Since 1992 the number of establishments open to the public for currency exchange has grown considerably and includes entities of a very different nature: From seasonal tourist establishments registered for to exchange foreign currency as an additional service to its customers, to anonymous companies with an important volume of own resources and a significant amount of activity, dedicated to the change in a professional and exclusive way.

Several of these companies that are professionally engaged in change have been expanding their sphere of activity with the realization of fast transfers of money with the outside.

Well, in contrast to what happens in other European countries in which professional changers, in the double aspect of activity already pointed out, currency exchange and transfer management, are considered as quasi-entities. In the case of the financial sector, the Commission has been in a position to monitor and control the monetary authority in Spain, despite the fact that the currency exchange activity has been subject to public control, only a mere system of registration of the same in the Banco de España.

In recent years it has been observed that the liberalizing framework established by Royal Decree 1816/1991 of 20 December, of economic transactions with the outside, was to be supplemented by a more comprehensive regulation as regards the subjects who perform such operations. To this end, the General Courts empowered the Government, in general, to develop the forecasts contained in Article 178 of Law 13/1996 of 30 December.

This Regulation that develops this legal precept comes to establish a regulation of foreign exchange establishments that takes into account all these concerns, without forgetting the respect to the free currency. competition and due protection for customers.

To do this, we establish a staggering of the demands of material and capital resources, depending on the operations to be carried out by each establishment. It also includes a specific monitoring and reporting regime, in accordance with a legislative technique similar to that of other subjects acting on the financial markets.

Finally, the framework of administrative intervention is completed, establishing, for this purpose, the procedures for authorization and supervision, all in accordance with the enabling legal provision.

In its virtue, on the proposal of the Second Vice President and Minister of Economy and Finance, after the approval of the Minister of Public Administration, according to the State Council and after deliberation by the Council of Ministers in their meeting of 11 December 1998, DISCLAIMER:

CHAPTER I

Scope

Article 1. Scope of application.

1. Foreign currency exchange transactions, whatever their denomination, are free, with no more limits than those set out in the change control legislation. However, professional activity consisting in the exchange of foreign currency, whatever its name, in establishments open to the public (hereinafter referred to as currency exchange establishments), is subject to the following conditions: authorisations and arrangements set out in this Royal Decree and in its implementing rules.

This currency exchange activity comprises the purchase or sale of foreign banknotes and traveler's checks, as well as the management of transfers received from abroad or sent abroad, through credit institutions, in the terms provided for in this Royal Decree.

2. The scheme set out in this Royal Decree shall not apply to the foreign currency exchange activity carried out by credit institutions.

CHAPTER II

Currency Exchange Establishments

Article 2. Currency exchange facility operations.

1. Natural or legal persons, other than credit institutions, who intend to carry out operations in open establishments to the public to purchase foreign banknotes or travellers ' cheques, with payment in pesetas, shall bring together the Article 4 of this Royal Decree provides for the prior authorisation of the Banco de España for the exercise of that activity and to register in the Register of currency exchange establishments in charge of that activity. institution.

Such an activity may be performed either on an exclusive basis or on a complementary basis to the business that constitutes the main activity.

2. Those persons who, without prejudice to the operations referred to in the preceding paragraph, intend to carry out operations for the sale of foreign banknotes or the management of transfers received to the public from abroad or sent abroad through credit institutions, they must meet the requirements set out in Article 4 of this Royal Decree, obtain the prior authorization of the Banco de España, as well as register in the Register of currency exchange establishments in charge of the currency.

3. For the purposes of the above paragraph, the following shall be considered for the sale of foreign banknotes and travellers ' cheques or transfer management with the outside of the following:

(a) Sale of foreign banknotes and traveler's checks against the delivery of their equivalent in pesetas or other foreign bank notes.

b) Management of the receipt of transfers received from abroad by the delivery to their customers of Spanish or foreign banknotes, or checking account checks or by means of transfers ordered from accounts of ownership of currency exchange establishments to the bank accounts of their clients.

c) Management of transfers sent abroad against the delivery of their cash amount in Spanish or foreign banknotes, or against the payment of their amount in bank accounts held by currency exchange establishments, by its customers.

