This Royal Decree develops Law 13/1992, of 1 June, on own resources and supervision on a consolidated basis of financial institutions, dedicating signs to the Chapters of the Law that deal with the entities of credit and its groups (Title I), companies and securities agencies and their groups (Title II), insurance companies and their groups (Title III) and finally the other consolidated groups of financial institutions (Title IV).
The Chapter V of the Law that regulates non-consolidated mixed groups has not been the object of development, because it is considered premature, given the complexity of the matter and not being so pressing for its regulation. Instead, a preliminary title has been included, which, by way of a gantry, contains a series of provisions common to all the groups facilitating the understanding of the rest of the articulated and avoiding unnecessary reiterations.
With this Royal Decree it is aimed to fully achieve the following objectives already stated in the Law that develops:
First of all, to transpose properly Directives already approved by the European Community (Directive 89 /299/EEC of 17 April 1989 on the own funds of credit institutions; part of the Directive). 89 /646/EEC of 15 December 1989, Second Banking Directive; Directive 89 /647/EEC of 18 December 1989 on the solvency ratio of credit institutions; in part, Directive 91 /674/EEC of 19 December 1991, on the annual accounts and consolidated accounts of insurance undertakings and Directive 92/30/EEC of 6 December The proposal for a Directive on the supervision and control of credit institutions 'high risk operations and the proposal for a Directive on the supervision of credit institutions on a consolidated basis (the proposal for a Directive on the supervision and control of credit institutions' operations). Directive on capital adequacy of investment firms and credit institutions).
In this way, our legal system incorporates all the Community rules governing the solvency of financial institutions. In this transposition, the concern of not subjecting the Spanish financial institutions to a more stringent regime than that required by the Directives is concerned, although in some exceptional cases it has been chosen to subject them to additional measures. essential to ensure their sound financial health. It should not be forgotten that the necessary competitiveness of our institutions vis-à-vis foreigners can also be increased by their correct prudential supervision and the confidence that this creates.
Secondly, an adequate response is given to one of the most relevant and complex phenomena of modern financial systems such as the existence of groups often integrated by entities of very different nature and subject to the supervision of different public bodies. Thus, in this Royal Decree, and following the method of reaching special regulations based on more general statements, the different types of groups are defined, their own resources requirements are established and mechanisms are articulated. supervision on a consolidated basis.
Given the unitary nature of the financial system and the essential affinity of the entities that make it up, it has also been claimed that in the regulation specifically applicable to each type of entity there is a notable degree of homogeneity. In this sense and following the mandate of the Law, the solvency rules cater more to the objective nature of the risks inherent in each financial operation, than to the type of entity that performs it.
Another objective pursued by the standard is to strengthen collaboration between the different supervisory bodies, which is the only way to deal adequately with increasingly sophisticated organisational schemes. To this end, it is also possible to create a register of groups of financial institutions in the Ministry of Economy and Finance.
Finally, it has been tried that the regulation was as complete as possible since the novelty and importance of its object demanded it. However, in many cases the referral to the appropriate single lower-ranking provisions has been unavoidable to regulate the most muddable and detailed aspects.
In its virtue, on the proposal of the Minister of Economy and Finance, prior to the report of the Advisory Committee of the National Securities Market Commission, according to the Council of State and after deliberation by the Council of Ministers in their meeting on 6 November 1992,
D I S P O N G O:
Preliminary Title
Common Provisions
Chapter I
Financial Entity Groups
Article 1. Concept.
The groups of financial institutions referred to in Chapters I to V, both inclusive, of Law 13/1992, of June 1, are those sets of entities of that nature in which any of the following circumstances:
a) That a financial institution controls one or more financial institutions.
b) That a natural person, a group of persons acting systematically in concert, or a non-financial institution controls several financial institutions.
Item 2. Control of an entity.
1. In order to determine whether there is a control relationship, the criteria provided for in Article 4 of the Securities Market Act shall be met.
2. Non-inclusion in the group of a financial institution in which a holding equal to or greater than 20 per 100 of its capital or voting rights is held shall be justified to the body responsible for the supervision or supervision of the financial institution. group.
Article 3 Financial Entities.
1. For the purposes of this Royal Decree, the following financial institutions shall be considered:
(a) Credit institutions.
b) Securities companies and agencies.
c) The insurance entities.
d) Investment companies would be mobile.
e) The management companies of collective investment institutions, as well as pension fund management companies, whose exclusive social object is the administration and management of the aforementioned funds.
(f) The holding companies.
g) Venture capital and venture capital companies.
(h) Entities whose principal activity is the holding of shares or units.
(i) Entities, whatever their name or status, which, in accordance with the rules applicable to them, exercise the typical activities of the former.
Likewise, and aunue do not have the consideration of financial institutions, they shall form part of the groups of these financial instruments whose activity involves the extension of the business of a financial institution, or consists of in the case of the provision to entities of the group of ancillary services, such as the holding of immovable or tangible assets, the provision of computer services, valuation, representation, mediation or similar services.
The main activity of an entity shall be the holding of shares or units when, at the reference date referred to in Article 9, more than half of its assets are made up of financial investments. permanent capital, regardless of the activity, social object or status of the participating entities.
2. Investment funds, pension funds, venture capital funds, risk capital funds and other separate assets without legal personality shall not be considered as financial institutions.
Article 4. Entities belonging to groups of financial institutions on the basis of nationality criteria.
. If the dominant entity is a Spanish financial institution, all financial institutions controlled by it shall be integrated into the group, irrespective of their nationality, domicile or legal nature, and irrespective of the country in which they are located. develop their activities.
2. Where one of the assumptions referred to in Article 1 (b) of this Royal Decree is included, or where the parent is a foreign financial institution, the corresponding group shall be composed of the financial institutions of Spanish nationality and, where applicable, the subsidiaries of the latter which are financial institutions, irrespective of their nationality, domicile or legal status, and irrespective of the country in which they operate.
Article 5. Economic group.
For the purposes of this Royal Decree, a group of undertakings or entities, whatever the activity or social object thereof, constitutes a unit of decision, shall be considered as an economic group. Article 4 of the Law on the Stock Market.
Chapter II
Consolidable groups of financial entities
Article 6. Consolidation of groups of financial institutions.
1. With the exception referred to in paragraph 3 below, the financial institutions component of the same group shall consolidate their accounting statements, in the terms set out in the specific rules for each type of group of entities. financial.
2. The annual accounts and consolidated management report of the groups of financial institutions shall be subject to the audit of accounts governed by Law 19/1988 of 12 July of Audit of Accounts. These accounting statements, as well as their corresponding audit reports, shall be deposited in the Trade Register, in accordance with the Trade Code and its implementing rules.
3. By way of derogation, the accounting statements of insurance institutions and their groups, on the one hand, with those of credit institutions and securities companies and their respective groups, on the other, shall not be consolidated without prejudice to the accounting operations which are required to be carried out when the assumptions provided for in Chapter V of Law 13/1992 of 1 June 1992 on special surveillance rules applicable to non-consolidated mixed groups of financial institutions are met; and in the provisions that develop it.
Article 7. Types of consolidable groups of financial institutions.
1. For the purposes of this Royal Decree, the following are consolidated groups of financial institutions:
(a) The consolidable groups of credit institutions, regulated in Title I.
(b) The consolidated groups of companies and securities agencies, regulated in Title II.
(c) The consolidable groups of insurance entities, regulated in Title III.
(d) The other consolidable groups of financial institutions, regulated in Title IV.
2. The financial institutions that integrate, in each individual case, a consolidable group may be individually subject to the same or different classes of own resources requirements, being of application in the latter case what is foreseen in the Article 14.
Article 8. Required entity.
1. In accordance with the provisions of Law 13/1992 and the following Titles of this Royal Decree, in each consolidated group of financial institutions there will be an entity which must fulfil the duties mentioned in the following number and the other (a) to be required in accordance with the rules applicable to it.
2. The required entity shall have, inter alia, the following duties:
a) Formulate and approve the annual accounts and consolidated management report for the group.
b) Designate auditors from the group.
(c) Depository in the Trade Register, in accordance with the applicable rules, the annual accounts and the consolidated management report and the report of the group's auditors.
d) The duties arising from relations with the body responsible for the supervision of the group, such as drawing up and forwarding documentation and information concerning the group, meeting the requirements and facilitating the the inspection body of the supervisory body, and the other actions to be provided for in the applicable rules; all without prejudice to the fact that the body responsible for the supervision of the group may be directly addressed to the constituent entities of the group.
