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Law 37 / 1998, Of 16 Of November, Of Reform Of The Law 24 / 1988, Of 28 Of July, Of The Market Of Values.

Original Language Title: Ley 37/1998, de 16 de noviembre, de reforma de la Ley 24/1988, de 28 de julio, del Mercado de Valores.

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TEXT

JOHN CARLOS I

KING OF SPAIN

To all who present it and understand it.

Sabed: That the General Courts have approved and I come to sanction the following Law.

EXPLANATORY STATEMENT

After more than ten years since the enactment of the Law 24/1988, of July 28, of the Stock Market, this standard, the expression of one of the most important reforms experienced by our stock markets, must be amended to transpose Directive 93 /22/EEC of 10 May 1993 on investment services in the field of marketable securities, as amended by Directive 95 /26/EC of the European Parliament and of the Council of 10 May 1993 on the Parliament and the Council of 29 June 1995. The text also uses the text to incorporate, in addition, Directive 97 /9/EC of the European Parliament and of the Council on the compensation schemes for investors.

The Investment Services Directive, together with Directive 93 /6/EEC of 15 March 1993 on the capital adequacy of investment firms and credit institutions, and the second Council Directive of 15 December 1993 on the December 1989, for the coordination of laws, regulations and administrative provisions relating to the access to the activity of credit institutions and their financial year, represents one of the key pieces in the construction of the market Single Financial and, in particular, the so-called "Single Stock Market".

To achieve this goal, the Investment Services Directive, which is similar to the second Banking Coordination Directive, introduces the principle of the "Community passport" or "single license". In its virtue, an 'investment firm', under the authorisation granted by the State of its registered office, can provide investment services and complementary activities in the rest of the Union, both by establishing itself in other States by branch, as by offering their services in them.

The requirement for a single licence is based on the harmonisation of the conditions for authorisation and the exercise of the activity, requirements which are entrusted to the State of origin of the undertakings (principle of 'home'). country "). However, the rules of conduct to which undertakings must be subject to their operations remain the responsibility of the State in which they are carried out (the "country host" principle).

Expressions of the above are: on the one hand, the right of any investment firm to access any market in membership, and, secondly, the possibility of access to or accession to the clearing and settlement systems.

Regarding the rules on the functioning of the markets, the Investment Services Directive is part of a classification of the markets that distinguishes between regulated and unregulated. The differentiation is based on the fact that a regulated market, in addition to enjoying such a condition by an express recognition of a Member State, has such a character as to meet the requirements of organisation, operation and admission of instruments. financial negotiations, advertising and transparency which determine a structure based on the rules of minimum standards laid down in the acquis communautaire.

Finally, the content of the Directive should highlight the transparency and reporting obligations.

The first ones are predicated on the markets, as much information about the operations that take place within them, and whose knowledge by investors is a key piece of protection that should be dispensed with. As regards reporting obligations ("reporting") , they are statuesque to ensure oversight work on subjects operating in the markets.

A complete description of the reform would not be achieved unless it was mentioned that all the regulatory decisions that allow our markets to compete more effectively have been incorporated into the objectives of the reform. It is an important step towards the new and important challenge of economic and monetary union as of 1 January 1999.

Likewise, it should be noted that this provision provides a response to the Constitutional Court's decision regarding Law 24/1988, incorporating the necessary changes in the legal text to conform to the the distribution of powers between the State and the Autonomous Communities, in accordance with the judgment of 16 July 1997.

Already moving on to the text of the Reform Law, the initial article introduces some changes in Title I of Law 24/1988. First, as a result of the cast of financial instruments falling within the new scope of market management, which exceed the category of marketable securities, the discipline applicable to the securities is extended to those of the The European Commission has already been able to make a contribution to the new financial situation. "swaps", "fras", options, futures, etc.) that have a presence in our markets.

Another aspect that should be highlighted in the first precept is the break-up of the monopoly of the conduct of the registration of negotiable securities in non-traded accounts in official secondary markets, which up to now held companies and securities agencies.

In the second article, two new developments are included as regards the regime of the Advisory Committee of the National Securities Market Commission. Thus, on the one hand, its composition is updated, giving input to representatives of all official secondary markets. On the other hand, their powers are accommodated in the new provisions of the legal text in the subject of subjects and markets.

In the third article, the regime of requirements for emissions of similar securities to others already negotiated in a secondary market is relaxed, in order to avoid unnecessary costs for emissions, especially where there is already sufficient information on the markets of the issuer of the securities, or where the recipients of the securities are institutional or professional investors. It also regulates the Law of the procedure of approval of the participation of companies that manage Spanish secondary markets in other societies that manage secondary markets outside Spain, as well as the participation in Spanish markets of the latter.

The fourth article introduces important new developments regarding the regulation of official secondary stock markets.

While the provisions of the Investment Services Directive are incorporated into national law, the regulation of markets, as in the case of those of the derivatives, not developed in the year1988 in our financial system.

In the second term, and in line with the distinction that the Investment Services Directive recommends between regulated and unregulated markets, key to the design of the operational Single Market Financial Market, preaches the nature of the regulated secondary markets that we know today in our system, abolishing the distinction, as it was introduced in the year 1990, between official and unofficial organized markets, to collect the only one Unofficial organized market that has been authorized up to the present time.

In line with the decision of the Constitutional Court, the distribution of competences between the State and the Autonomous Communities is to be added, in accordance with the differentiating criterion between the markets of the State and regional.

In this field, in view of the need to address the interrelation of markets in the international economic context, an answer is offered, allowing the relations, of a reciprocal nature, between the national markets and outside.

The reform has also been used to make some changes to the admission and exclusion of securities to the negotiations. In particular, the question of equating the requirements of the issue with admission, which generated undesirable effects when measuring a brief time between the two moments, is ended, and an immediate entry is also followed. on the market for securities issued to commence, as soon as possible, its negotiation. In the case of exclusion, the budgets of the same are regulated for the case of non-compliance with information obligations to the market of the issuer of the securities traded. In both cases, the autonomous powers in this field are recognized.

Special mention deserves the classification that is introduced in the market operations, consistent with the principles of deconcentrator order that guide the regulation of the matter in the Investment Services Directive. The result has been the basic distinction between market operations and those that do not enjoy such a condition.

Market operations are characterized by the result of transfers for sale or other onerous business of the market. In turn, it distinguishes itself between ordinary and extraordinary operations. The first are those which are subject to the basic rules of operation of the markets (in particular, the intervention of members and the opening up of the operation through the ordinary procurement systems). Extraordinary operations are those which are not subject to all or any of these basic rules, and can only be carried out in three cases: when the buyer and the seller habitually reside or are established outside the national territory, when the operation is not carried out in Spain and when the buyer and the seller expressly authorize it.

In the field of market operations, it has been considered appropriate to specify the regulation of certain types of loans on securities traded on secondary markets so that, at the same time as the depth and Market efficiency, the regulatory framework is established to provide for the corresponding tax regime that encourages the development of the markets.

In any event, irrespective of whether or not market operations are or not, the obligation to communicate all types of transactions to the decision-making bodies of the markets, in the interests of ensure its proper functioning and the protection of investors.

Another fundamental aspect of the reform, and which was bound by the Investment Services Directive, is the recognition of access to official secondary markets as members, with the ability to operate, both (a) companies of Spanish investment services such as those authorised in other countries of the European Union. It is the translation of the Community passport into the matter, which is reflected in Chapter IV of Title V. Among other consequences, it will bring with it the direct access of credit institutions in the securities field. However, and in accordance with the prohibition of the Investment Services Directive for the Spanish special case, it shall not apply until 1 January 2000.

Already entering into the specific regulation of each of the markets, it can be emphasized that in the stock market the execution of transactions in the Stock Exchanges and in the System of Stock Interconnection is subject to the current management, in such a way that the free access provided for in the Directive is achieved through the acquisition of the status of member of one of the Companies Rector of the Stock Exchanges. For this reason, some questions have been raised regarding the rules for accessing the social capital of those.

In terms of the Public Debt Market in Annotations, there have been significant developments. First, the parallel negotiation of the Central values in any other official secondary market is possible, with the advantage of a greater scope of negotiation and interrelation between markets.

Secondly, the fundamental rule of market management becomes the so-called "Market Regulation". In addition, the existing Market Advisory Commission integrates in its composition representatives of the market members and Autonomous Communities.

The functioning of the market is structured on the distinction of two areas: registration, clearing and settlement and negotiation. Thus, from the perspective of the subjects, multiple categories are opened according to what each subject's vocation is.

Another of the new features introduced in Title IV, which should be highlighted is the fact that the regulation of derivatives markets, already developed in our financial system, is being taken by a legal base.

Finally, in this Title, the reform has been used to redefine the concept of the public offering for the sale of securities, in such a way as to include not only those of non-listed securities, but also those that are already being negotiated. in a secondary market.

The new Title V, set out in Article 5, in line with the statutory equalisation between investment firm and credit institutions, which is recommended by the Investment Services Directive, comprises a new regulation of the so-called "investment services companies". In the above terms, the qualities that define those are your consideration of a financial institution, and, secondly, the provision of investment services with a professional character to third parties.

In line with the Directive, the "status" of investment firm activity is ordered around investment services and complementary activities that are projected on the financial instruments, and which, in short, determine their realization of the community passport's albur.

According to the new objective and subjective management of the statute of the operators in the financial markets, the Law preaches the condition of the company of investment services, in a strict sense, of the societies and agencies of securities, as well as the holding companies of the holding company, today within the collective investment legislation, and which find their natural premises in Law 24/1988.

For the purposes of keeping the framework of action reserved for investment firms uncontaminated, the Law introduces a severe safeguard regime for the reserve of action, and the Commission is widely entitled to National of the Securities Market as a guarantor of the system.

In this same order of matters, credit institutions are equated to investment firms in terms of their ability to operate in the markets, breaking with the walls that were stipulated, especially for the stock market, in 1988.

Similarly, the Law provides for the possibility of creating entities, as well as the possibility of empowering other persons or entities that, without having already the "status" of investment services companies, develop any of the activities of these entities, if with some limitations.

Chapter II of the new Title V, on "Conditions of access to activity", completes the system of administrative intervention of investment firms in respect of their authorization, providing for the necessary prior consultation with the authorities of another State of the European Union, in the case of subsidiaries, and also collecting some aspects in the matter contained in the Investment Services Directive (v. gr. programme of activities, start, transparency of the group structure, membership of the Investment Guarantee Fund, etc.).

In Chapter III, the "Conditions of exercise" of the authorization of investment firms are regulated separately. The system of administrative intervention of the so-called "qualifying holdings" of shareholders has also been included. These are subject to a comprehensive review by the National Securities Market Commission in order to ensure the correct management of investment services companies.

Special mention requires the obligations that are statuesque for the investment services companies in terms of information to the National Securities Market Commission on the transactions they carry out (the so-called reporting obligation). In addition, the new management of operational constraints that break with a rigid scheme in terms of extending the activities of investment firms should be highlighted.

In Chapter IV, under the heading of 'Cross-border activities', the 'Community passport' scheme for businesses in the European Union, and vice versa, is collected from our companies in the other Member States. European Union.

Finally, the new Title V concludes with a Chapter V in which: first, the regime of corporate transactions of an investment firm is specified; second, the revocation of the authorization is collected; third, and The possibility of suspending the activities of an investment firm as a preventive measure for exceptional cases is expected to be fully or partially suspended.

In the sixth article of the legal text, new wording is given to Title VI of Law 24/1988, regulating a new mechanism in our stock markets, which is the "Investment Guarantee Fund". As has already been pointed out, this regulation is transposed into national law by Directive 97 /9/EC of 3 March 1997.

Its rules also respond to a requirement of the Investment Services Directive, and, with a certain similarity to the Deposit Insurance Funds of credit institutions, compensate investors in the case of (a) the insolvency or insolvency of investment firms which give rise to the unavailability of cash or securities which an investor would have entrusted to those undertakings, without, under any circumstances, the risk of the system being at risk of any credit or losses in the value of a market investment.

In the seventh article, as a result of the novelties introduced in the text of Law 24/1988, it is necessary to redefine both the scope of the supervision of the National Securities Market Commission and the sanctioning regime. of the Law.

In the eighth article, amendments to the additional provisions of Law 24/1988 have been introduced, as a result of the changes incorporated in the original text of the Law.

Finally, a set of additional heterogeneous content provisions have been incorporated.

Thus, the occasion is used to modify some aspects of Law 46/1984, of December 26, regulating the Collective Investment Institutions. First, and in order to speed up the constitution of those, the functions of the National Securities Market Commission are enhanced. In the second term, new figures are added to the list of institutional arrangements, which are the "Funds of the Funds", the "Main and subordinate funds", all of them as specific categories of companies and investment funds. (a) a business, qualified to represent, exclusively, an investment modality of the same qualified to invest in securities issued by another collective investment institution.

In a similar vein, collective investment institutions that invest in non-listed securities and those characterized by having as sole investors those of institutional or professional court must be incardinated. These new figures, which are also specific categories of furniture cutting institutions, represent a further step in the adequacy of supply and demand in the field of institutional investment to channel more efficiently saving towards productive investment.

Third, the rules on investments by collective investment institutions in derivative instruments are more clearly outlined.

As regards the management companies of collective investment institutions, on the one hand, it is established as one of its powers to place the representative values on the market; on the other, they are extended certain provisions on intervention and supervision.

In another additional provision the possibility is provided, with due legal certainty and transparency, to securitize damaged mortgage loans, albeit with the proper supervision of the National Market Commission Values.

In line with the financial developments that are incorporated into the text, another additional provision is used to clarify the tax regime of the Investment Guarantee Funds.

A further provision is made for a regulation on securities markets, which is to be arbitrated by means of securities represented by means of an account, which would allow a decisive impulse to favour the efficient functioning of the same in the hedging of risks for market operations.

Finally, the changes that have been incorporated in the legal regime of public limited companies to favor an improvement in business financing especially through the markets cannot be mentioned. financial.

Under this reform, the so-called preference shares are regulated in a more comprehensive way, and in particular a sub-category of the measures which are the silent actions. The aim of the legislature is to allow for the financing via the market with sufficient guarantees for investors through investment formulas that allow access to the market, taking into account the practical circumstances of corporate control. capital without involvement, through the corresponding right of vote, in social management. However, the reform is aware of the differences between listed and unlisted companies, the more flexible the regime preached for the former, on the basis of the greater transparency that the discipline of the markets of the values.

In the previous line, a response is also offered from our corporate and stock market orders to issue in our country values that represent a middle income between variable income and income. They also have a special interest as assets which, while reporting efficient financing, also result in a greater strengthening of the broadcaster's own resources.

Manifestation of such claims is found in the novel regulation of so-called rescue actions.

Under the pattern of differentiating between listed and non-listed companies, a period of less than 15 days is set for the exercise of the right of preferential subscription in listed companies. With this change there is a greater speed in the realisation of capital increases in listed companies, without this being any other for the rights of the old shareholders, since the information to them remains It is well-guaranteed through the transparency mechanisms of the markets.

In the context of the exclusion of the right of preferential subscription, the changes introduced, also taking into account the differentiating pattern between listed and unlisted companies, make the exclusion requirements more flexible. enhance capital increases as a source of business finance.

In addition, the amendment introduced to facilitate a quicker entry into the trading of shares issued on the occasion of an increase in capital on a public offer basis is worth noting.

Finally, it should be mentioned that a commitment is being made to the government to complete the reforms outlined, in order to extend the changes to the area of fixed income, all through a legislative initiative that will modify the legal regime for the issuance of obligations.

It should be noted that the Law is dictated by the application of Article 149.1.6. and 11. of the Constitution.

Article first. Amendments to Title I of Law 24/1988.

The following amendments are introduced in Title I of the Law:

One. In Article 2, two new paragraphs are added-second and third respectively-with the following content:

" The following financial instruments will also fall within their scope:

(a) Contracts of any kind that are traded on a secondary, official or non-official market.

(b) Term financial contracts, option financial contracts and financial swap contracts, provided that their objects are marketable securities, indices, currencies, interest rates, or any other underlying type of a financial nature, irrespective of the way in which they are settled and even if they are not traded on a secondary, official or non-official market.

(c) Contracts or transactions on instruments not covered by the preceding letters, provided that they are liable to be traded on a secondary market, whether official or not, and even if their underlying is non-financial, comprising, for this purpose, the goods, the raw materials and any other consumables.

To financial instruments, they will apply to them, with the precise adaptations, the rules provided for in this Law for marketable securities. "

Two. The last paragraph of Article 6 is amended, and a new paragraph is added:

"In the case of the debt issues of the State and the Autonomous Communities, as well as in those other cases in which it is established, the publication of the characteristics of the issue in the" Official Gazette " corresponding to the public deed referred to in the preceding paragraphs.

Nor shall the public deed referred to in this article be required for financial instruments that are traded on official secondary markets for futures and options, and on the other assumptions that the government establishes, under the conditions which are laid down in regulation. '

Three. In Article 7, the second, fourth and fifth paragraphs are reworded and a new paragraph is added at the end:

Second paragraph:

" In the case of securities not admitted to trading on official secondary markets, that entity shall be freely designated by the broadcaster between the investment firm and credit institutions authorised to carry out the activity referred to in Article 63 (2) (a). The designation must be entered in the Register of the National Securities Market Commission provided for in Article 92 of this Law, as a prerequisite for the commencement of the accounting record. The Securities Clearing and Settlement Service may also assume this function when authorized by the Minister of Economy and Finance on a proposal from the National Securities Market Commission, after hearing the issuer and the Clearing and Settlement of Securities, in accordance with the requirements that, if applicable, are regulated. "

Fourth paragraph:

" In the case of securities admitted to trading on the Public Debt Market in Annotations, the record keeping will be the Central Log, as the Central Registry, already the Gestoras Entities. In the case of securities admitted to trading on other Official Secondary Markets, the keeping of the register shall be the responsibility of the body or entity, including the Securities Clearing and Settlement Service, which is regulated determine. "

Paragraph fifth:

" The government shall establish, in relation to the various entities entrusted with the conduct of the accounting records and the different types of securities, the rules for the organisation and operation of the corresponding records, securities and other requirements which are required of them, the identification and control systems of the securities represented by means of a statement of account, as well as the relations of those institutions with the issuers and their intervention in the administration of values. Such regulation shall be the responsibility of the competent Autonomous Communities when they make use of the power provided for in the second paragraph of Article 54 and in relation to the services referred to therein. "

Last paragraph:

" As stated in this article, in respect of the Securities Clearing and Settlement Service, it shall be applicable to similar services created by the Company's governing companies under the provisions of the the second paragraph of Article 54, where the corresponding Autonomous Community is authorised, subject to the hearing of the issuer and of the service itself. '

Article 2. Amendments to Title II of Law 24/1988.

The following amendments are made to Title II of the Law:

One. A new paragraph is added at the end of Article 13:

" The National Securities Market Commission will raise annually, to the Economic, Trade and Finance Committee of the Congress of Deputies, a report on the development of its activities and on the situation of the markets. Organized financial. The President of the Commission shall appear before the cited Congressional Commission to account for such a report, as well as how many times it is required to do so. "

Two. The following wording is given to Article 16:

" The provisions and resolutions dictated by the National Securities Market Commission in the exercise of the administrative powers conferred upon it in this Law shall bring an end to the administrative path and shall be in the administrative-administrative procedure. Except for this rule:

(a) Resolutions which give effect to sanctions, the regime of which shall be as provided for in Article 97.

(b) Resolutions that dictate the intervention and replacement of administrators, the regime of which shall be as provided for in Article 107. "

Three. Article 22 is reworded in the following terms:

" The Advisory Committee of the National Securities Market Commission is the advisory body of its Board. The Committee shall be chaired by the Vice-President of the Commission, who shall not have a vote on his reports, the number of his members being the number of members and the form of his appointment which shall be determined. Members shall be appointed on behalf of the members of all official secondary markets, issuers and investors, plus another representative appointed by each of the Autonomous Communities with powers in respect of securities markets in the territory of which there is an official secondary market. '

Four. Article 23 shall be worded as follows:

" The Advisory Committee of the National Securities Market Commission will report on how many issues are raised by the Board.

Your report will be required in relation to:

(a) The provisions of the National Securities Market Commission referred to in Article 15 of this Law.

b) The actions of the National Securities Market Commission regarding the collective bond provided for in Article 54 of this Law, in cases where it is regulated so that it is established.

