.

d) The requirements for the replacement of the SGIIC and the depositary.

e) The duration of the fund, which may be unlimited.

f) The general investment criteria and the rules for the selection of values.

g) The procedure for the issuance and redemption of the units and assumptions in which the issue or reimbursement may be suspended.

h) The procedure for determining the settlement value and the reimbursement with indication of the method and the frequency of its calculation.

i) The system of subscriptions and reimbursements, with an indication of the means in which they will be effected, in accordance with the provisions of Article 7.4 of the Law.

j) The characteristics of the certificates and the representative entries for the units.

k) The requirements and ways to perform the modification of the contract and the regulation.

l) The causes of dissolution of the fund and the rules for its liquidation, indicating the way to distribute in such a case the patrimony among the members of the fund and the advertising requirements that will have to be fulfilled.

m) Where appropriate, the special rights of information on the financial statements of the fund and of the SGIIC to be recognised as members.

2. The CNMV is enabled to determine the time limits and the form of referral of the investment fund management regulation and its amendments.

Article 11. Content of the social statutes of the investment companies.

1. In addition to the requirements laid down in the law and in Article 9 of the consolidated text of the Law on Companies, approved by Royal Decree-Law 1564/1989 of 22 December 1989, the following will be expressed:

(a) The social reason for the company in which the name 'variable capital investment company' or the abbreviation 'SICAV' must necessarily appear in the case of investment firms of a financial character; or 'real estate investment company' or 'SII' in the case of investment companies of a real estate character, or, where appropriate, that which corresponds in accordance with what is established for other special types of company investment.

b) The social object limited exclusively to the activities listed in article 1.1 of the law.

(c) Social capital, which may not be less than the legally established minimum for each type of investment company, with the expression of the number of shares and, where applicable, of the series in which it is divided and the nominal value of them. In the case of SICAV, the initial capital, which may not be less than the one set out in Article 50, as well as the maximum statutory capital, shall be entered in the case of the SICAV.

d) A declaration, if any, of the ability to create compartments.

(e) The designation of an authorised warehousekeeper in the case of the SICAV, indicating its name and address, as well as the data identifying its registration in the Trade Register.

f) Whether or not there is the possibility of entrusting the management of the assets of the company to a third party.

g) The general rules or criteria to be adjusted for your investment policy.

h) The prohibition of remunerations or advantages for founders and promoters.

2. The CNMV is enabled to determine the time limits and the form of reference of the social statutes of the investment companies and their modifications.

Article 12. Requirements for access and exercise of the activity and registration in the registry of the CNMV of the investment companies.

1. In accordance with the provisions of Article 11 (2) (a) of the law, the internal control procedures with which investment companies are to be counted shall include, in particular, a scheme regulating investment in instruments. of society.

All these measures must ensure that each transaction related to the entity can be reconstructed according to its origin, the parties involved, its nature and the time and place in which it has been carried out, as well as the the assets of the company are invested in accordance with their statutes and the legal provisions in force.

The CNMV is empowered to lay down the minimum requirements to be met by the internal control and risk management and control systems, as well as the way in which they are to be informed of the existence and functioning of such systems. systems.

2. For the purposes of Article 11.2.c) of the law, the requirement of business or professional repute shall also be understood as referring to natural persons representing legal persons who are members of the law.

3. In accordance with Article 11 (2) (d) of the Act, it shall be presumed that they have adequate knowledge and experience in matters relating to the securities markets which they have performed for a period of not less than two years, senior management, management, control or advisory functions of financial institutions, investment firms, IICs or SGIICs, or functions related to the markets referred to in other public or private entities. In the case of non-financial IICs, the identified experience shall be understood as referring to entities in the field in which they operate.

4. In accordance with the provisions of Article 11.2.e) of the law, investment firms shall include in the rules of procedure a system of personal transactions of directors, directors and employees of the company and, where appropriate, the Regime of related operations established in law.

5. The CNMV is enabled to determine the form, content and timing of the communication of changes in the composition or positions of the board of directors and directors or the like of investment companies.

Article 13. The IIC records of the CNMV.

In the CNMV, the following records related to IICs, SGIICs and depositories shall be carried out with the following sections and subsections:

1. Registration of investment companies of a financial character or SICAV.

2. Registration of financial or FI investment funds.

3. Registration of real estate investment companies or SII.

4. Registration of real estate investment funds or FII.

5. Free Investment IIC Record or IICIL.

6. IIC record of IIC of free investment or IICIICIL.

7. Registration of management companies of collective investment institutions or SGIICs.

8. IIC Depository Registry.

9. Registration of other IICs.

10. Registration of significant shareholdings.

11. Registration of brochures, periodic reports and audits.

12. Registration of foreign IICs marketed in Spain.

13. Registration of foreign management companies operating in Spain.

14. Registration of valuation companies that have communicated to the CNMV their intention to value real estate IIC properties.

15. Registration of relevant facts.

16. The SGIIC agent and proxy registry.

Article 14. Amendment of draft constitution, statutes, regulations and brochures.

1. Modifications to the draft constitution, once authorized, in the statutes or in the IIC regulations will be subject to the IIC authorization procedure provided for in the law and in this regulation, with the following specialties:

(a) Changes to the social statutes and regulations that do not require prior authorization, in accordance with Article 12 of the Act, shall be included in the immediate quarterly report thereafter, as well as in the following half-yearly or annual report. Consideration of little relevance in the case of investment funds may be made simultaneously to their registration in the corresponding register of the CNMV.

(b) Where the amendment of the prospectus is made in connection with the granting or renewal of guarantees to IICs which are or are to be managed for the purpose of achieving a specific objective of profitability, the guarantee of a third party, the information referred to in the second paragraph of Article 8.1.a shall be referred to the CNMV.

(c) In the case of amendments to the management regulations, the registration may be made on its own initiative if the changes are made by regulatory changes or changes in other records of the CNMV.

(d) In the case of statutory amendments, the application for authorisation may be made prior to its approval by the relevant governing bodies of the company.

e) The presentation to the CNMV of the precise documentation for the registration of the modifications mentioned in this article must be carried out within three months, counted from the notification of the prior authorization or of the consideration as being of little relevance. After this period has elapsed without the registration of the amendment being requested, the registration shall be refused and the advertising formalities must be completed again. However, where the amendment has to comply with requirements which require the time-limits for registration in the register of the CNMV, the period of three months may be extended for an additional period of not more than three months. months.

2. Any modification of the regulation of an investment fund requiring prior authorisation shall be published by the CNMV after its authorisation and communicated by the SGIIC to the unit-holders within 10 days of the notification of the investment fund. the authorisation. In such cases, the CNMV will require as a prerequisite for the registration of the modification in its administrative records the accreditation of the compliance of the obligation of communication by certification of the SGIIC and the presentation of a copy of the letter sent to the unit-holders.

When the change in the management regulation or, where appropriate, the prospectus affects investment policy, policy on the distribution of results, replacement of the management company or the depositary, delegation of the management of the the institution's portfolio in another entity, change of control of the SGIIC, transformation, merger or division of the fund or the compartment, establishment or elevation of the commissions, shall be communicated to the unit-holders prior to their entry into force, at least one month in advance. The entry into force of those amendments shall take place at the time of registration of the amendment of the management regulation or, where appropriate, of the updating of the explanatory prospectus. The change of control of the SGIIC, once carried out and communicated to the CNMV, must be communicated to the members within 10 days.

Provided that there is a reimbursement fee or expenses or discounts associated with it, the unit-holders may choose during that period of one month from the date of publication, or from the referral of the communications to the participants if they are later, for the reimbursement or transfer of their shares, in whole or in part, without deduction of a reimbursement fee or any expense, for the settlement value corresponding to the date of the last day of the month of information.

Equally, the unit-holders whose investment policy is based on the investment in a single fund of a financial character as set out in Article 45 shall have the same right of information or, where appropriate, of separation, within the same time-limits, when the fund constituting the sole object of its investment policy experiences any of the amendments referred to in the second subparagraph of this paragraph.

If the requested reimbursements reach a total amount equal to or greater than 50 percent of the fund's assets, it may be dissolved in the terms of Article 24 of the Law and Article 33 of the Law. rules.

Where the amendment does not affect the entire investment fund but only one or more compartments, the communications and, where appropriate, the exercise of the right of separation shall be understood solely and exclusively to the affected members of those compartments.

The Minister of Economy and Finance is enabled and, with his express rating, the CNMV to specify and develop the assumptions of modifications of the management regulations or the prospectus that give the participants the right of separation of the investment funds.

In accordance with the provisions of Article 12.2 of the Law, there shall be no right of separation or right of information prior to registration within one month, in the case of replacement of the management company or of the depositary, provided that the substitute entity is from the same group and a continuity in the management of the fund is established at the time of the application for the authorisation provided for in this paragraph.

Also, without prejudice to the provisions of this paragraph, the CNMV may establish that the members have the right to information on an individual basis, in those other amendments which it considers to be special relevance.

Article 15. Creation and modification of compartments.

1. The creation of new compartments or the modification of existing compartments in investment funds shall be authorised by the CNMV in accordance with the provisions of the previous Article in accordance with the following specialties:

(a) The time limit for the authorisation shall be three months from the receipt of the application.

(b) The application must be accompanied by the updated prospectus and, in the case of funds which do not expressly provide for the possibility of constituting compartments, of the corresponding proposal for amendment of the management regulations.

2. The creation of new compartments or the modification of existing ones in investment companies will be governed by the provisions of the previous paragraph and, in any case, the request for the corresponding proposal for the modification of the corresponding social agreement.

The agreement to create new compartments shall be adopted by the general meeting of the company or by the board of directors when it has been expressly delegated to it. The delegation shall be temporary and its duration shall in no case exceed 18 months. Only representative shares of the maximum statutory capital that are not subscribed at the time of the adoption of the agreement may be attached to the new compartment.

The compartment shall be constituted by the effective subscription and disbursement of the minimum number of shares provided for in the social agreement, the nominal value of which shall be at least equivalent to the minimum required capital figure. in this regulation. The constitution shall be communicated to the CNMV for constancy in the relevant register.

The modification of existing compartments, their integration with another or others or their deletion may be agreed by the general meeting or the board of directors in the terms indicated above.

The modification of the existing compartments will require the agreement of the majority of the shareholders concerned, adopted by special meeting or through separate vote in the general meeting, with the requirements laid down in the Article 144.1 of the recast text of the Law on Companies, approved by Royal Decree 1564/1989 of 22 December 1989.

Article 16. Revocation of the authorization.

1. In accordance with the provisions of the second paragraph of article 13.1.a) of the law, where due to circumstances of the market or due to the obligation to comply with the law or the requirements of the recused text of the Law of Companies, approved by Royal Decree-Law 1564/1989 of 22 December 1989, the equity or number of members of a fund, or one of its compartments, or the capital or number of shareholders of an investment company, or of one of its compartments, These institutions shall be subject to the minimum requirements laid down in this Regulation, during which they may continue to operate as such.

Within that period, they must either lead to the permanent reconstitution of the capital or assets and the number of shareholders or members, either to decide their dissolution or, in the case of companies, to give up the authorisation granted and to request the exclusion of the administrative register corresponding to the subsequent statutory amendments and its activity. After the one year period, the registration in the administrative registers shall be cancelled if such registration is in the alternative, unless the capital or equity or the number of shareholders or the number of shareholders has been reestablished within that period. partakers. The cancellation in the administrative register of the investment fund shall entail its automatic dissolution, and shall be wound up, in accordance with the provisions of Article 24 of the Law and Article 33 of this Regulation.

2. For the purposes of Article 13.1.c) of the law, the voluntary waiver of investment companies shall require the express agreement of the general meeting of shareholders, adopted by the majority required for the amendment of its statutes.

Article 17. Suspension of the authorisation of investment companies.

The duration of the suspension, agreed pursuant to Article 13.2 of the Law, may not exceed one year, which may be extended by another year, except in the case of a penalty in accordance with the provisions of Articles 85 and 86 of the law.

Article 18. Naming reservation.

1. The following denominations and their acronyms shall be proprietary to the IICs registered in the corresponding records of the CNMV:

a) "Collective investment institution" and its acronym "IIC".

(b) "Financial investment fund" and its acronym "FI".

(c) "Variable Capital Investment Company" and its acronym "SICAV".

d) "free investment IIC" and its acronym "IICIL".

e) "Free Investment Company" and its acronym "SIL".

f) "Free Investment Fund" and its acronym "FIL".

g) "free-investment IIC IIC" and its acronym "IICIICIL".

h) "Real estate investment company" and its acronym "SII".

i) "Real estate investment fund" and its acronym "FII".

2. The IICs covered by this Regulation shall include in their social reason the literal name corresponding to them from those mentioned above or, if they prefer, include the literal abbreviation of the name.

3. Any person or entity not listed in the records of the CNMV may use the names referred to in the previous paragraph of this Article or any other expression that leads to confusion with them.

Chapter II

Cross-border marketing of IIC shares and units

Article 19. Marketing in Spain of shares and units of foreign IIC.

1. The placing on the market in Spain of the shares and shares of IICs authorised in another Member State of the European Union in accordance with Council Directive 85 /611/EEC of 20 December 1985 on the coordination of provisions laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities must be made by means of the intermediaries empowered and under the conditions laid down in Law 35/2003 of 4 November collective investment institutions, and in Law 24/1988, of 28 July, of the Securities Market. The rules in force on capital movements will also apply. Likewise, the CNMV will incorporate the documentation presented by the IIC into its records. The number with which the IIC is registered shall be reflected in any document and publicity of the IIC that is disseminated in Spain.

2. The placing on the market in Spain of the shares and units of IICs authorised in other Member States of the European Union not subject to Directive 85 /611/EEC and IICs authorised in non-EU Member States shall require that the IIC is expressly authorized for this purpose by the CNMV in accordance with the provisions of the Law and that the IIC is registered in the existing registry for this purpose in the CNMV. The number with which the IIC is registered shall be reflected in any document and publicity of the IIC that is disseminated in Spain.

3. The CNMV may require the intermediary to carry out in Spain the marketing of foreign IIC periodic information for statistical purposes on IICs placed on the market in Spanish territory, as well as any other necessary information for the fulfilment of its supervisory obligations under the Law and this Regulation.

4. The CNMV may determine the form, time and content of the information to be submitted when registering the marketing of foreign IICs. The information may be sent directly by the foreign IIC or its management company or by the trading entity or legal person it designates.

Article 20. Marketing of Spanish IIC shares and shares abroad.

1. Spanish IICs intending to market their shares or units within the European Union in accordance with the provisions of Directive 85 /611/EEC shall comply with the provisions of Article 16 of the Act without prejudice to the provisions of Directive 85 /611/EEC. established in the rules of capital movements.

2. The shares or units of Spanish IICs may be marketed in other countries through the legally qualified entities in these countries to carry out the marketing activity. However, the SGIIC shall in no case be exempted from its liability for the performance of these activities by the trading entity.

Marketing must meet the following requirements:

(a) In the register of shareholders or members of the Spanish IIC, shareholders or members who are channeled through the trading entity shall be included in the name of the market entity, on behalf of their clients.

(b) The trading entity shall communicate, in accordance with the frequency with which the IIC addresses the subscription or acquisition and the repayment or transmission of its shares or shares, to the Spanish IIC or, where appropriate, to the corresponding SGIIC the balance of subscriptions and refunds or transmissions produced, and will pay or request the payment of the difference. At the same frequency and for the purposes of determining the minimum number of shareholders or members of the IIC, it shall inform the Spanish IIC or, as appropriate, the corresponding SGIIC the number of shareholders or members of the IIC through she.

(c) In the contracts to be concluded between the Spanish IIC, or the SGIIC where appropriate, and the marketer must establish that it is the one to which it refers, or make available to the shareholders or members channeled through it, information documents which, in accordance with applicable law, are entitled to receive.

d) In these contracts, it must be established that the market is the one that sends to the CNMV all the information, in relation to the shareholders or members of the IIC channeled through that, which, according to the regulations The Spanish authorities must send the SGIIC to that authority. If the trading entity fails to comply with these obligations, the SGIIC shall automatically be held liable for such non-compliance with the Spanish authorities, where the contract shall not be valid for the purposes of non-compliance. This shall be without prejudice to any infringements and penalties which are relevant in accordance with the provisions of the law.

e) Spanish residents may not be shareholders or members of IIC in Spain through foreign marketers. Without prejudice to the infringements and penalties which, where appropriate, will be relevant, the SGIICs shall be liable for such non-compliance, and such a contract shall not be valid before the Spanish authorities from the moment of failure.

The CNMV may establish the minimum content of the contracts mentioned above and set the model contracts, if any. In any event, the marketing contract must necessarily include a clause establishing its decision in the event of non-compliance with the obligations laid down in this provision by the trading entity. The marketing contract shall be without effect from the moment when the management company or the investment company is aware of any means of such non-compliance.

3. The CNMV shall inform the European Commission of the general difficulties encountered by the harmonised Spanish IICs in order to market their shares or units in a non-EU Member State.

Chapter III

Information, Advertising, and Accounting

Article 21. IIC reporting obligations.

The SGIIC, for each of the investment funds it manages, and investment companies shall publish for dissemination among unit-holders, shareholders and the general public a full prospectus, a simplified prospectus, a annual report, a semi-annual report and two quarterly reports, so that, in an updated manner, all circumstances that may influence the determination of the value of the equity and the prospects of the institution, in particular the inherent risks involved, as well as compliance with the applicable rules.

At all times, IICs must be in a position to prove that they have complied with the reporting obligations set out in Article 18 of the law. The CNMV shall determine the manner in which compliance with these obligations is to be established.

The Minister of Economy and Finance and the CNMV will be able to obtain from the institutions regulated in this regulation the additional information they deem necessary in order to exercise their respective powers. In particular, the CNMV may establish, in general, the obligation to send it periodically information regarding compliance with the limitations to its investments in accordance with the provisions of the law and this regulation. Also, the CNMV is enabled to determine the form, content and deadlines for the referral of all the information contained in this article.