3. The penalties corresponding to the infringements of the consolidated group shall, as such, be imposed on the group's obligor and, if applicable, its directors and directors.
Article 9. Reference date for the existence of a consolidated group of financial institutions.
such holdings to be considered in the definition of a consolidable group of financial institutions shall be those existing on the date to which the consolidated accounting statements relate, whichever is their permanence in the accounts. portfolios of the entities in the group.
Article 10. Consolidated sub-groups of financial institutions.
1. For the purposes of this Royal Decree, a consolidated group of financial institutions shall be considered to be a consolidated group of financial institutions whose configuration corresponds to one of the types provided for in Article 7, which in turn is integrated into a group of financial institutions. The most extensible and the different type of consolidation.
2. For the purposes of prudential supervision, institutions belonging to a consolidated sub-group of financial institutions shall consolidate their accounting statements, without prejudice to the fact that the states corresponding to the sub-group are consolidated with the remaining component entities of the group. For these purposes, the consolidated sub-groups as provided for in Article 6 (3) shall be applicable to the consolidated groups.
3. In any sub-group there shall be an entity required to carry out the sub-consolidated level of the duties provided for in Article 8 (2), in the following terms:
(a) Where the sub-group lacks a consolidated dominant entity, it shall only fulfil the duties set out in paragraphs (b) and (d) of that paragraph.
(b) Where the circumstance referred to in the preceding paragraph is not given, the required entity must fulfil all the duties relating to the aforementioned paragraph. In this case, the duty of consolidation laid down in Article 6 (2) of Royal Decree 1815/1991 of 20 December 1991 laying down the rules for the formulation of consolidated annual accounts shall be deemed to be fulfilled.
4. The penalties for infringements of the consolidated sub-group shall, as such, be imposed on the sub-group's obligor, and, where appropriate, its managers and directors, without prejudice to any penalties that may be imposed by the sub-group. the obligable entity of the consolidable group in which the group is integrated.
Chapter III
Monitoring of financial institution consolidable groups
Article 11. Supervisory arrangements.
1. The consolidated groups of financial institutions shall be subject to a prudential supervision regime on a consolidated basis. For these purposes, in each case there will be a Spanish state agency responsible for this supervision in accordance with the provisions of Law 13/1992, of June 1, and in the following Titles of this Royal Decree.
On a consolidated basis, supervision on a consolidated basis shall not prevent all or some of the components of the consolidable groups of financial institutions from being subject to individual supervision or on a basis subconsolidated. In particular, the inclusion of a consolidated group of an institution subject to individual supervision by a body other than the group's supervisory officer shall not exempt the group's first supervisory body from the exercise of its functions.
2. The individual exclusion of a consolidation entity based on the provisions of Article 43 (2) of the Trade Code or the specific rules of each type of consolidation group shall be without prejudice to the fact that the institution supervision on a consolidated basis continues to exercise control over that institution which confers on it the specific rules referred to above.
3. The consolidated sub-groups of financial institutions shall be supervised, as such, on a sub-consolidated basis.
For the determination of the type of consolidable subgroup in each case, the required entity, the specific requirements of the minimum own resources, and the supervisory body and the supervisory body, the rules shall apply. for the different types of groups that can be consolidated in the following Titles of this Royal Decree.
Article 12. Collaboration between supervisory bodies.
1. Where, in addition to the body responsible for the supervision of a consolidated group on a consolidated basis, there are other Spanish bodies responsible for individual supervision or on a sub-consolidated basis of group components, the first of which they must act in a coordinated manner with the other supervisors and all must cooperate with each other.
2. If foreign entities are part of Spanish groups or if Spanish entities are part of foreign groups, the Spanish authorities will collaborate with the foreign competent authorities to facilitate prudential supervision. on condition of reciprocity and respect for professional secrecy. In the case of the competent authorities of other Member States of the European Communities, prudential supervision shall be carried out on the terms of the Community rules or the conventions concluded under them.
Chapter IV
Minimum own resource requirements of financial institution consolidable groups
Article 13. General rules.
1. For the purposes of this Royal Decree, the following classes of minimum own resources requirements shall be distinguished: the solvency ratio of credit institutions, the requirements of own resources of companies and credit institutions securities, the solvency margin of insurance institutions and, in general, any other rules specifically applicable to them and other financial institutions which relate their own resources to the risks assumed or to their volume of business, including, where appropriate, those which they may issue for collective investment institutions.
2. Each type of consolidated group of financial institutions must meet its specific minimum own resources requirements in the terms provided for in the respective Title of this Royal Decree, without prejudice to the provisions of the article. next.
3. The consolidated sub-groups of financial institutions shall meet at the sub-consolidated level the minimum own resources requirements corresponding to the type of sub-group concerned, in accordance with the rules referred to in paragraph 3 of this Article. Article 11 of this Royal Decree. This shall be without prejudice to the groups in which they are integrated and which, where appropriate, are to be required of the individual entities.
Article 14. Particular rules.
1. The own resources of a consolidated group in which financial institutions subject to minimum own resources requirements of different classes are integrated shall not be less than the highest of the following measures:
(a) The necessary to achieve the minimum own resources requirements specific to the type of consolidable group in question.
(b) The sum of the minimum own resources requirements established for the entities in the group, calculated on an individual or sub-consolidated basis.
2. Although in a consolidated group entities subject to different definitions of own resources are to be integrated, they shall only compute as own resources of the group, as such, those elements which are covered by the own rules of the type of consolidable group in question. The same rule applies in relation to the deductions of own resources and their limitations.
3. For the purposes of paragraph 1 (b) above, the calculation for the application to each component entity of the consolidable group, or for each consolidable sub-group, of its specific minimum own resources requirements, shall be carried out considering the following rules:
1. The representative assets of holdings in consolidated entities, and any other assets not included in the consolidated accounting statements, shall not entail any own resources requirements.
2. The own resources elements which, in accordance with their specific rules, are to be computable for one of the individual entities, or sub-groups of entities, and which, however, are not for the group as a whole, shall be deducted from the requirements for those individual entities or sub-groups, as far as they are concerned; deductions in own resources to be made under those individual or sub-group specific rules, but not in accordance with the rules of the group in together, they shall be added to the above requirements.
3. The demand for own resources corresponding to consolidable entities that are not subject by nature to individual own resources requirements shall be the highest of the following amounts:
-The minimum capital of constitution which, if any, imposes on them their special legislation.
-The result of applying to the entity the minimum own resource requirements specific to the type of consolidable group in which it is integrated.
4. The consolidated groups of insurance companies, which are regulated in Title III of this Royal Decree, are exempted from the provisions of paragraph 1 (a) and 3 (3).
5. In order to ensure that the body responsible for the supervision of a consolidated group in which entities subject to different classes of minimum own resources requirements are integrated, it can monitor the application of the provisions of subparagraph (b) of the Paragraph 1 above, the other bodies responsible for the individual supervision or on a sub-consolidated basis of the group's members shall communicate to the group, whenever necessary and at least twice a year, the requirements of minimum own resources which, in accordance with their specific rules, are required in a manner individual or sub-consolidated to the entities subject to their supervision, the deficits they present in relation to such minimum requirements, and the measures taken for their correction.
6. The body responsible for the supervision of the consolidable group shall inform the other bodies with supervisory powers on individual entities, or on sub-groups thereof, where it considers it necessary for the performance of their tasks. (a) the respective functions, the deficits in the minimum own resources requirements which are required for the group and the measures taken for its correction.
Chapter V
Other Provisions
Article 15. Designation of the supervisory body and group registry.
1. The competent departments of the Ministry of Economy and Finance shall process the files for the designation of the body responsible for the supervision of the consolidated groups of financial institutions when the circumstances of Article 65 are met. of this Royal Decree or the second paragraph of Article 8 (3) of Law 13/1985, of 25 May, and may, for these purposes, request from the entities components of the group the necessary information and data.
Effected by the Ministry of Economy and Finance, this designation shall be notified to the designated supervisory body and to the other supervisory bodies concerned, as well as to the representatives of the group.
2. The Ministry of Economy and Finance may establish, on its own or through the various supervisory bodies, a Register of Financial Institution Groups, which consists of the composition and structure of each group.
Title I
Provisions concerning credit institutions and their groups
Chapter I
Consolidable groups of credit institutions
Article 16. Definition.
1. Without prejudice to the provisions of the second paragraph of Article 8.3 of Law 13/1985 of 25 May, the consolidated groups of credit institutions are those groups of financial institutions in which any of the following are present. circumstances:
a) That a credit institution controls one or more financial institutions.