4. The exchange establishments authorized for the conduct of the operations referred to in paragraphs (b) and (c) of the preceding paragraph, regardless of the communication procedures they establish with their foreign correspondents for the execution of the transfers, must channel through open accounts in operating credit institutions in Spain the movements of charges, credits and settlement of balances that are derived or are necessary for the development of this activity.

5. The settlement of customers, orders or beneficiaries of transfers, the amount of which exceeds 500 000 pesetas, shall necessarily be effected by means of credit or debit transactions in the amount of bank accounts held by the currency exchange establishments.

6. The operations for the management of transfers with the outside, in the terms laid down in this Article, shall in any event be the subject of a declaration in the form set out in Chapter III of this Royal Decree, immediately the transfers ordered and paid to their addressees, as soon as possible, those received.

Article 3. Authorization and registration of currency exchange establishments.

1. It is for the Banco de España to authorize the exercise of the currency exchange activity in the exchange establishments referred to in this Royal Decree. Such authorization shall be granted subject to the procedure laid down in Title VI of Law No 30/1992 of 26 November 1992 on the Legal Regime of Public Administrations and the Common Administrative Procedure. The authorisation shall specify the activities which may be carried out by the abovementioned currency exchange establishments.

The Banco de España shall refuse, by means of a reasoned decision, the authorization of a currency exchange when the requirements laid down in Articles 4and 5 of this Royal Decree are not met. An ordinary appeal may be brought before the Minister for Economic Affairs and Finance against the refusal of the application.

2. The application for authorization will be sent to the Banco de España and must be resolved within three months of its receipt at the Banco de España. Where the application is not settled within the prescribed period, the application shall be deemed to be rejected for the purposes laid down in Law No 30/1992 of 26 November 1992 on the Legal Regime of Public Administrations and the Common Administrative Procedure.

3. Once the authorization has been obtained and after registration in the Mercantile Register, if such a requirement is required, the Banco de España will immediately proceed to the registration of the applicant in the Register of currency exchange establishments, as well as to its subsequent notification, in accordance with the provisions of Article 58 of Law 30/1992, of 26 December, of the Legal Regime of the Public Administrations and of the Common Administrative Procedure, at which time the start the exercise of your activity.

Article 4. Requirements to obtain and retain the authorization to exercise foreign currency exchange activity.

1. They shall be eligible to obtain and retain the authorisation to carry out operations for the purchase of foreign banknotes or travellers ' cheques, with payment in pesetas, which the owners of the establishments and, where appropriate, the partners, Administrators, Directors-general or assimilated persons have recognised commercial and professional good repute.

2. In order to obtain and retain the authorisation to carry out the operations referred to in Article 2.3 of this Royal Decree, it shall also be specified that the establishment meets the following requirements:

a) Revestir the form of public limited company constituted by the simultaneous foundation procedure. Your constitution as such and registration in the Register of Trade will be prior to the access to the Register of currency exchange establishments, located in the Banco de España, which must be completed within six months from the date of notification. of the authorization.

b) Having as sole social object the operations of buying and selling foreign banknotes, traveller's cheques and transfer management with the outside.

c) Have a fully subscribed and cash-paid share capital, represented by nominative shares. The amounts to be achieved by the social capital, in the light of the operations provided for in this Royal Decree, shall be as follows:

1. Ten million pesetas when their social object is limited exclusively to the transactions of the sale of foreign banknotes and travellers ' cheques, against the delivery of their equivalent in pesetas or other banknotes of the Bank foreign.

2. A total of 50 million pesetas when its social object includes, in addition to the provisions of the preceding paragraph, or consists exclusively of the management of transfers with the outside in respect of expenses of stays in the abroad and remittances from workers domiciled in Spain.

3. Three hundred million pesetas when the social object of the establishment comprises, in addition to the provisions of the two preceding paragraphs, or consists exclusively of the management of transfers with the outside other than the above.

d) To be insured against third parties for the civil liability that may arise from their activity in the management of transfers with the outside in respect of expenses of stay abroad and remittances of workers registered in Spain by insurance policy subscribed with an insurance institution legally entitled to operate in the insurance of civil liability, for an amount of not less than 50 million pesetas. In the remaining cases of transfers abroad, other than those mentioned above, the amount of the insurance policy shall be raised to an amount not less than 100 million pesetas.