Article 22. Full brochure.

1. The full prospectus, in addition to the statutes or management rules to be incorporated as an annex, shall contain the following:

(a) The identification of the IIC, the depositary and, where appropriate, the manager and the sponsor.

(b) The date of incorporation of the IIC and the manager, as well as its duration if it is limited, and the indication of the data identifying the investment company's registration in the Mercantile Register.

c) The indication of other IICs managed by the management company, if any.

(d) A statement indicating that the last annual report and the quarterly report published may be obtained free of charge, upon request, prior to the conclusion of the contract and that, after the conclusion of the contract, the Successive annual and half-yearly reports shall be obtained free of charge, unless expressly waived; in addition, the quarterly report may be obtained upon request. The date of incorporation of the prospectus in the registration of the CNMV, the place where the public IIC documents and a point of contact are made available, shall also be indicated in order to obtain further clarifications.

e) The indication, where appropriate, of the existence of classes of shares or series of shares, as well as of the applicable regime.

(f) In the case of IICs by compartments, the indication of this end, as well as the manner in which the shareholders or, where applicable, the unit-holders may pass from one to the other and the fees that would be applicable in this case.

g) The relevant indication for the shareholder or shareholder on the tax regime applicable to the IIC and the shareholder or shareholder itself, including a reference to any holds.

h) The date of the closing of the IIC annual accounts.

i) The identity of the auditors.

(j) The identity and functions in the investment company, and in the management company, of the members of the administrative, management and control bodies. Also, a mention of the main activities carried out by these persons outside the society or the management company when they are significant in relation to them.

k) The indication of the social capital of the investment company and the management company.

(l) The indication, where appropriate, of the markets or systems in which the units or shares are or are traded.

m) A description of the investment objectives of the IIC or, as the case may be, of each of the compartments, including the benchmark, if any, and the financial and profitability objectives with particular reference to when In the case of an IIC, a management shall be carried out to achieve a specific objective of profitability that is guaranteed by a third party; those of the investment policy and its limits, an assessment of the risk profile, as well as the techniques, instruments and possibilities of indebtedness which may be used in the management of IIC.

The IIC investment policy, in the case of IIC by compartments, should refer to each compartment. In the case of financial IIC, the prospectus shall contain the following details:

1. Indication of the categories of financial assets that IIC can invest in.

2. It shall be indicated whether transactions with derivative instruments are permitted, including in this case a statement to determine whether the investment is for hedging purposes or for compliance with investment objectives or possible impact of the use of the derivative instruments on the risk profile and the degree of leverage.

3. It shall be clearly stated in the prospectus when the IIC invests primarily in categories of assets other than those set out in Article 30.1.a) and b) of the law, or reproduces a stock index or fixed income index.

4. The prospectus shall expressly state those cases where the liquidative value of the IIC may present a high volatility due to the composition of its portfolio or the techniques used for portfolio management.

n) Special investment plans offered to investors, with specifications of their characteristics in terms of minimum contributions and their review, duration of the plan, amount of fees to be paid by the subscribers to the plans, notice rules for their cancellation by the investor, causes of termination by the SGIIC or the investment company, guarantees to be obtained from financial institutions, special rules of information and other circumstances of the plans.

n) Commercial information, indicating the way to acquire or subscribe and sell or repay the units or shares; where appropriate, the maximum volume, which may be achieved by the total number of shares or shares owned by the same investor; the date and form of distribution of the dividends of the units or shares where applicable; identification of the settlement value applicable to subscriptions and repayments and the indication of the daily limit time for the acceptance of orders subscription and redemption of shares or purchase and sale of shares; and frequency the publication of the liquidative value and place or form in which it may be consulted.

o) Information about advisory societies, including external investment advisors, who will always act under contract. The name of the company or, where appropriate, the identity of the consultant and the terms of the contract which may be of interest to the members or shareholders shall be indicated. In any case, it should be noted that the costs of counselling will be borne by the IIC management company.

p) The profile of the type of investor to which the IIC is addressed.

q) Inclusion of all possible expenses and commissions, distinguishing between those who are to be paid by the shareholder or shareholder of those who are paid out of the IIC assets. In particular, they must be set out in the prospectus: the maximum fees and the actual charges inherent in the sale, subscription, repurchase or redemption of shares or shares; the discounts to be used for such transactions; and the entity benefiting from its recovery; the fixing of the way in which the management fee and the commission of deposit are to be calculated. Additionally, a total supported expense ratio and a portfolio rotation index will be included.

r) The historical evolution of the IIC, making an express statement that such evolution does not constitute an indicator of future results. Where appropriate, this information may be collected as a document annexed to the prospectus. It shall appear in the prospectus together with the financial objective, the return or the benchmark if they exist, the ratio of the total expenditure and the rate of rotation referred to in the previous paragraph.

2. The CNMV shall determine the content and the way in which the information leaflet is presented and may establish specialties where they are necessary according to the category to which the IIC belongs, in accordance with the provisions of the last paragraph of the Article 30.2 of the law. The CNMV shall establish the elements of the prospectus that are considered essential and require prior verification for its entry into force. Where the essential elements of the prospectus are modified, they shall be updated.

3. The CNMV may also require the inclusion in the prospectus of any additional information, warnings or explanations it deems necessary for the appropriate information and protection of investors and market transparency.

Article 23. Simplified brochure.

The simplified prospectus is a separable part of the full prospectus and shall contain in summary the most relevant information of the aspects referred to in paragraphs (a), (b), (d), (e), (f), (g), (i), (l), (m), (n), (o), (p), (q) and (r) of paragraph 1 of the previous Article. This information shall be presented in an easily analysable and comprehensible form by the average investor. In addition, it must contain a statement from the place where the full prospectus can be obtained free of charge.

Article 24. Annual report.

1. The annual report, in addition to the provisions of Article 17 of the Act, shall contain the following:

(a) Information on the state of the estate, indicating the total assets, liabilities and net worth.

b) The number of shares or shares outstanding.

c) Net equity value by share or share.

(d) The securities portfolio, in accordance with the criteria established by the CNMV, taking into account the IIC's investment policy, as a percentage of the net asset, and with an indication, for each of the securities (a) of its share of the total assets of the IIC. Movements in the composition of the portfolio during the reference period shall also be reported.

e) Indication of the results generated in the IIC assets in the reference period, using the following data: investment income, other income, management costs, deposit costs, other charges, fees and charges taxes, net income, distributed and reinvested income, increase or decrease in the capital account, capital gains or losses of investments and any other changes affecting the assets and commitments of the IIC.

(f) Comparative table relating to the last three financial years and including, for each financial year, the liquidative value and the net worth of equity or share.

g) Indication of the amount of commitments arising from contracted derivative instruments.

h) Indication of all IIC expenses expressed in terms of percentage of the equity of the fund or, where applicable, the capital of the company.

i) The number of members or shareholders of the IIC and, where applicable, of each compartment.

2. The CNMV may provide that other general or specific information and warnings to be included in the annual report as required, if it considers it necessary. The CNMV shall also establish the form and time limit for the referral of the annual report.

Article 25. Semi-annual and quarterly report.

The semi-annual and quarterly reports shall contain information on the aspects referred to in the previous article, in accordance with the standard models referred to in Article 17.6 of the Law. The CNMV shall establish the form and time limit for the referral of the half-yearly and quarterly reports.

Article 26. Periodic reporting of non-financial IICs.

Without prejudice to the provisions of the two preceding Articles, the CNMV may determine the specialties applicable to the content of the annual, semi-annual and quarterly reports of non-financial IICs.

Article 27. Publication of periodic reports.

Annual, semi-annual and quarterly reports shall be published and delivered to unit-holders, in accordance with the provisions of Article 18.2 of the Act, in the month following the end of the reference period.

The publication of the audited annual accounts shall be carried out separately from the annual report within four months of the end of the reference period and shall be delivered to the unit-holders within the following month. to be drawn up.

Article 28. Relevant facts.

1. The IICs must make public any specific facts relevant to the situation or the development of the institution, through its immediate communication to the CNMV, subsequent dissemination by this and inclusion in the quarterly and annual report or immediate semi-annual A person whose knowledge may affect an investor reasonably to acquire or transmit the shares or units of the institution and therefore be able to influence in a manner relevant to the institution shall be considered to be specifically relevant to the institution. sensitive in its liquidative value and in particular:

1. All reduction of capital in circulation of investment companies that represents a variation of more than 20 percent of that.

2. All reimbursement in investment funds that results in a decrease of more than 20 percent of the equity.

For the purposes of calculating the percentages set out in this paragraph 2. and above, the reductions or repayments made in a single act shall be taken into account. However, where the limits are reached through successive capital reductions or reimbursements requested by the same participant or by several members belonging to the same group within a period of two months, it shall also be considered as a fact. relevant the set of capital reductions or reimbursements.

3. The entire borrowing operation, from the moment it implies that the obligations towards third parties exceed five percent of the IIC's assets.

4. The replacement of the SGIIC or the investment fund depository, as well as the changes that occur in the control of the first.

In the case of replacement of the SGIIC or the depositary, the communication to the CNMV shall be understood when the replacement is authorised.

5. º All decisions that result in the obligation to update the essential elements of the information booklet.

2. The CNMV is enabled to determine the form, content, and deadlines of relevant fact.

Article 29. Significant shareholdings.

Investment companies or, as the case may be, their management companies and the SGIIC of the investment funds shall report to the CNMV on a quarterly basis during the month following the end of that period and by means of electronic, the identity of the shareholders or unit-holders which in itself or by person, in the latter case provided that the SGIIC has knowledge of this circumstance in accordance with the rules applicable to the entities operating in the securities markets in relation to the identification of customers, reach, exceed or decrease from the the following percentages of participation in the company or in the fund: 20, 40, 60, 80 or 100 per cent. The obligation to report shall be reported as a result of acquisition, subscription, redemption or transfer of shares or units or of changes in the capital of the company or in the equity of the fund.

Investors shall communicate to the management company or the investment company the information necessary to ensure that they, in turn, duly inform the CNMV.

The failure to comply with the obligation referred to in this article shall be sanctioned in accordance with the law.

The Minister of Economy and Finance and, with his express rating, the CNMV will be able to modify the percentages provided for in the first paragraph, to establish the information that must be made public and to dictate the detailed rules of development for the proper application of the provisions of this Article.

Article 30. Distribution of results.

1. In the case of investment funds, the results shall be the result of deducting from all the returns obtained by the fund the SGIIC commission and the other expenses provided for in the prospectus.

For investment companies, the determination of the results will be done in the form provided for in the recast text of the Law of Companies, approved by the Royal Decree of Law 1564/1989 of 22 December 1989, and in the the statutes of the company, in so far as it does not object to Law 35/2003, of 4 November, of institutions of collective investment.

2. For the purposes of determining the value or cost price of the listed assets, the weighted average cost systems or the identification of items may be used, in accordance with the provisions of the fund rules or the agreed upon, in their case, by the general meeting of the company, and the chosen system will be maintained throughout, at least, three full exercises.

3. The rules of the fund shall lay down the periods of distribution of the results and, where appropriate, the form of their distribution. In the case of companies, the results of the exercise will be distributed in accordance with the provisions of the recast of the Law on Companies, approved by Royal Decree 1564/1989 of 22 December 1989, and in the statutes of the society, in which the regulatory legislation of IICs is not opposed.

4. In no case may the unrealised increases in equity be distributed.

Non-equity increases are not made on capital returns due to transferable securities and financial assets that are part of the equity. For these purposes, the delivery of shares or shares of the fund or of the company released from such increases shall not be the distribution of results.

Article 31. Annual accounts.

1. The SGIIC of investment funds and the managers of the investment company shall, within the first three months of each financial year, formulate the annual accounts of the funds and the companies referred to in the preceding financial year.

2. In the case of investment funds, the formulation and approval of their annual accounts shall be the responsibility of the management board of their SGIIC.

3. In the case of companies and investment funds by compartments, companies and funds shall keep separate accounts in their accounts which differentiate between the revenue and expenditure strictly attributable to each compartment, without prejudice to the oneness of the accounts.

4. Within the first four months of each financial year, the SGIICs and the investment companies shall submit to the CNMV the above accounting documents, together with the audit report.

5. The financial year for companies and for investment funds shall be the calendar year.

6. The Minister of Economy and Finance and, with his express rating, the CNMV will dictate the necessary provisions for the development of the precepts contained in this article.

Article 32. Audit of IIC accounts.

1. The annual accounts of the IICs shall be audited by the accounts, which shall be carried out in accordance with the provisions of the first provision of Law 19/1988 of 12 July on auditing of accounts. The review and verification of its accounting documents shall be carried out in accordance with the provisions of the regulatory standards for auditing of accounts.

In the case of companies and funds by compartments, the audit of accounts shall refer to each of the compartments.

2. The auditors shall be appointed by the general meeting of the investment company or by the management board of the SGIIC of the investment funds. The designation shall be made before the end of the audit exercise, shall be borne by one of the persons or entities referred to in Article 6 of Law 19/1988 of 12 July, and shall be notified to the CNMV, which shall also be notified to the notify any changes in the appointment of the auditors.

3. In all that is not provided for in this regulation, specific rules on auditing of accounts will be available.

Chapter IV

Rules on dissolution, settlement, transformation, merger and division of collective investment institutions

Article 33. Dissolution and settlement of investment funds.

1. It shall be the cause of the dissolution of the fund to comply with the time limit laid down in the contract of incorporation, the agreement of the SGIIC and the depositary when the fund was constituted for an indefinite period and the other provisions laid down in the law, in this regulation and in its implementing rules, as well as in the fund management regulation.

2. The dissolution agreement shall be adopted by common agreement by the SGIIC and the depositary, except in the case of dissolution by the end of the SGIIC; in that case, it shall be adopted only by the depositary. The dissolution agreement must be communicated immediately to the CNMV, which will proceed to its publication, without prejudice to its publication in the "Official State Gazette" and in one of the most important newspapers of the place of the registered office of the SGIIC; in addition, it must be communicated immediately to the members.

3. Once the fund has been dissolved, the settlement period shall be opened and the right of redemption and subscription of shares shall be suspended. The SGIIC shall, with the tender of the depositary, act as liquidator and shall proceed with the utmost diligence and in the shortest possible time to dispose of the securities and assets of the fund and to satisfy and receive the claims. Once these operations have been carried out, they shall draw up the relevant financial statements and determine the share corresponding to each participant.

Financial statements must be verified in the manner provided for in the law and in this regulation. The balance sheet and the results account shall be published in the "Official Gazette of the State" and in one of the newspapers with the highest circulation of the place of residence of the SGIIC.

After the period of one month from the date of its publication without any complaints, the distribution of the assets among the unit-holders shall be carried out. The non-claimed fees within three months shall be entered in deposit in the General Deposit Box and shall be made available to their rightful owners.

In the event that there have been complaints, the judge or the competent court will be at the disposal and may make deliveries to the unit-holders as a provisional settlement.

Once the total distribution of the assets has been made, the SGIIC and the depositary shall request the cancellation of the seats relating to the fund in the registration of the CNMV that corresponds to and, if applicable, in the Commercial Registry.

4. The dissolution of one or more compartments of a fund shall be governed by the provisions of the preceding paragraphs. For such purposes, references to the fund shall be construed as being made to the compartment.

Article 34. Merge.

1. The draft merger between two or more funds or, where appropriate, between two or more compartments of the same fund shall have the following minimum content:

(a) The identification of the funds or compartments involved and their management and depository companies. In the case of merger by creation of a new entity, identification of the new fund.

(b) An explanation of the procedure for the merger with indication of the legal and economic aspects of the merger.

(c) A summary of the composition of the portfolios, highlighting in their case the substantial differences between the different funds or compartments that are merged, as well as the investment policy to be made by the new fund; or compartment, absorbent in the future.

d) Information on the latest audited financial statements, as well as on the possible exchange equation resulting from the implementation of the latest financial statements submitted to the CNMV.

e) Information about the tax effects of the merger.

f) In the case of merger by absorption, an explanation of all the amendments to be included in the management regulation and in the full and simplified brochures of the absorbent fund or compartment. In the case of merger for the creation of a new fund or compartment, the inclusion of the draft management regulation and an explanatory memorandum of the draft with the general content required for the formation of new funds or compartments.

2. As regards the procedure for the merger by absorption between IIC of different legal nature, the provisions of the recast text of the Law of Companies, approved by the Royal Decree of Law 1564/1989 of 22 December 1989, will be followed. the relationship to the merging company or companies, and in the law and in this regulation as to the fund or compartment or funds or compartments covered by the merger, in accordance with the specialities which, where appropriate, establishes the CNMV. In these cases:

(a) The merger procedure shall be initiated subject to the agreement of the management company and the depositary of the fund or compartment or funds or compartments intended to be merged, and of the general meeting of the company or companies of investment that is merged.

(b) The draft merger, together with the agreements referred to in the preceding paragraph, shall be submitted to the CNMV for authorisation. The draft terms of merger will have the content indicated by the CNMV, in accordance with the provisions of the recast text of the Law on Companies, approved by Royal Decree 1564/1989 of 22 December 1989, in relation to the merger of companies, and in this regulation as regards investment funds.

c) The merger will be executed by granting the corresponding public deed and its registration in the records that proceed.

Article 35. Excision.

The project for the division of an investment fund or, where appropriate, one or more compartments of a fund shall be initiated upon the agreement of the management company or, as the case may be, the management companies and the depositaries, and shall contain the specifications referred to in paragraph 1 of the previous Article, as well as the following:

(a) The designation and the precise allocation of all the assets and liabilities to be transmitted to the beneficiary funds.

(b) The sharing between the unit-holders of the participating interests in the beneficiary funds, as well as the allocation criterion used.

TITLE III

Classes of collective investment institutions

CHAPTER I

Financial collective investment institutions

Section 1. Common Provisions

Article 36. Assets eligible for investment.