(b) The dominant entity is an entity whose principal activity is to have holdings in credit institutions.
c) That a natural person, a group of persons acting systematically in concert, or a non-consolidated entity controls several entities, all of which are credit institutions.
2. By way of derogation from Article 4 (2), the foreign dominant entity whose principal activity consists of holding shares in credit institutions, as well as its consolidable subsidiaries, shall be integrated into the consolidated group of credit institutions, for the purposes of their supervision by the Spanish authorities, when the following conditions are met simultaneously:
(a) The nationality of that dominant entity is applicable to any member country of the European Communities and none of its subsidiary credit institutions has the same nationality.
b) Be in the presence of any of the following assumptions:
1. Where the Spanish national credit institutions are the only subsidiaries of that nature at Community level.
2. Where, in the case of Spanish subsidiary credit institutions and other Community countries, an agreement has been reached between the competent Spanish authorities and those of those other countries, including the host country of the dominant entity, in the power to provide supervision on a consolidated basis to the Spanish authorities.
3. Where, in the absence of the agreement referred to in the preceding subparagraph, the credit institution of the group with the highest balance sheet has Spanish nationality or, if any, credit institutions in Spain and other Community countries exist, the balance sheet totals were equal, outside the Spanish credit institution authorised in the first place.
3. By way of derogation from Article 4 (1), it shall not constitute a consolidated group of credit institutions for the purposes of its supervision by the Spanish authorities, consisting of a Spanish entity whose principal activity is the holdings of shares in credit institutions and their consolidated subsidiaries, where there is no subsidiary credit institution of Spanish nationality.
4. For the purposes of the foregoing paragraphs of this Article, the principal activity of an institution shall be understood to consist of holdings in credit institutions where the following two requirements are met. simultaneously:
(a) The entity shall be as referred to in paragraph 1 (h) of the preceding Article 3 (1).
b) That more than half of its portfolio of permanent financial investments in capital is constituted by shares or other types of securities representing holdings in credit institutions or in companies, is its name or status which, in accordance with the rules applicable to it, carries out the typical activities of the credit institutions.
Article 17. Prudential supervision.
1. The consolidated groups of credit institutions shall be subject to supervision on a consolidated basis of the Banco de España.
2. The Banco de España may request the branches of foreign credit institutions to send the accounting statements of financial institutions located in Spain and controlled by those credit institutions or by their group, unless they are are subject to supervision, on an individual or consolidated basis, by the National Securities Market Commission, the Directorate-General for Insurance or the Banco de España itself. They shall also inform you of the financial and management relations between the branch, or the parent and its group, and those entities.
Article 18. Required entity.
The required entity of a consolidated group of credit institutions shall be its dominant entity. However, in the case referred to in Article 16 (1) (c), the required entity shall be designated by the Banco de España among the credit institutions of the group.
Article 19. A set of credit institutions affiliated to a central body.
The provisions of this Royal Decree relating to consolidated groups of credit institutions shall be applicable to sets of credit institutions permanently affiliated to a central body that comply with the following requirements:
1. The central body has a status as a credit institution.
2. That the obligations of the central body and the affiliated institutions are in solidarity, or that the obligations of the affiliated institutions are fully guaranteed by the central body.
3. The central body shall draw up consolidated accounts for the whole.
4. That the management of the central body controls the solvency and liquidity of the affiliated entities and is enabled to give binding instructions to them in virud of the statutes of these or of a public contract granted to the effect.
It will be up to the Banco de España to appreciate the concurrence of the preceding requirements.
Chapter II
Defining the own resources of credit institutions and their consolidable groups
Article 20. Composition of own resources.
1. For the purposes of Title II of Law 13/1985 of 25 May, the own resources of credit institutions shall comprise the following elements:
(a) The share capital of public limited liability companies, excluding the share of the same referred to in paragraph (f) below; the funds and the equity shares of the savings banks, as well as the social fund of the The Spanish Confederation of Savings Banks and the participative shares of association issued by it; the contributions to the social capital of the credit unions, and the endowment fund of the branches of foreign credit institutions.
b) The effective and express reserves, including the reserve fund of the savings banks and their Confederation.
At the end of the financial year and until the implementation of the results is carried out, credit institutions may incorporate the part of the results of the exercise which is intended to be applied to this item, provided that:
1. There is a formal decision to apply the results of the entity's management body;
2. The accounts in which such results are reflected have been verified in accordance with the entity's external auditors, and
3. To the satisfaction of the Banco de España, it is credited that the part to be incorporated is free of any foreseeable burden, especially for tax, dividend, or endowments to the benefit-social work of the Savings Banks and the funds of credit unions.
c) The reserves of regularisation, updating or revaluation of assets, after verification by the Banco de España of the correction of its calculation and its submission to the accounting rules.
Reserves of this nature associated with merger processes shall not be counted as own resources prior to the registration of the merger in the Mercantile Register, subtracting from the revalued assets for the purposes of the calculation of the solvency ratio.
(d) The funds affected to the institution's risk pool, the allocation of which has been made separately within the profit or loss account, and provided that its amount is shown separately in the public balance sheet of the entity.
e) The funds of the benefit-social work of the Savings Banks, those of its Confederation and those of education and promotion of credit unions, provided that they are permanent in nature. It is understood that they have such a character that they are materialised in real estate.
(f) The share of the share capital corresponding to the non-voting shares regulated in Section 5 of Chapter IV of the Companies Act.
(g) Subordinated financing received by the credit institution meeting the requirements set out in Article 22 (3) of this Royal Decree. Subordinated financing is defined as those which, for the purposes of credit ranking, are placed behind all the common creditors.
(h) Finances of indeterminate duration which, in addition to the conditions required for subordinated financing, provide that the debt and interest payable may be applied to absorb the losses of the entity without the need for dissolution.
For inclusion in own resources, the items referred to in paragraphs (a), (f), (g) and (h) shall be taken into account in the part that is actually disbursed.
2. In the own resources of a consolidable group of credit institutions, I
shall, in addition to the elements indicated in the preceding number resulting from the consolidation of the corresponding accounting statements, bear the following elements of the consolidated balance sheet:
(a) The shares representing the minority interests of the companies of the consolidated group, in the part that is actually disbursed.
b) Reserves in consolidated companies. In the case where the consolidated balance sheet assets are lost in consolidated companies, they shall be deducted from the consolidated reserves.
Without prejudice to the power of the Bank of Spain referred to in Article 22 (4), the shares representing minority interests shall be distributed between paragraphs (b), (f) and (g) of the preceding paragraph, for the purposes of the limits laid down in Article 23, in accordance with the following criteria:
1. The items referred to in paragraph (b) of the preceding paragraph shall include shares representing ordinary shares and materialised shares in preference shares issued by foreign subsidiaries, provided that they are available for the hedging of risks and losses under the same conditions as ordinary shares, their duration is undetermined and they do not grant cumulative rights to the collection of dividends.
2. The items referred to in paragraph (f) of the preceding paragraph shall include the silent shares issued by the Spanish subsidiaries and the preferred shares issued by foreign subsidiaries which are available to absorb losses of the entity without (a) the need for dissolution, which either has an indefinite duration or, where it is determined, is not less than that provided for in Article 22 (3) for subordinate financing and does not confer any cumulative rights on the collection of dividends.
3. The items referred to in paragraph (g) of the preceding paragraph shall include preferred shares issued with a fixed term of foreign subsidiaries, where they grant cumulative rights to the collection of dividends. In any event, their duration may not be lower than that provided for in Article 22 (3) for subordinate financing.
Article 21. Deductions from own resources.
1. They shall be deducted from the own resources of the credit institutions, or from the consolidable groups of credit institutions:
(a) The negative results of previous financial years and the current financial year, as well as the intangible assets incorporated in its assets.
(b) Shares, contributions or other transferable securities as own resources of the entity or group that are held by that entity or group of any entity in the consolidable group, including those held by persons acting on behalf of any of them and those who have been the subject of any transaction or undertaking which would prejudice their effectiveness in covering losses of the institution or group.
(c) Financing to third parties, the object of which is the acquisition of shares, contributions or other transferable securities as own resources of the credit institution that has granted them or of other entities in its consolidated group. This deduction shall not apply to the financing provided to the staff of the institution or other entities in the consolidable group, provided that their unit amount does not exceed the limits to be established.