3. Commercial and professional honorability in those who have been observing an adequate personal trajectory of respect to the Commercial Laws and others that regulate the economic activity and the life of the business, as well as the good practices commercial and financial.

In the case provided for in Article 2 (1), the requirements of commercial and professional good repute shall be deemed to be met by the existence of an establishment open to the public in which the principal activity of the applicant.

In any case, it is understood that they lack such good repute as those who have a criminal record or are prosecuted or, in the case of the procedure referred to in Title III, book IV, of the Law of Criminal Procedure, The Court of Justice held that the Court of Justice held that the Court of Justice held a hearing of the Court of Justice of the Court of Justice of the Court of Justice of the Court of Justice of the European Communities. infidelity in the custody of documents and violation of secrets, embezzlement, disabled for public office or administration or management positions in financial institutions, and non-rehabilitated or non-rehabilitated.

Article 5. Requirements for the request.

1. The application for authorization for the exercise of foreign exchange activity shall be sent to the Banco de España in the form it determines and shall be accompanied by the following documents when the applicants are persons physical:

a) Personal data of applicants.

b) Detailed information about your professional activity.

(c) Declaration signed by the holder of the activity in which it is stated that it has no criminal record and is not prosecuted or charged for the crimes referred to in Article 4.3 of this Royal Decree.

However, those natural persons who only intend to carry out the operations provided for in Article 2.1 as a supplementary activity of that other activity which constitutes their principal activity shall not be obliged to send such transactions. declarations, when submitting the relevant application.

(d) Relation of premises where foreign exchange operations are to be carried out, with an indication of the identifying data of those premises and the permanent or seasonal nature of the activity.

2. Where the applicants are legal persons, the application, in addition to the provisions referred to in paragraph (d) of the preceding paragraph, shall be accompanied by the following documents:

a) Identification data of the entity.

b) The relationship of the Administrators, as well as the persons who are to perform functions as Directors-General or assimilated into the entity.

(c) Declaration signed by each of the Administrators, Directors-General or Assimilated of the entity in which it is stated that it has no criminal record and is not prosecuted for the crimes referred to in the Article 4.3 of this Royal Decree.

However, those legal persons who only intend to carry out the operations provided for in Article 2.1 as a complementary activity of that other activity which constitutes their principal activity, shall not be required to submit such transactions. declarations, when submitting the relevant application.

(d) a programme of activities in which the foreign exchange transactions which are intended to be carried out and, where appropriate, information on other types of activities carried out by the applicant for the authorization.

3. Those legal persons intending to carry out the operations referred to in Article 2.3 of this Royal Decree shall, in addition to those referred to in paragraph 2 above, provide the following documents:

a) Project of the Social Statutes, accompanied by a certification registration negative of the proposed social denomination.

(b) the relationship of the partners to be established by the company, indicating their holdings in the share capital. In the case of partners, which have the consideration of legal persons, the most relevant economic and financial data of their last two years and the composition of their administrative bodies shall also be provided.

(c) Specific programme of activities, in which the gender of the operations to be carried out must be specified, the most relevant data on the personal and technical means with which the company and the structure of the organization of the same.

4. In any case, it is appropriate to require the owners of the establishments to have as many data, reports or records as appropriate to verify compliance with the conditions and requirements set out in this Royal Decree.

5. The modification of any of the data included in the applications for authorisation referred to in this Article, the opening of new premises, as well as the cessation of the exchange rate in foreign currency exchange activity, shall be notified to the Banco de España within the month following the date on which such events have occurred.

Where the holder of an establishment who carries out only operations to purchase foreign banknotes or travel cheques with payment in pesetas intends to extend them to those referred to in Article 2 (3), the the procedure laid down for obtaining the prior authorization, the requirements laid down in Article 4.2 being fulfilled and a new application must be accompanied by the documents and information which correspond, as provided for in this Article.

CHAPTER III

Sanctioning and Monitoring Regime for Foreign Currency Exchange Activity

Article 6. Monitoring and control functions.

It will be up to the Banco de España to control and inspect the activity of currency exchange establishments, regulated in this Royal Decree.

To this end, the Banco de España may request from the holders of currency exchange establishments how much financial, accounting or other information it deems appropriate for the effective exercise of its functions.

Article 7. Sanctioning regime.