1. Financial IICs may invest in the following financial assets and instruments:

(a) The securities and financial instruments, as provided for in the first paragraph of Article 2 and in paragraph (a) of that same Article of Law 24/1988, of 28 July, of the Securities Market, admitted to trading on securities or other organised trading markets or systems, irrespective of the State in which they are located, provided that, in any event, the following requirements are met:

1. No. To be markets that have regular operation.

2. º That offer equivalent protection to the official markets located in Spanish territory.

3. Having rules of operation, transparency, access and admission to negotiations similar to those of the official markets located in Spanish territory.

SGIICs and investment companies must ensure, prior to the start of investments, that the markets in which they intend to invest meet these requirements and collect in the IIC explanatory brochure a indication of the markets in which to invest.

(b) The securities and financial instruments referred to in subparagraph (a) in respect of which their admission to trading is requested in any of the markets or systems referred to in that paragraph. Those securities and instruments shall be equated with those in whose terms of issue the commitment to apply for admission to trading is made, provided that the initial period for fulfilling that commitment is less than one year. Where admission to trading does not occur within six months of the date on which the undertaking to submit the relevant application for admission is requested or not fulfilled, the portfolio in question shall be restructured. the following two months following the end of the periods referred to above. If the time limit is insufficient, the CNMV may be requested to extend it. Such extension shall not exceed an additional period of two months. The financial instruments and securities referred to in this paragraph may not represent more than 10 percent of the IIC's assets.

(c) Shares and shares of other IICs authorized under Directive 85 /611/EEC, provided that the rules of the funds or the statutes of companies whose shares or shares are intended to be acquired do not authorize invest more than 10 percent of the institution's equity in shares and shares of other IICs.

(d) The shares and shares of other IICs of a financial character not authorised under Directive 85 /611/EEC, provided that the latter are not intended to invest in other IICs and provided that they comply with the Following requirements:

1. The regulation of the funds or the statutes of the companies whose shares or shares are intended to be acquired does not authorize the investment of more than 10% of the institution's assets in shares of other IIC.

2. The underlying IICs are based or located in an OECD Member State excluding those that lack cooperation mechanisms and exchange of information with the Spanish supervisory authorities.

3. The rules on investment arrangements, asset segregation, indebtedness, leverage and uncovered sales are similar to those of the Spanish legislation contained in Section 1 of Chapter I of Title III.

In addition, the liquidative value of the shares/units included in this paragraph (d) and in subparagraph (c) above shall have sufficient periodic publicity for the timely performance by the investment IIC of its valuation obligations, and the reimbursement from the IIC's assets shall be guaranteed with a frequency that allows the investment IIC to meet normally the repayment of its shares or units. If an IIC invests in other IICs whose repayment guarantee is lower than the rate at which the investment IIC provides for the repayment of its shares or units, it shall provide for compulsory pre-notices for the refunds that take into account this circumstance.

In the case of IICs that do not guarantee the repayment of their shares or units from their assets, they must be admitted to trading on a market or trading system that meets the requirements stated in the (a) above and having sufficient dissemination, or liquidity mechanisms, to ensure the liquidity of its shares or units.

4. The report of your business activity in a semi-annual and annual report to enable the assessment of assets and liabilities, income and operations during the reporting period.

Spanish IICs, excluding free-investment IICs and free-investment IIC IICs, shall be understood to comply with paragraphs 2 and 3.

(e) deposits in credit institutions that are in the view or may be made liquid, with a maturity of not more than 12 months, provided that the credit institution is based in a Member State of the European Union or, if the registered office of the credit institution is situated in a non-member State, in the case of credit institutions whose weighting is not more than 20% for the purposes set out in Article 26 of Royal Decree 1343/1992 of 6 November 1992, the development of Law 13/1992, of 1 June, on own resources and supervision on a consolidated basis financial institutions.

(f) derivative financial instruments traded on a market or trading system that meets the requirements set out in subparagraph (a) above provided that the underlying asset consists of assets or instruments of the referred to in paragraphs (a), (b), (c) and (d), credit risk, volatility, financial indices, interest rates, exchange rates or foreign currency, in which the IIC of a financial character may invest in accordance with its investment policy as stated in the prospectus. Any other derivative instrument provided that the CNMV has approved its use by IICs, in general or in particular. In the exercise of such power, the specific characteristics of the instrument, its application and use in the financial markets, as well as the impact on the risk management and investment policy of the IICs shall be taken into account.

When the underlying is a financial index, it shall reflect the evolution of assets eligible for investment in accordance with the provisions of this Article. The index must be sufficiently diversified, represent an appropriate reference to the evolution of the market to which it refers and have adequate public dissemination. The agent for the calculation of a financial index may not belong to the same economic group as the counterparty acting in a derivative financial instrument whose underlying is such an index.

g) Non-traded derivative financial instruments in a market or trading system that meets the requirements set out in subparagraph (a) above, provided that:

1. º The requirements set out in paragraph (f) are met in terms of the composition of the underlying asset.

2. Counterparties are financial institutions domiciled in OECD Member States subject to prudential supervision or supranational bodies of which Spain is a member, which is a regular and professional member of the OECD. operations of this type and which have sufficient solvency. For this purpose, the counterparty shall be presumed to have sufficient solvency when it has a favourable credit rating of a specialised credit rating agency of recognised prestige.

3. º Exist a commitment, from the issuer or a financial institution, to give firm quotes on a daily basis, with a maximum differential from which the periodic reporting documents will be reported.

The requirements set out in paragraphs 2 and 3 shall also be required for the financial instruments referred to in paragraph (f), except where they are traded on a market that requires the deposit of guarantees on a basis (a) of the contributions or adjustment of profit and loss and there is a clearing house which records the transactions carried out and is between the contracting parties acting as a buyer to the seller and as a seller to the seller buyer.

The Minister of Economy and Finance and, with his express rating, the CNMV will determine the categories of instruments included in this paragraph (g).

(h) Money market instruments, provided they are liquid and have a value that can be accurately determined at all times, not traded on a market or trading system that meets the requirements set out in the paragraph (a), provided that one of the following requirements is met:

1. º That are issued or guaranteed by the State, the Autonomous Communities, the local entities, the Banco de España, the European Central Bank, the European Union, the European Investment Bank, the central bank of some of the Member States, any public administration of a Member State, a third country or, in the case of federal States, by one of the members of the Federation, or by an international public body to which one or more States belong members.

2. º That are issued by a company whose securities are traded on a market that meets the requirements set out in paragraph (a).

3. º That are issued or guaranteed by an entity subject to prudential supervision.

4. º That are issued by entities belonging to the categories that the CNMV determines.

For the purposes of this paragraph (h), money market instruments shall be considered to be those fixed income assets with a maturity of less than 18 months. In addition, they shall be considered liquid:

If there are mechanisms to perform them at their market value, or

If there is a repurchase commitment by the issuer or a financial institution.

(i) In the case of investment companies, the movable and immovable property essential for the direct pursuit of its business, with a maximum limit of 15% of the IIC's assets.

j) The following financial assets and instruments, up to a maximum of 10 percent of their equity:

1. The shares and fixed income assets admitted to trading on any market or trading system that do not meet the requirements set out in paragraph (a) or that have other mechanisms that guarantee their liquidity at least at the same frequency as the investment IIC is in store for the repayments of its shares or units, either directly or in accordance with the provisions of Article 52.

2. No IIC shares or units not authorised in accordance with Directive 85 /611/EEC, other than those referred to in paragraph (d).

3. The shares/units of free investment IIC and IIC of free investment, both regulated in Articles 43 and 44 and similar foreign institutions.

4. º Non-listed securities as provided for in Article 37.

5. º The shares and units of the risk capital entities governed by Law 1/1999 of 5 January, the regulator of the risk capital institutions and their management companies.

6. º Deposits in credit institutions that do not meet the requirements of paragraph (e).

IIC prospectuses that intend to invest in any of the assets referred to in this paragraph (j) shall make express and clearly prominent mention of this, including detailed information on such investments, risks they behave and the selection criteria to which they will be adjusted.

2. IICs may invest in structured transactions resulting from the combination of one or more eligible assets or financial instruments and one or more eligible financial instruments. Investment in such structured operations shall comply with the limitations set out in Article 38.

3. IICs may not invest in derivative financial instruments or structured transactions, the underlying of which, or between the components of which, are included assets other than those provided for in this Article, including those that may be authorised under the provisions of paragraphs (f) and (g) of paragraph 1, or in Article 30.9 of the law.

Article 37. Investment in unlisted securities.

Investment in unlisted securities will be subject to the requirements listed below:

(a) The values that may be acquired may not present any limitation to their free transmission.

(b) The securities issuing entity shall have its registered office in any OECD member country in which the nature of the tax haven is not present. For securities issued by institutions with registered offices in a non-OECD country, in addition to the non-participation of a tax haven in that country, the prior authorisation of the CNMV shall be required, in accordance with the requirements that it determines. In any event, the issuer shall audit its financial statements annually, which shall be external and independent. At the time of the investment, the audit report of the last two financial years shall be audited, with the opinion of the auditor at least in the last financial year. The requirements laid down in this paragraph shall not be required in the case of entities which have recently been constituted as a result of merger, division or transfer of branches of activity from others which did so.

c) Not individually, nor the sum of the investments of the SICAV belonging to the same group and of the funds and SICAV managed by SGIIC in which the same circumstance can be assumed, in no case, to be exercised or can exercise the direct or indirect control of the entity in which it is invested.

(d) Investment may not take place in entities whose members, administrators or managers have, individually or jointly, directly or through persons involved, a significant participation in the IIC or its SGIIC. No investments in securities issued by companies that have been financed by entities in the SICAV group or by the SGIIC may be made and that the financing received from IICs shall be used to write down directly or indirectly the credits granted by the companies of the above groups.

IIC investment in non-listed securities issued by entities belonging to its group or to the group of its SGIIC is prohibited.

e) In addition to the limitations set out in Article 38, investment in unlisted securities shall be subject to the following limitations:

1. No IIC may have more than two percent of its equity invested in securities issued or endorsed by the same entity.

2. No IIC may have more than four percent of its equity invested in securities issued or endorsed to entities belonging to the same group.

The percentages provided for in this paragraph shall be measured by reference to the effective valuation of the total financial assets and the securities in question.

Where, in circumstances beyond the will of the IIC or its management company, the above limits or the limits laid down in Article 36 are exceeded, the IIC or its management company shall, within one month, adopt the necessary measures. to rectify such a situation and put it to the knowledge of the CNMV.

(f) For the purposes of calculating the liquidative value, as well as of the compliance with the percentages provided for in this Article, the acquired unlisted securities shall be valued in accordance with their effective value, according to Maximum prudence and the use of valorative methods generally accepted in practice.

The Minister of Economy and Finance and, with his express rating, the CNMV will dictate the provisions necessary to establish the accounting treatment and to develop the valuation methods applicable to each type of securities. listed, distinguishing between those of variable income and fixed income, as well as for setting the criteria according to which the percentages provided for in this article are to be computed.

The valuation methods to be established shall be those applicable by IICs, unless the CNMV authorizes, in accordance with the foregoing paragraph, at the request of the SICAV or the management company and the depositary, other methods which ensure the same level of confidence in the estimated value of the investment in question. In this case, such methods shall have the approval of the management body of the SICAV or the management company, as well as of a person with sufficient power on the part of the depositary.

Article 38. Diversification of risk.

1. In order to comply with the principle of risk diversification, financial IICs shall respect the limitations set out in this Article.

2. Investment in the financial assets and instruments referred to in paragraphs (a), (b), (h) and (j) of Article 36.1 issued or endorsed by the same issuer shall not exceed five per cent of the IIC's assets. This limit will be applied with the following specialties:

a) It will be extended to 10 percent, provided that the investment in the issuers in which it exceeds five percent does not exceed 40 percent of the IIC's patrimony.

(b) It shall be extended to 35% in the case of investments in securities issued or endorsed by a Member State of the European Union, an autonomous community, a local entity, an international body of which Spain is a Member State or any other State which has a solvency rating issued by a specialised credit rating agency of recognised prestige, not less than that of the Kingdom of Spain.

However, IICs may invest up to 100 percent of their equity in securities issued or endorsed by an entity of those referred to in this paragraph (b).

When the limit of 35 percent is to be exceeded, the prospectus and any publication of the IIC's promotion shall be clearly visible in this circumstance, and the issuers in whose securities are to be specified shall be specified. intention to invest or have invested more than 35 per cent of the estate.

(c) It shall be extended to 25% in the case of investments in bonds issued by credit institutions the amount of which is guaranteed by assets that sufficiently cover the commitments of the issue and which remain In the case of the issuer's insolvency situation, the principal and the payment of the interest shall be paid in a privileged manner. In any event, the mortgage and mortgage bonds provided for in Law 2/1981 of March 25 on the regulation of the mortgage market will be taken into account; the territorial cedules regulated in Law 44/2002 of 22 November, of reform measures of the financial system; and the non-subordinated securities issued by the mortgage-backed funds regulated in Law 19/1992 of 7 July on the arrangements of companies and funds for real estate investment and on securitisation funds mortgage. The total investments in these types of obligations in which the five per cent limit is exceeded will not be able to exceed 80 per cent of the IIC's estate.

(d) It shall not apply where the purpose of the IIC is to develop an investment policy that replicates or reproduces a given stock index or a fixed income index representative of one or more markets located in a State or any other State, or securities traded on them.

The market or markets where the shares or bonds that make up the index must meet characteristics similar to those required by Spanish legislation in order to obtain the secondary market condition official.

The index must gather at least the following conditions:

1. Have a sufficiently diversified composition.

2. The easy-to-play result.

3. Be a sufficiently suitable reference for the market or set of values in question.

4. Having a proper public broadcast.

In these cases, investment in shares or bonds of the same issuer may reach 20 percent of the IIC's equity. This limit may be extended to 35% for a single issuer, where exceptional circumstances on the market are to be assessed by the CNMV.

The Minister of Economy and Finance and, with his express rating, the CNMV will specify the requirements set out in this paragraph (d).

e) It shall not apply where the IIC object is to develop an investment policy that takes as a reference a certain index that meets the requirements of the first three paragraphs of paragraph (d).

In these cases, investment in shares or bonds of the same issuer may reach 10 percent of the IIC's equity. In addition, a further 10 per cent of the IIC's equity may be invested in such securities, provided that it is done through the use of derivative financial instruments traded on official or foreign secondary markets. equivalents.

The 20 per cent joint limit on securities of the same issuer referred to in the preceding paragraph may be extended to 35 per cent for a single issuer when exceptional circumstances on the market which are to be valued by the CNMV.

The CNMV shall specify the maximum deviation allowed for the benchmark index, its calculation formula and its reporting obligations.

3. Investment in the financial assets and instruments referred to in the first subparagraph of the previous paragraph, issued or endorsed by the same issuer, the positions vis-à-vis the issuer in derivative products and the deposits that the IIC has in that institution may exceed 20 percent of the IIC's assets.

For the purposes of the limits set out in paragraphs 2, 3, 4, 5 and 6, institutions that are part of the same economic group shall be considered as a single issuer.

Entities in which the conditions provided for in Article 4 of Law 24/1988 of 28 July of the Stock Market are to be considered belong to the same group.

4. Investment in assets and financial instruments referred to in the first subparagraph of paragraph 2, issued or endorsed by the same entity, shall not exceed five per cent of the securities in circulation of the latter. Furthermore, the sum of the investments in securities of an issuer of the SICAV belonging to the same group and of the investment funds and SICAV managed by management companies of that same group shall not exceed 15 per cent of the values in the movement of a given entity, without in any case being able to imply the possibility of exercising a significant influence on that issuer.

5. The exposure to the risk against a counterparty associated with the financial instruments referred to in Article 36.1 (g) shall not exceed five per cent of the IIC's equity. This limit shall be extended to 10% where the counterparty is a credit institution that complies with the provisions of Article 36.1 (g) .2 and

.

The limits of the preceding paragraph shall also apply to the derivative financial instruments referred to in Article 36.1.f), except if they are traded on a market that requires deposit of guarantees and there is a clearing house that is interposed between the parties.

6. Without prejudice to the derogation provided for in the first subparagraph of paragraph 2 (b), the sum of the investments in the assets and financial instruments referred to in the first subparagraph and in paragraph 2 (c) issued by an issuer of the deposits in Article 36.1 (e), which are provided for in that issuer and the positions vis-à-vis it in derivative products, shall not exceed 35% of the IIC's assets.

7. Investment in shares or units issued by a single IIC, as referred to in Article 36.1 (c) and (d), shall not exceed 45 per cent of the IIC's assets. Those IICs, as referred to in Article 45, whose investment policy is based on investment in a single fund of a financial character referred to in Article 36.1 (c) and (d), shall not be subject to this limit.

8. The excess over the investment limits referred to in the preceding paragraphs may be regulated by the IIC within a period of six months from the time it occurred, provided that such excess has occurred after the date of the last partial or total acquisition of the securities in question. However, where the excess exceeds the limit by more than 35%, the IIC shall reduce the excess to a percentage below 35% of the limit within three months, without prejudice to the total regularisation within the period of six months. months.

The CNMV may, for exceptional reasons alleged by the IIC, authorize the extension of the time limits provided for in the preceding paragraph, without in any event being able to exceed that three-month extension.

9. The risk diversification coefficients contained in this Article shall not have to be respected when the subscription rights are exercised in respect of marketable securities that are part of their asset. If, as a result of the exercise of the subscription rights referred to or for reasons not attributable to the IIC, the limits of diversification are exceeded, the IIC shall correct that circumstance as soon as possible, and in its operations The aim of the sale should be to regularise this situation and, in any event, within the time limits set out in the previous paragraph.

10. The percentages referred to in this Article shall be measured by reference to the actual valuation of the total financial assets and the securities in question, except for the limits provided for in paragraph 4, which shall be measured by the nominal value or the number of values. In order to ensure adequate compliance with the provisions of the previous paragraphs, the Minister for Economic Affairs and Finance and, with his express rating, the CNMV will dictate the precise rules to determine what is to be understood by value. cash and equity of IICs; to this end, they shall establish the appropriate formalities for the control of such compliance.