(d) Shares, contributions or other transferable securities as own resources of the credit institution, or of other consolidable entities, held by non-consolidated entities of the same economic group, up to the limit that they reach, directly or indirectly, the shares, cash supports or credit guarantees granted to the holding entities by the credit institution or by any of the entities in the consolidable group.
(e) Shares in financial institutions, other than insurance institutions, not integrated in the consolidable group, where the participation of the credit institution, or the consolidable group of credit institutions, is more than 10 per 100 of the capital of the investee.
(f) Subordinated financing or other transferable securities as own resources issued by the participating entities referred to in the preceding paragraph and acquired by the entity or group holding the shares.
(g) participations in financial institutions other than insurers, other than those included in the preceding paragraph (e), and not integrated in the consolidable group, and subordinated financing issued by them and acquired by the entity or group holding the shares, in the party where the sum of all of them exceeds 10 per 100 of the credit institution's own resources, or of the consolidated group of credit institutions, calculated after to carry out the deductions referred to in paragraphs (a), (b), (c) and (d) of this paragraph.
(h) The excess of the shares in non-financial entities referred to in Article 10 of Law 13/1985 of 25 May and Article 24 of this Royal Decree.
(i) the existing deficits in the specific provisions or funds of the mandatory allocation, in the form that is determined in the application provisions.
2. The deductions referred to in the preceding number shall be made, where appropriate, by their value in the books of the holding entity.
Article 22. Conditions for the computability of own resources.
1. For the purposes of its consideration as own resources, the capital of credit unions shall be composed of contributions from partners and associates who meet the following requirements:
(a) Your remuneration shall be conditional on the existence of net results or, subject to the authorisation of the Bank of Spain, sufficient reserves to satisfy it.
b) Its duration will be indefinite.
(c) Your eventual refund will be subject to the conditions arising from Article 7 (4) of Law 13/1989, of credit unions.
2. In order to qualify as own resources, the reserves, funds and provisions referred to in Article 20 (1) (c), (d) and (e) shall, to the satisfaction of the Bank of Spain, comply with the following requirements:
(a) To be freely usable by the institution to cover the risks inherent in the exercise of banking activity, even before any losses or losses have been determined.
b) Reflect on the accounting of the entity, having been verified its amount by the external auditors of the entity and communicated such verification to the Banco de España.
c) Be duty free or reduced in the amount of which they are likely to be imputable.
3. In order to be considered own resources, subordinated financing must meet the following conditions:
(a) The original time limit for such financing shall not be less than five years; if the date of its expiry has not been fixed, a notice of at least five years shall be required for its withdrawal. In one or another case, during the five years preceding the expiry date, they shall reduce their calculation as own resources by 20 per 100 per year, until their remaining period is less than one year, at which time they shall cease to be be computed as such.
(b) The payment of interest shall be deferred in the event of losses.
(c) They may not contain redemption, redemption or early repayment terms, without prejudice to the possibility that the Banco de España may authorise the debtor to repay subordinated financing in advance if this is not affected by the solvency of the institution.
(d) They may not be provided, or subsequently acquired, by the institution itself, by entities or persons with financial support from the issuing institution or the consolidable group; however, they may be convertible into shares, contributions or units of the issuing entity, or of entities of the consolidable group, and be acquired with the exclusive purpose of their conversion.
e) In the contracts and prospectuses, the condition of subordinated financing for the creditors will be evident; the Banco de España will verify these contracts and brochures in order to qualify their computability as resources. own.
Subordinated financing may be denominated in both pesetas and foreign currency.
4. The Bank of Spain shall be responsible for the rating and inclusion in the own resources of a consolidated group of credit institutions of all kinds of preferred shares, issued in accordance with the rules applicable, and the referred to in Article 20 (1) (f), (g) and (h), issued by means of financial instruments or other subsidiaries. The Bank of Spain shall take care, in particular, that the law of the country in which the issue is issued, or the own interposition of the FVCs or subsidiaries, does not weaken the effectiveness of the requirements and limitations established for such companies. instruments, nor their value as the group's own resources.
Article 23. Limits on the computation of own resources.
1.
for the purposes of the following paragraph:
(a) The basic own resources of a credit institution shall be made up of the sum of the items referred to in Article 20 (1) (a), (b) and (d), minus the amount of (a) of paragraph 1 of the Article 21 and the items included in concepts (b), (c) and (d) of this last paragraph relating to those items.
(b) The basic own resources of a consolidated group of credit institutions shall include, with their sign, the items referred to in the preceding paragraph resulting from the consolidation of the corresponding accounting statements; holdings representing the minority interests which may be included among the items referred to in Article 20 (1) (b) and the reserves in consolidated companies referred to in paragraph 2 (b) of this Article. Article 20.
(c) The second-category own resources of a credit institution shall be made up of the elements set out in paragraphs (c), (e), (f), (g) and (h) of Article 20 (1).
(d) The second-rate own resources of a consolidated group of credit institutions shall be made up of the items listed in the preceding paragraph resulting from the consolidation of the corresponding states. (a) accounting and for holdings representing the minority interests to be included in the items referred to in Article 20 (1) (f) and (g).
2. They shall not be eligible as own resources of a credit institution or a consolidated group of credit institutions:
(a) The excess of the items referred to in paragraph 1 (g) of Article 20, over 50 per 100 of the core own resources of the entity or the consolidable group.
(b) The excess of own resources of the second category on the 100 per 100 of the core own resources of the entity or of the consolidable group, on the part where that excess has not been disposed of in accordance with the provisions laid down in paragraph (a) of this paragraph.
The Banco de España may authorize credit institutions and consolidable groups of credit institutions to compute as their own resources, transitory and exceptionally, the excess over the limits established in this sector. paragraph.
Article 24. Qualifying holdings in non-financial institutions.
1. In accordance with the provisions of Article 10 of Law 13/1985 of 25 May, they shall be deducted from the own resources of the consolidated groups of credit institutions, or of credit institutions not belonging to one of these groups, the largest of the following amounts:
(a) The total amount of their qualifying holdings in undertakings which do not have the character of financial institutions or of their financial institutions, in the part where the total amount exceeds 60 per 100 of the own resources of the consolidable group or the credit institution holding the holdings.
(b) the amount of qualifying holding in a single undertaking or the sum of qualifying holdings in undertakings belonging to the same economic group, provided that the undertakings are not of a financial character or (a) in the part of each holding or sum of shares exceeding 15 per 100 of the own resources of the consolidable group or of the credit institution holding the holdings.
2. For the purposes of the preceding number, a consolidated group of credit institutions, or a credit institution not belonging to one of these groups, shall be deemed to hold a qualifying holding when, in relation to the undertaking investee:
a) Poses at least 10 per 100 of its capital or voting rights, including the possession through entities controlled by the consolidable group or by the credit institution, or through persons acting on behalf of one of the parties. or another, and that of what is arranged in concert with any other person; or
b) Pueda to exercise a notable influence on its management. It shall be understood that this possibility exists where at least 20 per 100 of the members of the investee company may be designated, or have actually been, by the consolidable group or the credit institution holding the holding.
3. For a financial assistance operation carried out by a consolidated group of credit institutions, or a credit institution not belonging to one of these groups, to allow the exclusion of a qualifying holding from the limitations to which This article shall be required:
1. The transaction would affect a company in which the consolidated group or the credit institution, or other entities in their respective economic groups, had a stake not less than 5 per 100 of the capital; they were involved in permanent form in their management; or they are creditors with a share in the total of the liabilities of the company exceeding 25 per 100.
2. The company concerned has been declared to be in suspension of payments or bankruptcy, or experiences serious and permanent solvency problems.
3. That, in the view of the Banco de España, there are no alternative possibilities to guarantee the interests of the credit institution in the company in difficulty.
The Bank of Spain will set the maximum period of exclusion on the basis of the company's consolidation programme. That period may not exceed four years.
4. Where the consolidated group or the credit institution holds a qualifying holding as a result of the underwriting of a securities issue, the non-inclusion of that holding in the deduction provided for in this Article shall not exceed a year from the acquisition of the securities by the entity.
5. The non-inclusion in the deduction set out in this article of shares held on its own behalf, but on behalf of third parties, shall require the existence of a written contract of mandate and shall be incompatible with the existence of a participation the same undertaking by the consolidable group or by the credit institution or, where appropriate, by other entities in their respective economic groups.
Chapter III
Solvency Ratio
Article 25. Level and requirement of the solvency ratio.
1. The consolidated groups of credit institutions and credit institutions which are not integrated into one of these groups shall at all times maintain a solvency ratio of not less than 8 per 100.