(c) The imposition of penalties for very serious infringements, pursuant to the provisions of Title VIII of this Law.

(d) the authorisation, revocation and corporate operations of investment firms and other persons or entities acting under Article 65.2, where this is established in a regulatory manner; taking into account economic and legal significance.

(e) The authorisation and revocation of branches of investment services companies from countries not members of the European Union, and the remaining subjects of the Securities Market, when so regulated, having Account for the economic and legal relevance of such subjects.

Without prejudice to the nature of the advisory body of the Council of the National Securities Market Committee, the Advisory Committee shall inform the draft general provisions on directly related matters. with the market of securities sent to it by the Government or by the Ministry of Economy and Finance with the aim of making the principle of the hearing of the sectors concerned in the procedure for drawing up provisions effective administrative. "

Five. A new Article 26a is inserted, with the following wording:

" Without prejudice to the activities reserved for credit institutions, in accordance with the provisions of Article 28 of Law 26/1988 of 29 July, of Discipline and Intervention of Credit Entities, no person or the entity may appeal or capture savings from the public on Spanish territory without submitting to this Title or the collective investment rules or any other special legislation that empowers the entity to carry out the above mentioned activity. "

Article 3. Amendments to Title III of Law 24/1988.

The following amendments are introduced in Title III of the Law:

The second paragraph of Article 30 is worded as follows:

" Without prejudice to the provisions of the preceding paragraph, the Government may, in whole or in part, exempt from the requirements referred to in Articles 26, 27, 28 and 29 above, certain categories of emissions, depending on the nature of the issuer, the small amount of the issue, the restricted number or the special characteristics of the investors to which it is intended or other circumstances which it makes advisable to establish exceptions to them, except in those cases which, where appropriate, are regulated set the opposite. The Government may not establish a scope or content of the audits provided for in Article 26 (c) and Article 27, less than that laid down by the regulatory rules for auditing of accounts. '

Article 4. Amendments to Title IV of Law 24/1988.

The following amendments are made to Title IV of the Law:

One. Article 31 shall be worded as follows:

" 1. They are official secondary markets of securities which function regularly, as forewarned in this Law and in its implementing rules, and, in particular, with regard to the conditions of access, admission to negotiation, procedures operational, information and publicity.

2. The following official securities markets shall be considered as the following:

a) The Stock Exchanges.

b) The Public Debt Market represented by annotations in account, managed by the Annotation Central.

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

(d) Other, state-wide, which, in compliance with the requirements of paragraph 1, are authorized in the framework of the provisions of this Law and of its implementing legislation, as well as those of an autonomous nature, which authorize the Autonomous Communities with competence in the field.

3. In the terms provided for in this Law and in its development provisions, securities and other financial instruments may be traded on official secondary markets which are eligible for this.

4. Without prejudice to any provision of special laws, the creation of any market or organised trading system of securities or other financial instruments which does not have the consideration of an official market shall be authorised, prior to the report of the National Securities Market Commission, by the Government, or, in the case of markets of a regional level, by the Autonomous Community corresponding to the competences in the matter.

5. The participation of companies managing Spanish secondary markets in other companies that manage secondary markets outside Spain, and the participation in Spanish markets of companies that manage secondary markets outside of Spain Spain will require the approval of the government prior to the report of the National Securities Market Commission. The approval may be accompanied by measures to encourage or facilitate this participation.

Conditions and requirements may be laid down for the participations provided for in the preceding paragraph. "

Two. Article 32 shall be worded as follows:

" 1. The admission of securities to trading on official secondary markets will require prior verification by the National Securities Market Commission of the compliance with the requirements and procedure that are to be regulated. In the case of securities traded on stock exchanges, such verification shall be unique and valid for all securities exchanges. Admission to trading on each of the official secondary markets shall also require the agreement of the governing body of the relevant market, at the request of the issuer, who may request it, under his or her responsibility, once the values or the corresponding annotations.

2. The requirements and the procedure for the admission of securities to trading on official secondary securities markets, as well as the publicity to be given to admission agreements, shall be determined. The requirements may be laid down separately for the different categories of securities or markets. In the same way, the requirements and the procedure for the permanence of securities shall be determined in the event of a division of companies.

3. By way of derogation from the preceding number 1, the securities issued by the State and by the Institute of Official Credit are considered to be admitted to trading on the Public Debt Market in Annotations or, where appropriate, in other markets. official secondary as determined in the issue. Securities issued by the Autonomous Communities shall be deemed to be admitted to trading on the basis of the issuer's mere request. In all of the above cases, however, they shall be adjusted to the technical specifications of the relevant market, in accordance with the provisions of the preceding number.

4. The powers referred to in the preceding paragraphs shall correspond to the Autonomous Communities with powers in the field, in respect of securities traded exclusively on markets in the autonomous area and subject to compliance with requirements. specific requirements in those markets. '

Three. The first paragraph of Article 34 is amended as follows:

" The National Securities Market Commission may exclude the negotiation of securities that do not meet the requirements for dissemination, frequency or volume of procurement that are regulated, and of those whose issuer does not comply with the obligations which they apply to it, in particular in the field of referral and publication of information. Such exclusion shall be agreed by the National Securities Market Commission on its own initiative or on a proposal from the governing bodies of the corresponding official secondary markets. Such agreements shall, in any event, be adopted after the person concerned has been heard, without prejudice to any precautionary measures which may be taken. "

Four. The second paragraph of Article 35 is worded as follows:

" Such entities shall make publicly available on a quarterly basis a progress of their results and other relevant information. In any case, on a six-monthly basis, they shall make public their supplementary financial statements, in a detail similar to that required for their annual statements. The content of the quarterly and half-yearly information referred to in this article will be determined by the Ministry of Economy and Finance. The Minister for Economic Affairs and Finance may also adapt the above obligation for certain categories of securities or markets. "

Five. Article 36 shall be worded as follows:

" 1. The transactions of an official secondary securities market shall be considered to be the transfer of a sales title, or other onerous business characteristic of each market, when they are carried out on marketable securities or instruments financial admitted to trading on the same.

2. The market operations referred to in the preceding number may be ordinary and extraordinary.

They shall be subject to the consideration of ordinary transactions in accordance with the rules of operation of the official secondary market concerned.

Extraordinary operations shall be considered as not subject to all or any of the rules of operation of the official secondary market.

3. In any of the following cases extraordinary operations may be performed:

a) When the buyer and seller habitually reside or are established outside the national territory.

b) When the operation is not performed in Spain. Regulations will determine the requirements that must be given in an operation to understand that it is carried out outside Spain.

(c) Where both the buyer and the seller previously authorize an investment firm or a credit institution, expressly and in writing, that the relevant transaction be performed without the rules of the market. The content and the requirements of the said authorisation shall be determined in accordance with the rules, for which account shall be taken, inter alia, of the nature of the investor, the amount of the transaction and the price conditions to be used, unless otherwise mandated, ensure that the best price is obtained in the operation.

4. The conduct of extraordinary operations shall be communicated to the decision-making bodies of the relevant market in the form that it is determined. In the case referred to in point (c) of the preceding number 3, as long as such communication does not take place, the acquirer shall not be able to negotiate the corresponding financial securities or instruments or to exercise the rights they understand.

They must also be notified to the decision-making bodies of the relevant market, in the form that is regulated, the transmissions by way of sale of those securities whose trading on a market The official secondary has been suspended in accordance with the provisions of Article 33 of this Law. As long as such communications do not take place, the acquirer shall not be able to negotiate the relevant securities or exercise the rights they understand.

5. Transfers for consideration other than those provided for in the preceding number 1, and transfers of securities or financial instruments admitted to trading on an official secondary market shall not be taken into account as a operations of the same. However, they must be notified to the decision-making bodies of the relevant market in the form which it is determined to regulate. As long as such communications do not take place, the acquirer shall not be able to negotiate the relevant securities or exercise the rights they understand.

6. For the decision-making bodies of the relevant markets, to whom the communications or notifications referred to in the preceding paragraphs are made, they shall give an account of this to the National Securities Market Commission, in the form and cases which are regulated to be established.

7. Without prejudice to other forms of lending, the loan of securities traded on a secondary market the purpose of which is to provide them for subsequent disposal, to be the subject of a loan or to serve as collateral in a financial transaction shall be subject to the following requirements:

(a) Only those securities which, owing to their frequency of trading and liquidity or their ability to serve as collateral in monetary policy operations, are designated by the body, shall be eligible for the loan. The market operator in question.

They may also be the subject of the loan referred to in this paragraph the securities identical to those of the issuer which are the subject of a public offering for the sale or subscription of securities and the operation is recorded in the prospectus information.

(b) The securities issued on a loan must belong to the lender and be held by the lender by virtue of transactions already settled on the date of the perfection of the contract. For this purpose, either the lender or the borrower must be an attached entity or a member of the relevant market clearing and settlement body where the value is traded.

(c) The securities provided and those delivered at the maturity of the transaction shall be free of any charge or charge, without such a condition lacking those securities whose political or economic rights are subject to some limitation, restriction, or suspension class.

(d) The lending operation shall be recorded or recorded in the relevant securities account of the entity in charge of the administration or deposit of securities and communicated to both the market governing body and the clearing and settlement.

e) The creditor, unless otherwise agreed, shall receive the fruits derived from the economic rights inherent in those securities, including the premiums for assistance to General Shareholders of Shareholders that are due during the loan. Similarly, you will be entitled to the rights of free allocation and preferential subscription of new shares that are born during the life of the loan.

(f) The maturity of the loan may not exceed one year.

(g) The borrower shall ensure the repayment of the loan through the provision of securities to be determined by the National Securities Market Commission. Such guarantees shall be subject to the application of the securities regime provided for in this Law. The guarantee requirement shall not apply to loans of securities resulting from monetary policy operations, nor to those which are made on the occasion of a public offering for the sale of securities.

The Minister of Economy and Finance and, with his express rating, the National Securities Market Commission will be able to:

(a) Set limits on the volume of lending operations or on the terms of the loan operations, taking into account market circumstances.

b) Establish specific reporting obligations on operations. "

Six. The following new wording is given to Article 37:

" 1. They may be members of official secondary securities markets, subject to the requirements laid down in this Act or those that are regulated for each type of market, the following entities:

a) Securities companies and agencies.

b) Spanish credit institutions.

(c) Investment service undertakings and credit institutions authorised in another Member State of the European Union, provided that, in addition to the requirements of Title V to operate in Spain, the authorisation given by the authorities of their country of origin is empowered to provide the investment services referred to in Article 63 (1) (b) or (c).

(d) Investment service undertakings and credit institutions authorised in a State other than a Member of the European Union, provided that, in addition to the requirements set out in Title V of this Act to operate in Spain, in the authorisation given by the authorities of their country of origin, are empowered to provide the investment services referred to in Article 63 (1) (b) or (c). The Minister for Economic Affairs and Finance may refuse or condition the access of these entities to the Spanish markets for prudential reasons, for not giving equivalent treatment to Spanish entities in their country of origin, or for not being insured by the Spanish authorities. compliance with the rules of management and discipline of the Spanish stock markets.

e) Those other who determine the Autonomous Communities with competence in the field and with respect to the official secondary markets located in their territorial scope, and comply with the provisions of Title V.

The above is without prejudice to the market's own specialties in the area of membership, as provided for in this Law and in its regulatory development.

2. The entities referred to in point (c) of No 1 may be members of the official secondary markets, provided that they meet the requirements to be determined for each of them. In particular, where the physical presence is not required as a requirement to operate on an official secondary market, they may be members of such markets without the need for a branch to open.

3. The acquisition of the status of a member of an official secondary market will require an express act of admission by the governing bodies of each market. It shall be sufficient for such an effect to be established before the National Securities Market Commission, as well as the undertaking to comply with the rules of organisation and operation of the Securities Market, including those relating to compensation and settlement of the transactions in the case. As regards the Public Debt Market in Annotations, the acquisition of the membership condition shall be in accordance with the provisions of Articles 55 to 58 of this Law.

The accreditation referred to in the preceding paragraph shall correspond to the Autonomous Communities with competence in the matter, in respect of the official secondary markets of the Autonomous Region.

4. Without prejudice to the general duty of information provided for in Article 70, members of official secondary markets shall inform their decision-making bodies of the operations in which they are involved. Regulations shall be determined, taking into account the specificities of the markets and securities in which they are negotiated, as well as the specificity of their members, the form and time limit in which the identity and the number of values transmitted are communicated, the the time and the price of the transaction, the identity of the investment service undertakings or the intervening credit institutions, and the other data that are estimated to be accurate for the proper identification of the transaction.

The members of the official regional secondary markets will also inform the respective Autonomous Communities, with powers in the matter, of the operations they carry out in such markets, in the cases in question. which are determined by those. "

Seven. Article 43 shall be worded as follows:

" In order to seek market transparency, the National Securities and Exchange Commission, the Banco de España or the governing bodies of the markets will determine, within the limits that they regulate, the information of a public nature which shall be required to disseminate market operations. In particular, the content of the information relating to such operations shall be established mainly in respect of the prices and volumes negotiated; the form of advertising and the exact time limit in which such information is to be provided; means by which it shall be made available to the public. This information obligation shall be governed by the type of operation, the nature, size and needs of the market concerned, as well as those of the investors in the market.

The Government shall determine in which cases and under what conditions the transmissions referred to in Article 36 (5) shall be made public.

Without prejudice to the public information referred to in the preceding paragraphs, the Autonomous Communities with powers in the matter and with respect to operations carried out in their territorial scope may establish any other duty of information. "

Eight. A paragraph is added at the end of Article 44 of Law 24/1988, with the following text:

"The forecasts contained in the preceding paragraphs will also apply to non-official secondary markets."

Nine. Article 45 shall be worded as follows:

" The creation of Stock Exchanges will be the responsibility of the Government, except in the case of Stock Exchanges located in the territory of Autonomous Communities whose Statutes of Autonomy recognize them as competition. In this case, the creation of Stock Exchanges shall correspond to those Autonomous Communities. "

Ten. Article 46 shall be worded as follows:

" The Stock Exchanges shall have as their object the negotiation of those categories of marketable securities and other financial instruments, as provided for in Article 63 (4), which by their characteristics are eligible for and to be determined by the National Securities Market Commission.

They may not be traded on any official secondary market other than Stock Exchanges:

(a) Shares and securities convertible into or entitled to their acquisition or subscription. The admission to trading of such securities shall, with the exceptions or limitations imposed by the Government, refer to the whole of the issued.

(b) Those other securities for which the National Securities Market Commission so determines.

They may be traded on the Stock Exchanges, in terms of the terms that are regulated, securities admitted to trading on another official secondary market. Also, in the terms that are regulated, the securities of fixed income which, other than those referred to in (a) above, are traded on a Stock Exchange may be traded on other official secondary markets.

In both cases, provision should be made for the necessary coordination between the respective settlement services. "

Once. Article 47 shall have the following

:

"They may acquire the status of members of the Stock Exchanges of the entities that comply with Article 37 and, in addition, participate in the capital of the companies referred to in the following Article."

Twelve. Article 48 is reworded in the following terms:

" 1. Stock Exchanges shall be governed by and administered by an anonymous company, which shall be responsible for its internal organisation and operation, and shall be the holder of the necessary means for this, with this being its principal social object.

Such companies may also develop other complementary activities related to the Stock Exchanges. The shares of those companies shall be nominative. Such companies shall have as sole shareholders all members of the relevant Bags and must necessarily have a Board of Directors composed of no less than five persons and at least one Director-General. Such companies shall not have the legal status of members of the relevant Stock Exchanges and shall not be able to carry out any financial intermediation activities, or activities related to Article 63.

The aforementioned companies shall exercise the functions conferred upon them by this Law and the other functions determined by the Government, the Minister of Economy and Finance or the National Securities Market Commission, without prejudice to those that may be grant them the Autonomous Communities which they have attributed to them in their Statute of Autonomy in the field. Stock exchanges may require remuneration for the services they provide.

The capital of the companies referred to in this Article shall be distributed among the members of the Stock Exchanges, with the classification of these effects in two groups, as they may or may not operate on their own account. Within each group, their members will have the same number of shares. In order to make effective the right to the incorporation of those who have indicated the intention to acquire the status of members or the cessation of those who have such a condition, the shares in the capital of each of the Member States will be adapted. the members of the Stock Exchange, in the manner that it is regulated.

In order to enable such adaptations, the companies referred to in this Article shall extend or reduce capital to the extent necessary, unless it is chosen to make them effective by buying or selling them. by the company of its own shares. For the purposes of the provisions, extensions or reductions of capital referred to in this paragraph, the agreement of the Board of Directors shall be sufficient not to apply the provisions of Articles 75 to 79,158,164 to 166 of the Law of Public Limited Companies. In the case of a reduction in capital and the purchase of shares belonging to members, the shareholders to whom their contributions are restored or their liabilities are waived shall be liable, up to the amount of the shares and for the three years the following, of the debts incurred by the company prior to the reduction or purchase.

The share price, in all cases referred to in the previous two paragraphs, will be determined and reviewed periodically in the form that is regulated. Such regulation shall take into account the special accounting rules applicable to the collecting societies and respect, in any case, the principles of free access to the Stock Exchanges and non-discrimination between their members.

The remaining capital increases or reductions will be subject to the general regime of the Company Law, with the exception that the shares that are issued can only be subscribed by the shareholders.

The statutes of such companies and their modifications shall require the prior approval by the National Securities Market Commission, or, where appropriate, by the corresponding Autonomous Community with competence in the matter, in respect of of the Autonomous Stock Exchanges. The appointment of the members of the Board of Directors and of the Director-General shall require prior approval by the National Securities Market Commission or, where appropriate, by the Autonomous Community.

2. The Autonomous Communities with competence in the field and with respect to the Stock Exchanges of the Autonomous Community, may establish for those the organization that they consider opportune. "

Thirteen. The following amendments are made to Article 54:

1. Paragraphs (b) and (c) of the first subparagraph shall be worded as follows:

" b) Manage, exclusively, the compensation of securities and cash arising from the ordinary transactions performed on the Stock Exchanges.

(c) The others entrusted to it by the Government, prior to the report of the National Securities Market Commission. "

2. The second paragraph is worded as follows:

" The provisions of the foregoing paragraph are without prejudice to the fact that, in respect of securities admitted to trading on a single Stock Exchange, the Autonomous Communities with jurisdiction in the matter provide for the creation by the company which is responsible for that of a service of its own keeping of the accounting records of securities represented by means of account and clearing and settlement, which shall have the powers that this Law attributes to the Service of Clearing and Settlement of Securities. The restrictions on social and business objects contained in the first paragraph of Article 46 and the first paragraph of Article 48 shall not apply to this single effect. The provisions of Articles 7 and 54 shall apply to these services, except for references to bodies or bodies which shall be understood as referring to the corresponding regional bodies. "

3. The following new wording is given to the third paragraph:

" The Securities Clearing and Settlement Service will act under the principles of renting out its own resources and coverage by its users of the cost of the services provided. It shall not carry out any financial intermediation activity, or the activities referred to in Article 63, other than that referred to in point (a) of its number 2, and shall refrain from taking risks with the participants in the clearing and settlement services. settlement, all with the exceptions, strictly limited to what is indispensable for the development of their functions, which the Government establishes. "

4. The fourth paragraph shall be:

" The government shall establish the criteria for determining the financial institutions directly involved in the securities clearing and settlement processes that are required to participate in the capital of the Compensation Service and Settlement of Securities and to distribute the capital of the securities between those. Such institutions may include non-resident institutions which carry out activities similar to those of the Securities Clearing and Settlement Service, which in turn may also participate in the capital of those institutions. The procedure laid down in the third, fourth, fifth and sixth subparagraphs of Article 48 shall apply to the incorporation or termination of the shareholders and to the adaptation of their shares to the variations which occur. Precise regulations. "

5. The sixth paragraph will remain:

" The Government is empowered to regulate, in all the provisions of this Law, the system of operation of the company, as well as the services provided by it. In particular, it shall establish the legal status of the attached entities acting as the depository of the securities or bringing the individual accounts corresponding to the securities of those who do not have that status. If an attached entity ceases to meet, in whole or in part, the cash payment obligation arising from the settlement, the Securities Clearing and Settlement Service may dispose of the unpaid securities, taking the necessary measures. to dispose of them through a market member. "

6. The seventh paragraph shall be:

" The entities attached to the Securities Clearing and Settlement Service shall constitute a collective bond in order to ensure among them, not in the face of the clients, the fulfillment of the outstanding transactions liquidation. The initial and periodic contributions to be made by the entities referred to in the collective bond, the assets and securities in which the funds provided must be made, the cases and the conditions under which the same shall be applied shall be regulated. respond to the obligation of the entities responsible for replenishing the amounts paid by that security, the return of the contributions made and, in general, its operating system. "

7. The following new paragraphs are added to the article:

" In the event of a judicial declaration of bankruptcy or admission to the application for the suspension of payments of an attached entity, the Service of Compensation and Settlement of Securities shall have absolute right of separation in respect of the of the goods or rights in which the guarantees constituted in favour of the Service by its attached entities are materialized. Without prejudice to the foregoing, the remaining surplus after the liquidation of the guaranteed transactions shall be incorporated into the insolvency assets of the institution concerned. The above guarantees shall be contested only in accordance with the second paragraph of Article 878 of the Trade Code, by means of action by the trade unions of the bankruptcy in which the existence of fraud is established in the constitution of the guarantee.