11. The Minister for Economic Affairs and Finance and, with his express rating, the CNMV may raise the limit set out in the first subparagraph of paragraph 2 and in paragraph (a) to 20%.

Article 39. Requirements for investment in derivative financial instruments.

1. The SGIIC or, in the case of self-management, the SICAV shall be extremely diligent when investing in derivative financial instruments and shall comply with the internal control obligations laid down in this Regulation and in its provisions of development.

In any case, in order to carry out transactions with derivative financial instruments, the aforementioned entities must verify that these operations are appropriate to the IIC's objectives and that they have the means and experience necessary to carry out such activity. They shall also have a risk management system that enables them to estimate and control at all times the risk of open positions in derivative financial instruments and their contribution to the overall risk profile of the portfolio of the IIC.

They shall also report to the CNMV on a regular basis the types of derivative financial instruments used, the associated risks as well as the methods of estimation of such instruments, including, where appropriate, quantitative limits. applied.

2. IICs will be able to operate on derivative financial instruments in order to ensure adequate coverage of the risks assumed in all or part of the portfolio, as an investment to more effectively manage the portfolio or within the framework of a portfolio. management aimed at achieving a concrete objective of profitability, in line with the management objectives set out in the information leaflet and in the IIC's social regulations or statutes. The detailed rules for implementing this Regulation shall specify the purposes permitted according to the characteristics of the financial instrument concerned.

3. Total exposure to the market risk associated with derivative financial instruments shall not exceed the net worth of the IIC. Total exposure to risk shall mean any current or potential obligation arising from the use of derivative financial instruments, including those to be included in the uncovered sales.

The premiums paid for the purchase of options, either contracted in isolation, or incorporated into structured operations, will in no case exceed 10 percent of the IIC's assets.

They shall not be subject to the limits provided for in this paragraph by IICs which carry out a management aimed at achieving a concrete objective of profitability which has been guaranteed to the institution itself by a third party.

4. Exposure to the market risk of the underlying asset associated with the use of derivative financial instruments shall be taken into account for compliance with the diversification limits set out in paragraphs 2, 3 6, 7 and 8 of the Article 38. For such purposes, derivative financial instruments whose underlying is a stock index or fixed income index meeting the requirements laid down in Article 38.2.d), interest rates, exchange rates, currencies and indices shall be excluded. financial.

5. The Minister of Economy and Finance is enabled and, with his express rating, the CNMV to develop the provisions of this article. The CNMV shall also determine the information referred to in paragraph 1, the method of calculation of the total exposure to market risk and the exposure to the market risk of the underlying asset, including the conditions for coverage and compensation of positions, as well as for the recognition of the guarantees provided and the type of assets in which they are to be materialised.

Article 40. Liquidity.

1. In order to comply with the liquidity principle, IICs of a financial nature shall maintain a minimum liquidity ratio of three per cent of their equity. Such a coefficient shall be calculated on the monthly average of daily stocks of the institution's assets and shall be materialised in cash, deposits or accounts in the depositary or other credit institution if the depositary does not have a that consideration, or in the purchase of a one-day repurchase agreement in public debt securities. If the depositary does not have the consideration of a credit institution, the IIC shall include in the prospectus the identification of the credit institution in which it shall, where appropriate, materialize the cash, deposits or accounts in the view. Assets not invested in assets that are part of the liquidity ratio shall be invested in the eligible assets and financial instruments referred to in Article 36.

The CNMV may increase the quoted coefficient, without exceeding the limit of 10 percent, when, in view of the evolution of the IIC's subscriptions and repayments and the liquidity of the assets forming part of the The assets of the IICs, there are, or are expected to be, difficulties in dealing with reimbursements within the time limits laid down in the rules. The CNMV shall also establish the procedure for the calculation of the coefficient.

2. The management company or, in the case of being self-managed, the SICAV must have internal systems of control of the depth of the market of the values in which it invests considering the usual negotiation and the volume invested, in order to procure a orderly settlement of the IIC positions through the normal procurement mechanisms. The IIC information documents shall contain an explanation of the policy adopted in this respect.

Article 41. Obligations towards third parties.

1. IICs of a financial nature may be indebted to the overall limit of 10 per cent of their assets to resolve transitional cash difficulties, provided that it occurs for a period of not more than one month, or for the acquisition of assets with deferred payment, subject to the conditions laid down by the CNMV. For these purposes, the debits incurred in the purchase of financial assets shall not be taken into account in the settlement period of the transaction establishing the market where they have been contracted.

2. Investment companies may also contract loans for the purchase of real estate for the continuation of their activities up to 10% of their assets, without in any event their total indebtedness exceeding 15%. percent of its assets.

3. Neither the management companies in relation to the IICs managed by them nor the investment companies shall be able to carry out the uncovered sales of the financial assets referred to in Article 36.1 (c), (d) and (h). They will also not be able to make uncovered sales of unlisted securities. In any event, the uncovered sales of the securities and financial instruments provided for in Article 36.1.a) shall be subject to the obligation to maintain additional liquidity, which shall be calculated on a daily basis according to the price of the the value or instrument concerned, in the terms set out by the CNMV.

Section 2. Special Provisions

Article 42. IIC Spanish which are intended to be marketed in other Member States under Directive 85 /611/EEC.

1. The IICs referred to in this Article shall comply with Directive 85 /611/EEC at all its extremes. Among others, the rules contained in section 1 of this chapter will apply to them with the following exceptions:

(a) In order for IICs to be able to invest up to 100% of their equity in the securities issued or endorsed by an entity referred to in Article 38.2.b), it will be necessary to diversify at least six different and that the investment in securities of the same issue does not exceed 30 percent of the IIC asset.

(b) Investment in shares or units issued by a single IIC may not exceed 20 per cent of the IIC's equity. In addition, total investment in IIC not authorised under Directive 85 /611/EEC may not exceed 30% of the IIC's assets.

2. They may not invest:

(a) In shares without a vote of the same issuer above 10 percent of the shares without a vote in circulation.

(b) In debt instruments of the same issuer above 10 per cent of the debt instruments in circulation of the same issuer.

(c) In shares or units of the same IIC above 25% of the volume in circulation of shares or units of shares in the same IIC.

The limits of the preceding paragraphs shall not apply to financial assets and instruments issued or endorsed by a Member State of the European Union, the autonomous communities, local authorities, bodies, offices and agencies. international of which Spain is a member or by any other State which presents a credit rating awarded by a credit rating agency recognised by the CNMV that the latter considers appropriate.

3. The risk diversification coefficients contained in this Article shall not have to be respected when the subscription rights are exercised in respect of marketable securities that are part of their asset. If, as a result of the exercise of the subscription rights referred to above, or for reasons not attributable to IIC, the limits of diversification are exceeded, the IIC shall correct that circumstance as soon as possible and, in any case case, within the time limits referred to in Article 38.8.

Article 43. Special provisions of the IIC for free investment.

The IICs referred to in this article will be applicable to the financial IIC rules contained in this regulation, with the following exceptions:

(a) The shares and units of these IICs may be subscribed or acquired by an initial minimum outlay of EUR 50,000.

(b) They may only carry out the marketing activities referred to in Article 2.1 of the Act when they are addressed to qualified investors, as defined in the rules adopted for the transposition of the Directive. 2003 /71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published in the event of a public offering or admission of securities and amending Directive 2001 /34/EC.

(c) Free investment IICs shall have at least 25 shareholders or members.

(d) Subscriptions and repayments of investment funds or, where appropriate, acquisitions and sales of investment companies ' shares may be made by the delivery of assets and financial instruments eligible for the investment, appropriate to the investment vocation of the IIC.

(e) The liquidative value of the shares and units shall be calculated at least quarterly. However, where the planned investments so require, the liquidative value may be calculated on a semi-annual basis. The subscriptions and repayments of the funds or, where appropriate, the acquisitions and sales of the shares of the investment companies shall be carried out at the same frequency as the calculation of the settlement value.

(f) The maximum limits of the management, deposit, subscription and reimbursement fees provided for in this Regulation shall not apply to them.

g) They may invest in financial assets and instruments and in derivative financial instruments, whatever the nature of their underlying, taking into account the principles of liquidity, risk diversification and transparency; which are set out in Article 23 of the Act. The investment rules contained in Section 1 of Chapter I of Title III of this Regulation shall not apply to them.

(h) The IIC debt limit must be set out in the simplified prospectus, which cannot exceed the value of its assets by five times. The general limits provided for in the law for the pigmentation of assets shall not apply to them.

The information leaflet will include information on the criteria that IIC or the management company has decided to apply in the valuation of assets, the possible existence of conflicts of interest in carrying out transactions linked, the fees and charges applicable to the IIC and the investors and the minimum pre-notices required to make the repayments to ensure adequate liquidity management of the IIC.

(i) The risk management system referred to in Article 39.1 shall control the non-compliance with its cash or securities redemption commitments and shall include the periodic performance of the risk management exercise. (a) simulation of the effect on the ability of the IIC to fulfil its obligations in the event of adverse market developments. Paragraph 2 of that Article shall not apply to them.

(j) Prior to the subscription or acquisition of the units or shares of these IICs, the investor must state in writing that he knows the risks inherent in the investment. Compliance with this obligation shall be without prejudice to the respect at all times, by these IICs, to the rules of conduct provided for in the law, in this regulation and in its implementing rules.

k) These IICs shall be entered in a special register created for that purpose in the CNMV.

The Minister of Economy and Finance may, in order to protect the integrity of the market, provide for temporary derogations from the arrangements provided for in this Article, either as a general or individual, for one or more funds, or for one or more of the requirements set out in the preceding paragraphs. The CNMV shall develop the content of the document referred to in paragraph (j), which shall clearly reflect the risks involved in the investment, as well as enable the investor to adequately understand those risks.

Likewise, the CNMV will establish the specific requirements that the management companies of this type of IIC have to have. In compliance with the provisions of Article 43.1 (i) and (j) of the law, the requirements to be met shall in any event include:

1. Dispose of human and material resources necessary to carry out appropriate risk control, including risk control and measurement systems, and to allow for a continuous assessment and continuous monitoring of the investments;

2. Contar with appropriate investment selection procedures.

Additionally, the CNMV will be able to establish, among others, additional requirements of own resources to the management companies that manage this type of IIC.

Article 44. Special provisions of the IIC of free investment IIC.

1. The IICs referred to in this article shall be applicable to the rules on financial IIC contained in this Regulation, with the following exceptions:

(a) You must invest at least 60% of your equity in IIC of free investment referred to in the previous article incorporated in Spain and in similar foreign IICs, or domiciled in countries belonging to the OECD, or whose management has been entrusted to a management company subject to supervision with domicile in a country belonging to the OECD.

(b) They may not invest more than 10 percent of their assets in a single IIC referred to in the preceding paragraph.

(c) The liquidative value of the shares and units shall be calculated at least quarterly. However, where the planned investments so require, the liquidative value may be calculated on a semi-annual basis. The subscriptions and repayments of the funds or, where appropriate, the acquisitions and sales of the shares of the investment companies shall be carried out at the same frequency as the calculation of the settlement value.

(d) The maximum limits of the management, deposit, subscription and reimbursement fees provided for in this Regulation shall not apply to them.

e) These IICs shall be entered in a special register created for this purpose in the CNMV.

(f) Prior to the subscription of the shares or to the acquisition of the shares, the investor must state in writing that he is aware of the risks inherent in the investment. Compliance with this obligation shall be without prejudice to the respect at all times, by these IICs, to the rules of conduct provided for in the law, in this regulation and in its implementing rules.

g) The simplified and complete prospectus shall contain the information provided for in Articles 22 and 23, in particular details of the information concerning the objective, the investment policy and the risks inherent in it, to the profile The risk of the IIC and the investors to which it is directed at the minimum notice sufficient to make the repayments of the shares or units without prejudice to the other investors and the fees and charges which it directly or indirectly support the IIC. The special risks that the investment in these IICs may entail in the IIC should be included in the prospectus and in any publication of the IIC promotion in a visible manner.

2. The CNMV shall develop the content of the document referred to in paragraph 1 (f), which shall clearly reflect the risks involved in the investment, as well as enable the investor to be adequately aware of them.

Likewise, the CNMV will establish the specific requirements that the SGIICs will have to manage this type of IIC. In compliance with the provisions of Article 43.1 (i) and (j) of the law, the requirements to be met shall in any event include:

1. Dispose of human and material resources necessary to carry out appropriate risk control, including risk control and measurement systems, and to allow for a continuous assessment and continuous monitoring of the investments;

2. Contar with appropriate investment selection procedures.

Additionally, the CNMV will be able to establish, among others, additional requirements of own resources to the management companies that manage this type of IIC.

Article 45. IIC whose investment policy is based on investment in a single investment fund.

These IICs will have the following specialties:

(a) You must invest at least 80 percent of your assets in a single fund, which must be identified in the IIC information brochures. The rest of the equity may be invested in fixed income securities traded on markets as referred to in Article 36.1.a).

(b) The change in the fund in which it is invested shall be subject to the authorisation procedure of the CNMV and shall confer on the members of the investment IIC the right of separation provided for in Article 14.2. This change should be communicated as a relevant fact to the participants of the remaining investment IICs.

Likewise, the right of separation corresponding to the fund in which you invest will be exercisable by the investment IIC. The unit-holders of the investment IIC may, in the same way, exercise that right regardless of the decision taken by the management company of the investment IIC in respect of the separation.

c) The following rules will be taken into account in commission matters:

1. The management and deposit fees applied to the investment IIC added to those of the fund in which it is invested shall not exceed the ceilings set out in Article 5.

2. The commissions applied by the investment IIC on the amount of subscriptions and repayments added to those applied by fund in which it is invested will not exceed five percent.

3. The fee scheme shall be included in the explanatory prospectus, in the periodic reports of the investment IIC, as well as in any other publication of the institution's promotion.

d) The criteria for calculating the liquidative value applicable to the subscriptions and repayments of the investment IIC shall be the same as those applied to the fund in which it invests.

In cases where the management regulation of the fund in which it is invested provides for a period of notice in accordance with the provisions of Article 48, the management regulation of the investment IIC may provide for the same time limits as warning for refunds of any amount.

e) The explanatory prospectus and the periodic information of the investment IICs should include how much information is relevant to the participant on the fund in which it invests in the terms required by the CNMV. For such purposes, the SGIIC of the fund in which it is invested shall provide the investment IIC or the relevant SGIIC with any information that is necessary to enable it to meet its reporting and valuation obligations.

Section 3. Financial collective investment funds

Article 46. Minimum assets of the collective investment funds of a financial character and their compartments.

Investment funds of a financial character shall have a minimum equity of three million euro, which shall be maintained as long as they are registered in the records of the CNMV, without prejudice to the provisions of Article 16.1.

In the case of funds per compartment, each compartment must have a minimum worth of EUR 600,000, without, in any event, the total equity of the fund is less than EUR 3 million.

However, investment funds and compartments may be set up with a lower estate which, in the case of the funds, will not be less than € 300,000 and, in the case of the compartments, EUR 60,000, all on condition of that within the maximum period of six months, counted from their registration in the registration of the CNMV, they reach the minimum patrimony set out in the preceding paragraphs. Otherwise, the bottom or, where appropriate, the compartment shall be dissolved and liquidated.

Contributions to the constitution of the assets shall be made exclusively in money, securities admitted to trading on an official secondary market or other financial assets which, in accordance with the rules of each institution, are eligible for the investment or to comply with the liquidity principle. Contributions of securities and other financial assets shall be subject to the investment policy rules laid down in this Regulation.

Article 47. Equity investment.

The SGIIC will have a one-month period of time from the registration of the fund in the corresponding register of the CNMV to make the investment of the cash contributions obtained on the occasion of its constitution.

You will also have a one-month period of time from the registration of the modification of the prospectus, to adapt the asset of the fund to any changes in the investment policy.

Article 48. Calculation of the settlement value and subscription and reimbursement arrangements.

1. The liquidative value of the units shall be calculated on a daily basis by the SGIIC, with the exception provided for in paragraph 3.

For the purposes of fixing such a settlement value, the value of the equity of the fund shall be the value of deducting the sum of all its assets, valued subject to the rules contained in this Regulation, and in the provisions that develop it. All operating costs shall be provided on a daily basis for the determination of the liquidative value.

Securities admitted to trading on stock exchanges or on other markets or organised trading systems shall be valued at the market prices of the day to which the calculation of the settlement value relates.

Non-listed securities acquired shall be valued in accordance with their effective value, according to criteria of maximum prudence and applying valorative methods generally accepted in practice. The Minister for Economic Affairs and Finance and, with his express rating, the CNMV will dictate the provisions necessary to establish the accounting treatment and to develop the valuation methods applicable to each type of non-listed securities.

2. The liquidative value applicable to subscriptions and repayments shall be the same day of their application or on the following working day, in accordance with what is provided for in the simplified prospectus.

The simplified prospectus should also indicate the procedure for subscription and redemption of shares to ensure that subscription and redemption orders will be accepted by the SGIIC only when they have been requested in a the time when the applicable liquidative value is unknown to the investor and is impossible to estimate in a certain way.

In order to achieve this objective, it may be established in the simplified prospectus an hour of court from which the orders received shall be deemed to be made on the following working day for the purposes of the liquidative value applicable to the them. For these purposes, those in which there is no market for assets representing more than five per cent of the equity of the fund shall not be considered business days. In the simplified prospectus, different cut-off times may be set according to the marketer, which, in any case, shall be earlier than that established by the SGIIC in general.

3. Where the proposed investment is provided for in its management regulation, the liquidative value may, at least, be calculated on the dates provided for in the simplified prospectus. In such cases, the liquidative value applied to the subscriptions and repayments shall be the first to be calculated after the request for the transaction.