2. The obligation set out in the preceding paragraph shall also affect branches in Spain of foreign credit institutions which are not exempt from their application in accordance with the provisions of Article 13 of Law No 13/1985 of 25 May 1985. May.
Article 26. Weighting of the risk elements.
1. The assets and liabilities and other accounts of order which present a risk of credit, excluding those items which are deducted from own resources, shall be classified and weighted for the calculation of the solvency ratio in the the risk groups and the weighting and surcharges established by the Minister for Economic Affairs and Finance on a proposal from the Bank of Spain, taking into account the provisions of this Article.
In the exercise of these powers, the degree of risk assumed in the transactions shall be considered, having regard to their characteristics and guarantees and the personality of the counterparty.
2. The determination of the credit risk of the assets, and of the commitments and other order accounts, shall be in accordance with the following criteria:
(a) The risks to the State Administration and the Bank of Spain; vis-à-vis the Central and Central Banks of the States belonging to the European Communities, of the full member countries of the European Union. the OECD, and of those who have concluded special loan agreements with the International Monetary Fund under the General Agreement on Business, as well as against the European Communities as such, will have a zero weighting.
Identical weighting will receive the Public Debt issues of the Autonomous Communities when authorized by the State.
(b) The risks to the Autonomous Communities, with the exception of those included in the preceding paragraph, against the Spanish Local Corporations and the Regional or Local Administrations of the other countries of the European Communities, of the full member countries of the OECD, and of those who have concluded special loan agreements with the International Monetary Fund in the framework of the General Business Agreements, will receive a weight not less than 20 per 100 of the value of the assets or commitments.
(c) The weightings attributed in the preceding paragraphs to the risks with the Spanish Public Administrations will be extended to those contracted with the autonomous bodies and public entities that are dependent on them, provided that have the nature provided for in paragraph 1 (b) or (5), both of Article 6 of the recast text of the General Budget Law, or the analogous nature to that provided for in the relevant laws of the Communities Autonomous.
(d) The risks to Central and Central Banks of the countries not referred to in subparagraph (a) shall be given a zero weighting, provided that they are nominated and financed in the national currency of the borrower and comply with the conditions relating to the level of sovereign risk to be determined.
(e) The weighting of risks to credit institutions and securities companies and agencies shall not be less than 20 per 100 and shall be in accordance with the characteristics of the operation, period and country of the registered office of the institution. entity.
(f) The weighting of risks to the European Investment Bank and to the Multilateral Development Banks shall not be less than 20 per 100.
g) Fully secured loans with mortgages on housing will be assigned a weighting of not less than 50 per 100.
Equal weighting may be allocated for real estate leasing operations relating to multi-purpose commercial premises or offices.
(h) The accruals shall be subject to the same weighting as the assets from which the reporting returns are derived. Where the type of assets from which such returns are not determined, a flat-rate weighting of not less than 50 per 100 shall apply, except where the non-determination is a consequence of the non-compliance with the rules accounting, for which a weighting shall be applied not less than 100 per 100.
(i) Real assets and venture capital of any class, irrespective of their issuer, shall be assigned a weighting of not less than 100 per 100.
(j) Risks not included in the preceding paragraphs shall be weighted not less than 100 per 100. However, where such risks are provided with collateral, collateral or collateral, which reduces them significantly, they may be subject to a lower weighting.
k) Commitments and other order accounts shall be subject to a double weighting. First, each item shall be multiplied by a reduction coefficient, to be determined by the Bank of Spain, between 0 and 100 per 100, depending on the degree of risk involved. Second, the amount obtained shall apply to the weightings attributed to the corresponding counterparties, as provided for in the preceding paragraphs. However, in the sale agreements with a repurchase agreement and in the term purchase commitments recorded in order accounts, the applicable weighting shall be that corresponding to the asset in question and not to the counterparty of the transaction.
l) Risks with explicit personal guarantees shall be weighted taking into account the nature of the guarantor.
Chapter IV
Risks linked to the portfolio of trading securities and exchange risk
Article 27. Risks linked to the portfolio of trading securities.
1. The requirement, in accordance with the provisions of the preceding chapter, of own resources to cover the risks linked to the portfolio of securities trading in credit institutions shall be replaced by the requirement that, in accordance with this rule, establish the Minister of Economy and Finance or, with its rating, the Banco de España, taking into account both the credit risk and the market risks of the aforementioned trading portfolios.
2. In the exercise of these powers, the Minister of Economy and Finance and the Bank of Spain shall comply with the definitions and criteria set out in Section II of Chapter 3 of Title II of this Royal Decree and shall have the following: Development powers established there. The references made in this section to the National Securities Market Commission will be understood as being made to the Banco de España.
Article 28. Exchange rate risk.
1. The consolidated groups of credit institutions and credit institutions which are not integrated into one of these groups shall at all times cover the risk of a change in their own resources with sufficient own resources. These own resources shall be additional to those required by other obligations set out in this Royal Decree.
The level of this demand for own resources will be established by the Minister of Economy and Finance on a proposal from the Bank of Spain and will not be less than 8 percent of the position in net global currency.
However, the Bank of Spain may establish a coefficient of less than 8 per 100 for the opposite sign positions in closely related currencies, and for the opposite sign positions in foreign currency legally binding intergovernmental agreements. For the same procedure, an alternative method may be established for the calculation of the own resources requirement based on the potential losses which may derive from the foreign exchange positions taking into account the historical development of the exchange rates.
2. The Bank of Spain shall establish the method for the calculation of foreign currency positions, and the assets or liabilities and the commitments they shall include.
3. The Bank of Spain may also set limits on foreign currency positions, which may graduate the application of such limits for each entity according to its type of business and its ability to manage and monitor the risk of change.
Article 29. Compensation of positions.
In the calculation of the consolidated own resources payable, in accordance with the provisions of the two preceding Articles, the consolidated groups of credit institutions may be permitted to compensate for positions of the opposite sign. held by credit institutions and by companies and Spanish securities agencies included in the consolidation where, in the opinion of the Banco de España, there is an adequate distribution of the group's own resources between those entities, and the framework The legal framework of the group would ensure mutual financial support within the group.
Where compensation is sought with, or between, entities belonging to the consolidated group domiciled in other countries of the European Communities or in third countries, it shall be as provided for in paragraph 5 of the Article 43, with the exception of the reference in that number to the large risks arising from the portfolio of trading securities.
Chapter V
Other solvency rules
Article 30. Limits to the big risks.
1. A risk is considered to be incurred against the same person or economic group, including the non-consolidated party itself, where its value exceeds 10 per 100 of the own resources of the consolidated group of credit institutions or of the credit institution not belonging to one of these groups which grants the financing or takes the risk.
2. The value of all the risks that a consolidated group of credit institutions or a credit institution not belonging to one of these groups contracts with a single person or economic group shall not exceed 25 per 100 of the own resources the consolidable group or credit institution that grants the financing or takes the risks.
If the risks are maintained against non-consolidated persons or entities but with which there is a control relationship within the meaning of Article 4 of the Securities Market Act, the limit cited shall be 20 per 100.
3. All the major risks defined in paragraph 1 above shall not exceed 800 per 100 of the own resources of the consolidated group of credit institutions or of the credit institution not belonging to one of these groups.
4. The consolidated groups of credit institutions and credit institutions not belonging to one of these groups shall carry out appropriate monitoring of the concentration of their risks through administrative and accounting procedures and appropriate internal control mechanisms, with particular attention being paid to the relationship of participation, cross-guarantees and relations of commercial dependence between its clients. For the purposes of the limits laid down in paragraphs 2 and 3 of this Article, they shall accrue to the risks held against a single person or economic group which are held against natural or legal persons who, as such, are inter-related. (a) the economic and monetary policy of the Member States of the European Union and of the Member States of the European Union and of the Member States of the European Union; They shall also monitor their concentrations of risk in the different branches of economic activity.
The Banco de España will monitor compliance with this rule and may establish that certain sets of clients are considered as a unit for the purposes of applying those limits, even if they do not belong to the same economic group.
The Banco de España may permit the application of the reference limits on an individual basis, or added to only certain components of an economic group, when its autonomy of management, limitation of liability, or activity specifies the advice.
5. They shall not be subject to the limitations set out in paragraphs 2 and 3 above:
(a) The risks referred to in Article 26 (2) (a).
(b) The risks with direct and unconditional guarantee of the subjects referred to in the first subparagraph of Article 26 (2) (a), and those insured sufficiently with a pledge of securities issued by such persons. the same subject or the values referred to in the second subparagraph of that paragraph.