1. The system of penalties applicable to holders of currency exchange establishments as well as, where appropriate, their administrators and directors, shall be as laid down in Title I of Law 26/1988 of 29 July on Discipline and Intervention of Credit institutions, with the adaptations set out in this Chapter.

2. The references in Title I of Law 26/1988 to credit institutions shall be construed as being made in respect of the holders of the currency exchange establishments both natural and legal persons.

3. As provided for in Article 3 of Law 26/1988, infringements are classified as very serious, serious and minor infringements.

I) Are considered very serious violations:

(a) The performance of acts or operations prohibited by the regulatory standards of currency exchange establishments with a range of law or with non-compliance with the requirements laid down in those rules unless it has a character occasional or isolated.

b) The lack of legally required accounting or carrying them with essential irregularities that prevent the establishment of the assets and financial situation of the establishment.

c) The refusal or resistance to the inspector's performance, as long as it is required to express and in writing.

(d) The lack of referral to the competent administrative body of any data or documentation should be referred to or required in the exercise of its functions, or the lack of veracity thereof, when this is hindered by the assessment of the financial and financial situation of the establishment. For these purposes, it is understood that there is a lack of referral where the referral does not take place within the time limit granted to the competent body by the competent body in writing the obligation to reiterate the requirement.

e) Failure to fulfil the duty of information due to the general public and, where appropriate, to its partners, provided that the number of persons concerned or the importance of the information is not such as to be estimated as especially relevant.

(f) The execution of fraudulent acts or the use of natural or legal persons brought in for the purpose of obtaining a result whose direct obtaining would involve the commission of at least one serious infringement.

g) Serious infringements where during the five years prior to their commission the imposition of a firm penalty for the same type of infringement was imposed.

II) Serious violations are considered:

(a) The mere occasional or isolated conduct of acts or operations prohibited by the regulatory standards of currency exchange establishments with a range of law or with non-compliance with the requirements laid down in the same.

(b) The performance of acts or operations prohibited by regulatory regulatory standards of currency exchange establishments or with non-compliance with the requirements laid down therein, unless it has a character occasional or isolated.

(c) The failure to refer to the competent administrative body for any data or documentation should be referred to or required in the performance of its duties, or the lack of veracity thereof, unless this is the result of the a very serious infringement. For these purposes, it is understood that there is a lack of referral where the referral does not occur within the time limit granted to the competent body by the competent body in writing the obligation or reiterating the requirement.

d) The lack of communication by the administrators to the General Board of those facts or circumstances whose communication to it has been ordered by the administrative body empowered to do so.

e) Failure to comply with the duty of information due to the general public and, where appropriate, to its partners when the circumstances referred to in paragraph e) of the previous paragraph are not present.

(f) The execution of fraudulent acts or the use of natural or legal persons brought in with the aim of achieving a result contrary to the rules of the currency exchange establishments, always such conduct is not included in paragraph (f) of the previous paragraph.

g) Non-compliance with the existing rules on accounting for transactions and on the formulation of balance sheets, profit and loss accounts and financial statements of mandatory communication to the competent administrative body.

(h) The minor infringements, when during the two years prior to their commission, would have been imposed on the establishment of a firm sanction for the same type of infringement.

4. The holders of currency exchange establishments, as well as, where appropriate, their administrators and directors, shall be subject to the penalties provided for in Chapter III of Title I of Law 26/1988, with the following adaptations:

(a) The penalty provided for in Article 10 (b) shall not apply to the formation of non-interest-bearing compensatory deposits up to three times the shortfall in the coverage of the cash or investment ratio mandatory.

(b) The penalties provided for in Articles 12 and 13 shall be construed as referring to those who exercise management or management positions in those establishments.

(c) The disablement penalties provided for in paragraphs (c) and (d) of Article 12 shall be construed as referring to the exercise of management or management positions in currency exchange establishments.

Article 8. Sanctioning procedure.

1. The penalty procedure applicable to infringements committed by holders of currency exchange establishments, as well as by their administrators and directors, shall be as regulated in Royal Decree 2119/1993 of 3 December 1993 on the the sanctioning procedure applicable to subjects acting on financial markets.

2. The instruction of the sanctioning procedures to be initiated in accordance with the provisions of Article 178 (3) of Law 13/1996, as well as the imposition of the corresponding sanctions, whatever their graduation, will be The Bank of Spain's competence.