4. In the case of automatic re-investment, the applicable settlement value shall be that corresponding to the date of the accrual of the recognised benefit to the participant.

5. The payment of the refund shall be made by the depositary within the maximum period of three working days from the date of the settlement value applicable to the application. Exceptionally, this period may be extended to five working days where the specialties of investments exceeding five per cent of the fund's assets so require.

6. By way of derogation from the previous paragraph, the rules governing the management of the funds may provide that reimbursements for figures exceeding EUR 300 000 will require for full effectiveness the notice to the SGIIC with 10 days of prior to the date of submission of the request for reimbursement. Also, where the total amount of the reimbursement to the same participant within a 10-day period is equal to or greater than EUR 300,000, the SGIIC may require the requirement of the notice for the new requests for reimbursement, whichever is its own. amount, please make the same contribution within 10 days of the last refund. To determine the computation of the figures provided for in this paragraph, account shall be taken of the total reimbursements ordered by the same proxy.

7. Where the hiring of listed securities has been suspended and such securities and other similar, not yet quoted securities issued by the same company form, part of the fund, the repayment and subscription of the holding shall be made at the price determined in accordance with the preceding paragraphs, provided that the value of the securities referred to above does not exceed five per cent of the value of the assets and is provided for in the fund's rules of procedure.

In the opposite case, the subscription and redemption of shares shall be made in cash for the part of the price of the holding which does not correspond to the values quoted in the preceding paragraph, and the difference shall be made effective. where the contract is resumed, taking into account the contribution of the first day in which the contract is made. In the subscription, the participant, and in the reimbursements, the SGIIC, shall state that they undertake to make effective the differences calculated in the form expressed; the SGIIC shall proceed to the compensation of differences when the participant requests the repayment of the shares before the circumstances that gave rise to their debit were exceeded.

However, when the hiring of listed securities has been suspended, due to technical or other causes affecting the hiring of an entire market or organized trading system, and provided such Securities account for more than 80% of the value of the equity of the fund, the SGIIC may suspend the redemption and subscription of shares until the causes that gave rise to the suspension are sold, following communication to the CNMV.

8. In exceptional cases, the CNMV may authorise, on a reasoned request from the SGIIC and where provided for in the management regulation, that the redemption of the units is made in securities which form an integral part of the fund. The CNMV shall fix in such cases the conditions and time limits for the use of such exceptional power.

9. The CNMV is enabled to set specific rules for the calculation of the liquidative value.

Article 49. Listed investment funds.

1. These are listed investment funds whose holdings are admitted to trading on a stock exchange.

2. The following are requirements for the admission to trading of equity securities of an investment fund:

a) Obtain the authorization of the CNMV, in accordance with the procedure laid down in Article 10 of the law.

b) Meet the special rules of Article 52.1. At the time of admission to trading, the minimum number of members shall not be required to be as set out in Article 3.

(c) The objective of the investment policy is to reproduce an index that meets the conditions laid down in Article 38.2.d).

(d) The SGIIC shall determine the composition of the stock basket and/or the amount of cash liable to be exchanged for units. The subscription and redemption operations shall be carried out in the securities belonging to or in the necessary amount of cash, in accordance with the requirements of the management company. In this respect, the SGIIC may limit in the information leaflet the operation of subscriptions and reimbursements only to entities, of those authorized in accordance with Articles 64 and 65 of the Law 24/1988, of 28 July, of the Stock Market, for be able to provide investment services, with which you have signed a contract for that purpose.

(e) For the purposes of facilitating the alignment of the value of the quotation with the estimated settlement value at different times of the procurement, institutions shall have to assume the commitment to offer in firm positions buying or selling units with a maximum price differential. Such entities shall fall within the categories referred to in paragraph (d). The information leaflet of the fund shall contain the conditions and limits of the commitment made by those institutions and the maximum range of contributions they shall offer.

f) An appropriate dissemination must be carried out through the society of the exchange in which it is cotice of:

1. The background portfolio.

2. The composition of the basket of securities and/or the amount of cash liable to be exchanged for shares.

3. º The estimated liquidative value at different times of the hiring.

g) The other requirements that the CNMV can set.

3. The procedure for the transfer of shares provided for in Article 28 of the law shall not apply to the investment funds listed.

4. Where the SGIIC admits that the subscription or redemption transactions are settled in cash, it shall establish mechanisms to pass on, to investors who subscribe or repay, any mismatches that may occur in the reproduction of the index. as a result of such operations.

5. These funds shall not be subject to the provisions of Article 40.

6. The stock exchange acquisition of shares of listed investment funds shall be exempt from the free delivery obligation of the simplified prospectus and the last half-yearly report. In any event, upon request, the full prospectus and the latest published annual and quarterly reports shall be delivered.

7. In the information documents of the institution in which data on the liquidative value of the units are shown, the corresponding data based on the market share shall also appear. In addition, the CNMV may determine the detail to be reported in relation to the premium or discount of the listing in respect of the settlement value and the differences in profitability that occur between the benchmark and the fund investment. In all the publications of the institution, it should be noted that the fund is publicly traded and that its investment policy is to reproduce a certain index.

Section 4. Companies for collective investment of variable capital

Article 50. Concept, social capital and obligations vis-à-vis third parties.

1. They are variable capital investment companies of the financial character IICs that adopt the corporate form.

2. The minimum paid-up capital of the SICAV shall be EUR 2,400 000 and shall be maintained as long as the company is registered in the register, without prejudice to the provisions of Article 16.1. The initial capital must be fully subscribed and paid up from the time of the formation of the company. The maximum statutory capital may not exceed the initial capital by more than 10 times.

In the case of SICAV by compartments, each compartment shall have a minimum paid-up capital of EUR 480,000, without, in any event, the minimum total capital paid out is less than EUR 2,400,000.

3. The decrease or increase of the minimum capital and the increase or decrease of the maximum statutory will have to be agreed by the general meeting, with the requirements established by the recast text of the Law of Companies Anonymous, approved by the Royal Decree Legislative 1564/1989 of 22 December.

4. Shares representing the maximum statutory capital not subscribed to, or subsequently acquired by the company, shall be held in holding until they are put into circulation by the managing bodies. The portfolio shares shall be held by the depositary. The exercise of the rights incorporated in the portfolio shares shall be suspended until they have been subscribed and disbursed.

5. Contributions for the formation of the capital shall be made exclusively in money, securities admitted to trading on an official secondary market or in other financial assets which, in accordance with the rules of each institution, are eligible for the investment or to comply with the liquidity principle. Contributions of securities and other financial assets shall be subject to the investment policy rules laid down in this Regulation.

Article 51. Calculation of the liquidative value.

1. For the purposes of calculating the settlement value, the provisions of Article 48 shall apply.

The write-downs of movable or immovable property that are part of the asset, the taxes on the social benefit and all operating expenses shall be provided on a daily basis for the exact determination of the value of the company's assets.

For the purposes of the preceding paragraph, a forecast of the expenditure which may be incurred shall be made before the beginning of each financial year. This forecast should be made public in the first month of the financial year, through its inclusion in the quarterly report. It shall be excluded from this duty the SICAV that have delegated to an SGIIC all its management, administration and representation functions.

2. The shares shall be sold and repurchased by the company itself through at least one of the procedures provided for in the following three Articles.

3. The CNMV is enabled to set specific rules for the calculation of the liquidative value.

Article 52. Admission to trading on a stock exchange.

1. SICAV may request admission to trading on stock exchange of its shares, to which the following special rules apply:

(a) The requirements set out in Article 26.1.a) of Law 24/1988 of 28 July of the Stock Market and, by reference, in Article 32 thereof, shall be fulfilled by the filing of the corresponding articles of incorporation, duly registered in the Trade Register and, where applicable, a literal certification of the relevant emission agreement.

(b) The prospectus referred to in Article 26.1.c) of that law shall be the full prospectus governed by this Regulation.

(c) The requirement laid down in Article 32.1.c) of the Regulation of the Official Exchanges of Trade, approved by Decree 1506/1967 of 30 June, shall not be required.

2. Where a SICAV is lowered in the corresponding register of the CNMV, the admission to the stock exchange of the shares of the company shall be without effect, without prejudice to the fact that the company may submit a new application for admission, with the general rules.

3. The company shall buy or sell its own shares in cash transactions, without settlement deferment, in stock exchanges, either in normal procurement, or through a public offering for the acquisition or sale of its shares, provided that the the purchase or sale price of their shares is, respectively, lower or higher than their liquidative value in the following terms:

(a) When the difference between the settlement value and the official listing is greater than five per cent of that for three consecutive days, until the difference is reached below that percentage.

(b) Or there have been buying or selling positions that have not been met for the number of days determined by the Minister of Economy and Finance.

The acquisition and sale operations performed by the company on its own shares must be carried out at a price which, without any appreciable deviations from its liquidative value, is unknown and is impossible to estimate in a certain way.

4. The results that are attributable to the acquisition and sale of their own shares may be distributed only when the assets, valued in accordance with the previous article, are higher than the paid-up share capital.

5. If, for any reason, the shares excluded from trading on a stock exchange are found in accordance with the provisions of Article 34 of Law 24/1988 of 28 July of the Stock Market, the company will guarantee the shareholder that it intends to carry out shares the repayment of the liquidative value of the shares, fixed on the basis of the average changes in the last month's contribution, by means of a public offer to all shareholders. The public procurement offer shall be made for a price equal to the settlement value of the day on which the refund is executed.

6. The Minister of Economy and Finance and, with his express rating, the CNMV will dictate the necessary provisions for the development of the provisions in this article.

Article 53. Acquisition and sale of shares outside the stock exchange.

1. Where the company does not apply for admission to trading of its stock exchange shares, nor its incorporation into a market or an organised securities trading system, it shall have the obligation to acquire and sell such shares from the same market. the time at which the data subjects are requested at a price equal to the liquidative value corresponding to the date of application, in accordance with Article 48.

2. The company may carry out these operations directly or through authorised intermediaries, and for this purpose commissions or discounts may be collected in favour of the company. When it intends to carry out this activity, it shall, on a prior basis, prove to the CNMV that it complies with the provisions of Article 65.

Article 54. Other liquidity procedures.

SICAV may request that its shares be incorporated into a market or an organized securities trading system.

These markets or systems should include the facilities necessary to enable SICAV to comply with the obligations laid down in Article 32 of the Act.

The company will purchase or sell its own shares in compliance with Article 52.3.

Chapter II

Non-financial collective investment institutions

Section 1. Non-financial collective investment institutions

Article 55. Concept.

Non-financial IIC are all those that are not provided in the previous chapter.

Section 2. Third Real Estate Collective Investment Institutions

Article 56. Delimitation of the object.

1. Real estate IICs are those of a non-financial nature that have as their principal object the investment in real estate of an urban nature for their lease. For the purposes of this Regulation, investments in buildings of an urban nature shall be considered:

a) Investments in completed real estate. Investments in a company whose assets are primarily constituted by immovable property shall be understood as falling within this paragraph, provided that the acquisition of such assets is designed to dissolve it within six months of its acquisition. acquisition and the building is the subject of a lease from the property. Investments in rental housing entities referred to in Chapter III of Title VII of the recast of the Company Tax Act, approved by the Royal Decree-Law 4/2004 of 5 May, shall also be understood as including investments in rental entities. March.

Also included in this paragraph (a) are investments in a company whose asset is primarily constituted by real estate, provided that the real estate is the subject of a lease. All investments in the companies described in this paragraph may not represent more than 15 percent of the IIC's assets.

(b) Investments in buildings in the construction phase, even if they are acquired on a plane basis, provided that the developer or builder has been granted the authorization or license to build.

(c) The purchase of purchase options where the value of the premium does not exceed five per cent of the price of the property, as well as the purchase commitments on a real estate basis, provided that the maturity of the options and commitments does not exceed the two-year period and the relevant contracts do not establish restrictions on their free transmissibility.

d) The ownership of any other real property rights, provided that it allows them to fulfill their objective of being leased.

e) The ownership of administrative concessions that allow the lease of real estate.

2. Investments in buildings through purchase on a flat basis and purchase commitments will not be able to represent more than 40% of the assets; for the purposes of this limit, the purchase commitments will be valued for the agreed purchase price of the immovable property of the contract. Investment in purchase options shall not exceed 10 per cent of the equity; for the purposes of this limit, the purchase options shall be valued for the total premium paid.

With regard to the acquisition of properties of homes that are covered by some public protection regime, the special legislation applicable to them will be applicable.

3. Investments in buildings that integrate the assets of these institutions shall be registered, where appropriate, in their name in the Land Registry.

4. In no case, the IIC may exploit the business and services annexed to the real estate members of its asset, beyond the lease of the premises.

5. The real estate that is part of the real estate IIC asset may not be disposed of until three years have elapsed since its acquisition, unless it is exceptionally authorised by the CNMV.

Article 57. Assessment.

1. The criteria for the valuation of real estate and real estate rights which integrate the assets of the IIC in real estate will, in general, be those laid down in Royal Decree 685/1982 of 17 March 1982 for the development of certain aspects of the Law 2/1981, of 25 March, of regulation of the mortgage market, and in the regulations of development, with the adaptations and modifications established by the Minister of Economy and Finance.

2. The appraisals will be carried out by a valuation company of those provided for in the mortgage market legislation.

3. The CNMV is enabled to establish how the valuation value should be considered in the estimation of the value of performing the buildings in the FII portfolio.

Article 58. Conflict prevention of interest.

1. The partners and unit-holders of real estate investment companies and funds may be tenants or holders of other rights other than those arising from their status as partners or members in respect of the immovable property which they integrate. the assets or assets of those assets, where this conflict of interest is not derived from this situation and is contracted at normal market prices and conditions. The same channels shall apply to any purchases or sales of assets of the asset made with the partners or members.

As provided for in the preceding paragraph, it shall also apply to persons or entities which maintain links with or form part of the same group, as provided for in Article 4 of Law 24/1988 of 28 January 1988. July, on the Securities Market.

The statutes of the real estate investment companies and the regulations of the real estate investment funds shall, where appropriate, collect the possibility of carrying out the operations described in this paragraph, and include specific rules of conduct on this subject. In any event, a ratio of such leased properties, acquired or sold to partners or unit-holders, as well as the amount to be paid as consideration, shall be included in the annual memory.

IIC leased properties to partners or members, as well as to persons or entities that maintain links with them, will not be able to exceed 25 percent of the IIC's equity.

2. The entities of the group of the management companies of the funds and the real estate investment companies, in accordance with the criterion of Article 4 of Law 24/1988 of 28 July, may not be liable to be a tenant of the immovable property which they integrate. the assets of such funds and collective investment companies.

3. Real estate IICs may only acquire real estate from entities in the same group or in the group of their management company when they are newly constructed and provided that the following requirements are met:

(a) That the institution's regulations or statutes permit such acquisitions.

(b) The management company or, where appropriate, the investment company has a formal internal procedure set out in its internal rules of conduct to ensure that the transaction is carried out in the exclusive interest of the IIC. Confirmation that these requirements are met must be adopted by an independent commission set up within its board or, alternatively, by an internal body of the management company to which this function is entrusted.

(c) The management company or, where appropriate, the investment company shall report in the prospectus and on the periodic information it publishes on the procedures adopted to avoid conflicts of interest and on transactions performed in the form and in the detail that the CNMV determines.

(d) The commission or internal body referred to in paragraph (b) shall report to the council on the operations carried out in the previous month. Where no such operations have occurred within a month, no report shall be required.

Real estate acquired from entities in the same group of the collective investment institution or group of its management company may not assume more than 25 percent of the institution's assets.

4. Real estate IICs shall not be able to sell buildings to persons or entities in the same group or group of the management company.

Article 59. Specialties in respect of obligations vis-à-vis third parties.

1. Real estate IICs will be able to finance the acquisition of properties that integrate their equity with mortgage collateral. These buildings include those covered by a public protection scheme, the requirements and benefits of which shall be governed by the provisions of the relevant special rules. Such funding may also be used to finance rehabilitation of buildings.

2. The outstanding balance of external financing may not exceed 50% of the institution's assets at any time, and information must be provided to investors in the annual report and quarterly reports on the amount of the funds. obligations against third parties.

Article 60. Investment in real estate and liquidity.

1. Real estate investment companies shall invest at least 90% of the annual average monthly balances of their assets in real estate under the terms of Article 56. The remainder of the asset may be invested in securities admitted to trading on stock exchanges or in other markets or organised trading systems referred to in Article 36.

2. Real estate investment funds must adjust the investment of your asset to the following rules:

(a) At least 70 percent of the annual average monthly balances shall be invested in real estate in the terms of Article 56.1.

b) They must maintain a minimum liquidity ratio of 10 percent of the total assets of the previous month. Compliance with the coefficient shall be limited to the months in which the unit-holders ' right of reimbursement exists and shall be calculated on the basis of the daily average of the ratio over the month. This coefficient shall be materialised in cash, deposits, accounts in the view of a credit institution or in fixed income instruments or instruments with a maturity period of less than 18 months and which are agreed with the repurchase of securities of public debt, provided that they are traded on secondary markets as provided for in Article 36.1.a).

(c) The remainder of the asset may be invested only in the securities referred to in paragraph 1.

The percentage provided for in paragraph (a) shall be referred to the value of the goods, rights and securities at the end of each month in accordance with the valuation rules established by the Minister for Economic Affairs and Hacienda and, with its express rating, the CNMV. To check whether the percentage is met, the calculation shall be carried out at the end of each year, as an average of the balances at the end of each month of the financial year, without any such balances being considered, for the purposes of that percentage, if the management company so decides, the contributions made by the unit-holders in the preceding 24 months to each of the dates considered in their calculation.

Article 61. Diversification of risk.