Judicially declared bankruptcy or admitted to processing the request for suspension of payments of an entity adhered to the Service of Compensation and Settlement of Securities, the National Securities Market Commission may dispose of, immediate and cost-free form for the investor, the transfer of their securities accounting records to another entity that is enabled to carry out this activity. Similarly, holders of such securities may request the transfer of such securities to another entity. If no entity is in a position to take charge of the records indicated, this activity shall be assumed by the Securities Clearing and Settlement Service, on a provisional basis, until the holders request the transfer of the registration. of their values. For these purposes, both the competent court and the court of insolvency shall provide the entity with which the securities are to be transferred to the accounting and accounting records and records necessary to make the transfer. The existence of the insolvency proceedings shall not prevent the holders of the securities from being made to cash from the exercise of their economic rights or from their sale. '

Fourteen. New wording is given to Article 55 of Law 24/1988, which would remain as follows:

" 1. The Public Debt Market in Annotations shall be the exclusive object of the negotiation of fixed income securities represented by account taken by the State, by the Institute of Official Credit and, at their request, by the Bank. European Central Bank, by the National Central Banks of the European Union or by the Autonomous Communities, and, subject to the authorization of the Minister for Economic Affairs and Finance, at the request of the issuer, by multilateral development banks of which Spain is a member, either by the European Investment Bank or by other public entities, in the case of that they are regulated. In any event, the securities shall comply with the technical specifications to be established for that purpose in the Market Regulation.

The securities admitted to trading on this market may be traded on other official secondary markets on the terms they regulate. Such trading shall be subject to the regulatory standards of the Public Debt Market in Annotations.

2. The Banco de España will have the consideration of the Public Debt Market Rector Body in Annotations.

3. The Central Bank of Annotations, which will lack its own legal personality, is a public service of the State that will manage, on behalf of the Treasury, the Banco de España and will be responsible for the Central Register of the securities traded in this country. market and organise the clearing and settlement of the transactions in which they are carried out.

4. The Public Debt Market in Annotations will be governed by this Law and its development regulations, as well as by a regulation whose approval will be the responsibility of the Minister of Economy and Finance at the proposal of the Banco de España, prior to the report of the National Securities Market Commission.

This Regulation will regulate, in accordance with this Law and its regulatory development, in any case, the rules regarding listing, hiring, reporting obligations to the Banco de España and advertising of the operations, including the rights and obligations of market members. It shall also regulate the recording, clearing and settlement of transactions, and may include procedures to ensure the delivery of securities and their payment, as well as the requirement of guarantees for such purposes. Similarly, it shall regulate the rights and obligations of account holders in their own name and in the management entities. The Regulation may be developed, where expressly provided for, by means of circulars from the Banco de España.

5. An Advisory Commission on the Public Debt Market in Integrated Log will work, in accordance with what is specified in regulation, by representatives of the Banco de España, the National Securities Market Commission, and the General Directorate of the Treasury and Financial Policy and of the Autonomous Communities with Public Debt admitted to trading on the market, as well as, where appropriate, of the entities participating in it, whether or not they are members of the market. The Presidency of the Commission shall be a representative of the Bank of Spain.

The Advisory Commission on the Public Debt Market in Annotations will inform the draft general provisions on market related matters, except in the special cases that may be established. Regulation. The Commission may propose to the bodies that in each case the approval of measures or provisions contributing to a better functioning of the market is competent.

6. The Autonomous Communities with powers in the field may create, regulate and organize a regional market of Public Debt in Annotations that is exclusive to the negotiation of fixed income securities issued by those and other entities governed by public law within their territorial scope. '

Fifteen. Article 56 shall be worded as follows:

" 1. The status of members of the Public Debt Market in Annotations, in addition to the Banco de España, may be accessed by entities that comply with the requirements of Article 37 of this Law, as well as those other entities that are determined regulentarily.

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

3. The authorization of the status of member of the Public Debt Market, as well as its revocation, will be the responsibility of the Minister of Economy and Finance, on a proposal from the Banco de España, prior to the report of the National Securities Market Commission. The condition of a member, whatever its nature, may be revoked for the reasons set out in Article 73. "

Sixteen. New wording is given to Article 57:

" 1. The record of the securities traded on the Public Debt Market in Annotations shall be the same as the Log Central and the managing entities.

2. The Central Bank shall bear the securities accounts corresponding to all securities admitted to trading on that market, either on an individual basis, in the case of accounts in the name of account holders, or global form, in the case of the client accounts of the managing entities. They may also maintain securities in the Central Bank of the European Central Bank, the European Central Bank, the European Union's National Central Banks, as well as the central securities depositaries based thereon. Similarly, the Annotation Central may hold securities accounts to its name in the central securities depositories.

3. In addition to the Banco de España, the clearing and settlement bodies of the official secondary markets and the inter-bank clearing centres may be holders of account in the name of the Central de Annotations, in addition to the Banco de España. the system of guarantees, as well as those who meet the requirements set out in the Market Regulation. The authorization of the status of account holder in his own name, as well as the revocation of it, will be the responsibility of the Minister of Economy and Finance, on a proposal from the Banco de España, prior to the report of the National Market Commission Values. "

seventeen. Article 58 is thus left:

" 1. In addition to the Banco de España, the members of the market may be responsible for managing the requirements to be regulated.

2. The authorization to obtain the status of managing body, as well as its revocation, will be the responsibility of the Minister of Economy and Finance, on a proposal from the Banco de España, prior to the report of the National Securities Market Commission. The status of the managing body may be revoked for the reasons set out in Article 73.

3. The managing entities shall keep records of the securities of those who are not holders of account in their own name in the Log Central and shall keep in this a comprehensive account which shall at all times constitute the exact counterpart of those securities.

4. Where those managing entities have the additional status of account holder in their own name in the Log Central, the latter accounts shall be held in that Central with total separation from the global accounts referred to in the paragraph previous.

5. In the terms of the regulation, the Banco de España may agree to the suspension or limitation of the activities of the members of the market and of the managing entities when they create a risk or cause a serious risk. Market disruption, for clearing and settlement procedures or, in the case of managing entities, for the legal certainty of the securities entered. These measures will be communicated by the Banco de España to the National Securities Market Commission and to the Ministry of Economy and Finance, so that the Minister, if necessary, will proceed to its ratification.

6. The powers referred to in Article 54 (8) to the Securities Clearing and Settlement Service shall also correspond to the Banco de España in respect of the goods and rights in which the guarantees which, according to the Rules of Procedure of the Market, must be constituted.

7. The Bank of Spain will be able to provide, immediately and at no cost to the investor, the bankruptcy or admission to the payment suspension request of a public debt market entity in Annotations. transfer of the securities to third-party accounts of other managing entities. Similarly, the holders of the securities may request the transfer of the securities to another managing body. For this purpose, both the competent court and the court of insolvency shall facilitate the access of the managing body to the accounting and accounting records and records necessary to make the transfer effective, thereby ensuring the exercise of the rights of the holders of securities. The existence of the insolvency proceedings shall not prevent the holders of the securities from being made to cash from the exercise of the economic rights or from their sale.

8. Deleted. "

Eighteen. New name is given to Chapter IV of Law 24/1988, which is renamed "From the Official Secondary Markets of Futures and Options represented by annotations in account", with its article 59 being worded as follows:

" CHAPTER IV

Future and Options Official Secondary Markets represented by account annotations

Article 59.

1. Secondary Markets may be created in the form of a State-wide, Future and Options Official, whose form of representation is that of an account. It shall be for the Government, on a proposal from the National Securities Market Commission, to authorise such creation.

The authorization will be the responsibility of the Autonomous Community with competence in the field in the case of markets of autonomy.

2. Futures and options contracts may be traded on these markets, whichever is the underlying asset. They may also be traded, compensated and settled, either by carrying out all or only of these actions, other financial derivative instruments, under the conditions which are determined to be determined. The market company shall either give its own or ensure by means of another entity, after approval, in this case, by the Minister of Economy and Finance, the counterpart in all contracts that are negotiated.

3. Institutions that comply with the requirements of Article 37 of the Law may be members of these Markets. In the case of markets where financial instruments derived from underlying non-financial instruments are traded, the acquisition of such a condition may be determined by other entities other than those mentioned above, provided that they meet the requirements for specialty, professionalism and solvency.

4. In the Official Secondary Markets of Futures and Options there will be a governing company, in the form of a public limited company, whose basic functions will be those of organization and supervision, registration of contracts and, where appropriate, management of compensation and settlement. These companies may not carry out any financial intermediation activities or the activities referred to in Article 63. However, and in order to manage the system of guarantees, they may be account holders in the Log Central.

5. The social statutes of the governing company, as well as its modification, will require the prior approval of the National Securities Market Commission.

6. The governing board shall have a board of directors with at least five members and at least one Director-General. His appointment will require the prior approval of the National Securities Market Commission.

7. These Markets, in addition to being governed by the rules provided for in this Law and implementing regulations, will be governed by a specific Regulation, which will have the character of the standard of management and discipline of the Stock Market, whose approval is adjust the procedure provided for in the creation of the market and the full content of which will be published in the "Official State Gazette". It shall specify the classes of members, legal relations with the clients, rules of supervision, the guarantee scheme, the winding-up operation, the contracts, as well as any other aspects that are required to be regulated. The procedure for amending the specific Regulation for each market shall be the subject of regulatory development.

8. Guarantees, irrespective of the form in which they are established, which are constituted in relation to the transactions carried out in the Futures and Options Markets, shall not be liable for obligations other than those arising from those transactions. operations, nor in relation to persons or entities other than those in whose favour they were constituted.

9. The securities companies of the Official Secondary Markets of Futures and Options shall have an absolute right of separation from the securities and the cash in which the guarantees which the members and customers would have materialised constituted or accepted in favour of those on account of the transactions carried out on the above markets, in the event that such members or clients were subject to a court-supervised procedure. Without prejudice to the foregoing, any remaining remaining after the settlement of the secured transactions shall be incorporated into the insolvency assets of the client or member concerned.

In case of bankruptcy of a member or a client of the Secondary Markets Officers of Futures and Options, the constitution or acceptance of securities and cash as a guarantee of market operations will only be impeachable to the pursuant to the second paragraph of Article 878 of the Code of Commerce, by means of action by the trade unions of the bankruptcy, showing the existence of fraud in the formation or affectation of securities and cash such as guarantee of market operations. '

nineteen. The first paragraph of Article 61 shall be worded as follows:

" The offer to the public offering securities to the public, on its own or third parties, of marketable securities that are already in circulation. All the provisions of Title III of Law and its provisions for the development of securities issues shall apply to public offerings for the sale of securities. "

Article 5. Amendments to Title V of Law 24/1988.

Title V of Law 24/1988 is referred to as "Investment Services Companies" and its wording will be as follows:

" CHAPTER I

General provisions

Article 62.

1. Investment firms are those financial institutions whose main activity is to provide investment services, on a professional basis, to third parties.

2. Investment firms, in accordance with their specific legal arrangements, shall carry out the investment services and the complementary activities provided for in the following Article, and may be members of the official secondary markets if request it.

Article 63.

1. The following investment services shall be considered:

a) The receipt and transmission of orders on behalf of third parties.

b) The execution of such orders on behalf of third parties.

c) Self-negotiation.

(d) Discretionary and individualized management of investment portfolios under the mandates conferred by investors.

e) The mediation, by direct or indirect account of the issuer, in the placement of the issues and public offerings of sales.

f) The underwriting of the subscription of issues and public offers of sale.

2. The following activities are considered as complementary activities:

(a) The deposit and administration of the instruments provided for in item 4 of this Article, including the carrying out of the accounting record of the securities represented by notes.

b) The rental of security boxes.

(c) The granting of loans or loans to investors, in order to enable them to carry out an operation on one or more of the instruments provided for in Article 4 of this Article, provided that the undertaking concerned is involved in the operation; grants the loan or loan.

d) Advice to companies on capital structure, industrial strategy and related issues, as well as advice and other services related to mergers and acquisitions of companies.

e) Services related to securing operations.

f) The investment advice on one or more of the instruments provided for in Article 4 of this Article.

g) The performance as registered entities to perform foreign currency transactions linked to investment services.

3. Investment firms, on the terms they regulate, and whenever possible conflicts of interest between them and their clients, or between the interests of different types of investment, are properly resolved. clients, may carry out other activities as provided for in the previous numbers, relating to instruments not covered by the following number.

4. Investment services and, where appropriate, complementary activities shall be provided on the following instruments:

(a) marketable securities, in their different modalities, including investment fund holdings and money market instruments that have such a condition.

(b) The financial instruments referred to in Article 2 of this Law.

(c) Monetary market instruments that do not have the status of marketable securities.

5. The Government may amend the content of the investment services ' relationship, complementary activities and instruments set out in this Article, in order to adapt it to the amendments to be made to the European Union legislation. The Government may also regulate the way in which the complementary services and activities referred to in this Article are provided.

Article 64.

1. They are investment services companies as follows:

a) Securities companies.

b) The securities agencies.

(c) Portfolio management companies.

2. Securities companies are those investment firms which are able to operate professionally, both on an employed and self-employed basis, and to carry out all the investment services and complementary activities provided for in the Article 63.

3. Securities agencies are those investment firms that can professionally only operate on behalf of others, with or without representation. They may carry out the investment services and the complementary activities provided for in Article 63, with the exception of those referred to in paragraphs 1 (c) and (f) and in point (c) of number

.

4. The portfolio management companies are those investment firms which can only provide the investment service provided for in Article 63 (1) (d). They may also carry out the additional activities provided for in paragraphs (d) and (f) of Article 2 (2

.

5. The names 'Securities Society', 'Securities Agency' and 'Management Company of Carteras', as well as their abbreviations 'S.V.', "A.V. ' and "S.G.C.", respectively, are reserved for the entities registered in the corresponding records of the National Securities Market Commission, which are obliged to include them in their name. No other person or entity may use the same or any other that leads to confusion.

6. No person or entity may, without having obtained the required authorisation and be registered in the relevant administrative registers, normally carry out the activities referred to in paragraph 1 and in points (a) and (c) of the Article 63 (2), in relation to the instruments provided for in paragraph 4 of that provision, comprising, for that purpose, foreign exchange transactions.

7. Persons or entities who fail to comply with the above two numbers shall be sanctioned as provided for in Title VIII of this Law. The National Securities Market Commission may take all measures it deems appropriate to cease infringing conduct, and may in particular:

(a) Make repeated requests, with the imposition of periodic penalty payments of up to two million pesetas to the infringer and, where appropriate, also to the administrators of the entity.

b) Agree to the seizure of books, files, accounting records and, in general, all documents, whatever their support, related to their activity, including computer programs and magnetic files, optical or any other class.

c) Agreed to close the establishment of the offender.

(d) To warn the public of the existence of such conduct and, where appropriate, of the measures taken to cease them.

The provisions of this number are without prejudice to other responsibilities, including criminal law, which may be enforceable.

8. The Commercial Registry and other public records shall not register those entities whose social object or denomination is contrary to the provisions of this Law. Where, however, such inscriptions have been carried out, they shall be null and void and shall be cancelled ex officio or at the request of the National Securities Market Commission. Such nullity shall not prejudice the rights of third parties in good faith, acquired in accordance with the content of the relevant Registers.

Article 65.

1. Credit institutions, even if they are not investment firms under this Law, may normally carry out all the activities provided for in Article 63, provided that their legal status, their statutes and their specific authorisation are enable for this.

2. The Government may regulate the creation of other entities, as well as allow other persons or entities that, without being an investment firm under this Law, may carry out any of the activities themselves, or that contribute to better development of the stock markets. Such persons or entities may not provide investment services in respect of the financial instruments referred to in Article 63 (4), with the exception of those referred to in Article 63 (1) (a), provided that they do not They do not receive any funds or financial instruments from their clients.

The requirements to constitute these entities, their social object, their form of action in Spain and abroad, and the other extremes that they configure their legal regime, including, where appropriate, the Administrative authorization regime and registration in the Special Records of the National Securities Market Commission. Such persons or entities shall be subject to the system of penalties applicable to investment firms, with the adjustments to be made to their specific nature.

3. The requirements to be complied with by those acting as agents or proxy for investment firms, as well as the powers conferred on them and their arrangements for the provision of services, shall be laid down. action.

4. In any event, the entities and persons referred to in this Article shall be applicable to the provisions of this Law and its implementing rules in respect of the conduct and discipline of the services and activities provided for in Article 63 thereof and to their possible participation in the official secondary stock markets.

CHAPTER II

Activity access conditions

Article 66.

1. It shall be for the Minister for Economic Affairs and Finance, on a proposal from the National Securities Market Commission, to authorise investment firms.

The authorisation shall include the type of investment firm concerned, as well as the specific investment services and complementary activities authorised to it from among those listed in the the programme of activities referred to in the following number 2

The administrative decision shall be reasoned and shall be notified within three months of receipt of the request, or at the time of completion of the required documentation and, in any case, within six months. following the reception of the one. Where the application is not settled within the time limit, it may be deemed to be dismissed. For the effectiveness of the alleged dismissal, the certification of the alleged act referred to in Article 44 of the Law of Legal Regime of Public Administrations and of the Common Administrative Procedure shall be requested.

2. The application for authorization, together with the statutes and other documents which are to be determined, must, in any event, accompany a programme of activities, in which it shall specify in a specific manner which of those provided for in the Article 63 is intended to be carried out by the company and with which it reaches, as well as the organization and means thereof. Investment firms shall not be able to carry out activities which do not expressly provide for the authorisation referred to in the preceding number 1.

3. Prior consultation with the supervisory authority of the relevant Member State of the European Union shall be the subject of the authorisation of an investment firm when any of the following circumstances arise:

(a) That the new company is to be controlled by an investment firm or credit institution authorised in that State.

(b) Your control is to be exercised by the dominant undertaking of an investment firm, or of a credit institution, authorised in that State.

(c) that their control is to be exercised by the same natural or legal persons who control an investment firm, or a credit institution, authorised in that Member State.

An enterprise is understood to be controlled by another company when any of the assumptions referred to in Article 4 of this Act are made.

4. In the case of the establishment of investment firm undertakings which are to be controlled, directly or indirectly, by one or more undertakings authorised or domiciled in a non-Member State of the European Union, the granting of such investment shall be suspended. the authorization requested, refused or limited its effects, when it had been notified to Spain, a decision taken by the Community in verifying that the Community investment firms 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 effective access to the market.

5. In order for an investment firm, once authorized, to be able to start its activity, the promoters must constitute the company, registering it in the Commercial Registry and subsequently in the Register of the National Market Commission Corresponding values. The registration in the Register of the Commission shall be published in the Official Gazette of the State. In the case of transformation of a pre-existing entity, it shall be as provided for in Article 72.

Article 67.

1. The Minister for Economic Affairs and Finance may only refuse authorisation to constitute an investment firm for the following reasons:

a) Failure to meet the requirements of the following number.

(b) When taking into account the need to ensure sound and prudent management of the institution, the suitability of the shareholders to have a significant stake, as defined in the Article, is not considered appropriate. 69. Among other factors, suitability will be appreciated based on:

1. Business and professional honorability of shareholders.

2. The heritage means with which these shareholders have to attend to the commitments made.

3. The possibility that the institution may be inappropriately exposed to the risk of its promoters ' non-financial activities; or, when dealing with financial activities, the institution's stability or control may be be affected by the high risk of those.