(c) The risks secured with cash deposit, or certificates of deposit, in the lending institution itself or in others of its consolidable group.
(d) 50 per 100 of assets with a maturity equal to or less than one year constituting claims and other risks on credit institutions or on companies and securities agencies, provided that they do not constitute own funds of those assets entities.
e) All assets and other items deducted from own resources.
f) Available that can be unilaterally and freely cancelled by the entity.
g) Shares in insurance institutions, up to a maximum of 40 per 100 of the own resources of a consolidated group of credit institutions or of a credit institution not belonging to one of these groups.
(h) Home mortgage collateral loans, provided that they meet the requirements of the mortgage market regulatory legislation, up to 50 per 100 of the value of the corresponding property.
i) 50 per 100 of the risks to Spanish Local Corporations, and to the Autonomous Communities, as soon as they have not already been excluded in accordance with the provisions of paragraph (a) above, as well as the risks guaranteed by those administrations directly and unconditionally.
(j) Other assets or risks that, in the light of the circumstances that are exempt or mitigating, establish the Minister of Economy and Finance on a proposal from the Banco de España.
6. The Bank of Spain may regulate the conditions under which the risk to a customer shall be attributed, or may be attributed by the institution, to third parties which guarantee it directly and unconditionally or to issuers of the securities issued in its guarantee.
7. The risks of Spanish credit institutions subsidiaries of foreign credit institutions, including consolidated groups of credit institutions in Spain, which are not subject to the limitations set out in paragraphs 2 and 3 above, shall be excluded. a dominant entity is a foreign credit institution or an entity belonging to a group of foreign credit institutions subject to supervision on a consolidated basis, with what is explicitly guaranteed by the dominant entity; consolidable or other foreign credit institutions of the consolidable group of entities credit.
In any case, the Spanish credit institution or the consolidated group of credit institutions in Spain shall be subject to supervision on a consolidated basis to the foreign group, and the foreign group shall be subject to limitations equivalent to those laid down in this Article. It will be up to the Banco de España to appreciate the concurrence of these circumstances.
8. The obligations set out in paragraphs 2, 3 and 4 above shall also affect branches in Spain of foreign credit institutions which are not exempt from their application in accordance with the provisions of Article 13 of the Law. 13/1985, of 25 May.
Article 31. Limits to material immobilizations.
1. A consolidated group of credit institutions, or a credit institution not belonging to one of these groups, shall not be able to maintain net tangible assets the amount of which exceeds 70 per 100 of its own resources.
Real estate and other tangible assets used by entities in a consolidable group, or by a credit institution not belonging to a consolidated group, that are owned by a non-consolidated entity integrated in its economic group shall also be included in such a calculation up to the limit of the holdings, support numbers or credit guarantees of those in favour of the owning entities, provided that such financing instruments do not taken into account in the deduction provided for in paragraph 1 (d) of the Article 21 above.
2. The limitation referred to in paragraph 1 shall not include:
(a) The materialization of the funds of the benefit-social work of the Savings Banks and of their Confederation, and of education and promotion of credit unions, which constitute own resources in accordance with the provisions of the (e) in Article 20 (1) (e).
(b) the fixed assets acquired in payment of debts, for a period not exceeding three years from the time of their acquisition.
3. Where, in the case of oversold circumstances, such as mergers or securities updating, the limits of paragraph 1 above are exceeded, the procedure laid down in Article 34 shall apply in order to return to those limits.
4. The Banco de España may authorize, prior to its operations, tangible fixed assets exceeding the limits of this article.
5. The limitations established by this Article shall not apply to branches in Spain of foreign credit institutions.
Article 32. Control of interest rate and liquidity risks.
1. Interest rate and liquidity risks shall be the subject of continuous surveillance by credit institutions, by means of appropriate internal monitoring and control procedures. The Bank of Spain shall monitor these procedures and may subject them to minimum requirements or standardised rules.
2. The number of foreign credit institutions in Spain may be required for the number of branches in Spain.
Chapter VI
Complementary rules
Article 33. Common rules applicable to the limits laid down in this Title.
1. Without prejudice to its compliance with the consolidated group on a consolidated basis, the Banco de España may also require credit institutions to be part of it and not its dominant entity, the individual compliance with the rules of solvency established in this Title, at levels below or even equal to that set by the non-integrated credit institutions in
a consolidated group of these, when this is justified by the autonomy of management of the entity or the limitation of the group's responsibility in them, or when the special situation of the entity so advises. In such a case, and for the purposes of the limits laid down in Article 30 (2) and (3), the risks expressly guaranteed by another credit institution of the consolidable group shall be attributed to that credit institution.
2. The Bank of Spain may replace the fulfilment by the consolidated group on a consolidated basis of the provisions of Articles 27 and 28 for its individual compliance, either for the reasons set out in the preceding number, for the difficulty of consolidate positions with the frequency required to make the provisions of those articles effective.
3. The content of Articles 27 and 28 shall also affect branches in Spain of foreign credit institutions which are not exempt from their application in accordance with the provisions of Article 13 of Law 13/1985 of 25 May. National rules of other countries which have a prudential regime comparable to the content of the Community directives governing such matters shall be regarded as equivalent to those effects.
Article 34. Adoption of measures to return to compliance with the coefficient and other solvency rules.
1. Where a consolidated group of credit institutions or a credit institution not belonging to one of these groups presents a deficit of own resources in respect of the minima required under this Title, it shall inform the The Bank of Spain will immediately present a programme to the Bank of Spain to implement its plans to return to compliance. This programme must at least refer to the following aspects: identification of the causes of non-compliance with the level of own resources required; plan to return to compliance, which will include both the limitation to the development of activities involving high risks as measures to be taken for the increase in the level of own resources, and time limits for returning to compliance.
This programme should be approved, if appropriate, within a maximum period of three months from its presentation by the Bank of Spain, which may set additional measures for the proposals, in order to ensure the return to the (a) After the period specified without any express resolution, the programme submitted shall be deemed to have been approved.
2. Where a consolidated group of credit institutions or a credit institution not belonging to one of these groups fails to comply with the limitations set out in this Title, a procedure similar to that described in the previous paragraph shall be followed.
Article 35. Application of results in the case of non-compliance with the coefficient and the other solvency rules.
1. Where a consolidated group of credit institutions or a credit institution does not belong to one of these groups, it presents a deficit of own resources of more than 20 per 100 of the minimum required under the provisions of this Title, the entity, or any and all entities belonging to the consolidable group, shall be required to allocate all the net profits or surpluses to reserves. The provisions of Article 11 (5) of Law 13/1985 of 25 May 1985 are hereby imposed.
The subsidiaries in which the entities included in the consolidable group hold at least 90 per 100 of the voting rights and the capital, which individually satisfy the minimum required level, are exempted from this obligation. of own resources.
2. Where the deficit referred to in the preceding number is equal to or less than 20 per 100, the institution, or any and all entities belonging to the consolidable group, with the exception indicated therein, shall subject their distribution of results to the prior authorisation of the Banco de España, which shall establish the minimum percentage to be allocated to reserves on the basis of the programme of the consolidable group or the institution to return to the minimum levels; this minimum percentage shall be equal to 50 per 100 of the net profits or surpluses, subject to the provisions of Article 11 (5) of Law 13/1985. The Banco de España may require a higher percentage when the circumstances of the institution or group result in other effective measures to return to compliance with the rules that have been infringed or where the proposals referred to in paragraph 1 The programme is insufficient to do so.
The authorization of the Banco de España shall be deemed to have been granted if one month after the request has not been expressed.
3. The provisions of this Article and the foregoing shall apply individually to credit institutions which, included in a consolidated group of credit institutions, do not individually comply with the solvency rules required by them in the the provisions of Article 33.
4. The provisions of this Article and the foregoing are without prejudice to the application, where appropriate, of the penalties provided for in Law 26/1988 of 29 July on the discipline and intervention of credit institutions.
Title II
Provisions relating to securities companies and agencies and their groups
Chapter I
Consolidable groups of societies and securities agencies
Article 36. Definition.
1. Without prejudice to Article 86a (5) of the Securities Market Act, the consolidated groups of companies and securities agencies are those financial groups in which any of the following is fulfilled. circumstances:
(a) A company or securities agency controls one or more financial institutions.
(b) the dominant entity is an entity whose principal activity is to have holdings in companies and securities agencies.
c) That a natural person, a group of persons acting systematically in concert, or a non-consolidated entity controls a number of entities, all of which are companies or securities agencies.