1. No good, including the rights to it, may represent more than 35 percent of the total assets at the time of its acquisition. For these purposes, the market value of pre-purchase valuation shall be considered, or the value actually paid or committed when it is higher than that of the valuation. In the case of buildings, the percentage above will relate to the value of the building as a whole and not to the value of the different farms that make it up. For this purpose, all integrated buildings in the same building shall be considered as the sole building. The CNMV may, by way of exception, temporarily exempt from compliance with this limit at the request of the management company or, where appropriate, the investment company in the real estate, in the light of the market situation and the difficulty of find suitable buildings to cover these percentages.

2. The percentages and investment criteria referred to in this article and the foregoing articles shall be attained by the IICs within three years of their registration in the special register of the CNMV. During this transitional period, the IIC asset shall be invested in securities admitted to trading on stock exchanges or in other markets or organised trading systems referred to in Article 36.

3. Real estate integrated in the asset under any title and leased to entities in the same group may not represent more than 35 percent of the institution's assets. For these purposes, the group concept referred to in Article 4 of the Law 24/1988 of 28 July 1988 on the Stock Market shall apply. This limit must be met within 12 months of the IIC registration in the special register of the CNMV.

Article 62. Specialties of real estate investment companies.

1. Real estate investment companies shall be public limited liability companies which may only take the form of fixed capital.

2. The minimum share capital of real estate investment companies will be EUR 9 million. In the case of companies by compartments, each of them must have a minimum capital of EUR 2,4 million, without, in any event, the total capital of the company being less than EUR 9 million.

3. Contributions to the formation or extension of capital may also be made in buildings. In this case, the real estate must be assessed at the time of its contribution. This assessment may be the same as that required by Article 38 of the recast of the Law on Companies, approved by Royal Decree-Law 1564/1989 of 22 December 1989; to that end, the independent expert appointed by the Registrar Mercantil shall be one of the valuation companies provided for in the legislation of the mortgage market. Also, when the contribution is made in the constitution, the operation must be reflected in the explanatory memorandum of the IIC presented prior to the authorization of the draft constitution. In the case of subsequent contributions, the information shall be collected in the quarterly report immediately following the operation.

Article 63. Regime of real estate investment funds.

1. Real estate investment funds must have an initial minimum worth of nine million euros, fully disbursed. In the case of funds per compartment, each of these funds shall have a minimum equity of EUR 2,4 million without, in any event, the total equity of the fund being less than EUR 9 million.

2. Contributions to the constitution or extension of the estate may also be made in buildings. In the case of the provision of buildings for the constitution, this operation must be reflected in the explanatory memorandum of the institution submitted prior to the authorization of the draft constitution; in the case of Further to the constitution, the information shall be collected in the quarterly report of the fund immediately following the operation. The fund regulations may limit the proportion of the contribution which may be made in kind, as well as impose limitations on unit-holders who have made less than a percentage of their cash contribution and wish to obtain the reimbursement of their participation before a given deadline; they may also apply discounts in favour of the fund in such cases.

3. The arrangements for participating interests and their subscription and reimbursement shall be in accordance with the following rules:

(a) The liquidative value shall be fixed at least monthly by the management company of the fund.

(b) The value of the real estate shall be taken as the reference of the last valuation. Decreases and increases in the value of the buildings shall be charged to the month in which the assessment is carried out.

(c) Members shall be permitted to subscribe or to request the redemption of their shares at least once a year, unless the CNMV, exceptionally, when there are market reasons for it or to ensure the good operation or stability of the fund, in the case of reimbursements, authorise a different time limit which may not exceed two years.

d) In exceptional cases, especially in cases of petitions greater than 10 percent of the total assets of the fund, as well as in the cases that the Minister of Economy and Finance establishes to ensure good management the fund may temporarily suspend the subscription or redemption of shares or allow non-compliance with the diversification coefficients of Article 61, as well as the reimbursement of assets belonging to the fund's assets. It will be up to the CNMV to give the appropriate authorization in each specific case. In the case of a provisional suspension of reimbursement, up to an amount equal to 10% of the assets shall be reimbursed; to this end, a pro rata shall be made between all the refunds requested prior to the suspension.

4. The immovable property and the rights in which it is invested shall be assessed at least once a year and, in any event, at the time of its acquisition, contribution to the fund or sale. In the case of sale, it will be sufficient for such goods or rights to be priced in the previous six months. The appraisals shall be carried out in accordance with the criteria and periodicity laid down expressly in the fund management regulation. In the case of acquisition, the immovable property shall be assessed for the first time within 12 months of its acquisition, in that month in which there is the least real estate whose valuation is to be carried out, with the exceptions expressly provided in the information leaflet.

TITLE IV

Managing societies of collective investment institutions

Chapter I

Concept and social object

Article 64. Activities related to IIC management.

For the purposes of Article 40.1 of the law, the IIC management activity of the SGIIC shall include, inter alia, the following activities:

a) Asset management.

b) The administration of IIC. Within this activity, the following tasks are understood:

1. Legal and accounting services in relation to the management of IIC.

2. Client Queries, related to managed IICs.

3. th Valuation and determination of the liquidative value, including the applicable tax regime.

4. Control of compliance with applicable regulations.

5. th Take the record of shareholders or shareholders.

6. th Distribution, if any, of the yields.

7. th Subscription and redemption of fund shares and, where applicable, acquisition and disposal of IIC shares.

c) The marketing of IIC shares or shares.

Article 65. Marketing by IIC's SGIIC of shares and units.

1. The SGIICs that intend to carry out the marketing activity of both IIC shares and units managed by them and, where appropriate, other IICs, or other activities related to that referred to in Article 2.1, fine, of the law, must, prior to its commencement, present to the CNMV a declaration of activities that reflects its intention, accompanied by an explanatory memory of the form of its execution and justification of its ability to comply with the requirements that the CNMV establishes in the development of this provision.

Once the compliance with the requirements is verified, the CNMV will incorporate the activity declarations into the corresponding register of the SGIIC.

2. This activity can be performed directly or by agents or proxies, depending on the following rules:

(a) When the activity is carried out directly, the opening and closing of branches, both in national and foreign territory, must be communicated to the CNMV within the time limit and the form it indicates for its constancy in the Register of the SGIIC. The CNMV may require any additional information on such decisions and on the manner of their execution.

(b) When the activity is performed by agent or proxy, the following items shall be provided. In any event, the SGIIC shall communicate it to the CNMV in the form and the time limit that it determines for its constancy in the corresponding register. The communication in any case shall include express mention by the SGIIC that the agent complies with the requirements of suitability and good repute provided for in article 43.1.h) of the law.

The CNMV may obtain from the SGIIC and its agents or proxies any information it deems necessary on the matters relating to the matters covered by its jurisdiction.

Likewise, the exercise of the activity of the agents and proxies will be subject to the supervision of the CNMV, which may establish additional requirements for the agents and proxies for the coverage of the risks arising from the defaults or frauds arising from your activity.

3. The Minister for Economic Affairs and Finance may make the opening of branches and the appointment of agents or proxies conditional upon the maintenance of certain levels of own resources or require additional levels of solvency to the SGIICs.

Article 66. Agent and proxy requirements.

1. The consideration of agents or proxies shall be those which are not linked by employment relationship to the company or to entities in their group and to which the SGIIC has granted powers to act on its behalf and on its behalf. in the case of clients in the marketing of IIC shares and units the management of which is entrusted to them. Action as agents and proxies for legal persons shall be conditional upon the compatibility of such activity with its social object.

2. The agents or proxies shall comply with the requirements laid down in Article 43.1 (h) and (i) of the law and, where they are legal persons, those provided for in paragraph 1 (e) and (f) of the same Article, all with the necessary adaptations which, in your case, determine the Minister of Economy and Finance.

3. Such relations must be formalised by the granting of a power of attorney which must specify the territorial scope of action, including companies and investment funds, type of customers and the form of execution of the acquisitions or subscriptions and of the fees or refunds which, in any event, must comply with the requirements laid down in this Regulation and its implementing rules. In addition, institutions may conclude a contract governing other aspects of the representation relationship, such as the obligations arising out of the contract for the parties, the systems of bonds, the system of incompatibilities which, in their Case, it is desired to establish, the charging systems of commissions and the rules of conduct applicable to the representative.

4. Agents or proxies may not act by means of subagents or establish legal relationships that bind them personally to clients in matters related to the scope of the SGIIC.

5. The agents or proxies must show in all the relationships that they maintain with the clientele in an unequivocal manner their status as representatives of the SGIIC.

An agent or proxy may only represent an SGIIC or several belonging to the same group, as defined in Article 4 of Law 24/1988 of 28 July of the Securities Market. The SGIIC shall be liable to the shareholders or members of the damages that may arise from the action of their agents or proxies in the field of the representation granted.

6. The agents or proxies must comply with the customers ' obligations under Law 35/2003 of 4 November of collective investment institutions, of this regulation and of the other applicable provisions governing the activity. for the marketing of shares and units of IIC. The SGIICs shall be responsible for compliance by their agents with those standards and shall develop appropriate control procedures in accordance with the provisions of the following Article.

Article 67. Representation regime.

1. The SGIICs which grant proxies must, prior to their establishment, ensure that the agents or proxies have sufficient capacity, training and professionalism to carry out the activity which is the subject of the proxy.

2. The SGIIC shall at all times have the means and procedures for the internal control of the actions of its agents and proxies that are appropriate for the monitoring of the transactions and relations of the agent or proxy with the shareholders. or members. To this end, prior to the completion of the takeover, they shall verify the adequacy and adequacy of the administrative and media organization, the operational procedures, the internal control and accounting procedures and, where appropriate, the computer systems to be used by those in the further development of their actions. In the event that the representation is to be granted to a legal person, the above checks shall be extended to their economic and financial situation. The SGIIC shall condition the appointment of the agents and proxies to the satisfactory verification of the aspects referred to in this paragraph.

Similarly, the SGIICs may impose on agents and proxies that their actions are carried out in accordance with the operational, internal control and accounting procedures which, for that purpose, develops that, in particular in the This is the case for cash or payment instruments, as well as the use of computer systems to ensure the proper integration of data and information between agents or proxies and the SGIIC. To this end, the agents and proxies shall allow and collaborate in those operational audits, procedures and internal controls that are carried out by the SGIICs on such procedures and systems. The SGIIC shall condition the maintenance of the contract of representation to the compliance by its agents or proxies of these measures.

3. Any delivery of funds must be made directly between the SGIIC and the investor, without the funds being able to be even in a transitional period in power or in the account of the agent or agent. Except for the receipt or delivery of funds by means of nominative effects, either in favour of the IIC, or in favour of the investor, as appropriate.

4. In no case shall the shares or shares of the shareholders or members of the shareholders or members of the shareholders be held or held by the agents or proxies, and must be deposited directly in the name of those agents or agents.

5. Likewise, agents or proxies must be subject to rules that guarantee a behavior adjusted to the rules of conduct provided for in Law 35/2003, of 4 November, of institutions of collective investment, in Law 24/1988, of 28 of In July, the Securities Market and the internal rules of conduct of the SGIIC. The SGIICs shall be responsible for compliance by their agents with those standards, including all the requirements set out in this Title and in the rules that develop them.

6. The formalization of the proxies, their registration in the Commercial Registry and the communication to the CNMV will be prerequisites for the performance of the proxies.

7. The SGIIC must have a file whose content will determine the CNMV, relating to the documentary support of the agency relations and grants awarded.

8. The CNMV shall keep the register of the agents and proxies acting on behalf of the SGIICs available to the public.

9. The Minister for Economic Affairs and Finance and, with his express rating, the CNMV will dictate the necessary provisions for the development and implementation of the provisions of this article, as well as in the previous article, in particular regarding the media and internal control procedures, publicity of the representation relationships and the information that the SGIICs will have to send to the CNMV or to keep them at their disposal.

Article 68. Delegation of asset management and management of IICs.

1. The delegation of tasks by the SGIICs shall not limit their responsibility for the fulfilment of the obligations laid down in the rules in relation to delegated activities. In any event, a delegation may not be involved, implying that the SGIIC becomes an instrument or an empty content entity. In any event, the delegation shall be subject to the following paragraphs.

2. The delegation of the SGIIC to one or more entities in the activities of asset management, accounting services in relation to the management of the IIC, valuation and determination of the liquidative value and control shall require prior authorisation from the CNMV. compliance with the applicable financial rules. In no case, the SGIIC may delegate all the functions in relation to the IICs whose management they are entrusted with.

The agreement or delegation agreements mentioned in the previous paragraph will be entered in the corresponding registration of the CNMV in accordance with the procedure provided for in the law and in this regulation for the modifications of the social statutes and regulations. In addition, the IIC brochures will have to expressly include the existence of these delegations and detail their scope.

Among the clauses of such contracts, the commitment of the entity that receives the delegation of facilitating and allowing the work of supervision that, if necessary, the CNMV will understand necessary to perform in its headquarters, must be included expressly. social.

3. The entity or entities in which the tasks are delegated shall have the qualifications and the capacity to perform them, taking into account the nature of the delegated functions.

When the asset management is delegated, the entity shall necessarily be another SGIIC or those other qualified entities, in accordance with the provisions of Articles 64 and 65 of Law 24/1988, of 28 July, to carry out Spain the investment service provided for in Article 63.1 (d) authorised to carry out the activity of discretionary and individualised management of portfolios.

4. The SGIIC shall establish appropriate procedures for the control of the activity of the entity in which the delegation is carried out. These procedures shall be submitted to the CNMV accompanying the request for authorization of the delegation, in the case of any of the activities referred to in paragraph 2. The SGIIC may also give instructions at any time. additional to that entity, as well as to revoke the delegation, with immediate effect, where it is in the interest of investors.

5. The CNMV may establish the requirements to be met by these contracts, which, in the case of delegation of asset management, shall ensure continuity in the management of assets so that those assets are not resolved by the a mere replacement of the SGIIC, unless it is also decided upon to replace the SGIIC with the entity that manages, by delegation, all or part of the institution's assets.

6. In no case shall the management of the assets be delegated, the control of compliance with the applicable financial rules or the functions of administration in the depositary, with the exception of the provisions of Article 84, or any other entity. whose interests may conflict with those of the SGIIC or those of the members or shareholders. It shall also not be possible to delegate such functions to the same entity in which the depositary has delegated the custody of the IIC assets.

In the case of delegation of asset management to a foreign entity, it must be domiciled in an OECD Member State, be subject to prudential supervision and provide similar guarantees to those required by the Spanish SGIIC. In addition, there must be a bilateral cooperation agreement between the CNMV and the authority entrusted with equivalent functions in the State in which the institution is situated, in accordance with Article 90 of Law 24/1988 of 28 July 1988, to provide for supervision and inspection in this field, or the obligation of cooperation between supervisory bodies in application of Community legislation.

In the case of delegation of the management of the assets of an investment fund, the authorisation of such a delegation shall confer on the unit-holders of the investment fund the right to repay their shares without fee or discount of reimbursement or expenditure under the terms of Article 12.2 of the Law and Article 14.2 of this Regulation.

7. Entities in which the SGIICs carry out total or partial delegations of asset management shall be subject to the rules of operations linked to the terms set out in Article 67 of the law and in Article 99 of this Regulation.

Article 69. Reservation of naming and activity.

1. The name 'management company of collective investment institutions' and their acronym 'SGIIC' shall be proprietary to the entities registered in the corresponding records of the CNMV.

2. The entities covered by this Title shall include in their social reason the literal name referred to in the preceding paragraph or, if they prefer, include the names of the names.

3. No person or entity may, without having obtained the required authorization and without being registered in the registry of the CNMV, develop the activities legally reserved for the SGIIC, in accordance with the provisions of Article 40.6 of the law.

Chapter II

Activity access conditions

Article 70. Own resources.

1. The SGIICs shall at all times have their own resources which may not be less than the greater of the following amounts:

(a) A minimum social capital of EUR 300,000 in full, increased:

1. In a proportion of the five per 1,000 of the effective value of the IIC assets that they manage as long as it does not exceed EUR 60 million; of the three per 1,000, in excess of that amount, up to EUR 600 million; of the two per 1,000, in excess of this last amount, up to 3 billion euros; of one per 1,000, in excess of this figure, up to 6 billion euros, and of 0.5 per 1,000, over the excess of this last amount.

To calculate the required own resources referred to in the preceding paragraph, they shall be deducted from the assets of the managed IICs for investments in other institutions that are in turn managed by the IIC. the same SGIIC.

2. º Five per 1,000 of the effective value of the managed assets to third parties, when the SGIIC performs the discretionary and individualized management activity of portfolios.

3. When the SGIIC trades shares or shares of IIC, the minimum own resources shall be increased by an amount of EUR 100 000 prior to the start of such activity, plus 0,5 per 1,000 of the assets cash of the unit-holders or shareholders whose marketing has been made directly by the SGIIC.

b) 25 percent of the structure expenses charged to the profit and loss account of the preceding financial year. Structure expenditure shall include: staff expenditure, depreciation of fixed assets, expenditure for external services, taxes and other running costs other than fees for the placement of units or shares in the the IICs you manage.

The entity will be able to reduce this amount, prior to the authorization of the CNMV, if its activity has decreased significantly from the previous year In this case, the new base of calculation will be communicated to the CNMV, which will be able to amend it within three months if it considers that it does not comply with the provisions of this Regulation. The institution shall also increase this amount immediately if its activity is significantly increasing compared to the previous year.

When the entity has not completed an exercise since its registration in the CNMV registry, it will be taken as a basis of calculation for the structure expenses foreseen in its business plan.

It is understood that the level of activity has varied substantially when the expenditure of structure increases or decreases by 25% in relation to the total expenditure of the previous year, calculated in proportion to the corresponding period of time elapsed in the current exercise.

2. Where an SGIIC presents a level of own resources lower than the minimum required, it shall immediately inform the CNMV and present a programme setting out its plans to return to compliance. The programme shall refer to the causes of the non-compliance; the actions carried out, where appropriate, by the institution within the time limit referred to in the last subparagraph of this paragraph; the definition of a plan to return to the compliance, and the time limit for this, which may not exceed three months.

This program must be approved by the CNMV, which may fix additional measures to the proposals by the entity, within two months of the approval.