(c) The lack of transparency in the structure of the group to which the entity may eventually belong, or of the close links it may have with other persons, and, in general, the existence of serious difficulties for to inspect or obtain the information that the National Securities Market Commission deems necessary for the proper development of its supervisory functions.

2. They shall be eligible for an entity to obtain its authorisation as an investment firm:

a) That it has for exclusive social object the realization of the activities that are own of the companies of investment services, according to this Law.

(b) The form of a limited liability company or a limited liability company, constituted for an indefinite period, and which shares or shares in its registered capital are nominative.

c) That in the case of a newly created entity, it is constituted by the simultaneous founding procedure and that its founders do not reserve any special benefits or remuneration of any kind.

d) The existence of a minimum fully paid-up share capital in cash.

e) Having a Board of Directors, consisting of no less than five members in securities companies, and three in securities agencies and portfolio management companies.

f) That all members of its Board of Directors, as well as its Directors-General and assimilated, have a recognized business or professional honorability.

g) That none of the members of its Board of Directors, as well as any of its Directors General or Assimilated, has been, in Spain or abroad, declared bankrupt or a creditor contest without having been rehabilitated; is processed or, in the case of the procedure referred to in Title III of Book IV of the Law of Criminal Procedure, has been ordered to open the oral trial; have a criminal record for crimes of falsehood, against the Public Finance, of infidelity in the custody of documents, of violation of secrets, money laundering, misuse of public funds, discovery and disclosure of secrets, against property; or is disabled or suspended, criminal or administratively, to exercise public or administrative charges or management of financial institutions.

h) That most members of its Board of Directors, as well as all Directors-General and assimilated, have adequate knowledge and experience in matters related to the stock market.

i) Having a good administrative and accounting organization, as well as with adequate human and technical means, in relation to its program of activities.

j) Having an internal regulation of conduct, adjusted to the provisions of this Law, as well as control and security mechanisms in the field of computer and adequate internal control procedures, including, in particular, a system of personal operations of the company's directors, directors, employees and proxies.

k) That they adhere to the Investment Guarantee Fund provided for in Title VI of this Act, where the specific regulation of this Act so requires.

In the regulatory development of the requirements set out in this issue, account must be taken of the type of investment firm in question and the type of activities they carry out, in particular in relation to the establishment of the minimum social capital provided for in paragraph (d) above.

CHAPTER III

Exercise Conditions

Article 68.

1. The amendments to the social statutes of investment firms shall be subject to the procedure for the authorisation of new entities, subject to the exceptions which they regulate, but the application for authorization must to be resolved, notifying the parties concerned, within two months of their submission. Where the application is not settled within this period, it shall be deemed to be estimated. All of them must be registered in the Commercial Register and in the National Securities Market Commission.

2. Any alteration of the specific investment services and complementary activities initially authorised shall require prior authorisation granted in accordance with the procedure for the authorisation of new entities, subject to a report from the National Commission. of the Securities Market and to register in the Registers of this Commission, in the form that it is regulated. Authorisation may be refused if the institution does not comply with Articles 67 and 70 and, in particular, if it considers the administrative and accounting organisation of the institution, its human and technical means or its control procedures insufficient. internal.

If, as a result of the authorized alteration, the investment firm restricts the scope of its activities, it shall, where appropriate, settle the outstanding transactions or transfer the securities, instruments and cash that would have been entrusted to him by his clients. The National Securities Market Commission may agree on appropriate precautionary measures, including the intervention of the settlement of pending transactions.

Article 69.

1. For the purposes of this Law, significant participation in a Spanish investment firm shall be understood to be that which reaches, directly or indirectly, at least 5 per 100 of the capital or the voting rights of the company.

It will also have the consideration of significant participation, which, without reaching the percentage indicated, will allow to exert a noticeable influence on the company. It may be determined, taking into account the characteristics of the different types of investment firm, when it is assumed that a person may exercise such significant influence.

2. The provisions of this Title for investment firms shall be without prejudice to the application of the rules on takeover bids and information on significant shareholdings contained in this Act.

3. Any natural or legal person seeking to acquire, directly or indirectly, a significant participation in an investment firm must inform the National Securities Market Commission thereof, indicating the the amount of such participation, the mode of acquisition and the maximum period for the operation to be carried out.

4. It must also inform the National Securities Market Commission in advance, in the terms indicated in the previous number, who intends to increase, directly or indirectly, its significant participation in such a way as to capital or voting rights reach or exceed one of the following levels: 10, 15, 20, 25, 33, 40, 50, 66, or 75 per 100. In any event, this obligation will also be enforceable to the person who, by virtue of the proposed acquisition, would be able to control the investment firm.

5. It is understood that there is a control relationship for the purposes of this Title provided that it is one of the assumptions provided for in Article 4 of this Law.

6. The National Securities Market Commission shall have a maximum period of two months, from the date on which it has been informed, in order, where appropriate, to oppose the acquiring acquisition, as provided for in Article 67. If the Commission fails to act within that period, it shall be deemed to accept the claim. Where there is no opposition from the National Securities Market Commission, the National Securities Market Commission may fix a maximum period of time other than the one requested to carry out the acquisition.

7. In the event that, as a result of the acquisition, the investment firm was to be placed under some of the control arrangements provided for in Article 66 (3), the National Securities Market Commission must consult the competent supervisory authority.

The National Securities Market Commission should suspend its decision or limit its effects when under the acquisition the investment firm will be controlled by an authorized company in a non-State. and the circumstances provided for in Article 66 (4) are given.

8. Where an acquisition of the regulated in the preceding numbers is carried out without having previously informed the National Securities Market Commission, having informed him, but without having elapsed the three months provided for in the The following Article shall be used, or with the express opposition of the Commission:

(a) In any event and automatically, no political rights may be exercised corresponding to the shares acquired irregularly. If, however, they will be exercised, the corresponding votes will be null and the agreements will be impugable in court, as provided for in the Law of Companies Anonymous, being legitimized to the effect the National Commission of the Market Values.

(b) The suspension of activities provided for in Article 75 may be agreed.

(c) If necessary, the intervention of the undertaking or the replacement of its administrators, as provided for in Title VIII, shall be agreed.

In addition, the penalties provided for in Title VIII of this Law may be imposed.

9. Any natural or legal person who, directly or indirectly, intends to cease to have a significant participation in an investment firm; that he intends to reduce his participation in such a way that it transfers some of the levels provided for in number 4; or which, by virtue of the intended disposal, may lose control of the undertaking, must inform the National Securities Market Commission in advance, indicating the amount of the proposed operation and the time limit laid down for it. to perform it.

Failure to comply with this duty of information shall be sanctioned as provided for in Title VIII of this Act.

10. Investment firms shall communicate to the National Securities Market Commission, as soon as they are aware of this, the acquisitions or disposals of holdings in their capital which transfer some of the levels indicated in the the previous numbers. Do not register, those companies, in their Book of Actions the transmissions of actions that need authorization, in accordance with this Law, until the authorization of the National Commission of the Market of Values is justified.

11. Where there are substantiated and substantiated reasons for the fact that the influence exercised by persons holding significant participation in an investment firm may be detrimental to the sound and prudent management of the undertaking, The Minister for Economic Affairs and Finance, on a proposal from the National Securities Market Commission, will adopt some or some of the following measures:

(a) Those provided for in points (a) and (b) of number 8, while the suspension of voting rights may not exceed three years.

b) By way of exception, revocation of the authorization.

In addition, sanctions may be imposed as provided for in Title VIII of this Law.

Item 70.

1. Investment firms shall comply with the obligations laid down in this Law and their implementing rules and in particular:

(a) comply with the requirements laid down in Article 67 for the purposes of the authorization, in the form that it is regulated.

Reglamentarily will determine how to communicate those changes in the conditions of the authorization that may be relevant to the supervisory work of the National Securities Market Commission and the powers of is.

b) Take the records of the operations in which they intervene in the manner that is regulated.

(c) Inform the National Securities and Exchange Commission, in the form that it regulates, of the transactions that they carry out, in particular, when they are subject to securities or financial instruments traded in official secondary markets.

(d) To maintain at all times a volume of own resources provided to that of its activity and expenses of structure and to the risks assumed and, in general, to comply with the solvency rules to be established. This obligation shall be extended to the consolidable groups provided for in Article 86.

The elements that make up the own resources can be established, the minimum levels of own resources required and the deductions that apply; the minimum levels of own resources (a) the risk classes under cover and their different weights; the quantitative criteria and rules that directly or indirectly limit certain categories of investments, operations or positions involving high risks; in particular, those arising from permanent portfolio holdings which maintain companies and securities agencies; the consequences of non-compliance with the rules to be established, including the limitation of profit-sharing, and, in general, all measures necessary to ensure the the solvency of investment firms and the solvency of the consolidated groups in which they are integrated.

e) Maintain minimum investment volumes in certain categories of liquid and low-risk assets which, in order to safeguard their liquidity, are regulated in a regulatory manner.

f) Participate in an Investment Guarantee Fund as provided for in Title VI of this Law, informing its clients of their level of coverage.

g) To inform the National Securities Market Commission, in the form and with the periodicity that it regulates, on the composition of its shareholders or the changes it establishes. Such information shall necessarily include the information relating to the participation of other financial institutions in their capital, irrespective of the amount. It will be determined in which cases the information provided will be public.

h) Take appropriate measures, in relation to the values and funds entrusted to them by their clients, to protect their rights and prevent the improper use of those rights. The internal control mechanisms to be completed by the investment firm to properly comply with this obligation shall be regulated.

2. It shall also be reported, and in the same cases as those referred to in the previous No 1, to the Autonomous Communities with powers in the field and in respect of the operations carried out in an official secondary market. autonomic.

3. Investment services companies are subject to the following operating limitations:

(a) They may not assume functions of management companies of collective investment institutions, pension funds or asset-securitisation funds.

(b) Securities companies which provide the investment portfolio management service, or which participate in the capital of a portfolio management company or other entity providing such a service, may only trade on a per-account basis. itself with the holders of the securities managed by it, where it is explicitly stated in writing that the latter have known such a circumstance before the completion of the relevant transaction.

(c) Securities agencies and holding companies may acquire securities on their own account only: in order to maintain their own resources in a stable manner, to maintain holdings, where they have been issued by entities whose activity involves the extension of their own business, and, in general, in those cases where the participation serves to the proper development of the activities that are their own, in accordance with this Law. The conditions to be met by such participations shall be determined.

d) Your financing, when you review different forms of participation in your capital, must be in line with the constraints that you regulate.

4. In any consolidated group of investment firms, each of the integrated financial institutions, and in particular the required entity referred to in Article 86 (4), shall take the necessary measures to resolve the appropriately potential conflicts of interest between clients of different entities in the group.

CHAPTER IV

Cross-Border Performance

Article 71.

1. Investment firms authorised in another Member State of the European Union may carry out in Spain either by opening a branch or by means of the freedom to provide services, the activities referred to in the Article 63. It is essential that the authorisation, the statutes and the legal status of the entity enable it to carry out the activities it intends to carry out.

In the exercise of their activity in Spain they must respect the provisions laid down for reasons of general interest, the rules of conduct, including the physical presence on the markets whose form of negotiation requires them, and the rules for the management of markets which, where appropriate, are applicable.

The requirements and the procedure for Community investment services companies to be able to operate in Spain will be determined. In no case may the establishment of branches or the freedom to provide services referred to in the first subparagraph of this issue be subject to the obligation to obtain an additional authorization or to provide a fund of allocation, or any other measure having equivalent effect.

2. Undertakings for non-Community investment services which intend to open a branch in Spain shall be subject to the prior authorization procedure provided for in Chapter II of this Title with the adjustments which they may regulate. establish. If they intend to provide services without a branch, they must be authorised in the form and conditions which they regulate. In both cases, the authorization may be refused, or conditional, for prudential reasons, for not giving an equivalent treatment to the Spanish entities in their country of origin, or for not being assured the fulfillment of the rules of ordination and discipline of the Spanish stock markets.

Non-Community investment services companies operating in Spain shall be subject to this Law and its implementing rules.

3. A Spanish investment firm intending to open a branch abroad, or to provide services without a branch in a State which is not a member of the European Union, must obtain prior authorisation from the National Commission. of the Stock Market. The provision of services without a branch in another Member State shall only be communicated to the National Securities Market Commission in advance, specifying the activities to be carried out.

The requirements and the procedure for investment firms to be able to operate in another State shall be determined, taking into account whether or not the investment firm belongs to the European Union.

4. The creation by an investment firm or a group of Spanish investment service companies of an investment service company will also be subject to prior authorisation from the National Securities Market Commission. foreign investment, or the acquisition of a holding in an existing undertaking, where that foreign investment firm is to be incorporated or is domiciled in a State which is not a member of the European Union. The information to be included in the application will be determined.

The National Securities Market Commission, within three months of receipt of all the required information, will resolve the request. Where the application is not settled within the time limit, it may be deemed to be dismissed. For the effectiveness of the alleged dismissal, the certification of the alleged act referred to in Article 44 of the Law of Legal Regime of Public Administrations and of the Common Administrative Procedure shall be requested.

The National Securities Market Commission may also refuse the request: when, taking into account the financial situation of the investment firm or its management capacity, it considers that the project may affect the negatively; when, in view of the location and characteristics of the project, the effective supervision of the group, on a consolidated basis, by the National Securities Market Commission or, where the activity of the dominated entity does not remain, cannot be ensured. subject to effective control by a national supervisory authority.

CHAPTER V

Societal operations and revocation of investment services companies

Article 72.

The transformation, merger, division and segregation of a branch of activity, as well as other social modification operations carried out by an investment firm or leading to the creation of a business of investment services, require prior authorization, in accordance with the procedure laid down in Article 66, with the adjustments to be made to them which are regulated, without in any event the social alteration of any of the the requirements for the establishment of the investment services undertakings to be legal or regulatory established.

Article 73.

The authorisation granted to an investment firm or to one of the entities referred to in Article 65.2 of this Law or to a branch of an entity based in non-Community States may be revoked in the Assumptions:

(a) If you do not start the authorized activities within twelve months of the date of notification of the authorization, for cause attributable to the person concerned.

b) If you expressly waive the authorization, regardless of whether it is transformed into another entity or agrees to its dissolution.

(c) If it interrupts, in fact, the specific activities authorised for a period of more than six months.

d) If for a year it performs a lower than normal volume of activity that is regulated by regulation.

e) If you are in breach of any of the requirements for obtaining the authorization, unless otherwise provided for in connection with the above requirements.

(f) In the event of a serious, manifest and systematic breach of the obligations laid down in Article 70.1 (b), (d) and (h) of this Law.

g) When the assumption is provided for in Article 69 (11).

(h) If the investment firm or the person or entity is, as the case may be, declared judicially in contest, in the state of bankruptcy, an application for a suspension of payments is legally admitted.

i) As a sanction, as provided for in Title VIII of this Act.

(j) If the investment firm ceases to belong to the Investment Guarantee Fund provided for in Title VI.

k) When any of the causes of forcible dissolution provided for in Article 260 of the Companies Act, or in Article 104 of the Limited Liability Company Act, are to be found.

l) If you have obtained the authorization by virtue of false statements or by other irregular means.

Article 74.

1. The revocation of the authorisation shall be in accordance with the common procedure laid down in Title VI of the Law on the Legal Regime of Public Administrations and the Common Administrative Procedure, with the following specialties:

a) The initiation agreement and the instruction shall be the responsibility of the National Securities Market Commission.

(b) The resolution of the file shall be the responsibility of the Minister for Economic Affairs and Finance, on a proposal from the National Securities Market Commission, or directly to this body in the cases referred to in (b) and (j) of the Article 73.

2. However, where the cause of revocation is one of the reasons set out in points (a), (b) or (h) of the previous Article, it is sufficient to give the interested party a hearing. In the cases referred to in points (i) and (j), the specific procedures provided for in this Law shall be followed.

3. The resolution that agrees to the revocation shall be immediately enforceable. Once notified, the service company concerned will not be able to carry out any new operations. The resolution must be registered in the Commercial Register and in the National Securities Market Commission, and the Commission of the European Union is aware. It will also be published in the "Official State Gazette", which has since then produced effects vis-à-vis third parties.

4. The Minister of Economy and Finance may agree, on a proposal from the National Securities Market Commission, that the revocation will entail the forced dissolution of the entity. In these cases, the National Securities and Exchange Commission and the governing bodies of the official secondary markets, on its own or at the request of the latter, if they are affected, may, in the interests of the protection of the investors and the regular functioning of the securities markets, to agree on all the prudential measures that are considered relevant and, in particular:

(a) Agree to the transfer to another entity of the marketable securities, financial instruments and cash that would have been entrusted to it by its clients.

b) Require some specific guarantee to the liquidators appointed by the company.

c) Name the liquidators.

d) Intervening settlement operations. If, pursuant to this provision, or in other provisions of this Law, it is necessary to appoint liquidators, or auditors of the winding-up operation, to apply, with the appropriate adaptations, the provisions of Title III of Law 26/1988, of Discipline and Intervention of Credit Entities.

5. Where the revocation does not lead to the dissolution of the investment firm, it shall proceed in an orderly manner to settle the outstanding transactions and, where appropriate, to transfer the securities, financial and cash instruments. that his clients would have trusted him. The National Securities Market Commission may agree on appropriate precautionary measures, including the intervention of the settlement of pending transactions.

6. Where an investment firm agrees to be wound up by any of the causes provided for in Article 260 of the Companies Act, or in Article 104 of the Limited Liability Company Act, the authorization, and the National Securities Market Commission may agree to the orderly liquidation of any of the measures mentioned in issue 4 of this article.

7. The revocation of the authorisation granted to a non-Community investment firm shall determine the revocation of the authorisation of the operating branch in Spain.

8. In the event that the National Securities Market Commission becomes aware that an investment firm of another Member State of the European Union operating in Spain has been revoked the authorisation, it shall immediately agree to the appropriate measures to ensure that the institution does not initiate new activities and the interests of investors are safeguarded. Without prejudice to the powers of its supervisory authority and in collaboration with it, the National Securities Market Commission may agree on the measures provided for in this Law to ensure proper settlement.

Article 75.

The Minister of Economy and Finance, on a proposal from the National Securities Market Commission, may suspend, in full or in part, the effects of the authorization granted to an investment firm. When the suspension is partial, it will affect some activities, or the extent to which they were authorized.

Article 76.

1. The suspension referred to in the previous Article may be agreed upon when any of the following assumptions are made:

a) Opening a sanctioning case for serious or very serious infringement.

(b) Where any of the causes referred to in points (e), (f), (h), (j), (l) or (l) of Article 73 are provided, as long as the revocation procedure is substantiated.

c) When the assumption is provided for in Article 69, number 8.

d) When the company does not make contributions to the Investment Guarantee Fund provided for in Title VI.

e) As a sanction, as provided for in Title VIII.

2. The suspension shall be agreed only where, in the case of one of the reasons set out in the preceding number, the measure is necessary to ensure the solvency of the institution or to protect investors. It shall not be agreed, except in the case of a penalty, for a period exceeding one year, which may be extended by another year.

3. The measure of suspension of activities shall be agreed and shall produce its effects as provided for in Article 74, except where it is assumed to have a specific regime in this Law.

Article 76a.

1. Where an investment firm is present in suspension of payments in accordance with the Law of 26 July 1922, the appointment of auditors shall be made by the technical staff of the National Securities Market Commission or in other Member States. persons proposed by the same. To this end, the Court shall officiate the National Commission, which shall communicate the identity of the persons to be appointed.

The designation of the person or persons to act as administrators shall likewise be performed, where the assumptions of the first paragraph of Article 6 of the said Law on the Suspension of Payments are given and the suspension and replacement of the administrative bodies of the institution concerned.

The remuneration of the controllers or administrators may be anticipated by the National Securities Market Commission when exceptional circumstances are present and this is the only way to ensure the orderly continuation of the procedure. The National Securities Market Commission shall not enjoy special privileges for the collection of the amounts it would have anticipated.

2. Where an investment firm is formally declared bankrupt, in accordance with the rules of the Commercial Code and the Civil Procedure Act, the appointment of a commissioner and a depositary shall be on a personal basis. (a) technical assistance from the National Securities Market Commission or other persons proposed by the National Securities Market Commission. To this end, the Court will officiate the National Commission, which will communicate the identity of the persons to be appointed. The appointment of at least one of the syndicates shall be made by the judge, on a proposal from the management company of the Investment Guarantee Fund, once the latter has satisfied its compensation.