Article 9. Revocation of the authorization.

1. The following shall be the cause of revocation of the authorization for the exercise of foreign exchange activity:

a) The waiver of express mode to the authorization.

b) Do not initiate the exercise of your activity within twelve months of the registration of the establishment in the Special Register.

c) Failure to comply with any of the conditions that prompted the granting of the authorization.

(d) The interruption of the exercise of foreign exchange activity for a period exceeding twelve months.

e) The penalty provided for in paragraph (b) of Article 9 of Law 26/1988 of 29 July on the revocation of the authorisation of the entity.

2. The revocation of the authorization, except in the cases of very serious infringements, in which the provisions of Law 26/1988, of July 29, of Discipline and Intervention of the Credit Entities, will be in accordance with the common procedure foreseen In Title VI of Law 30/1992, of 26 November, of the Legal Regime of Public Administrations and of the Common Administrative Procedure, as well as that established in Royal Decree 1778/1994, of 5 August, for which they conform to the Law 30/1992, of 26 November, of the Legal Regime of Public Administrations and of the Procedure Common Administrative, the rules governing the procedures for granting, modifying and extinguishing authorizations, with the following specialties:

(a) The initiation agreement, the instruction and the resolution of the file shall correspond to the Banco de España.

(b) However, where the cause of revocation is that provided for in paragraph (b) of the preceding paragraph, it shall be sufficient to give the establishment concerned a hearing.

3. The agreement that the authorization is revoked will be motivated, and immediately executive, and will be entered in the Commercial Registry and in the Register of currency exchange establishments " of the Banco de España.

CHAPTER IV

Obligations of currency exchange establishments

Article 10. Types of change and protection of customers.

The exchange rates applicable to transactions in the purchase and sale of foreign currency shall be free, with the general nature of these operations being to respect the arrangements for advertising, transparency of transactions and protection of customers and, in particular, what is established in the rules for the development of this Royal Decree.

Article 11. Log of operations.

1. Currency exchange establishments shall record the transactions they make subject to this Royal Decree, identify individually the persons participating in such operations, and report to the Bank of Spain and the the competent authorities of the tax administration in the form and with the limits established by the current regulatory framework and with those established in the norms of development of this Royal Decree, for the purposes of statistical and fiscal monitoring of such operations.

2. In any event, in the case of transfer management operations with the outside of a single customer, of a value exceeding 500 000 pesetas, the exchange establishment shall obtain from its client, prior to its execution, a statement to contain the following information: Name or social reason and address of the persons involved in the operation, both in order and beneficiaries, residents or non-residents; tax identification number of the beneficiary or resident, if applicable, as well as the amount, currency and concept for which the same is made. Such declaration shall be signed by the beneficiary or the payer, as appropriate, stating the veracity of the data entered.

Within the time limit to be determined, from the date of execution of the transfer, and the form to be established in the implementing rules of this Royal Decree, the currency exchange establishment must present to the Banco de España the statement referred to in the preceding paragraph, being attributed to each transfer operation of a value exceeding 500,000 pesetas an identification number.

3. For the purposes of the foregoing paragraph, failure to comply with the procedure laid down therein shall be deemed to be non-compliance with the declaration referred to in the first and second subparagraphs of the preceding paragraph, the non-filing of the Bank of Spain of that declaration with the consequent allocation of an identification number to the transfers in accordance with the procedure to be determined in the implementing rules, as well as those payments or payments whose object is to circumvent the quantitative limit set out in the first subparagraph of the previous paragraph.

Article 12. Reporting obligation to the Banco de España.

Without prejudice to other specific information obligations set out in other provisions of this Royal Decree, currency exchange establishments whose holder is a legal person, shall refer to the Bank of Spain. the information required of them on their Balances, Results Accounts, administrative bodies, control units or other similar data which it considers to be from them. Natural persons shall also provide information on the accounting and performance of their activity.

CHAPTER V

Other Provisions

Article 13. Performing currency exchange activity by unauthorized persons.

1. Natural or legal persons who, without having obtained the required authorization from the Banco de España, carry out in establishments open to the public foreign exchange operations or offer to the public to carry out the same, The provisions of the additional provision of Law 26/1988 of 29 July, of Discipline and Intervention of Credit Entities, with the adaptations laid down in the following paragraph, shall apply.