The requirement for the own resources of the SGIICs shall not be rejected when, as a result of changes in the contributions of the securities integrating the assets of the managed institutions or the portfolio of the portfolios (i) individual and managed risk capital institutions, or the number of units or shares of IICs to be managed, the default of own resources does not exceed 20%. However, the SGIIC shall have within the following two calendar months the corresponding own resources required for the last day of each month.

3. The own resources of the SGIICs shall be composed of the following accounting items:

a) Social capital.

b) The reserves that appear on the balance sheet.

c) The emission premium.

d) During the financial year and its closure, until the implementation of the results, the SGIICs may incorporate into their own resources the share of the results that are expected to be applied to reserves, provided that:

1. º Exist the formal commitment of application of results by the entity's management body.

2. The accounts in which such results are reflected have been verified in accordance with the entity's external auditors; and

3. It is established with prior character to the CNMV that the part to be incorporated is free from any foreseeable burden, in particular for tax and dividend taxes.

(e) The subordinated financing received by the SGIIC which for the purposes of credit ranking is behind all the common creditors and meets the following requirements:

1. The original time limit for such financing shall not be less than five years or, if the date of its expiry has not been fixed, a notice of at least five years shall be required for its withdrawal. In both cases, during the five years preceding the expiry date, they shall reduce their calculation as own resources at the rate of 20% per year, until their remaining period is less than one year, at which time they shall cease to be be computed as such.

2. No rescue, redemption or early amortisation clauses may not be contained, without prejudice to the fact that the CNMV may authorise the debtor to repay the subordinated financing in advance if the solvency is not affected. of the SGIIC.

3. No, they may not be provided, or subsequently acquired, by the SGIIC itself or by entities in its group. However, they may be convertible into shares of the SGIIC or entities in their group, and be acquired with the sole purpose of their conversion.

4. In the contracts and prospectuses, the condition of subordinated financing for the creditors will be evident; the CNMV will verify these contracts and brochures to qualify their computability as own resources.

(f) The participative loans provided for in Article 20 of Royal Decree-Law 7/1996 of 7 June 1996 on urgent measures of a fiscal nature and on the promotion and liberalization of economic activity.

The own resources referred to in paragraphs (e) and (f) above shall not represent more than 50% of the other own resources that are available for use.

g) Own resources will be deducted:

1. The negative results of previous exercises and the current exercise.

2. The Company's own portfolio shares.

3. Intangible assets.

4. º Establishment expenses and those other expenses or losses that are distributed in various exercises.

5. º The dividends to account delivered in the financial year.

6. The investments in other SGIICs and in portfolios of portfolios, both domestic and foreign, as well as in any other financial institution subject to individual own resources requirements.

4. Own resources shall be invested, at least, by 60%, in securities admitted to trading on any of the markets referred to in Article 30.1.a) of the law, in the accounts or in deposits with credit institutions. The calculation of this limit shall be carried out in the light of the accounting value of the investments.

Other resources must be invested in any assets that are appropriate to the fulfillment of the social end.

Within the 60% ratio, the SGIICs may compute their investments in IIC shares or units, including those they manage, provided that such IICs comply with the provisions of Article 36.1.c) and d), except for the prohibition of investing more than 10% of the IIC's equity in shares or units of other IICs that will not be applied in these cases. In no case may they acquire shares or shares in IIC as provided for in Articles 43 and 44.

The subscription or reimbursement of the investments of the SGIIC in the IICs it manages must be carried out, in any case, giving the appropriate instructions to the depositary of the IIC with a notice of five days. The depositary shall maintain a documentary support of the notice made by the SGIIC.

5. The SGIICs will only be able to borrow up to the limit of 20% of their own resources.

6. The SGIICs may not grant loans, except to their employees or employees, with the limit of 20% of their own resources.

Article 71. Risk diversification.

The investments of SGIICs in securities issued or endorsed by the same entity, or by entities belonging to the same economic group, shall not exceed 25% of the SGIIC's own resources. For these purposes, investments shall be computed by their book value.

Investments in securities issued or endorsed by a Member State of the European Union, the autonomous communities and other OECD Member States that have an investment in securities shall not be subject to the limit laid down in the preceding paragraph. solvency rating, granted by a specialised agency of recognised prestige, not less than that of the Kingdom of Spain.

Article 72. Use of derivative financial instruments.

SGIICs may only acquire for their investment portfolio derivative financial instruments that comply with the provisions of Article 36.1.f) and (g) for the purpose of risk hedging of financial securities or instruments which are part of their portfolios. Exceptionally, they may acquire derivative financial instruments for investment purposes where they are part of structured securities or deposits that incorporate the full return commitment of the invested capital as a loan.

Article 73. Administrative organization.

1. The SGIIC shall have a good administrative and accounting organisation and with adequate human and technical means in accordance with the provisions of Article 43.1 (i) of the law, including, in particular, rules governing the personal transactions of its employees and investments in financial instruments that they carry out on their own account. These measures shall ensure, inter alia, that each transaction related to the IIC managed can be reconstructed according to its origin, the parties involved, its nature and the time and place in which it has been carried out and that the assets of the investment funds or investment companies that administer the SGIIC are invested in accordance with the provisions of the IIC prospectuses that they manage and in the existing regulatory provisions.

The Minister of Economy and Finance is empowered and, with his express rating, the CNMV to establish the minimum requirements to be met by the internal control and risk management and control systems, as well as the to be informed of the existence and functioning of such systems. Such systems shall be in line with the type of IIC that the SGIIC manages, and the CNMV may, where appropriate, require the establishment of additional control measures where it deems necessary.

2. The management board of the SGIIC shall establish appropriate operating rules and procedures to enable all its members to fulfil their obligations at all times and to assume the responsibilities of the SGIIC. According to the provisions of Law 35/2003, of 4 November, of institutions of collective investment, in Law 24/1988, of July 28, of the Market of Securities, in the recast text of the Law of Companies Anonymous, approved by the Royal Decree Regulation 1564/1989 of 22 December 1989 and the other provisions applicable to them.

Article 74. Accession to the General Investment Guarantee Fund.

SGIICs should adhere to the General Investor Guarantee Fund in the event that they perform the individual portfolio management activity. Membership must be before the start of the activity. In any event, the provisions for investment firms in Royal Decree 948/2001 of 3 August 2001 governing the systems for the compensation of investors and their development provisions shall apply.

Article 75. Requirements for the request.

The authorization request for the creation of an SGIIC must be accompanied by the following documents:

(a) The draft social statutes accompanied by a certificate of refusal of the proposed social name.

(b) The programme of activities in which, in a specific manner, the activities to be carried out in accordance with the provisions of Article 40 of the Law and a description of the business plan of the SGIIC are to be counted.

(c) A description of the administrative and accounting organisation, of the technical and human resources appropriate to its programme of activities, of the procedures for internal control and of access to and safeguarding of computer systems, as well as the appropriate procedures and bodies for internal control and communication in order to prevent and prevent the conduct of money laundering related operations under the conditions laid down in Articles 11 and 12 of the Regulation of Law 19/1993 of 28 December 1993 on certain measures for the prevention of money laundering of capital, approved by Royal Decree 925/1995 of 9 June. The description shall be accompanied, where necessary, by the relevant report drawn up by an independent expert.

d) A shareholder relationship with an indication of their participation in the share capital. In the case of shareholders who are to hold a significant holding, they shall also be provided, if they are natural persons, information on their career and professional activity, and if they are legal persons, their social status, annual accounts and the management report, with the audit reports, if any, of the last two exercises, the composition of their administrative organs and the detailed structure of the group to which they may belong.

e) A relationship of persons to be integrated by the board of directors and those who have to serve as general or assimilated directors, with detailed information on the trajectory and professional activity of all them.

(f) The rules of procedure of conduct in which the personal transactions of directors, employees and agents of the undertaking or agents of the undertaking are provided for, and other aspects referred to in Title VI of the Law 35/2003 of 4 November, of collective investment institutions, in Title VII of Law 24/1988 of 28 July of the Stock Market and in its implementing rules which, in accordance with the schedule of activities provided for, are applicable to the SGIIC.

In any case, it is appropriate to require the promoters of any data, reports or records to be considered appropriate to verify compliance with the conditions and requirements set out in this Regulation.

Article 76. Commercial and professional honorability of the partners.

For the purposes of Chapter II of Title IV of the Act, good repute shall be presumed when the partners are public administrations or entities of which they are dependent.

Article 77. Authorisation of SGIIC subject to the control of foreign persons.

1. For the purposes of Article 41.3 of the Act, an SGIIC shall be deemed to be controlled by another entity when it is one of the assumptions provided for in Article 4 of Law 24/1988 of 28 July.

2. The CNMV shall direct the prior consultation to the equivalent supervisory body of the country of origin of the entity exercising control.

3. In the case of the creation of SGIICs which are to be controlled, directly or indirectly, by one or more persons or entities domiciled in a non-EU Member State, the authorisation may be refused or limit its effects, in addition to the reasons provided for in Article 42 of the law, where a decision taken by the European Commission had been notified to Spain by verifying that the Community SGIICs do not benefit in that State from a treatment offered by the the same conditions of competition as their national entities and that the conditions of access are not met cash on the market.

4. The authorisations granted to the SGIICs referred to in the preceding paragraph shall be communicated by the CNMV to the European Commission, specifying the structure of the group to which the institution belongs.

Chapter III

Exercise Conditions

Article 78. Amendment of the social statutes.

The communication to the CNMV of the modifications that do not require prior authorization must be made within the 15 working days following the registration of the modification in the Commercial Registry. If, if the notification has been received, such modification has exceeded its scope as provided for in Article 44.2 of the law or will adversely affect the conditions for the authorisation, the CNMV shall notify the approval within 30 days of the date of the notification. interested, to review the amendments or, where appropriate, to comply with the ordinary authorisation procedure.

Article 79. Significant shareholdings.

1. For the purposes of Article 45 of the Act, the shares, shares or voting rights that are integrated into a significant holding shall include:

a) Those acquired directly by a natural or legal person.

(b) Those acquired through companies controlled or engaged by a natural person.

(c) Those acquired by companies incorporated in the same group as a legal person or participated by entities in the group.

d) Those acquired by other persons acting on behalf or in concert with the shareholder or companies of their group.

Controlled companies shall be considered to be those in which the holder exercises control within the meaning of Article 4 of Law 24/1988 of 28 July of the Stock Market, and participated in, those in which one of the percentages provided for in Article 185 of the recast of the Law on Companies, approved by Royal Decree 1564/1989 of 22 December 1989.

Indirect holdings shall be taken for their value when the holder is in control of the holding company, and as a result of applying the percentage of participation in the interment, in the opposite case.

In cases where a significant participation is, in whole or in part, indirectly, changes in the persons or entities through which such participation is enjoyed shall be communicated in advance. to the CNMV, which may object in accordance with the provisions of Article 45 of the Law.

2. The possibility of appointing or removing any member of the administrative board of the SGIIC shall be understood as a notable influence.

3. For the purposes of Article 45.5 of the law, the opposition of the CNMV may be founded on the refusal to consider the acquirer as appropriate, as provided for in Article 42.

4. The SGIICs shall comply with the obligations laid down in Article 45.9 of the Act, with the formalities to be determined by the CNMV.

5. The CNMV shall determine the form, content and time limits for the referral of the information referred to in this Article.

Article 80. Legal status of control units.

1. In accordance with the provisions of Article 45.6 of the Law, any natural or legal person who intends to increase, directly or indirectly, his participation in an SGIIC in such a way that the society becomes controlled in the terms of the article 41.3 of the law must inform the CNMV in advance in the terms of its article 45.2.

2. The procedure for the authorisation of the control units shall follow the formalities laid down in Article 45.5 of the law.

Article 81. Obligations.

1. In addition to the obligations laid down in Article 46 of the Act, the other obligations laid down in this Regulation and in its implementing rules, the SGIICs shall fulfil the following obligations:

(a) Compose the fund management regulation and grant with the depositary, both the corresponding constitutive contract or, where appropriate, the corresponding public writing of the fund's constitution as, in its day, the documents or modification or settlement writes of that.

b) To exercise all rights inherent in the securities integrated in the fund, to the sole benefit of the unit-holders.

c) Carry out the accounting of the fund, with the proper separation of the SGIIC, and carry out the accountability in the form provided for in the law and in this regulation.

In cases where the shares are represented by means of a statement of account, the SGIIC shall draw up, or grant, together with the depositary, the document or, where appropriate, the public deed to which it refers. Article 6 of Law 24/1988 of 28 July of the Stock Market.

d) Determine the value of the shares in the form and effects provided for in this Regulation.

e) Issue the certificates of participation in the fund and other documents provided for in this regulation.

(f) To effect the subscription or redemption of the units and to indicate to the depositary its value in accordance with the rules established for that purpose.

g) Agree, if appropriate, to distribute the results of the financial year, in accordance with applicable rules.

(h) Select the securities to be integrated into the fund, in accordance with the investment policy provided for in the prospectus, and transfer to the depositary the instructions relating to the settlement of transactions.

i) As regards the obligation laid down in Article 46.1 (d) of the law, the SGIIC shall be required to exercise, with particular attention to the right of assistance and vote in general meetings, all political rights inherent in the law. securities integrated into the funds that it manages, provided that the issuer is a Spanish company and that the participation of the funds managed by the SGIIC in the company was over 12 months old and provided that it was participation represents, at least, one percent of the capital of the participating company.

Furthermore, in any event, the SGIIC should place on record in the corresponding annual report of its policy in relation to the exercise of the political rights inherent in all the values integrated in the set of funds that the issuer is a Spanish company, provided that the issuer is a Spanish company.

(j) The SGIIC shall forward to the depositary any information necessary for the exercise of its functions. In any event, the CNMV may provide that information to be sent in any case to the depositary on a mandatory basis, as well as the form, content and time limits for the referral.

k) The SGIIC shall report to the CNMV the audit report of accounts within four months of the end of the reference period.

(l) The SGIIC shall communicate to the CNMV any transmission of shares that are part of its capital within seven days of the date on which it became aware of the transmission. Annually, it shall forward to the CNMV, in accordance with the model it establishes, the relationship of all shareholders and their units. The relationship of shareholders with significant participation and of those who do not have such significant participation shall be considered as a financial

.

2. Without prejudice to the above paragraph, the SGIICs shall comply with the obligations to which they are subject, where appropriate, in the development of the asset management activity of persons or entities other than IICs, in accordance with the Article 43.3 of the law.

In particular, those obligations shall be fulfilled in the light of the fact that the SGIICs may not hold securities accounts or cash-flow accounts linked to the portfolio management activity, without prejudice to the provisions of this Regulation. Article 40.2.b) of the law.

SGIICs performing the discretionary and individualised management activity of portfolios shall comply with the rules of conduct governing such activity, with the adaptations which, if appropriate, the Minister for Economic Affairs and Hacienda and, with its express rating, the CNMV.

Article 82. Foreign funding of SGIICs.

SGIICs may not, under any circumstances, issue bonds, promissory notes or similar effects, or give in collateral or pay for the assets in which their own minimum resources are materialised. They will also only be able to take credit to finance the free disposal assets, with a ceiling of 20% of their own resources.

Article 83. Causes of revocation.

The authorisation granted to an SGIIC may be revoked in the cases provided for in Article 49 of the Act.

In accordance with paragraph 1.a) of that Article, the authorisation of an SGIIC shall be revoked for the duration of 12 months from the date of notification of the authorisation without the SGIIC having assumed the authorisation. administration of any IICs.

Article 84. Substitution.

1. In the event of the cessation of the SGIIC by the initiation of a bankruptcy procedure or by any other cause, the management of the IICs by that managed shall be automatically and provisionally entrusted to its depositary, to whom the exercise of all the functions of that person. If, within one year, a new SGIIC is not registered in the corresponding register of the CNMV and is prepared to be in charge of the management, the fund shall be dissolved and the settlement period shall be opened. The settlement shall be carried out by the depositary in the manner provided for in Article 33.

2. The replacement of the SGIIC, as well as any changes in its control, shall confer on the members a right to the reimbursement of their shares in the terms laid down in Article 12.2 of the Law and in Article 14 of the Act. rules.

3. For the purposes of the preceding paragraph, a change in the control of the SGIIC shall be deemed to exist where it accumulates over a natural or legal person other than the person who previously exercised the power of decision on that company.

4. The replacement and the change in the control referred to in the preceding paragraphs shall be published by means of an advertisement in the "Official State Gazette" and in two national newspapers.

Chapter IV

Cross-Border Performance

Article 85. Branches of SGIIC.

For the purposes of Chapter IV of Title IV of the Act, a branch shall be defined as a branch of a holding which is a party, devoid of legal personality, of an SGIIC, which carries out directly, in a manner total or partial, the operations inherent in the activity of an SGIIC. A branch shall be considered to be all operating sites created on Spanish territory by a foreign SGIIC.

Article 86. Action by the SGIICs authorised in Spain in the Member States of the European Union.

1. When the CNMV, in application of the provisions of Article 54.5 of the Law, adopts a measure aimed at preventing or sanctioning the commission of acts contrary to the regulations in force by an SGIIC authorized in Spain, it must communicate it to the competent in the host State within one month of the adoption of that measure. In the same way, they shall forward to such authorities any other information they need for the exercise of their duties.

2. Likewise, the CNMV may, by itself or through the persons designated for that purpose, carry out on-the-spot verifications at the branches of the SGIICs authorised in Spain in other States of the European Union, after communication to the authorities. the competent authority of those States. The verification shall extend to any information relating to the management and structure of the ownership of the SGIICs which may facilitate its supervision, as well as any information that may facilitate its control.

Similarly, the CNMV may request that the competent authorities of the host Member State carry out such verifications. They shall satisfy the request, within the framework of their powers, and carry out the verification themselves, allow the CNMV to do so or authorise auditors or experts to carry out the verification.

Article 87. Action of the SGIICs authorised in Spain in non-EU Member States.