The provisions of the previous number on the remuneration of the Interventors and administrators of the institutions shall apply to the commissioners and depositaries of the failing entities.

3. The National Securities Market Commission shall be entitled to apply for the declaration of the bankruptcy of the investment firm, provided that the accounting statements submitted by the institutions or the checks carried out by the company, it turns out that the liability of the company is superior to its assets and that the company is in an inability to deal with its creditors.

If the National Securities Market Commission has agreed to replace the entity's management body, interim administrators may apply for both the bankruptcy filing and the bankruptcy filing. payments from the entity.

In any of the cases referred to in the preceding paragraphs, ratification of the application by the General Board of the entity shall be required, and the appointed interim administrators, if applicable, may be appointed commissioners, depositaries, syndicates or interventors.

4. Prior to the declaration of the bankruptcy of an investment firm, whether it has been requested by the institution itself or by a legitimate creditor, the Court before which the procedure is followed shall request a report from the National Securities Market Commission on the situation of the entity. The report shall be issued within a maximum of seven working days and shall be based on the accounting statements which are periodically referred to by the said entities and on any other documentation or information available to the Commission. National of the Securities Market. Together with that report, the Court shall send to the Court a copy of the accounts, public and reserved, of the annual accounts and the audit reports for the last two financial years, unless the institution has not sent them or (a) the information referred to in Article 1 (1) of Directive (EU) No. 1 of the European Parliament and of the Commission of the European Parliament and of the Commission The Court, when deemed necessary to adopt its resolution, may request that the National Securities Market Commission refer to it accounting information relating to periods prior to that indicated.

5. The regulation provided for in this article will also be applicable in the case of branches in Spain of foreign service companies, and any of the cases referred to in this connection. This is without prejudice to the powers conferred on the judicial and administrative authorities of foreign authorities and the cooperation of the National Securities and Exchange Commission and other Spanish authorities. '

Article 6. Amendments to Titles VI and VII of Law 24/1988.

One. Title VI of Law 24/1988 is renamed "Investment Guarantee Fund", with the following text:

" TITLE VI

Investment Guarantee Fund

Article 77.

1. One or more investment guarantee funds shall be established to ensure the coverage referred to in paragraph 7 of this Article on the occasion of the performance of the services provided for in Article 63, as well as of the additional activity of deposit and administration of financial instruments.

2. Investment guarantee funds shall be set up as separate assets, without legal personality, whose representation and management shall be entrusted to one or more managing companies, which shall have the form of a public limited liability company, and the capital of which shall be (a) distribute among the investment services firms attached to the same proportion as they make contributions to their respective funds.

3. The budgets of the management companies, their social statutes, as well as their modifications, will require the prior approval of the National Securities Market Commission. The budget of the funds to be drawn up by the management companies shall be subject to the same approval.

It shall apply to the incorporation or termination of the shareholders and the adaptation of their shares to the changes in the capital that occur, the procedure provided for in the third, fourth, fifth and sixth subparagraphs of the Article 48 of this Law, with the necessary adaptations. The result of this adaptation process will be communicated to the National Securities Market Commission.

4. The appointment of the members of the Board of Directors and of the Director or Directors-General of the management companies shall require the prior approval of the National Securities Market Commission.

A representative of the National Securities Market Commission, with a voice and without a vote, will be included in the Board of Directors. In addition and with the same functions, each Autonomous Community with competence in the field in which there is an official secondary market shall appoint a representative on that Board of Directors.

The National Securities Market Commission may suspend any agreement of the Board of Directors that is considered contrary to those rules and to the own ends of the fund.

5. All Spanish investment firm companies must join the investment guarantee funds. Branches of foreign companies will be able to join if they are from the European Union. The system of accession of branches of undertakings of a third State shall be in accordance with the terms to be laid down in regulation.

The funds shall cover the operations carried out by the undertakings attached to them within or outside the territory of the European Union, as appropriate for each type of undertaking, in the terms which it regulates set.

It will also be regulated:

a) The number of funds and managers that are created.

(b) The rules determining the accession of Spanish investment service companies to the various funds that are set up.

(c) The specific regime of accession of newly created investment service companies.

(d) The exceptions for the entry into the fund of those investment firms that do not incur the risks mentioned in the number 1 of this Article.

6. An investment firm may only be excluded from the fund to which it belongs when it fails to comply with its obligations. The exclusion shall entail the revocation of the authorisation granted to the undertaking. The guarantee will reach customers who have made their investments up to that point.

It will be competent to agree to the exclusion of the National Securities Market Commission, prior to the report of the management company of the fund. Before taking this decision, the necessary measures, including the requirement of surcharges on non-paid dues, must be agreed for the investment firm to fulfil its obligations. The suspension provided for in Article 75 may also be agreed by the National Securities Market Commission. The fund management company will collaborate with the National Securities Market Commission to achieve the best effectiveness of the agreed measures.

The exclusion agreement shall provide adequate dissemination to ensure that the clients of the investment firm concerned have immediate knowledge of the measure taken.

7. Investors who are unable to obtain directly from an entity attached to a fund the repayment of the amounts of money or the return of the securities or instruments belonging to them may apply to the management company for the execution of the collateral provided by the fund, where any of the following occurs:

a) That the entity has been declared bankrupt.

b) That the entity's payment suspension declaration is judicially requested.

(c) That the National Securities Market Commission declares that the investment firm cannot, apparently and for reasons directly related to its financial situation, fulfil its obligations under the investors, provided that investors had asked the investment firm for the return of funds or securities entrusted to it and would not have been satisfied by it within a maximum of 21 days.

Once the guarantee is actually made by the fund, it will be subrogated to the rights that the investors have in front of the investment firm, up to an amount equal to the amount that would have been paid to them as compensation.

In the event that the securities or other financial instruments entrusted to the investment firm are restored by the investment firm after payment of the amount secured by the fund, it may be resarted of the amount which is satisfied, in whole or in part, if the value of those to be returned is greater than the difference between those entrusted to the investment firm and the amount paid to the investor. To this end, it is entitled to dispose of them in the amount resulting from it, in accordance with the requirements laid down in regulation.

8. The Government is empowered to regulate, in all the provisions of this Law, the operating system of the investment guarantee funds and the extent of the guarantee they will provide. In particular you can determine:

(a) The amount of the guarantee and the form and time period in which it will be effective.

(b) Investors excluded from the guarantee, including those of a professional or institutional nature and those who are particularly related to the non-compliant undertaking.

(c) The budgetary and financial arrangements, both in the management companies and in the investment guarantee funds, which will regulate, among other things, their potential for indebtedness and the way in which the former can pass on their operating expenses in the seconds.

d) The investment regime for resources that integrate the wealth of funds, which will be inspired by the principles of profitability and liquidity to quickly meet their commitments.

e) The rules for determining the overall amount of contributions to be made by the attached entities, which shall be sufficient for the coverage of the security provided.

(f) The criteria for the allocation of the institutions to the overall contribution to be fixed, including the number of customers covered and the volume of money or instruments eligible for restitution, as well as the frequency with which they will have to make the contributions and the recharging scheme for late payment.

g) Deleted. "

Two. A new wording is given to Article 78, which becomes the following:

" Investment services companies, credit institutions, collective investment institutions, issuers and, in general, how many persons or entities exercise, directly or indirectly, related activities with the securities markets, they must comply with the following rules of conduct:

(a) The rules of conduct contained in this Title.

b) the codes of conduct which, under the rules referred to in paragraph (a) above, are approved by the Government or, with its express rating, by the Minister for Economic Affairs and Finance, on a proposal from the National Commission of the Stock Market.

c) Those contained in their own internal regulations of conduct. "

Three. Article 79 shall be worded as follows:

" Investment services companies, credit institutions and persons or entities acting on the Securities Market, either receiving or executing orders and advising on securities investments, shall comply with the following principles and requirements:

a) To engage with diligence and transparency in the interests of their clients and in defense of the integrity of the market.

b) Organize in such a way as to minimize the risks of conflicts of interest and, in a situation of conflict, to give priority to the interests of their clients, without giving priority to any of them.

c) Develop orderly and prudent management, taking care of clients ' interests as if they were their own.

d) To provide adequate means to carry out its activities and to have appropriate internal controls in place to ensure prudent management and to prevent non-compliance with the duties and obligations of the legislation The Stock Market imposes on them.

e) Ensure that they have all the necessary information about their clients and keep them always properly informed. "

Four. Article 81 (2) is amended as

:

" 2. Any information of a specific nature relating to one or more securities and to one or more issuers of securities, which has not been made public and which, if made or made public, could influence or have been disclosed shall be considered to be inside information. appreciably influenced the listing of such securities.

Everyone who has any inside information must refrain from self-executing or otherwise directly or indirectly executing any of the following:

a) Prepare or perform any type of market operation on the securities to which the information relates.

b) Communicate such information to third parties, except in the normal exercise of their work, profession or position.

(c) Recommend to a third party that acquires or cedes securities or makes another acquire or cedes them on the basis of such information. "

Five. Article 81 (3) is deleted.

Six. Article 83 shall have the following

:

" All investment firms, credit institutions and other entities acting, or providing investment advisory services, in the securities markets shall provide for the necessary measures to be taken in respect of ensure that the reserved or privileged information derived from the activity of each of its divisions or sections is not, directly or indirectly, within the scope of the staff of the institution itself providing its services in another sector of activity, so that each function is exercised autonomously. In addition, they shall take appropriate measures to ensure that no conflicts of interest arise in the decision-making process, both within the institution itself, and between entities belonging to the same group. '

Item seventh. Amendments to Title VIII of Law 24/1988.

The following amendments are made to Title VIII of the Law:

One. New wording is given to Article 84:

" are subject to the supervision, inspection and sanction regime established in this Law, by the National Securities Market Commission:

1. The following persons and entities governed by this Law:

a) The governing bodies of official secondary markets or not, with the exclusion of the Banco de España.

(b) the Securities Clearing and Settlement Service, the Stock Exchange Company and the companies holding the ownership of all the shares of the bodies referred to in point (a), as well as other clearing and settlement bodies; and the liquidation of the markets which are created under the provisions of this Law.

c) Spanish investment services companies, extending this competence to any office or center within or outside the national territory.

(d) Non-Community investment services companies operating in Spain.

(e) Entities which are believed to be covered by the provisions of Article 65 (2), as well as the agents and proxies referred to in Article 65 (3).

f) The management companies of the investment guarantee funds.

g) Who, not being included in the preceding letters, have the status of a member of a secondary market, or of the entity that compense and liquorates their operations.

2. The following persons and entities, in terms of their actions related to the Stock Market:

a) The issuers of values.

b) Credit institutions.

(c) Investment service undertakings authorised in another Member State of the European Union operating in Spain.

(d) Other natural or legal persons as soon as they may be affected by the rules of this Law and its provisions for development.

3. Persons resident or domiciled in Spain who directly or indirectly control investment firms in other Member States of the European Union, within the framework of the partnership with the authorities responsible for the supervision of such undertakings, as well as holders of significant shareholdings for the purposes of compliance with the provisions of Article 69 of this Law.

4. Entities that are part of the consolidated groups of investment services companies referred to in Article 86 of this Law, to the sole effects of the compliance at the consolidated level of the requirements of own resources and of the limitations that may be established on investments, operations or positions involving high risks.

5. Institutions which form part of the consolidated groups of which the entities referred to in points (a) and (b) of the preceding number 1 are dominant, to the sole effect of the fulfilment of the obligation to consolidate their accounting and financial statements. the limitations that may be established in relation to their activity and balance of assets.

6. The natural persons and non-financial institutions referred to in Article 86, number 9, for the sole purpose of that number.

7. Any person or entity for the purpose of verifying whether it infringes the name and activity reserves provided for in Articles 64 and 65.

In the case of legal persons, the competencies that correspond to the National Securities Market Commission according to the above numbers may be exercised on those who hold positions of administration, management, or the same.

The provisions of this Article shall be without prejudice to the powers of supervision, inspection and sanction that correspond to the Autonomous Communities that have them attributed to the governing bodies of markets. (a) secondary level of autonomy and, in relation to transactions on securities admitted to trading only in those securities, on the other persons or entities related to the first two previous numbers. For the purposes of the exercise of those powers, the relevant provisions of this Title shall be of a basic nature, except for references to state bodies or bodies. The National Securities Market Commission may conclude agreements with Autonomous Communities with competence in the field of securities markets in order to coordinate their respective actions. "

Two. Article 85 shall be worded as follows:

" 1. The National Securities Market Commission may obtain from the natural and legal persons listed in Article 84 as much information as it deems necessary on the matters covered by this Law. In order to obtain such information or to confirm its accuracy, the Commission may carry out any necessary inspections. The natural and legal persons covered by this paragraph shall be required to make available to the Commission any books, records and documents, whatever their support, is considered to be precise, including software and software. magnetic, optical or any other class.

Testing and research actions may be developed, at the choice of the services of the National Securities Market Commission:

a) In any office, office, or dependency of the inspected entity or its representative.

b) On the premises of the National Securities Market Commission.

Where the verification and investigation actions are carried out in the places referred to in paragraph (a) above, the working day of the same shall be observed, without prejudice to the fact that agreement may be reached in other places. hours and days.

2. In the case of investment firms authorised in other Member States of the European Union operating in Spain, the duty to provide information shall only be extended to those aspects relating to provisions laid down for reasons of general interest, rules of conduct and rules of management of the markets, as well as for statistical purposes. These information will be the same as those required of Spanish investment firms for all these purposes.

Without prejudice to the power of the National Securities Market Commission to inspect branches on national territory of Community undertakings, the competent authorities of the Member State which has granted the The authorisation of one of these companies may be inspected by their branches in Spain, following communication to the National Securities Market Commission.

The National Securities Market Commission shall inform the competent authorities of the Member States that have granted the authorization to an investment firm operating in Spain any measure a sanction adopted against the company or involving a restriction on its business.

3. The National Securities Market Commission may inspect branches of Spanish investment firms established in other Member States of the European Union, subject to prior notification to the competent authorities of such companies. States.

4. When Spanish investment firms operate in the securities markets of other Member States or Community firms, the National Securities Market Commission will collaborate closely with the Spanish market. competent authorities for the effective exercise of their respective powers. When the National Securities Market Commission exercises its powers over foreign investment services companies, it will be able to do so with the scope provided for in this Law for Spanish entities.

5. The provisions of numbers 2 to 4 above shall also apply to Community credit institutions authorised to operate on the securities markets.

6. The National Securities Market Commission may require the persons and entities listed in Article 84 to make public the information that it considers relevant to its activities related to the Securities Market or that may influence on this. Failure to do so directly will be done by the National Securities Market Commission itself. "

Three. Article 86 is thus left:

" 1. The individual and consolidated accounts and management reports for each financial year of the institutions referred to in Article 84 (1) shall be approved within four months of the end of the year of the year. corresponding general meeting, after audit of accounts.

2. Without prejudice to the provisions of Title III of Book I of the Commercial Code, the Minister of Economy and Finance is empowered and, with his express rating, the National Securities Market Commission, for, prior to the report of the Institute of Accounting and Audit of Accounts, establishing and modifying in relation to the entities mentioned in the previous number the accounting rules and the models to be adjusted their financial statements, as well as those related to the compliance of the coefficients to be established, the frequency and detail with which the data is to be established they must be supplied to the Commission or made public in general by the entities themselves. This power shall have no more restrictions than the requirement that the advertising criteria be homogeneous for all entities of the same category and similar for the various categories. The Minister of Economy and Finance is also empowered and, with his express rating, the National Securities Market Commission, to regulate the records and documents to be carried by investment firms, as well as, in relation to with their securities market operations, the other entities referred to in Article 65.

3. The Minister of Economy and Finance and, with his express rating, the National Securities Market Commission, prior to the report of the Accounting and Audit Institute of Accounts, will have the same powers as the previous number in relation to the with the consolidated groups of investment firms referred to in the following number and with the consolidable groups whose parent entity is one of the groups referred to in points (a) and (b) of Article 84 (1

.

4. In order to comply with the minimum levels of own resources and limitations required under Article 70 or, where appropriate, to comply with the provisions of Article 87, investment firms shall consolidate their states. accounting with those of the other investment services firms and financial institutions which constitute a unit of decision, as provided for in Article 4. A group of financial institutions shall be deemed to be a consolidated group of investment services undertakings when any of the following circumstances arise:

a) That an investment services company control the other entities.

(b) the dominant entity is an entity whose principal activity is to have holdings in investment services companies.

(c) That a natural person, a group of natural persons acting systematically in concert, or a non-consolidated entity under this Law, controls a number of entities, all of which are services undertakings of investment.

The obligation to formulate and approve the consolidated accounts and the consolidated management report, and to proceed to its deposit, shall be the responsibility of the dominant entity; however, in the case referred to in point (c) of the present paragraph, the required entity shall be designated by the National Securities Market Commission among the investment services companies of the group.

The consolidated accounts and consolidated management report of investment firm groups shall be subject to the audit of auditors in accordance with Article 42 of the Trade Code and other rules applicable. However, the appointment of auditors shall in any event be the responsibility of the entity required to formulate and approve those accounts and report in accordance with the preceding paragraph.

5. The cases in which, by the nature of the entities forming the group or the absence of potential injury to investors or the regular functioning of the stock markets are not, shall be established. (a) the consolidation obligation referred to in the previous point. In such cases, investment firms belonging to such groups shall use the definition of own funds which they regulate, individually comply with the requirements and limits laid down for them. (a) to establish systems for the supervision and control of sources of capital and the financing of the other financial institutions of the group which would prevent the financial situation of such undertakings from being harmed, National Securities Market Committee of the organization of such systems and their results.

The National Securities Market Commission may in these cases, even if the consolidation obligation does not apply, apply to investment firm companies that are part of the group, information relating to the risks of the group as a whole, such as large exposures, participations in non-financial or other companies; as well as imposing restrictions on capital transfers of investment firms with the other entities of the group. This is without prejudice to the powers conferred on the National Securities Market Commission by point 9 of this Article.

Also, the types of financial institutions to be included in the consolidated group of investment services companies referred to in the previous point shall be determined.

6. They will be part of the consolidable group:

a) Investment services companies.

(b) Credit institutions, without prejudice to the second subparagraph of Article 8 (3) of Law 13/1985.

c) Investment companies would be mobile.

(d) the management companies of collective investment institutions, the management companies of securitisation funds, as well as the management companies of pension funds, the sole object of which is the management and management of the above funds.

e) Venture capital companies and venture capital fund management companies.

(f) Entities whose principal activity is the holding of shares or units.

In addition, they will be part of the consolidated group of investment firm companies whose main activity involves the extension of the business of some of the entities included in the consolidation, or include the provision to these ancillary services.

The National Securities Market Commission may authorize the individual exclusion of an entity from the consolidable group of investment services companies, when any of the assumptions set out in number 2 of the Article 43 of the Trade Code, or where the inclusion of that entity in the consolidation is inappropriate for the purposes of the objectives of the supervision of that group.

7. An insurance institution shall not be a party to any consolidated group of investment service undertakings.

8. Regulation may be regulated in the manner in which the rules laid down in this Law on own resources and supervision of the consolidable groups shall be applicable to the sub-groups of investment service undertakings, on the understanding of such those that, including entities of such nature, are in turn integrated into a larger, consolidated group.

Similarly, the mode of subgroup integration in the group and collaboration between the supervisory bodies can be regulated.

9. The National Securities Market Commission may require institutions subject to consolidation as much information as necessary to verify the consolidations made and to analyze the risks assumed by the entity as a whole. consolidated, as well as, with the same object, inspect your books, documentation, and records.

When of the economic, financial or managerial relationships of an investment firm with other entities, the existence of a control relationship within the meaning of this Article shall be presumed, without institutions have carried out the consolidation of their accounts, the National Securities Market Commission may request information from or inspect those entities for the purposes of determining the source of the consolidation.

10. The National Securities Market Commission may request information from natural persons and inspect non-financial institutions with which there is a control relationship as provided for in Article 4 of this Law for purposes of to determine its impact on the legal, financial and economic situation of investment firms and their consolidable groups.

11. Compliance by the consolidated group with the provisions of the preceding numbers shall not exempt companies or securities agencies from individually complying with their own resource requirements.