2. By way of derogation from Article 4 (2), the foreign dominant entity whose main business is to have holdings in investment firms, including Spanish companies and securities agencies, as well as its subsidiaries consolidated, shall be integrated into the consolidated group of securities companies and agencies, for the purposes of their supervision by the Spanish authorities, when the following conditions are met simultaneously:
(a) The nationality of that dominant entity is applicable to any member country of the European Communities and none of its subsidiary credit institutions has the same nationality.
b) Be in the presence of any of the following assumptions:
1. Where the Spanish investment firms are the only subsidiaries of that nature at Community level.
2. Where, in the case of Spanish subsidiary investment firms and other Community countries, an agreement had been reached between the competent Spanish authorities and those of those other countries, including the host country of the dominant company, in the power to provide supervision on a consolidated basis to the Spanish authorities.
3. Where, in the absence of the agreement referred to in the previous subparagraph, there are Spanish subsidiary investment firms and other Community countries, the investment firm of the highest balance sheet group has Spanish nationality. or, if the balance sheet totals were equal, the investment firm authorised in the first place was Spanish.
3. By way of derogation from Article 4 (1), it shall not constitute a consolidated group of companies and securities agencies, for the purposes of its supervision by the Spanish authorities, consisting of a Spanish entity whose business the principal is the holding of shares in investment firms, and their consolidated subsidiaries, where there is no subsidiary investment firm of Spanish nationality.
4. For the purposes of the preceding numbers of this Article, the principal activity of an institution shall be understood to consist of holdings in companies and securities agencies or in investment firms where the two are present. following requirements simultaneously:
(a) The entity shall be as referred to in paragraph 1 (h) of Article 3 of this Royal Decree.
b) That more than half of its portfolio of permanent financial investments in capital is constituted by shares or other types of securities representing shares in securities companies and agencies or in undertakings, whatever their name or status, which, in accordance with the rules applicable to them, carries out the typical activities of companies and securities agencies.
Article 37. Prudential supervision.
The consolidated groups of companies and securities agencies will be subject to supervision on a consolidated basis by the National Securities Market Commission.
Article 38. Required entity.
The obligor of a consolidated group of securities companies and agencies shall be their dominant entity. However, in the case referred to in Article 36 (1) (c), the required entity shall be designated by the National Securities Market Commission of the companies and securities agencies of the group.
Chapter II
Corporate own resources and securities agencies and their consolidable groups
Article 39. Definition and composition of own resources.
1. For the purposes of Titles V and VIII of Law 24/1988 of 28 July 1988 on the Securities Market, the own resources of companies and securities agencies shall comprise the elements referred to in Article 20 (1). agree with the legal nature of these entities and with the same specifications, with the exception of the reference in paragraph (b) of which is made , which shall be understood as replaced by the following: close ... >. In addition, in point (i) of that paragraph b) the word shall be understood as .
2. In the own resources of a consolidated group of companies and securities agencies, the elements of the consolidated group of companies and securities agencies shall be integrated, in addition to the elements indicated in the preceding number resulting from the consolidation of the corresponding accounting statements. consolidated balance sheet as referred to in Article 20 (2), with the same specifications as are made in that number.
3. They shall be deducted from the own resources of the securities companies and agencies, or from the consolidated groups of securities, the same items as referred to in Article 21, with the same specifications, except for the excess of the shares in entities of a non-financial nature as referred to in Article 10 of Law 13/1985 of 25 May, which shall only be deducted when the circumstances provided for in Article 67 (2) of this Royal Decree are given.
4. The statements which, in the articles to which the preceding numbers are referred, are made to the consolidated groups of credit institutions, credit institutions and the Banco de España shall be construed as references to the effects of this Chapter. consolidated groups of companies and securities agencies, companies and securities agencies and the National Securities Market Commission, respectively.
Article 40. Alternative definition and composition of own resources.
1. The Minister for Economic Affairs and Finance or, with his express rating, the National Securities Market Commission, for the purposes of covering the own resources requirements arising from Sections II, IV and V of Chapter III of this Title and, where appropriate, in Article 54, they may authorise the securities companies and agencies and their consolidated groups to apply the said Section II, on risks linked to the portfolio of trading securities, to use the alternative definition of own resources as set out in the following paragraphs.
2. The alternative definition of own resources of companies and securities agencies shall consist of the elements referred to in paragraphs (a) and (b) below, by deducting the items referred to in paragraphs (c) and (d) below:
(a) The elements referred to in Article 39 (1).
(b) subordinated financing received by securities companies or agencies that meet the requirements set out in paragraph 2 of the following Article.
(c) The elements referred to in Article 39 (3).
(d) Liquid assets, where the authorization is granted for the subordinated financing referred to in subparagraph (b) above to exceed 150 per 100 of the basic own resources referred to in Article 42.
3. The alternative definition of own resources of the consolidated groups of companies and securities agencies shall be made up of the elements referred to in the preceding paragraph, except for the elements of subparagraph (a), which shall be the same as in the Article 39 (2), all in relation to the consolidated balance sheet.
4. The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission will define the accounting items that make up the illiquid assets, and can differentiate between those that apply to the entities individual and those that are to the consolidable groups.
Article 41. Conditions for the computability of own resources.
1. The conditions for the computability of the own resources of the companies and securities agencies shall be those set out in Article 22 (2), (3) and (4); the reference to the banking activity referred to in paragraph 2 of that Article shall be It shall be understood as a reference to the typical activity of securities companies and agencies.
2. In order to be considered as own resources, the subordinated financing referred to in Article 40 (2) (b) shall, in addition to the conditions referred to in Article 22 (3) (b), (d) and (e), be met. following:
(a) The original time limit for such financing shall not be less than two years.
(b) They may not contain redemption, redemption or early amortisation clauses, except in the case of liquidation of the institution. Without prejudice to the foregoing, the National Securities Market Commission may authorise the debtor to repay the subordinated financing in advance if the solvency of the entity or the consolidable group is not affected.
(c) The interest payment and the principal's repayment shall be deferred in the event that the level of own resources falls below 100 per 100 of the overall levels required of the entity or the consolidable group.
Entities shall notify the National Securities Market Commission of any amortization when, as a result of the same, the own resources of the entity or the consolidable group fall below 120 per 100 of the the overall levels required, or where own resources are already below that percentage.
Subordinated financing may be denominated in both pesetas and foreign currency.
3. The provisions of Article 39 (4) shall also apply to this Article.
Article 42. Limits on the computation of own resources.
1.
for the purposes of the following paragraph:
(a) The basic own resources and the second category of companies and securities agencies and their consolidated groups shall be those referred to in Article 23 (1), taking into account the provisions of Article 39.
(b) The third-class own resources of a company or securities agency shall be made up of the subordinated financing referred to in Article 40 (2) (b).
(c) The third-category own resources of a consolidated group of securities companies and agencies shall be made up of the items listed in the preceding paragraph resulting from the consolidation of the corresponding accounting statements.
2. They shall not be eligible as own resources of a company or securities agency or a consolidated group of securities, both in relation to the definition of Article 39 and the alternative definition of Article 40:
(a) The excess of the items referred to in Article 20 (1) (g) above 50 per 100 of the core own resources of the entity or the consolidable group.
(b) The excess of own resources of the second category on the 100 per 100 of the core own resources of the entity or the consolidable group, on the part where that excess has not been disposed of in accordance with the provisions of the Paragraph (a) above.
However, the second category of own resources exceeding that percentage in the alternative definition referred to in Article 40 shall be computable, subject to the condition that the sum of the own resources The second category assigned to the alternative definition and the third category does not exceed 250 per 100 of the basic own resources allocated to the said alternative definition.
(c) The excess of own resources of the third category on the 150 per 100 of the core own resources of the entity or of the consolidable group assigned to the alternative definition of Article 40. Notwithstanding the foregoing, the National Securities Market Commission may authorize the computability of the own resources of the third category exceeding that percentage, provided that the sum of the own resources of the second category category assigned to the alternative definition and those in the third category do not exceed 250 per 100 of the basic own resources allocated to that alternative definition.
The National Securities Market Commission may authorize securities companies and agencies and their consolidated groups to exceed, temporarily and exceptionally, the limits laid down in paragraph (a) and in the first subparagraph of Article 4 (1) of the Treaty. paragraph (b) of this paragraph.
3. The simultaneous use by a securities company or agency, or a consolidated group of securities, of the definitions of own resources referred to in Articles 39 and 40 above shall in no case be presumed to include any of the following: the components of own resources for an amount higher than the amount shown in the balance sheet of the institution or the consolidable group.