1. The SGIICs intending to open a branch in a non-EU Member State must first apply to the CNMV and accompany, together with the information of the State in whose territory they intend to establish the branch and the registered office for her, the information provided for in Article 54.2.b) and d) of the law.

2. The CNMV shall give a reasoned decision and notify it within a maximum of three months of receipt of the request or, where appropriate, of the time of completion of the referral of the relevant documentation. Where the decision is not notified within the time limit laid down, it may be deemed, in accordance with Article 43 of Law No 30/1992, of 26 November 1992, of the Legal Regime of the General Administration and of the Common Administrative.

3. The CNMV may refuse the authorisation, in addition to the reasons set out in Article 54.3 of the Law, for considering that the branch's activity is not to be subject to effective control by the supervisory authority of the State of reception, or because of the existence of legal or other obstacles preventing or hindering the control and inspection of the branch by the CNMV.

4. Any modification of the information referred to in paragraph 1 shall be communicated to the CNMV by the SGIIC at least one month before it is carried out.

A relevant modification may not be made in the branch's program of activities if the CNMV, within a period of one month, opposes it, by means of a reasoned resolution. Such opposition shall be based on the causes provided for in this Article which are applicable in each case.

5. The Spanish SGIICs intending for the first time to carry out their activities under the freedom to provide services in a non-EU Member State must first apply to the CNMV, indicating the activities for which they are in accordance with Article 40 of the law, which is proposed to be carried out. The provisions of paragraphs 2 and 3 of this Article shall apply to this authorisation procedure.

Article 88. Creation and acquisition of shares of foreign management companies by Spanish SGIIC.

1. The creation by an SGIIC, or a group of SGIICs, of a foreign management company, or the direct or indirect acquisition of a stake in an existing management company, shall be subject to the prior authorisation of the CNMV. (a) foreign nationals are to be incorporated or are domiciled in a State other than a Member of the European Union.

2. In the case of the creation of a management company, the application for authorisation submitted to the CNMV shall be accompanied by at least the following information:

(a) The amount of the investment and the percentage that represents the participation in the capital and the voting rights of the company to be created. The indication, where appropriate, of the entities through which the investment will be made.

(b) The provisions referred to in Article 75.a), (b), (c) and (e). The provisions of paragraph (d) of that Article shall be replaced by a list of shareholders who will have significant holdings.

(c) A summary of the current rules on tax and money laundering prevention applicable to management companies in the State where the new company is to be established.

3. Where a significant participation in a management company is to be acquired, as provided for in Article 45 of the law, or is intended to be increased by reaching or exceeding one of the percentages referred to in paragraph 3 of that Article 45, the information referred to in the preceding paragraph shall be submitted, but the information referred to in subparagraph (b) may be limited to those data which have a public character. The time limit for the implementation of the investment, the annual accounts of the last two years of the participating company and, where appropriate, the rights of the company in order to designate representatives in the bodies of the institutions shall also be indicated. administration and management of that.

4. In any event, it may be appropriate for applicants to require the applicants for any information, reports or records to enable the CNMV to give an appropriate opinion and, in particular, to assess the possibility of exercising supervision of the group.

Article 89. Notice of the opening of branches of management companies authorised in other Member States of the European Union.

1. In accordance with Article 55 of the Law, one year after the date of notification to the management company of the receipt of the communication by its supervisory authority, or from the end of the waiting period fixed by the CNMV, without the company having opened the branch, the procedure must be started again.

2. The CNMV shall also be notified of the closure of the branch, at least three months in advance of the planned date.

3. Where, in accordance with Article 55 of the Law, an SGIIC subject to Council Directive 85 /611/EEC intends to carry out, through a branch, the discretionary portfolio management activity in Spain, it may choose to to join the investment guarantee fund in the terms envisaged for branches of Community service companies in Royal Decree 948/2001 of 3 August 2001 on investor compensation schemes.

Article 90. Opening of branches and provision of services in Spain by non-Community management companies and by Community management companies not subject to Council Directive 85 /611/EEC.

1. The opening in Spain of branches of management companies of non-Community States and of Community States not subject to Council Directive 85 /611/EEC will require the authorization of the Minister for Economic Affairs and Finance, on a proposal from the CNMV. The requirements laid down in Chapter II of Title IV of the Law and in this Regulation shall be observed, in so far as they are applicable, with the following particularities:

(a) By minimum social capital, the amount held by the institution in Spain of permanent and indefinite-duration funds, available for the loss coverage of the branch, shall be understood.

(b) The provisions of Article 43.1.a), (b), (d) and (f) of the law shall not apply. The reference to the draft social statutes of Article 75 of this regulation shall be understood as referring to the draft constitution of the branch and to the existing statutes of the institution, and the CNMV shall be informed of the changes. they are subsequently produced in both.

(c) You must have at least two persons who effectively determine the orientation of the branch and are directly responsible for the management. Both shall be required to be of good repute, the knowledge and experience referred to in Article 43.1.h) of the law.

d) The social object of the branch may not contain activities not permitted to the entity in its country of origin.

(e) The documentation accompanying the application shall contain the information necessary for the accuracy of the legal and management characteristics of the requesting foreign entity, as well as its financial situation. A description of the organisational structure of the entity and of the group in which it is eventually integrated shall also be included. It shall also be established that it is in possession of the authorisations of its country of origin to open the branch, where required, or the negative certification, if they are not accurate.

2. The authorization referred to in the preceding paragraph may also be refused or conditional on prudential grounds for not giving equivalent treatment to Spanish entities in the country of origin or for failure to ensure compliance with the requirements of the Directive. rules of management and discipline applicable to Spanish IICs.

3. Where an SGIIC authorised in a non-Member State of the European Union or in a Member State, which is not subject to Council Directive 85 /611/EEC, intends to provide services without a branch in Spain, it must first apply to the CNMV, indicating the activities to be carried out and obtaining the corresponding authorisation. The CNMV may request an extension of the information provided, as well as condition the exercise of those activities to the fulfilment of certain requirements as a guarantee of compliance with the rules applicable to IICs or those issued for reasons of general interest.

The authorization referred to in this paragraph may be refused or conditioned for prudential reasons, for not giving equivalent treatment to Spanish entities in the country of origin, or for not being assured of compliance with the rules of management and discipline applicable to Spanish IICs.

In addition, the SGIIC will have to appoint a representative with tax residence in Spain to represent it for the purposes of the tax obligations to be met by the activities it carries out on Spanish territory.

TITLE V

Depositary

Article 91. Names and requirements.

1. Banks, savings banks, including the Spanish Confederation of Savings Banks, credit unions, companies and securities agencies may be deposited in the terms set out in Title V of the Law and in this Article. title. Such entities may only use the denomination of IIC depositary in relation to the depositary functions in respect of such entities.

2. Those who exercise management or management positions in a depository institution shall meet the eligibility requirements laid down by their specific legislation. In addition, the Director-General or assimilated to the IIC depositary area shall have adequate knowledge and experience in matters relating to the securities market.

Article 92. Repository and value administration function.

1. In accordance with the provisions of Article 60.i) of the law, it is for the depositaries to exercise the functions of depositing or administering securities belonging to IICs and to take responsibility for them in cases where they do not develop them. directly. To this end, the depositaries shall receive the IIC securities and deposit them, guarantee their custody and issue the supporting documents. To this end, the depositaries and the management company must establish the appropriate mechanisms and procedures to ensure that, in no case, the disposal of the IIC assets is done without their consent and authorization. Among others, such procedures shall affect the current accounts in other credit institutions, the transitional balances associated with the operation with securities, bilateral transactions and investments in other IICs.

2. The deposit of securities abroad, in any case, must guarantee that the property, the full domain and free disposition of the assets belong, at all times, to the IIC. The Minister of Economy and Finance and, with his express rating, the CNMV are empowered to develop the provisions of this paragraph.

3. It will also be up to the depositaries to receive and safeguard the liquid assets of the IICs. Without prejudice to the provisions of the foregoing Article, the cash-flow shall be deposited with a deposit institution, with the understanding of the banks, savings banks and credit unions. They may also maintain transitional balances associated with the settlement of securities securities in other financial intermediaries that are legally entitled to maintain such balances.

Article 93. Monitoring and monitoring function.

1. In order to develop the monitoring and monitoring functions of the management of the SGIICs and, where appropriate, of the administrators of the SICAV, the depositaries shall collect monthly information from the SGIIC or the SICAV administrators. sufficient to enable them to perform their monitoring and surveillance functions properly.

2. The depositaries must also carry out the appropriate checks to verify the accuracy, quality and sufficiency of the information referred to in the previous paragraph, as well as all other information, documentation and publicity that the SGIIC or, where appropriate, the administrators of the SICAV, must refer to the CNMV in accordance with the rules in force.

3. Depositaries shall report to the CNMV a half-yearly report on the performance of the monitoring and surveillance function, in which they shall demonstrate the accuracy, quality and sufficiency of the information referred to them by the SGIIC or, where appropriate, the administrators of the SICAV, in order to be able to fulfil its oversight and oversight function, as well as the remaining information, documentation and publicity referred to in the previous paragraph.

The report shall include all regulatory breaches or anomalies detected by the depositary in the management or administration of IICs.

In the case of anomalies that are not of particular relevance, the observations that the SGIIC or, where appropriate, the administrators of the SICAV could have made, should be incorporated into the report. To this end, the depositary, prior to the referral of the report, must have transferred the anomaly to the SGIIC or, where appropriate, the administrators of the SICAV.

The CNMV may determine the content and model to which this report will be adjusted, as well as the time and form for its referral.

4. Without prejudice to the provisions of the above paragraphs, the depositary shall inform the CNMV in writing without delay of any anomaly which it detects in the management or administration of IICs and which is of particular relevance.

5. The Minister of Economy and Finance and, with his express rating, the CNMV may establish specific oversight and oversight functions of the depositary with respect to the balances of the members or shareholders of IICs.

Article 94. Cessation of the depositary and advertising of substitution.

1. If the depositary ceases to function, the CNMV shall have its replacement by another entity empowered to exercise that function. If this is not possible, the IIC shall be dissolved and the settlement period opened. The settlement shall be carried out by the management company in the form provided for in Article 33.

2. The provisions of Article 12.2 of the Act shall apply to the replacement of the depositary.

Article 95. Liability action.

The responsibility of the depositary may be claimed by the participants either directly or indirectly through the management company. However, the latter shall not be required to make such a claim but upon request by members representing at least 10 per cent of the estate.

TITLE VI

Rules of Conduct

Article 96. Applicable rules.

SGIICs, depository entities and IICs that are in the form of a company and whose integral management is not entrusted to an SGIIC, the trading entities, as well as those who are in charge of administration and address in all of them, their employees, agents and proxies shall be subject to the rules of conduct provided for in Article 65 of the law, with the specifications provided for in this regulation and in its implementing rules.

Article 97. General code of conduct.

It will be applicable to the persons and entities listed in the previous article, the General Code of Conduct for the Stock Markets, which is listed as an annex to Royal Decree 629/1993 of 3 May 1993 on rules for action in the securities markets and mandatory records.

The Minister of Economy and Finance is enabled to, on the proposal of the CNMV, to develop and adapt the established in the mentioned code as necessary to the specific specificities of the activity in the field of the investment collective.

Article 98. Internal rules of conduct.

1. The SGIIC, the depository institutions, the IICs which are in the form of a company and whose management is not entrusted to an SGIIC, the different entities of an SGIIC that manage the assets of an IIC and the trading entities shall draw up an internal rules of conduct, which must be enforced, which will regulate the performance of its administrative bodies, employees and representatives.

When the entities referred to in the previous paragraph already have, in application of other regulations, the obligation to draw up an internal rules of conduct, they may integrate into this the specific rules concerning their activity in the the scope of collective investment.

2. The internal rules of conduct shall be based on the principles referred to in the rules referred to in Article 65 of the Law and in the General Code of Conduct for the Stock Markets and in their Implementing Rules. Specifically, they shall establish internal control procedures that demonstrate that investment decisions in favour of a particular IIC, or client, are taken prior to the transfer of the order to the intermediary. It must also have criteria, objectives and pre-established criteria for the distribution or breakdown of operations affecting several IICs, or clients, that ensure equity and non-discrimination between them.

3. The internal rules of conduct drawn up as provided for in this Regulation should be sent to the CNMV in advance of its implementation, which may make recommendations. If the CNMV appreciates the provisions of the legislation applicable to IICs, it shall notify the entities, which shall make the necessary modifications to ensure compliance.

4. Failure to comply with the provisions of the internal rules of conduct, as soon as their content is carried out under the provisions referred to in Article 96, may give rise to the imposition of the corresponding administrative penalties, in the terms provided for in the law.

Article 99. Related operations.

1. The following shall be related operations:

(a) The collection of remuneration for the provision of services to an IIC, except those provided by the management company to the institution itself and those provided for in Article 7.

b) Obtaining for a financing IIC or deposit constitution.

(c) The acquisition by an IIC of securities or instruments issued or endorsed by one of the persons defined in Article 67.1 of the law or in whose issuance any such person acts as a colocator, insurer, director or advisor.

d) The values of values.

e) Any transfer or exchange of resources, obligations or business opportunities between investment companies, management companies and depositaries on the one hand, and those who carry on them administration or address, on the other hand.

(f) Any business, transaction or provision of services involving an IIC and any business of the economic group of the manager of the depositary or of the SICAV or any of the members of their respective councils of administration or other IIC or assets managed by the same managing body or other management of the group.

2. Related transactions that are carried out between the SGIICs and investment companies that have not delegated the management of their assets to another entity, and those who perform management and management positions on them, when they represent for the SGIIC or the investment company, or for the IIC which they administer, a significant turnover, shall be approved by the management board in accordance with the following rules:

(a) The matter shall be included in the order of the day with due clarity.

(b) If any member of the board of directors is considered to be a party in accordance with the law and in this article, it shall refrain from participating in the vote.

c) Voting will be secret.

(d) The agreement shall be adopted by a two-thirds majority of the total number of members, excluding from the calculation the members who, where appropriate, abstain in accordance with the provisions of paragraph (b).

e) Once the vote has been held and the result has been proclaimed, it will be valid to record in the minutes the reservations or discrepancies of the members regarding the agreement adopted.

The CNMV shall determine the meaning, for the purposes of this Article, of significant business volume taking into account the size of the SGIIC or the investment company, the managed assets and the amount and characteristics of the linked operation.

Article 100. Separation from the depositary.

1. The internal rules of conduct of management companies or, where appropriate, investment companies, as well as depositaries, shall provide for the necessary measures to ensure that the information derived from their respective activities is not within the scope, directly or indirectly, of the staff of the other entity; for that purpose, it shall provide for the physical separation of human and material resources devoted to the management and depository activity and the IT instruments which prevent the flow of information that could generate conflicts of interest between the responsible for one and another activity.

In particular, the rules of procedure should provide for the following separation rules:

a) The non-existence of common advisors or administrators.

(b) The effective management of the management company by persons independent of the depositary.

(c) The management company and the depositary have different addresses and physical separation of their activity centres.

2. The management company and, where appropriate, the investment company shall state, in the information documents referred to in Article 21 of this Regulation, the exact type of relationship which binds them to the depositary, taking as a reference, where appropriate, the list of circumstances contained in Article 4 of Law 24/1988 of 28 July 1988 on the Stock Market.

The management company and, where appropriate, the investment company shall make reference in the half-yearly report and in the annual report to the operations for the acquisition or sale of securities or financial instruments in which the depositary is a seller or buyer, respectively.

3. In the independent commission set up within the board of directors or the internal body of the management company or the investment company, constituted to verify compliance with the requirements for the separation of the depositary, it shall not there are a majority of members with executive functions in the entity.

4. The report on the degree of compliance with the requirements laid down in Article 68.2 of the Act shall be drawn up on an annual basis and referred to the CNMV within one month of the end of the financial year to which it relates.

First transient disposition. Transitional arrangements for adaptation to new regulatory standards.

1. All the institutions and entities to which this Regulation applies shall have a period of one year from their entry into force in order to adapt to it.

2. During the year following the entry into force of the Regulation, the period for the authorisation of the amendment of the social statutes of the managing companies of collective investment institutions authorised before shall be extended to six months. of its entry into force, where such amendment is intended to include in its social object the activity referred to in Article 40.1.a) and 40.2. (a) and (b) of Law 35/2003 of 4 November of collective investment institutions.

Second transient disposition. Fee regime for investment funds of a financial character, constituted as funds for investment in money market assets under Law 46/1984 of 26 December, regulating collective investment institutions.

1. Investment funds of a financial nature, constituted as funds for investment in money market assets, under the repealed Law 46/1984 of 26 December, regulating the institutions of collective investment, registered in the This regulation will have to continue to respect the limits of the commissions contained in this transitional provision, while its investment policy will allow it to continue to be considered as such.

2. Management fees shall not be collected in excess of the following limits:

a) When the commission is calculated solely on the basis of the fund's assets, one percent of the fund's assets.

b) When calculated solely on the basis of results, 10 percent of these.

c) When both variables are used, 0.67 percent of the equity and 3.33 percent of the results.

3. Subscription and redemption fees shall not exceed one per cent of the liquidative value of the units.

4. The remuneration of the depositary shall be freely agreed, but shall not exceed 1,5 per 1,000 annual of the reserve assets. The Commission shall provide the depositary with the remuneration for carrying out all the tasks assigned to it by the rules, without the funds being able to bear any additional costs where the depositary has delegated to third parties the performance of any of such functions. Exceptionally, and subject to the authorisation of the CNMV, that commission may be higher in the case of depositaries who are primarily responsible for their duties abroad. Independently of this commission, the depositaries may receive from the funds commissions for the settlement of transactions, provided that they are in accordance with the general rules governing the corresponding tariffs.

Single end disposition. Enablement for regulatory development.

The Minister of Economy and Finance is empowered to make the necessary provisions for the compliance and enforcement of this regulation and, with its express rating, to the National Securities Market Commission.