12. Where there are foreign entities which may be incorporated into a consolidated group of investment firms, the scope of the supervision on a consolidated basis by the National Market Commission shall be regulated. Values, taking into account, among other criteria, the Community or non-Community character of the entities, their legal nature and degree of control.

13. The consolidation obligation laid down in Article 42 of the Code of Commerce shall be understood as being fulfilled by the consolidation referred to in the earlier numbers by those groups of companies whose dominant entity is a service undertaking. (a) investment, or by others who have a dominant company whose principal activity is the holding of shares in investment firms. That duty shall also be understood as being fulfilled for the groups of the governing bodies of the official secondary markets and the Securities Clearing and Settlement Service.

This is without prejudice to the obligation to consolidate one another, which may exist for subsidiaries other than financial institutions, where appropriate in accordance with Article 42 of the Trade Code. "

Four. Article 87 is amended as follows:

" 1. Where other types of entities subject to specific requirements of own resources exist in a consolidated group of investment firms, the group shall, for the purposes of the adequacy of such resources, be the highest of the The following measures:

(a) The necessary to achieve the minimum levels to be established as provided for in Article 70 (1) (d).

(b) The sum of the own resources requirements established for each class of entity members of the group, calculated on an individual or sub-consolidated basis according to their specific rules.

2. Compliance by the group with the provisions of the preceding number shall not exempt financial institutions from the financial institutions, whatever their nature, from individually fulfilling their own resources requirements. To this end, such entities shall be supervised on an individual basis by the body corresponding to its nature.

3. Any rule that is dictated in development of what this Law provides for and which may affect financial institutions subject to the supervision of the Banco de España or the Directorate General of Insurance will be given prior to the report of these agencies.

4. Provided that in a consolidated group of investment firms there are entities subject to supervision on an individual basis by a body other than the National Securities Market Commission, it is, in the exercise of the powers that This Law gives you the right to act in a coordinated manner with the supervisory body that in each case corresponds. The Minister for Economic Affairs and Finance may lay down the rules necessary to ensure proper coordination.

5. The Minister of Economy and Finance, after a report of the National Securities Market Commission, on a proposal from the Banco de España, may agree that a group of investment services companies in which one or more credit institutions are integrated eligible to join a deposit guarantee fund has the consideration of a consolidated group of credit institutions and is therefore subject to supervision on a consolidated basis by the Banco de España. '

Five. Two new initial paragraphs are introduced in Article 88, with the following wording:

" Without prejudice to Articles 84 and 87, the Bank of Spain shall exercise supervisory and inspection powers over members of the Public Debt Market in Annotations, the account holders in their own name and on managing entities, as well as on the activities related to the Securities Market carried out by entities registered in the Registers for which they are responsible, as referred to in Article 65.

In all cases of the confluence of supervisory and inspection powers between the National Securities Market Commission and the Banco de España, both institutions will coordinate their actions under the principle that the the solvency of the financial institutions concerned falls on the institution which maintains the relevant Register and that of the functioning of the securities markets corresponds to the National Securities Market Commission. '

Six. Article 90 shall remain as follows:

" 1. In the exercise of its supervisory and inspection functions provided for in this Law, the National Securities Market Commission shall collaborate with the authorities entrusted with similar functions in foreign states, and may subscribe to the to this effect collaboration agreements. In particular, it may communicate information relating to the management, management, solvency and ownership of investment firms, and other registered entities, as well as those which contribute to better supervision of the markets in question. values or serve to prevent, prosecute or punish irregular behavior.

Where the competent authorities do not belong to another Member State of the European Union, the supply of such information shall require that there be reciprocity and that the competent authorities are subject to secrecy. in conditions which, at least, are comparable to those laid down in the Spanish laws.

The access of the General Cortes to the information submitted to the duty of secrecy will be carried out through the President of the National Securities Market Commission, in accordance with the provisions of the parliamentary regulations. To this end, the President of the National Securities Market Commission may request the competent bodies of the Chamber to hold a secret session or to apply the procedure laid down for access to the materials. classified.

2. The information or confidential information which the National Securities Market Commission or other competent authorities have received in the exercise of their functions and the supervision and inspection provided for in this or other laws shall be subject to professional secrecy and may not be disclosed to any person or authority. The reservation shall be deemed to be lifted from the moment the persons concerned make public the facts to which they relate.

3. All persons who perform or have performed an activity for the National Securities Market Commission and have had knowledge of reserved data are required to keep secret. Failure to comply with this obligation shall determine the criminal and other responsibilities provided for by the laws. These persons may not provide a statement or testimony, or publish, communicate, display data or documents reserved, even after they have ceased their service, except for the express permission granted by the competent organ of the National Commission. of the Stock Market. If such permission is not granted, the person concerned shall keep the secret and shall be exempt from the liability.

4. Except for the obligation of secrecy laid down in this Article:

(a) When the data subject expressly consents to the dissemination, publication or communication of the data.

b) The publication of aggregated data for statistical purposes, or communications in summary or aggregate form so that individual entities cannot be identified even indirectly.

c) The information required by the competent judicial authorities in criminal proceedings, or in a civil trial, although in the latter case the obligation of secrecy shall be maintained in all matters relating to prudential requirements of an investment services company.

(d) Information which, in the context of the business procedures resulting from the suspension of payments, bankruptcy or forced liquidation of an investment firm, is required by the judicial authorities, provided that they do not relate to third parties involved in the reflation of the entity.

e) Information which, in the context of administrative or judicial remedies instituted in respect of administrative decisions given in the field of the management and discipline of the securities markets, is required by the competent administrative or judicial authorities.

(f) Information that the National Securities Market Commission has to provide for the fulfilment of its respective functions to the Autonomous Communities with jurisdiction in matters of Stock Exchanges; Spain; to the Directorate-General for Insurance; to the governing bodies of the official secondary markets in order to ensure the regular functioning of the secondary markets; to the guarantee funds of investors; to the financial controllers or syndicates of a the investment firm or an entity in its group, designated in the relevant administrative or judicial procedures, and auditors of the accounts of investment firms and their groups.

(g) Information that the National Securities Market Commission has to provide to the authorities responsible for the fight against money laundering pursuant to Law 19/1993 of December 28, on certain measures for the prevention of money laundering, as well as communications which, by way of exception, may be carried out pursuant to Articles 111 and 112 of the General Tax Law, subject to an indomitable authorization of the Minister for Economic Affairs and Finance. For these purposes, the collaboration agreements formalised by the National Securities Market Commission with supervisory authorities from other countries should be taken into account.

h) The information required by a Parliamentary Committee of Inquiry, in the terms established by its specific legislation.

i) The information that the National Securities Market Commission decides to provide to a system or Chamber of Compensation and Settlement of a Spanish Stock Market, when it considers that they are necessary to guarantee the the proper functioning of such bodies in the face of any non-compliance, or possible non-compliance, occurring on the market.

(j) Information that the National Securities Market Commission has to provide, for the performance of its tasks, to the bodies or authorities of other countries in which the public oversight function of credit institutions, insurance undertakings, other financial institutions and financial markets, or the management of deposit guarantee schemes or investor compensation, provided that there is reciprocity, and that the bodies and authorities are subject to professional secrecy under conditions which, at least, are comparable to those established by the Spanish Laws.

k) Information that for reasons of prudential supervision or sanction of investment services companies and financial institutions or institutions subject to the scope of this Law, the National Market Commission Securities must be made known to the Ministry of Economy and Finance or to the authorities of the Autonomous Communities with competence in the field of securities markets.

5. The judicial authorities which receive from the National Securities Market Commission reserved information shall be required to take the appropriate measures to ensure the reservation during the substantiation of the process concerned. The other authorities, persons or entities which receive information of a reserved nature shall be subject to the professional secrecy laid down in this Article and shall not be able to use it but in the context of the performance of their duties. legally established.

Members of a Parliamentary Committee of Inquiry who receive information of a reserved nature shall be required to take the appropriate measures to ensure the reservation.

6. Without prejudice to Article 6 of Royal Decree No 1290/86 of 28 June 1986 on the adjustment of the existing right in the field of credit institutions to that of the European Communities, the National Securities and Exchange Commission The Bank of Spain shall provide each other with all kinds of information likely to contribute to the proper development of the activities of which each of them is responsible. "

Seven. (e) and the following are added to the list in Article 92 of Law 24/1988:

" (e) A Register of the documents referred to in Article 6 and, in general, those referred to in Article 26 (b).

(f) A register of investment firms operating in Spain and, where appropriate, their managers, managers and assimilated persons.

g) A record of the entities provided for in Article 65 (2

.

h) A record of the agents or proxies acting on a regular basis on behalf of the investment firm.

i) A register of holders of significant holdings provided for in Article 53.

j) A record of significant facts and information for stock markets. "

Eight. The first two paragraphs of Article 95 have the following wording:

" The natural persons and entities to whom the provisions of this Law apply, as well as those who have in fact or in fact a right of administration or management of the latter, who violate rules of Securities Market management or discipline shall incur punishable administrative liability in accordance with the provisions of this Chapter.

They hold administration or management positions in the entities referred to in the preceding paragraph, for the purposes of this chapter, their administrators or members of their collective management bodies, as well as its Directors-General and assimilated, in the understanding of those persons who, in fact or in law, develop in the entity functions of senior management. "

Nine. The initial subparagraph and Article 97 (a) shall be worded as follows, with a new number being added:

" 1. The jurisdiction for the opening, instruction and sanction in the sanctioning procedures referred to in this Chapter shall be in accordance with the following rules:

(a) The opening and instruction of files shall be the responsibility of the National Securities Market Commission. The opening of files, where it affects investment firms authorised in another Member State of the European Union, shall be communicated to its supervisory authorities, in order to ensure that, without prejudice to the precautionary measures and sanctions which proceed under this Law to adopt those that they consider appropriate for the cessation of the infringing action or to avoid its reiteration in the future. "

" 2. Where the jurisdiction of penalties is applicable to the Autonomous Communities, the competent bodies for the opening, the instruction and the sanction shall be established in the organic rules which distribute the powers in the internal field of the respective Communities. Autonomous Community. "

Ten. Article 98 shall have the following

:

" 1. In the case of a sanctioning procedure, Law 30/1992 of 26 November 1992 of the Legal Regime of Public Administrations and of the Common Administrative Procedure, and its regulatory development, shall apply with the resulting from Articles 21 to 24 of Law 26/1988, of July 29, of Discipline and Intervention of Credit Entities.

Likewise, it will be applicable in the exercise of the sanctioning power attributed to the National Securities Market Commission, as provided in Articles 7.14 and 15 of Law 26/1988 of 29 July, of Discipline and Intervention by the Credit Entities, as well as, in relation to the entities within the meaning of Article 84 (1) of this Law, as provided for in Article 17 of that Law.

2. Resolutions imposing sanctions in accordance with the provisions of this Law shall be enforceable when they terminate the administrative route. They shall, where appropriate, take the necessary precautionary measures to ensure that they are effective as long as they are not enforceable.

3. The imposition of the penalties, with the exception of the private admonition, shall be recorded in the corresponding administrative register by the National Securities Market Commission. The penalties for suspension, separation and separation with disablement, once they are enforceable, shall also be recorded in the Trade Register.

4. Once the sanctions imposed on a legal person are enforceable, they must be communicated to the immediate general meeting that is held.

5. Penalties for very serious infringements will be published in the "Official State Gazette" once they are firm on the administrative side.

6. The Minister of Economy and Finance, after a report of the National Securities Market Commission, will be able to forgive, in whole or in part, or defer the payment of the fines imposed on legal persons when they have become controlled by others. shareholders after committing the infringement, are engaged in a bankruptcy procedure, or are given other exceptional circumstances that make the enforcement of the penalty in their own terms to be contrary to the equity or to prejudice the general interest. The foregoing shall in no case be subject to the penalties imposed on those who held administrative or managerial positions in those legal persons when the infringement was committed.

In no case shall there be any cancellation or postponement if, in the event of the transfer of shares of the sanctioned entity, the penalty is imposed or the insolvency situation has been overcome. "

Once. New wording is given to points (a), (b), (c), (f), (g), (h), (i) and (o) of Article 99 of Law 24/1988, which shall remain as follows:

" (a) The exercise, not merely occasional or isolated, by the companies governing the Stock Exchanges, or by the governing bodies of the other official markets or not, by the stock exchange company, by the Compensation Service and the settlement of securities, or by the clearing and settlement bodies of secondary markets, whether official or not, by the management companies of the investment guarantee funds, financial intermediation activities, or, in general, foreign to its unique social object.

(b) The admission of securities to trading on the official secondary markets by their decision-making bodies without prior verification, as referred to in Article 32 of this Law, as well as the suspension or exclusion thereof of the negotiation of some value, or failure to comply with the above circumstances in the framework of an unofficial secondary market.

(c) Non-compliance, not merely occasional or isolated, by the governing bodies of secondary markets, whether official or not, with the exclusion of the Bank of Spain, by the Securities Clearing and Settlement Service, or by the clearing and settlement of secondary markets, whether official or not, of the regulatory standards of such markets or of their own actions, by disregarding the requirements which have been formulated by the Commission for this purpose. National Stock Market. "

(f) the infringement of the prohibition laid down in the fourth paragraph of Article 12 by the members of secondary markets, whether official or not, and of the entities responsible for accounting records, as well as the carried out by the latter of the accounting records corresponding to securities represented by notes on account with delay, inaccuracy or other substantial irregularity.

g) Non-compliance by the managing entities of the Public Debt Market in Annotations and of the entities attached to the Securities Clearing and Settlement Service or the clearing and settlement bodies of secondary markets, whether official or not, of the rules governing their relations with the relevant central accounting records.

(h) the non-issue by members of secondary markets, whether official or not, of the supporting documents of the operations referred to in Article 44 (c) of the Act, or the failure to deliver them to their members; clients, unless they have an occasional and isolated character, as well as the circumstance of not reflecting in their actual terms.

i) The development of practices aimed at distorting the free formation of prices on the Stock Market when they produce a significant change in the price and generate considerable damage to investors. "

"(o) Failure to comply with the provisions of Article 81 (2)."

Twelve. New wording is given to the last paragraph of Article 99:

" Where the offences referred to in points (e), (k) and (m) of the preceding subparagraph are produced by reference to the consolidable groups of investment firms, or to the consolidated groups of which they are the entities referred to in points (a) and (b) of Article 84 (1) shall be held liable for the obligation to formulate and approve the consolidated accounts and management report. "

Thirteen. New wording is given to the paragraphs indicated and added seven paragraphs (s), (s), (t), (u), (v), (w), (x) and (y) of Article 100:

" (a) The appointment by the collecting societies of the Stock Exchanges or by the decision-making bodies of other markets, whether official or not, by the stock exchange company, by the Securities and Exchange Clearing and Settlement Service the settlement and clearing bodies or the management companies of the investment guarantee funds of members of its Board of Directors and, where appropriate, of Directors-General without the prior approval of the National Commission of the Securities market or, where appropriate, the Autonomous Community with powers in the field of market autonomic scope. "

" (d) The perception by the members of secondary markets, whether official or not, of commissions in excess of the limits in their case established or without having met the requirement of prior publication and communication of the rates in the event that this is mandatory.

(e) Non-compliance by those other than investment firms, financial institutions or public authorities, of the obligations, limitations or prohibitions resulting from the provisions of Article 36 of the Treaty. this Act or the provisions or rules laid down in accordance with Articles 38 and 43 thereof.

(f) The misuse of the names referred to in Article 64 (5

.

(g) The failure of the investment service undertakings to comply with the rules laid down in accordance with Article 70 (1) (e).

(h) Failure to comply with the rules laid down in accordance with Article 70 (1) (d), where it does not constitute a very serious infringement. "

" (j) The lack of communication of information to the decision-making bodies of secondary markets, whether official or not, or to the National Securities Market Commission in cases where such communication is required under the this Act and does not constitute a very serious infringement in accordance with the previous Article.

k) The cessation or reduction of significant participation in breach of the provisions of Article 69 (9). "

"n) The infringement or non-compliance with the rules of conduct provided for in Title VII where they do not constitute a very serious infringement in accordance with the previous article."

"(q) Minor infringements where during the two years prior to their commission the infringer has been subject to a penalty for the same type of infringement."

" s) The effective administration or management of the entities referred to in Article 84.1 of this Act by persons who do not exercise the right of such a charge.

t) The infringement of the rules of conduct laid down in Title VII of this Law, or the provisions laid down in its development, where they do not constitute a very serious infringement, as provided for in the previous Article.

u) Non-compliance by issuing institutions with securities admitted to trading on the secondary markets of securities of their obligations with respect to the system of registration of such securities.

v) The performance by investment firms, or other authorised entities, of transactions in a market, or organised trading system of securities or other financial instruments, which they have not obtained the authorisations required in this Act.

w) The development of practices aimed at distorting the free formation of prices on the Stock Market when it is not considered a very serious infringement.

x) Failure to comply with Article 81 (2) of this Law when the profits made by the infringer are of little relevance.

and) Failure to comply with the obligations laid down in Article 41 of this Law when they do not constitute a very serious infringement. "

Fourteen. The following new wording is given to the last paragraph of Article 100:

" Where the offences referred to in points (c), (g) and (h) of the preceding subparagraph are produced by reference to the consolidable groups of investment firms, or to the consolidated groups of which they are (a) the entities referred to in points (a) and (b) of Article 84 (1) shall be deemed to be responsible for the obligation to formulate and approve the consolidated accounts and management report. '

Fifteen. 1. (c) and (d) are reworded and three new ones are added to Article 102:

" (c) Suspension of the status of a secondary market member, whether official or not, for a period not exceeding five years.

(d) Revocation of the authorization in the case of investment firms, public debt market management entities or other entities registered in the records of the National Securities Market Commission. In the case of branches of investment firms authorised in another Member State of the European Union, this revocation penalty shall be replaced by the prohibition on the initiation of new operations in the Spanish territory.

e) Public assembly, with publication in the "Official State Gazette".

(f) Separation of the charge of administration or address held by the infringer in a financial institution, with disablement to exercise management or management positions in the same entity for a period not exceeding five years.

g) Separation of the charge of management or management that the infringer occupies in any financial institution, with disablement to exercise management or management positions in any other financial institution of the same nature of a term not exceeding 10 years. '

2. A new paragraph is added to Article 102:

"The sanctions for very serious violations will be published in the" Official State Gazette "once they are firm on the administrative path."

Sixteen. A new text is incorporated in point (d), a new point (e) is added and new wording is given to the last paragraph of Article 103:

" (d) Suspension of the status of a member of a secondary, official or non-official market, corresponding to a term of not more than one year.

(e) Suspension of a term of no more than one year in the exercise of any managerial position in the entity in which the offence was committed. "

" In the case of the infringement provided for in Article 100 (r), the penalty referred to in paragraph (b) above shall be imposed in any event and, in addition, one of the penalties provided for in the paragraphs (a), (c) or (d) of the same precept, without the fine which, where applicable, is imposed, may be less than 2,000,000 pesetas. "

seventeen. The following wording is given to Article 105 (d):

"(d) Separation of the charge with disablement to exercise management or management positions in any entity as provided for in Article 84, number 1 or in a credit institution for a term of not more than ten years."

Eighteen. Article 107 shall have the following text

" It shall apply to the entities listed in points (a), (b), (c), (d), (e) and (f) of Article 84, number 1, as provided for by credit institutions in Title III of the Law on Discipline and Intervention of the Entities of Credit. The competence to agree the intervention or replacement measures shall be the responsibility of the National Securities Market Commission.

The resolutions of the National Securities Market Commission that end the procedure will be subject to ordinary appeal to the Minister of Economy and Finance. "

Article 8. Amendments to the additional provisions of Law 24/1988.

One. The first provision shall be amended as follows:

"As of the entry into force of the provisions of this Law referring to the Stock Exchanges, the" Official Stock Exchange of Madrid "will be renamed" Stock Exchange of Madrid ", while those of Barcelona, Bilbao and Valencia will retain their name "Official Trade Bags" until the respective Autonomous Communities, with powers in the matter, do not vary that denomination. One and the other will have for all purposes the consideration of Stock Exchanges and will be of full application what is available in this Law for the same. "

Two. The third additional provision shall be worded as follows:

" The subscription or transfer of securities shall only require the intervention of a public purse for its validity when, while not being admitted to trading on an official secondary market, it is represented by means of carrier and such subscription or transfer is not made with the participation or mediation of a securities company or agency, or of a credit institution. '

Three. An additional new provision is added eleventh:

" Additional Disposition 11th.