2. In accordance with the provisions of Article 178 (4) of Law 13/1996 of 30 December 1996, the Bank of Spain shall be the competent authority to request the information or to carry out the inspections referred to in this Article. (a) and (b), paragraph 1, of the additional provision of Law 26/1988 of 29 July 1988 on Discipline and Intervention of Credit Entities.

The sanctioning procedure initiated as a result of the alleged commission of very serious infringements, as referred to in paragraph 2 of that additional provision tenth, will be simplified in accordance with the Article 10 of Royal Decree 2119/1993 of 3 December 1993 on the sanctioning procedure applicable to the persons acting on the financial markets, corresponding to their instruction, and, where appropriate, the imposition of the penalty which corresponds, to the Banco de España, within the terms set out in the provision itself Additional 10th of Law 26/1988 of 29 July.

Single additional disposition. Application of other regulations.

The currency exchange establishments regulated in this Royal Decree will apply to them Law 19/1993, of December 28, of Measures of Prevention of the Blanking of Capitals, and its regulations of development.

Single transient arrangement. Adaptation of registered establishments or pending registration.

1. Within one year, from the entry into force of this Royal Decree, the holders of establishments in which the activity of currency exchange is exercised which, at the entry into force of this Royal Decree, are registered in the Registration of establishments open to the public for foreign exchange, provided for in the Circular of the Bank of Spain No 8/1992 of 24 April, shall request authorization for the exercise of the currency exchange activity in accordance with the provisions of Chapter I of this Royal Decree.

After the aforementioned deadline without the timely request for authorization, the registration of the Bank of Spain to the exchange establishments that will be registered will be cancelled. find in that situation. From that date, the establishments concerned may not carry out any of the activities referred to in Article 2 of this Royal Decree.

2. The promoters of the registration files of new currency exchange establishments which are currently pending registration in the Banco de España Registers will have two months to adapt their applications to the provided in this Royal Decree, to be counted from its entry into force.

After that period without having proceeded with the said adaptation, it is understood that they are dissimilar from their previous requests.

3. The holders of exchange establishments who are carrying out transfer management operations outside the Circular No 8/1992, of 24 April, will have one month to inform the Bank of Spain. Once such communication has been carried out, these exchange establishments may benefit from the transitional arrangements provided for in paragraph 1 of this provision, provided that they expressly express their intention to request the appropriate authorisation, fulfilling the requirements set out in Article 4 of this Royal Decree.

Such establishments shall, from the time they are engaged in the transitional arrangements, comply with the requirements referred to in Article 4 (1) and in Article 4 (2) (c) and (d), as well as the provisions laid down in Article 4 (2). Articles 10, 11 and 12 of this Royal Decree.

Single repeal provision. Regulatory repeal.

The additional provision of Royal Decree 1816/1991 of 20 December on economic transactions with the outside is hereby repealed.

Final disposition first. Regulatory modifications.

Paragraph (a) of Article 11 (4) of Royal Decree 1816/1991 of 20 December 1991 on economic transactions with the outside world is worded as follows:

" 4. The Bank of Spain will be responsible for:

(a) Grant banks, savings banks and other financial institutions to act on the foreign exchange market, in cases where such authorization is required in accordance with existing legislation, as well as to authorize foreign currency exchange activities in establishments open to the public in accordance with their regulatory regulations. '

Final disposition second. Faculty of development.

The Minister of Economy and Finance is empowered to lay down the rules that are necessary for the development of this Royal Decree within six months of its entry into force, and in particular to dictate rules specific rules concerning the arrangements for advertising, transparency and protection of the customers referred to in Article 10 of this Royal Decree. Those provisions shall be subject to prior information from the General Council of Consumers and Users.

The Bank of Spain is authorised to lay down the rules necessary for the development of the functions of supervision and control of the activity of currency exchange establishments, as well as for the development of the duties of information from those establishments in respect of the registration of operations and identification of the persons involved in them.

Final disposition third. Basic character.

The provisions contained in this Royal Decree are declared basic in accordance with the provisions of Article 149.1.11. and 13. of the Constitution.

Given in Madrid on December 14, 1998.

JOHN CARLOS R.

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

RODRIGO DE RATO Y FIGAREDO