The Minister of Economy and Finance will give publicity to the Resolution by which, under the provisions of Article 31 of this Law, the markets that have the character of official secondary markets will be recognized.

The advertising referred to in the preceding paragraph shall correspond to the Autonomous Communities with powers in the matter and with respect to the official secondary markets that authorize in accordance with the provisions of the article 31.2.d) of this Law. "

Four. A new additional provision is added twelfth:

" Additional Disposition 12th.

The interbank deposit market will not be subject to the rules of this Law. The Bank of Spain shall be responsible for regulating and supervising the operation of that market. "

Five. A new additional provision is added thirteenth:

" Additional Disposition thirteenth.

The references in this Law to investment firms and authorities of Member States of the European Union also include those belonging to other States of the European Economic Area. "

Six. An additional new provision is added fourteenth:

" Additional Disposition Fourteenth:

The emission of values carried out by the Autonomous Community of the Autonomous Community of the Basque Country will be assimilated, for all purposes, and taking into account the special characteristics of the Foral Haciendas, to the emissions from an Autonomous Community. '

Additional disposition first.

The following changes are introduced in Law 46/1984, of December 26, Regulatory of the Collective Investment Institutions:

One. Article 8 (1) of Law 46/1984 shall be read as follows:

" 1. Any collective investment institution, in order to start its activity, must obtain the prior authorization of the draft constitution by the Minister of Economy and Finance, on a proposal from the National Securities Market Commission, to be as a public limited company or investment fund, as appropriate, and to register with the Register of the National Securities Market Commission that corresponds to the institution.

Such authorization may only be refused for failure to comply with the requirements of this Law and the provisions that develop them. The application for authorisation shall be settled by reasoned agreement within three months of its receipt or at the time of completion of the required documentation and, in any event, within six months of its receipt. receipt. "

Two. The third subparagraph of Article 8 (3) shall be read as follows:

" The amendments to the constitutive contract, the Statutes or the Regulation of the Collective Investment Institutions will be subject to the provisions of this number and the two previous ones, with the exceptions that regulentarily be set. "

Three. New wording is given to the last paragraph of Article 10.2:

" The Minister of Economy and Finance, prior to the report of the National Securities Market Commission, will establish the cases and conditions in which the investment companies, fixed or variable capital, will fund the (a) a movable investment and investment funds in money market assets may use derivative instruments and other techniques in order to ensure adequate coverage of the risks assumed in all or part of their portfolio; investment in order to manage its portfolio more effectively, or in the context of its management towards the achieving a concrete objective of profitability, in line with the management objectives set out in the information leaflet and in the institution's social regulation or statutes. "

Four. New wording is given to Article 12 (4):

" 4. The management of the assets shall be carried out by the organs of the company. If the social statutes contain a provision for the effect, the General Board, or its delegation, the Board of Directors may agree that the management, in whole or in part, of the assets of the company is entrusted to a third party in which the quality of the manager, in accordance with the provisions of this Law. This agreement must be entered in the Trade Register and the corresponding Special Register. "

Five. Point (c) of Article 27 (1) is worded as follows:

" They will have the exclusive social object of the administration and representation of collective investment institutions. However, they may also manage on behalf of the investment funds they administer the subscription and redemption of their shares, and may require additional solvency requirements in this case. The latter activity may be carried out directly, or by agents or proxies, and must in both cases comply with the requirements that are laid down in regulation. "

Six. Article 23a is worded as follows:

First.

" 1. The investment companies, the equity investment companies, the variable capital investment companies and the funds of mutual fund investment are collective investment institutions that are characterized by investment. (a) the majority of its assets in shares or units of one or more collective investment institutions of a financial character.

2. Its name must be followed, in any case, by the expressions "Socio de Inversión Mobiliaria de Fundas" ("Société de Inversión Mobiliaria de Fundas"), or its acronym "SIFF"; "Sociedad de Inversión Mobiliaria de Capital Variable de Fundas", or its acronym "SIMCAVF"; or, " Investment Fund Mobiliaria de Fundas ", or its acronym" FIMF ". In the case of institutions that invest in a single institution, the above names are replaced by the "Company of Subordinated Movable Investment" or its acronym "SIMS"; Subordinated "; or" SIMCAVS "or" Subordinated Movable Investment Fund "or its acronym" FIMS ".

With regard to collective investment institutions whose members are the institutions whose name is given in the last paragraph of the preceding paragraph, they shall have the following names: " Principal Mobiliaria Investment ", or its acronym" SIMP ";" Principal Variable Capital Investment Company "; or, its acronym" SIMCAVP ", or" Principal Mobiliary Investment Fund ", or its acronym" FIMP ".

3. The rules on investments in shares or shares of one or more collective investment institutions, on risk diversification, minimum liquidity ratio, valuation rules, among others, shall be established. accounting, and subscription and redemption of shares.

4. The investment companies, the variable capital investment companies and the funds for the investment of funds, as well as the principal and the subordinated, shall be governed by the provisions of the preceding paragraphs and by the forecasts to be determined on a regulatory basis, as well as subsidiary, and with the necessary adaptations, for the purposes of SIM, SIMCAV and FIM.

5. The sanctioning regime provided for in point (b) of point 2 (c) and (h) of Article 32 (3) (e) of this Law shall apply to institutions for the collective investment of funds, as well as to the principal and subordinate, with the adaptations to be determined. "

Second.

" Investment funds may be merged either through absorption already with the creation of a new fund.

The initiation of the procedure shall require the prior agreement of the management company and the depositary of the funds to be merged.

The merger will be previously authorized by the Minister of Economy and Finance on a proposal from the National Securities Market Commission.

The merger processes must be communicated to the members so that, within one month, from that date, the right of separation can be exercised, with the reimbursement of the participants without any expense, to the value of the (a) a specific settlement pursuant to Article 20 (2) corresponding to the day of the end of the period of the exercise of the right of separation. '

Seven. A new Article 23b is introduced with the following wording:

" 1. Under this Law, investment companies, both fixed and variable, will be able to create, as well as equity investment funds, to invest, mainly, their assets in non-traded securities in markets. secondary values.

2. Regulations, inter alia, shall include the specialities applicable to these institutions in respect of investments, diversification of risks, investment coefficients, liquidity ratio, valuation rules and accounting, subscription and redemption of shares.

Substitute, and with the necessary adaptations, will be governed by the provisions for SIM, SIMCAV and FIM. "

Eight. A new Article 23c is introduced with the following wording:

" 1. FIM and FIAMM may be set up, as well as any financial IICs with the form of an investment fund whose members are exclusively institutional or professional investors.

2. Regulations shall, inter alia, establish for the institutions referred to in this Article specialties in respect of the minimum number of members and the subscription and redemption of units. "

Nine. A new Article 31a is inserted with the following text:

" The provisions contained in Article 90 of Law 24/1988 of 28 July of the Stock Market, with the necessary adaptations concerning the collective investment institutions subject to the scope of this Law, will be applicable to the oversight functions of the National Securities Market Commission in this legal text. "

Ten. New wording is given to Article 27 (2) of Law 46/1984 of 26 December, Regulation of the Collective Investment Institutions, which will remain as follows:

" 2. The conditions under which the administration of foreign assets may be contracted with other entities shall be determined. '

Additional provision second.

To investment companies, both fixed capital and variable capital, and the management companies of collective investment institutions, regulated in Law 46/1984 of 26 December, will be applicable to them, with the regulatory adaptations that are required by their specific nature, the rules that the Law 24/1988, of 28 July, of the Stock Market, contains for investment services companies on the following matters:

1. Revocation of the authorisation for the reasons referred to in points (b), (d), (e), (g), (h), (k) or (l) of Article 73.

2. Suspension of the authorisation for the reasons referred to in points (a), (b), in the case of application, and (c) of Article 76 (1

.

The management companies of collective investment institutions shall also apply to them, with the regulatory adaptations required by their specific nature, the rules 2. number 1 and (g) of number 2 of the Article 67 and Article 69 of the Law 24/1988, of 28 July, of the Securities Market, contain for the investment services companies on the suitability of the shareholders holding significant participation.

Additional provision third.

In the cases of bankruptcy or suspension of payments of a securities issuing entity or of an entity registered with the National Securities Market Commission, the obligations under Law 24/1988 of 28 July of the Market of Securities or other laws have their managers and managers of forwarding information to the said Commission shall be payable to syndicates, depositaries and auditors, as appropriate.

Additional provision fourth.

1. Mortgage securitisation funds, as referred to in Law 19/1992 of 7 July, which are made up of shares of mortgage credit claims due, may be established, provided that such claims and mortgages are provided in their guarantee meet all other requirements set out in the mortgage market legislation and that credit enhancement mechanisms or instruments are also established.

2. In the supervision procedure of the National Securities Market Commission of the establishment of the said funds, that fund may establish specific reporting and control obligations for the regular operation of the funds.

Additional provision fifth.

1. Article 9 (d) of Law 43/1995 of 27 December 1995 on the Tax on Societies shall be read as follows:

"(d) The Bank of Spain, the Deposit Insurance Funds and the Investment Guarantee Funds."

2. The Investment Guarantee Fund shall be exempt from any indirect taxes which may be incurred by reason of its constitution, its functioning and the acts and operations which it carries out in the performance of its purposes. The exemption shall also extend to operations taxed by indirect taxes, the amount of which must be passed on to them in accordance with the provisions governing taxes.

Additional provision sixth.

1. Where, in accordance with the general obligations incurred in respect of a secondary market or in respect of its clearing and settlement systems, or as a guarantee of compliance with the obligations incurred by transactions carried out in one of these markets are made up of garments on securities admitted to trading on secondary markets and represented by means of notes on account, such garments may be constituted by means of a policy brought by a collegiate trade corridor or public writing.

2. Also, the garments referred to in the preceding number may be constituted, without the effects of the documents in the same referred to, but with application of the provisions of Article 10 of the Law of the Market of Securities:

(a) By means of a private document, the entity in charge of the keeping of the accounting record must practice the corresponding registration when it has a record of the consent of the person appearing in the register. and of the entity in whose favour the garment is constituted.

(b) By unilateral manifestation of which it appears as the holder in the accounting register, even carried out by telematic means, in which case the acceptance of the entity to which it has been established shall be deemed to have been such a unilateral demonstration is communicated to the entity in charge of the holding of the accounting record of the securities, provided that it is provided for in the market regulation or clearing and settlement system in question; or The Commission has already agreed to this form of acceptance between the parties concerned. However, this form of acceptance of the constitution of the garment will not imply the sufficiency of the guarantee that should be provided, so that, in the event of insufficient, it will be necessary to do so in such a case.

The entity in charge of the accounting record of the securities on which the pledge is made shall inform the entity in whose favour the garment's registration has been made as well as, where applicable, the incidents or, circumstances that occur.

The item of apparel incorporated in accordance with this paragraph shall have effects against third parties from the date on which it is recorded in the accounting record.

3. The performance of the garments, as referred to in the preceding paragraphs, shall be carried out in accordance with Articles 322 to 324 of the Trade Code, although the accreditation of the documents providing, where appropriate, the rules shall be sufficient. market management and discipline by regulating the creation of the garment to prove the existence of the pignoraticia guarantee and the amount due.

4. The decision-making bodies of the secondary markets and their clearing and settlement systems shall enjoy the same privileges as Article 1926 of the Civil Code confers on the creditors of the secondary markets in respect of the goods, securities or rights in question. the guarantees granted to them by the members or investors in those markets, whatever the goods, securities or rights and the formalities of their constitution, shall be materialised or shall be borne, provided that it has been adjusted to the applicable law and particular rules of each market.

5. Where the guarantees referred to in paragraph 1 of this provision consist of cash deposits, with or without a management mandate, the performance of the guarantee shall be made by simple compensation. In other cases, where there is no implementing procedure specially provided for by law, the procedure shall be carried out by means of an auction with a notary intervention or a collegial corridor of trade and summons of the debtor and the owner of the property, value or the right to be guaranteed if they are not the same person, following the procedure laid down in the first paragraph of Article 1872 of the Civil Code, without the above procedure being suspended or interrupted unless otherwise by a judicial mandate and, in this case, the judge must require, to whom he has urged the suspension, sufficient and specific guarantee to cover the damage and damage that may arise from it.

6. The arrangements laid down in the preceding paragraphs shall also apply to garments in respect of obligations incurred by the Bank of Spain in the exercise of its monetary policy operations and to those which it shall constitute entities participating in an interbank payment system in order to guarantee such participation.

Additional provision seventh.

Article 48.1 (a) of Law 18/1981 is amended by adding the following paragraph:

" For the purposes of the foregoing paragraph, they are to be understood by official secondary securities markets, in addition to those expressly provided for in Law 24/1988 of 28 July of the Securities Market, Markets for small and medium-sized companies on existing Spanish Stock Exchanges or which are believed to be in the future. "

Additional provision octave.

A new wording is given to the final paragraph of the final provision of Law 19/1988, of July 12, of Audit of Accounts, with the following text:

" The auditors of the annual accounts of institutions subject to the supervisory regime provided for in Law 13/1992 on own resources and supervision on a consolidated basis of financial institutions or entities regulated in Law 30/1995, of 8 November, of the Management and Supervision of Private Insurance, or of entities and institutions governed by Law 46/1984 of 26 December, on Institutions of Collective Investment, will have the obligation of promptly communicate in writing to the Banco de España, Comisión Nacional del Mercado de Valores, General Directorate of Insurance, as appropriate, any event or decision, on the audited entity or institution, of which they have been aware in the performance of their duties and which may:

(a) Constitute a serious violation of the content of the laws, regulations or administrative provisions which lay down the conditions of their authorization or which specifically regulate the exercise of their activity.

b) Prejudice the continuity of their operation, or seriously affect their stability or solvency.

c) Involve the abstention of the opinion of the auditor, or an unfavorable opinion or with reservations, or prevent the issuance of the audit report.

Without prejudice to the above obligation, the audited entity shall have the obligation to forward a copy of the audit report from the annual accounts to the competent supervisory authorities referred to above. If, within one week of the date of delivery of the report, the auditor was not satisfied with the fact that such a referral has occurred, he shall send the report directly to the said authorities.

The above obligation will also reach the auditors of the annual accounts of the companies linked by a control link, in the sense that Article 4 of the Law 24/1988, of the Stock Market, determines to some of the entities or institutions referred to in the first subparagraph.

Additionally, the auditors of the dominated companies that are subject to the supervisory regime, in addition to informing the competent supervisory authorities, as set out in the first paragraph, also report to the auditors of the parent entity.

The good faith communication of the above facts or decisions to the competent supervisory authorities shall not constitute a breach of the duty of secrecy laid down in Article 13 of this Law or of which it may be enforceable. contractually to the auditors, nor will it imply any liability for these. "

Additional provision ninth.

1. A new paragraph is added to Article 2 of Law 19/1985, of 16 July, of Change and of the Cheque, which will remain as follows:

"They will have the consideration of optional clauses all the mentions set out in the letter other than those mentioned in the preceding article."

2. The second, third and fourth paragraphs of Article 51 of Law 19/1985, of 16 July, are reworded as follows:

" It will produce all the change effects of the protest the declaration that consists of the letter itself, signed and dated by the free one in which the acceptance or payment is denied, as well as the declaration, with the same requirements, of the house or, where appropriate, of the Chamber of Compensation, in which the payment is refused, unless the bookseller has expressly required in the letter the lifting of the notarial protest in the space reserved by the rules applicable to clauses optional. In any case the statement of the free, house or Chamber of Compensation shall be made within the time limits laid down for the protest of notarial in the following article.

The notarial protest for lack of acceptance must be made within the deadlines set for the submission to the acceptance or the following eight working days.

The protest for non-payment of a change letter payable on a fixed date or a certain period of time from its date or from the view must be made in one of the eight working days following the expiration of the letter of exchange. If it is a letter payable at the hearing, the protest must be extended within the period specified in the preceding paragraph for the protest for lack of acceptance. "

3. A new paragraph is added to Article 95 of Law 19/1985 of 16 July, with the following text:

"They will have the consideration of optional clauses all the mentions put in the page other than those mentioned in the preceding article."

4. The first paragraph of Article 96 of Law 19/1985, of 16 July, will remain as follows:

" Shall be applicable to the promissory note, while this is not incompatible with the nature of this title, the provisions relating to the letter of change and references:

The endorsement (items 14 to 24).

Due (Articles 38 to 42).

For payment (Articles 43 and 45 to 48).

For non-payment actions (Articles 49 to 60 and 62 to 68). However, the optional clauses which are incorporated in the promissory note for validity shall be expressly signed by a person authorized for insertion, without prejudice to the signatures required by this Law for the validity of the title.

For intervention payment (Articles 70 and 74 to 78).

To copies (Articles 82 and 83).

For loss, theft or destruction (Articles 84 to 87).

To prescription (Articles 88 and 89).

When calculating the deadlines and the prohibition of the days of grace (Articles 90 and 91).

To the place and address (article 92).

To the alterations (article 93). "

5. In Article 107 of Law 19/1985, a new paragraph is added with the following text:

"They will have the consideration of optional clauses all the mentions put in the check other than those mentioned in the preceding article."

6. In Article 147 of Law 19/1985, the first paragraph is reworded and a new paragraph is added with the following texts:

" The protest or equivalent declaration must be made before the expiration of the filing deadline. If the filing is made within the last eight days of the deadline, the protest or equivalent declaration may be made within eight working days of the filing. "

" However, the optional clauses which are incorporated into the cheque, for their validity, must be expressly signed by a person authorized for insertion, without prejudice to the signatures required by this Law for the validity of the title. "

Additional provision tenth.

1. The rules of this provision shall apply to financial transactions relating to derivative instruments which are carried out in the framework of a contractual netting agreement, provided that the following requirements are met:

(a) At least one of the parties to the agreement is a credit institution or an investment firm, or non-resident entities authorized to carry out the activities reserved in Spanish law to the referred to as entities or companies.

(b) The agreement provides for the creation of a single legal obligation, covering all financial transactions included in it and under which, in the event of an anticipated maturity, the parties shall be entitled to the net balance of the operations due, calculated in accordance with the contractual netting agreement, shall be required.

2. For the purposes of this provision, financial swaps, term interest rate transactions, options and futures, foreign exchange purchases and any combination of the foregoing, as well as the securities, shall be considered for the purposes of this provision. similar or similar operations.

3. The statement of the anticipated maturity, resolution, termination or equivalent effect of the financial transactions included in a contractual netting agreement as referred to in the preceding number 1 may not be limited, restricted or affected in any form, by a state or request for bankruptcy, suspension of payments, liquidation, administration, intervention or contest of creditors that affects any of the parties to such agreement, its subsidiaries or branches.

In cases where one of the parties to the contractual netting agreement is in one of the situations referred to in the preceding paragraph, the amount shall be included as credit or debt of the mass only net of the financial transactions covered by the agreement, calculated in accordance with the rules laid down therein.

4. The financial operations or the contractual netting agreement which regulates them may be challenged only under the second paragraph of Article 878 of the Trade Code, by means of action by the trade unions of the bankruptcy, in which the demonstrate fraud in such procurement.

Additional provision eleventh.

New wording is given to Article 6 of the Royal Legislative Decree 1298/1986 of 28 June adapting the legal rules on credit institutions to the legal order of the European Economic Community:

" 1. In the exercise of its supervisory and inspection duties on credit institutions, the Banco de España shall cooperate with the authorities entrusted with similar tasks in foreign countries and may communicate information relating to the the management, management and ownership of these entities, as well as those which may facilitate the solvency control of these entities and any other that may facilitate their supervision or serve to prevent, prosecute or punish irregular conduct; may, for this purpose, conclude collaboration agreements.

Where the competent authorities do not belong to another Member State of the European Union, the supply of such information shall require that there be reciprocity and that the competent authorities are subject to secrecy. in conditions which, at least, are comparable to those established by the Spanish laws.

2. The data, documents and information held by the Banco de España under the terms of its duties shall be reserved and shall not be disclosed to any person or authority. The reservation shall be deemed to be lifted from the moment the persons concerned make public the facts to which they relate.

The access of the General Cortes to the information submitted to the duty of secrecy will be carried out through the Governor of the Bank, in accordance with the provisions of the parliamentary regulations. To this end, the Governor may request the competent bodies of the Chamber to conduct a secret session or to apply the procedure laid down for access to classified materials.

3. All persons who perform or have carried out an activity for the Banco de España and have had knowledge of data of a reserved nature are obliged to keep secret. Failure to comply with this obligation shall determine the criminal and other responsibilities provided for by the laws. Such persons shall not be able to provide a statement or testimony or to publish, communicate or display data or documents reserved, even after they have ceased their service, except for express permission granted by the competent authority of the Banco de España. If such permission is not granted, the person concerned shall keep the secret and shall be exempt from the responsibility of that person.

4. Except for the obligation of secrecy laid down in this Article:

(a) When the data subject expressly consents to the dissemination, publication or communication of the data.

b) The publication of aggregated data for statistical purposes, or communications in summary or aggregate form so that individual entities cannot be identified even indirectly.

(c) The information required by the competent judicial authorities in criminal proceedings.

(d) Information which, in the context of the business procedures resulting from the suspension of payments, bankruptcy or forced liquidation of a credit institution, is required by the judicial authorities, provided that they do not They are related to third parties involved in the reflation of the entity.

(e) Information which, in the framework of administrative or judicial remedies instituted in respect of administrative decisions given in the field of the organisation and discipline of credit institutions, is required by the competent administrative or judicial authorities.

(f) The information that the Banco de España has to provide for the fulfilment of its respective functions to the National Securities Market Commission, to the Directorate-General for Insurance, to the Deposit Guarantee Funds, to the financial controller (s) of a credit institution or an institution of its group, designated in the relevant administrative or judicial proceedings, and to the auditors of the credit institutions and their groups.

g) The information that the Banco de España trasmita, as a monetary authority, to the European Central Bank, to the central banks and similar function agencies of the European Union, as well as to other public authorities in charge of the supervision of payment systems.

(h) Information which the Banco de España has to provide, in order to fulfil its tasks, to the bodies or authorities of other countries in which the public oversight function of the service undertakings is placed investment, insurance undertakings, other financial institutions and financial markets, or the management of the deposit guarantee schemes or the compensation of the investors of credit institutions, provided that it exists reciprocity, and that the bodies and authorities are subject to professional secrecy under conditions which, at least be comparable to those established by the Spanish laws.

(i) Information that the Banco de España decides to provide to a chamber or similar body legally authorised to provide clearing or settlement services of the Spanish markets, when it considers that they are necessary to ensure the proper functioning of such bodies in the face of any non-compliance, or possible non-compliance, occurring on the market.

j) The information that the Banco de España has to provide to the authorities responsible for the fight against money laundering, as well as the communications which can be carried out in an exceptional manner by virtue of the Article 111 and 112 of the General Tax Law, after authorization from the Minister of Economy and Finance. For these purposes, the collaboration agreements signed by the Banco de España with supervisory authorities from other countries should be taken into account.

(k) Information which, for reasons of prudential supervision or the sanction of credit institutions, the Banco de España has to make known to the Ministry of Economy and Finance or to the authorities of the Autonomous Communities with powers on credit institutions.

(l) The information required by a Parliamentary Committee of Inquiry under the terms set out in its specific legislation.

5. The judicial authorities which receive from the Banco de España information of a reserved nature shall be obliged to take the appropriate measures to guarantee the reservation during the substantiation of the process in question. The other authorities, persons or entities which receive information of a reserved nature shall be subject to the professional secrecy laid down in this Article and shall not be able to use it but in the context of the performance of their duties. legally established.

Members of a Parliamentary Committee of Inquiry who receive information of a reserved nature shall be required to take the appropriate measures to ensure the reservation.

6. The transmission of information reserved to the bodies and authorities of countries outside the European Economic Area referred to in the second subparagraph of paragraph 1 and point (h) of paragraph 4 shall be conditional, where the information provided for in paragraph 1 is has originated in another Member State, to the express conformity of the authority which has disclosed it, and may be communicated to the addressees only for the purposes for which that authority has given its agreement. The same limitation shall apply to the information to the chambers and bodies referred to in paragraph 4 (i). '

Additional disposition twelfth.

1. In accordance with the provisions of Article 36 of Law 24/1988 of 28 July 1988 on the Securities Market, double transactions and repurchase agreements may be recognized as operations of a secondary market. For such purposes,

following definitions shall apply:

By double operations (also called simultaneous), those in which two are hired, at the same time, two comps of opposite-sense values, both of which are performed with values of identical characteristics and by the same nominal amount, but with a different date of execution, which may be both of the spot purchases with different settlement dates, in time, or the first spot and the second in the term.

By transactions with repurchase agreements, those in which the holder of the securities sells them up to the date of redemption, simultaneously agreeing to buy back securities of identical characteristics and for equal value nominal, at a specified and intermediate date between the sale and the nearest amortisation date, even if it is partial or voluntary.

2. Where the financial operations referred to in the first indent of the preceding paragraph comply with the requirements referred to in paragraph 1 of the additional provision of this Law, the provisions of paragraphs 3 shall apply to them. and 4 of the same.

3. In the transactions referred to in paragraph 1 above, if the first seller does not satisfy the price of the second sale, or fails to comply with the repurchase agreement, the first buyer shall irrevocably acquire the domain of the securities sold.

Likewise, both the declaration of bankruptcy of the first seller and the admission to processing of his application for suspension of payments, will entail the full resolution of the second sale, or of the repurchase agreement, the same effect as referred to in the preceding paragraph.

4. As set out in paragraph 2 above, it shall also apply to operations of that nature which are carried out on other financial assets in the guarantee of the general obligations incurred vis-à-vis the Bank of Spain in respect of its monetary policy operations.

Additional disposition thirteenth.

The following amendments are made to Royal Decree-Law 18/1982 of 24 May:

One. A new Article 2b is created with the following text:

" Article 2 ter.

Deposit guarantee funds in banking establishments, savings banks and credit unions will compensate investors who have entrusted a credit institution with money to them, securities or other financial instruments, for their deposit and administration or for the performance of any investment service referred to in the Securities Market Act 24/1988 of 28 July 1988 in the cases described in Article 5; Numbers 1 and 1a of this Royal Decree-Law. Such coverage shall have the limit, form, period and scope to be determined. "

Two. The following paragraph is added to Article 3 (1

:

" When the assets of a fund reach negative values, the Management Commission may agree, by a two-thirds majority of all its members, on the performance of branches among the entities attached. Those branches shall be distributed on the basis of the calculation of the contributions, and their total amount shall not exceed the amount necessary to eliminate that deficit. '

Three. The following number is added to Article

:

" 1 bis. Irrespective of the amount established as a guarantee of deposits pursuant to Article 1 (2) of Royal Decree-Law 4/1980 of 28 March and Articles 1 (2) and 2 (2) of this Royal Decree-Law, the amount of the deposit deposit guarantee shall satisfy the holders of securities or other financial instruments entrusted to a credit institution with the amounts secured when any of the following events occur:

(a) That the credit institution has been declared bankrupt, or the entity's payment suspension declaration is judicially requested, and these situations entail the suspension of the refund of the securities or financial instruments; however, the payment of those amounts shall not be made if, within the time limit laid down in the rules for initiating the disbursement, the suspension referred to is lifted.

(b) That, having produced the non-return of the securities or financial instruments, the Banco de España determines that the credit institution is unable to restore them in the immediate future for reasons directly related to their financial situation. The Bank of Spain shall have a period of 21 days to verify the existence of this assumption and to decide on the origin of the compensation. "

Four. The last subparagraph of Article 5 (1) shall be deleted, in addition to the following number:

" 1 ter. All payments made by the deposit guarantee funds under the two preceding numbers shall be made in cash, with the value of the securities or other financial instruments in the form to be determined.

By the mere fact of the payment, the deposit guarantee funds will be subrogated, by law ministry, in the creditor or investor rights corresponding to the amount paid, with sufficient title being the document in which the the payment.

In the event that securities or other financial instruments entrusted to the institution are restored by that entity after payment of a guaranteed amount according to the number 1 bis, the guarantee funds of the deposits may be resarted from the amount satisfied, in whole or in part, if the value of which has to be returned is greater than the difference between the value of those entrusted to the institution and the amount paid to the investor, with the right to be (a) to ensure that, in accordance with the procedure and criterion of allocation and assessment to be established. "

Additional disposition fourteenth.

The requirement of public deed provided for in Article 6 of Law 24/1988 of 28 July of the Stock Market in the case of emissions of promissory notes that are to be traded on a secondary market shall not be required, provided that the characteristics of the same are contained in an information leaflet.

Additional provision 15th.

The following precepts of the recast text of the Law on Companies, approved by Royal Legislative Decree 1564/1989, of March 22, are amended.

1. A paragraph 3 is added to Article 50, with the following wording:

" 3. Where the privilege consists of the right to obtain a preferential dividend, the company shall be obliged to agree on the distribution of the dividend if distributable profits exist.

The statutes will have to establish the consequences of the total or partial non-payment of the preferential dividend, whether or not it has a cumulative character in relation to the unsatisfied dividends, as well as the possible rights of the holders of such privileged shares in relation to dividends which may correspond to ordinary shares. They may not in any case receive dividends from the profits of an exercise, while the privileged dividend for the same financial year has not been satisfied.

The same regime as set out in the first subparagraph of this paragraph shall apply to unlisted companies, unless their statutes provide otherwise. "

2. Article 91 (1) is amended to read as follows:

" Article 91. Preferred rights.

1. Holders of shares without a vote shall be entitled to receive the minimum fixed or variable annual dividend, which shall lay down the social statutes. Once the minimum dividend is agreed, the holders of the silent shares shall be entitled to the same dividend corresponding to the ordinary shares.

With distributable profits, the company is obliged to agree on the distribution of the minimum dividend referred to in the preceding paragraph. In the absence of distributable profits or not in sufficient quantity, the part of the minimum unpaid dividend shall be satisfied within the following financial years.

In the case of unlisted companies, as long as the minimum dividend is not satisfied, the silent actions shall have the right to vote on an equal footing as ordinary shares and, in any event, retain their advantages. economic. "

3. A new paragraph 4 is inserted in Article 91 with the following wording:

" 4. In respect of the right of preferential subscription for holders of shares without a vote of listed companies, their statutes shall be subject to the provisions of their statutes. '

4. Article 92 (1) is amended to read as follows:

" Article 92. Other rights.

1. Shares without a vote shall give their holders the other rights of ordinary shares, except as provided in the previous Article. "

5. Section 6 of Chapter IV is hereby established under the heading 'Of the rescue operations', consisting of the following Articles:

" Article 92a. Issue of rescue actions.

1 Listed public limited companies may issue shares which are redeemable at the request of the issuing company, the holders of such shares or both, for a nominal amount not exceeding a quarter of the capital social. The terms and conditions for the exercise of the right of redemption shall be laid down in the emission agreement.

2. The redeemable shares must be fully disbursed at the time of the subscription.

3. If the right of redemption is attributed exclusively to the company, it shall not be exercised before three years have elapsed since the issue.

Article 92 ter. Redemption of redeemable shares.

1. Redemption of the redeemable shares shall be made from profits or free reserves or with the proceeds of a new issue of shares agreed by the General Meeting in order to finance the amortisation operation.

2. If these shares are amortised from profits or free reserves, the company shall constitute a reserve for the amount of the nominal value of the amortised shares.

3. In the event that there are no sufficient benefits or reserves in sufficient quantity and no new shares are issued to finance the transaction, the amortisation may only be carried out with the requirements laid down for the reduction of social capital. by return of contributions. "

6. Article 158 (1) is amended to read as follows:

" 1. In the case of increases in share capital with the issuance of new shares, ordinary or privileged, the former shareholders and holders of convertible debentures may exercise within the time limit which the administration grants to the company, which shall not be less than 15 days from the publication of the notice of the offer of subscription of the new issue in the "Official Gazette of the Commercial Register" in the case of listed companies, and of one month in the other cases, the the right to subscribe a number of shares proportional to the nominal value of the shares held or of which would correspond to the holders of convertible obligations to exercise at that time the power of conversion. "

7. Article 159 is amended to be amended as follows:

" Article 159. Exclusion from the preferred subscription right.

1. In cases where the interest of the company so requires, the General Board, when deciding on the increase in capital, may agree to the total or partial abolition of the right of preferential subscription. For the validity of this agreement, which must be respected as provided for in Article 144, it will be essential:

(a) That the proposal to abolish the right of preferential subscription and the type of issue of the new shares have been included in the call of the Board.

(b) The time of the meeting of the Board shall be made available to the shareholders, as provided for in Article 144 (1) (c), a report drawn up by the administrators, on which it is justified. in detail the proposal and the type of issue of the shares, indicating the persons to whom the shares are to be attributed, and a report drawn up, under their responsibility, by the auditor of the company on the actual value of the shares actions of the company and on the accuracy of the data contained in the administrators ' report. Where the company is not required to carry out an accounting verification, the auditor shall be appointed by the administrators for the above purposes.

(c) The nominal value of the shares to be issued, plus, where applicable, the amount of the issue premium, corresponds to the actual value resulting from the report of the auditors of the company. However, in the case of listed companies, the Shareholders ' Meeting may agree to issue new shares at any price, provided that it is higher than the nominal value of the shares, and may be limited to establishing the procedure for its determination.

2. In the case of listed companies, where the General Board delegates to the administrators the power to increase the share capital as laid down in Article 153 (1) (b), it may also be entitled to exclude the right to exclude the right of preferential subscription in relation to the emissions of shares which are the subject of delegation when the circumstances provided for in paragraph 1 of this Article are met and provided that the nominal value of the shares to be issued is more Case, the amount of the issue premium, corresponds to the actual value resulting from the auditors ' report of the accounts of the company.

3. Where the company has convertible debentures with a fixed conversion ratio and its holders are affected by the exclusion of the right of preferential subscription, a formula for adjustment of such a ratio should be provided for. compensate for any dilution of the amount of the conversion right.

4. There shall be no place in the right of preferential subscription where the increase in capital is due to the conversion of bonds into shares or to the absorption of another company or part of another company's spun-off assets. '

8. Article 162 (2) is amended to read as follows:

" 2. By way of derogation from the foregoing Article, the agreement to increase the share capital may be entered in the Trade Register prior to the implementation of that agreement when the following two circumstances are met:

1. When the issuance of the new shares would have been authorized or verified by the National Securities Market Commission.

2. When in the social capital increase agreement the incomplete subscription would have been expressly provided.

The administrators, once the agreement has been executed, will have to give new wording to the social statutes in order to collect the new social capital figure in them, to which effect they will be deemed empowered by the agreement of increase ".

9. The former paragraph 2 of Article 162 becomes paragraph 3 by keeping its current wording.

10. Two new paragraphs 4 and 5 are added to Article 162:

" 4. In the case of listed companies, and where the issuance of the new shares would have been authorised or verified by the National Securities Market Commission, one year after the end of the subscription period without the writing of the execution of the agreement has been filed in the Mercantile Register, the registrar, of its own motion, or at the request of any interested party, shall proceed to the cancellation of the registration of the agreement of increase of the social capital, forwarding certification to the company itself and to the National Securities Market Commission.

5. Cancelled registration of the increase, the holders of the new shares issued shall have the right referred to in apparatus 3 of this article. "

11. Article 194 (2) is amended to read as follows:

" 2. The goodwill may be included in the balance sheet asset only when it has been acquired for consideration.

Its depreciation, which must be carried out in a systematic manner, cannot be increased or exceed the period during which that fund contributes to the collection of income for the company, with the maximum limit of 20 years.

When the amortisation exceeds five years, the appropriate justification shall be collected in the memory, indicating the amounts of income that are expected to be generated during the amortisation period. "

12. A new paragraph 3 is added to Article 194 with the following wording:

" 3. The time limits laid down for the depreciation of the goodwill shall apply to the annual accounts which are issued after 31 December 1998, without amending the write-downs carried out in previous years. '

First transient disposition.

Marketable securities represented by securities admitted to trading on an official secondary market may be represented in such a way, as long as the law of development of this Law does not impose its representation. by logging into account.

Second transient disposition.

The securities issues of entities and public companies other than those mentioned in Article 55 of this Law that are negotiated in the Public Debt Market in Annotations will continue to be negotiated in the market until their expiration.

Transient Disposition third.

Companies and securities agencies, as well as portfolio management companies, will have to adapt their statutes and activity programmes to the provisions of this Law and their development regulations within six months of the year. from the entry into force of this Law and the relevant regulatory provisions.

Fourth transient disposition.

The acts and documents legally necessary for the companies incorporated under the previous legislation to be able, within the time limits laid down in these transitional provisions, to comply with the provisions of the This Law shall be exempt from taxes and charges of all kinds.

The Government, on the proposal of the Minister of Justice, will fix a reduction in the tariff rights that the notaries and the commercial registrars will apply to the granting and registration in the Register of the acts and documents necessary for the adaptation of existing societies to the provisions of this Law.

Transient disposition fifth.

As long as the precepts of Law 24/1988, corresponding to the Public Debt Market in Annotations, are not developed in the new wording given by this Law, and the Market Regulation to which it does Article 5 (4) of the abovementioned legal text shall remain in force with the regulatory provisions currently governing the said market.

Transitional disposition sixth.

1. Upon the entry into force of this Law, official secondary markets shall be deemed to be recognized at the time as organized under the third paragraph of Article 77 of this Law.

2. In the first judgment, which, as provided for in the additional provision of the Law 24/1988 of 28 July 1988 on the Stock Market, is published in recognition of markets which have the character of official secondary markets, include those that are such as to the date of publication of this Law, as well as those already authorized under the third paragraph of Article 77 of Law 24/1988 of 28 July of the Stock Market, in its wording given by the Article 58 of Law 4/1990, of 29 June, of the General Budget of the State for 1990.

Transient disposition seventh.

At the entry into force of this Law, the constitution of investment companies, investment companies of variable capital and funds of investment of funds, as well as principal and subordinated, funds and investor companies in non-listed securities and those funds whose members are institutional or professional investors. To this end, account shall be taken of the rules laid down in the first provision and those other rules which, in the current legislation, for SIM, SIMCAV and FIM, may be applicable.

Single repeal provision.

The current Article 86 bis of Law 24/1988 is repealed, as well as how many provisions of equal or lower rank are opposed to the provisions of this Law.

By way of derogation from the foregoing paragraph, the specialties provided for in the regime of the Canary Special Zone of Law 19/1994, of 6 July, of Amendment of the Economic and Fiscal Regime of the Canary Islands.

In the same way, the additional seventh provision of Law 3/1994 of 14 April, adapting Spanish legislation on credit institutions to the 2nd Banking Coordination Directive, is hereby repealed. other amendments relating to the financial system.

First disposition first.

1. This Law shall enter into force on the day following its publication in the Official Gazette of the State. However, the provision that credit institutions, irrespective of their nationality, may be members of the Stock Exchanges shall not enter into force until 1 January 2000.

2. As regards the provisions of Title VI of the Law, Article 77 on the Funds for the Guarantee of Investments, its entry into force in respect of the cases to which it applies, it shall coincide with the date of validity of the Directive. 93 /22/EEC of 10 May 1993 on investment services in the field of marketable securities.

Final disposition second.

1. The Government is authorized to produce, within six months of the entry into force of this Law, a recast of the Law 24/1988 of 28 July, of the Stock Market, incorporating, in addition to the regulation contained in this Law, the following legal provisions:

(a) Article 15 of Royal Decree-Law 3/1993 of 26 February of urgent measures on budgetary, tax, financial and employment matters.

(b) Article 13 of Law 22/1993 of 29 December 1993 on tax measures, the reform of the legal system of public service and unemployment protection.

2. The updates resulting from the adoption and entry into force of Laws 30/1992, 26 November, of the Legal Regime of Public Administrations and the Administrative Procedure will also be carried out. Common, and 13/1995, of 18 May, of Contracts of Public Administrations.

3. This delegation includes the power to regularise, clarify and harmonise the legal texts to be recast.

Third end disposition.

Within a period of not more than six months from the date of publication of this Law, the Government will have to submit to the Courts, for its processing, a bill amending Chapter X of the Law of Public limited liability companies, relating to the legal status of obligations.

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this Law.

Madrid, 16 November 1998.

JOHN CARLOS R.

The President of the Government,

JOSÉ MARÍA AZNAR LÓPEZ