Chapter III
Own resource requirements
Section 1.
General provisions
Article 43. Level and demand for own resources.
1. Companies and securities agencies and the consolidated groups of securities shall at all times maintain a volume of own resources provided for their activity and structure expenditure and the risks assumed.
2. The own resources of securities companies and agencies may not at any time be less than the highest of the following measures:
(a) Two-thirds of the minimum social capital fixed by Article 2 of Royal Decree 276/1989 of 22 March 1989.
(b) The sum of the resulting amounts in application of the provisions of Sections III and IV of this Chapter and, where applicable, in Section II of the same Chapter, as well as in Article 54 of Chapter IV.
(c) The amount resulting from the provisions of Section V of this Chapter.
3. The own resources of the consolidated groups of companies and securities agencies may not at any time be less than the magnitude referred to in subparagraph (b) of the preceding paragraph in relation to the consolidated balance sheet or, where appropriate, to the the highest of the quantities referred to in paragraphs (b) and (c) of that paragraph.
By way of derogation from the preceding paragraph, where institutions subject to the minimum own resources requirement of different classes are included in the consolidated group of companies and securities agencies, the provisions of this Article shall apply. Article 14 of this Royal Decree.
4. Compliance by a consolidated group of companies and securities agencies with the minimum own resources requirements at the consolidated level shall not exempt financial institutions integrated in it, whatever their nature, from fulfilling their obligations. individually their own minimum resource requirements.
5. In the calculation of own resources payable to the consolidated groups of companies and securities agencies, the clearing of opposite-sign positions subject to exchange rate risk and, where appropriate, risks linked to the exchange rate risk may be permitted. a portfolio of trading securities and the large risks arising from that portfolio, held by different companies and credit institutions and securities agencies of the same consolidated group, where each and every one of them meets their requirements of own resources on an individual basis, and are domiciled in Spain or another Member State of the European Communities.
The clearing of positions referred to in the preceding paragraph between entities belonging to the consolidated group domiciled in Spain or in another Member State of the European Communities and entities located in countries third parties, or between the latter, shall be permitted only when the following conditions are met, in the judgment of the National Securities Market Commission:
1. Institutions located in third countries shall be credit institutions or investment firms.
2. Institutions located in third countries must comply, at the individual level, with solvency rules or own resources requirements equivalent to those contained in this Royal Decree.
3. There are no rules in those countries to prevent the transfer of funds between the group's institutions.
Section 2.
Risks linked to the trading value portfolio
Article 44. General provisions.
1. The provisions of this Section shall apply to companies and securities agencies and to their consolidated groups, with the exception referred to in the following paragraph.
The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission may establish that the provisions of this Section do not apply to consolidable entities or groups whose (a) a portfolio of trading securities is lower than the lower of the following amounts: 5 per 100 of its total activity or 2 billion pesetas, in which case, shall determine how the amounts referred to above shall be measured; circumstances in which, exceptionally, these amounts may be exceeded without the application of the of this Section to the consolidable entity or group, or this Section should continue to apply even if the portfolio of trading securities of a consolidable entity or group is temporarily reduced from the above amounts.
Companies and securities agencies and consolidated groups of securities and groups which are not covered by this Section shall be governed by the provisions of Article 50 (2), including in respect of risks linked to their portfolio of trading securities.
2. For the purposes of the assessment of the risks referred to in this Section, the portfolio of securities trading companies and securities agencies and their consolidated groups shall consist of:
1) Securities, including derivative instruments, and commitments on securities held by institutions for sale in the short term, or with the intention of benefiting in the short term from changes in their price; or as a cover for other items in that portfolio.
2) Pending transactions relating to securities, securities loans, and similar transactions, all of which relate to items in that portfolio.
3) The fees, interest, dividends, deposits or margin of guarantee and similar assets directly related to items in that portfolio.
3. The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission shall establish the conditions to be met by the assets and commitments that are included in the trading book.
4. Notwithstanding the references that are made in this Section to the trading book of companies and securities agencies, their operations must be carried out within the limits established by the Securities Market Law and its rules of development, in particular with regard to the implementation of own-account operations by the securities agencies.
Article 45. General rules for the calculation of positions subject to risks linked to the trading book.
1. The net position of a consolidated entity or group in each derivative value or instrument shall be measured daily at market prices, becoming the case for pesetas.
The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission will determine the items that will integrate the positions referred to in the previous paragraph, as well as the special rules which are applicable in each case.
2. The risk of positions corresponding to the portfolio of trading securities, for the purposes of calculating the required level of own resources, shall be composed of:
a) General risk arising from a change in the price of own positions due to general movements in the markets.
(b) Specific risk arising from a change in the price of a position of its own due to causes relating to the issuer of the value, or to the issuer of its underlying, in the case of derivative instruments.
3. When determining the coefficients to be applied for the calculation of the specific risk, account shall be taken of the credit quality and solvency of the different issuers; the liquidity of the securities may also be taken into account and, in the case of positions in fixed income, their residual maturity periods.
For these purposes, the Minister of Economy and Finance or, with his express rating, the National Securities Market Commission will be able to establish different categories of issuers, to which different weightings will correspond.
Article 46. Positions in fixed income.
1. The own resources necessary for the specific risk shall not be lower than those laid down for the same items in Section III, unless, in accordance with the criteria referred to in the last issue of the previous Article, they are fixed other children.
2. For the calculation of the own resources required according to the general risk, the Minister of Economy and Finance or, with his express rating, the National Securities Market Commission shall establish one or more calculation methods based on the different residual maturity periods for the positions and the estimated changes in interest rates, in which compensation may be fully or partially permitted between long and short positions with different maturity periods. The own resources requirements shall be directly related to the time or duration of the positions.
Article 47. Positions in shares and units.
1. The entity, or the consolidable itself, shall add, on the one hand, all of its long net positions, and, on the other hand, all its net short positions in shares and units and instruments derived from them.
The sum of both amounts will be your overall gross position, and the difference between the two amounts will be your overall net position.
2. The own resources necessary for the specific risk shall not be less than 4 per 100 of the overall gross position, unless, on the basis of the criteria referred to in Article 45 (3) and the diversification of positions, the Minister of Economy and Finance or, with his express rating, the National Securities Market Commission will set another percentage, never less than 2 percent.
3. The own resources required according to the general risk shall not be less than 8 per 100 of the net overall position.
Article 48. Emission assurance.
1. In the case of emission assurance, the Minister of Economy and Finance or, with his express rating, the National Securities Market Commission may establish that positions secured by the entity or group that are not consolidated are not in the form of a firm or a third-party reinsurance, in accordance with the reduction factors to be determined, from the day on which the institution is unconditionally obliged to acquire the securities secured by an amount and at a price known.
The own resources requirements referred to in Articles 46 and 47 above shall be calculated on the weighted insured positions resulting from the application of such reduction factors.
2. The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission may establish own resources requirements to cover the risk of the entity or the consolidated group since the signing of the a commitment to insurance up to the day referred to in the previous paragraph.
Article 49. Other risks linked to the trading book.
The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission shall establish the level of own resources required of an entity or group that can be consolidated in consideration of other risks linked to their trading book, different from those referred to in the previous Articles of this Section, including, in particular, the following:
1. Counterparty risk arising from transactions relating to securities in the trading book, such as delays in the settlement of the trading book, positions in derivative instruments whose market does not secure their settlement adequately, or other commitments relating to those securities.
2. The risk of commitments on interest rates whose market does not adequately secure them.
3. The risk associated with the assets referred to in the third subparagraph of Article 44 (2), in which case the criteria laid down in Section III of this Chapter shall be followed.
In the exercise of these powers, the following criteria must also be considered, among others:
1. The delay period in the delivery of securities.
2. The nature of the counterparties or issuers of the underlying securities.
Section 3.
Credit Risk
Article 50. The required level of own resources.
1. To cover credit risk, securities companies and agencies and their consolidated groups shall at all times maintain a level of own resources of not less than 8 per 100 of the risk factors, weighted as established in the next article.
2. For the purposes of the calculation of credit risk, only assets and commitments that are not part of the trading book value portfolio shall be included, nor have they been deducted from own resources. However, securities companies and agencies and their consolidated groups for which, pursuant to Article 44 (1), shall not apply to Section II of this Chapter, shall take into account all the provisions of this Chapter. items subject to credit risk.
Article 51. Weighting of the risk elements.
1. The assets and liabilities, liabilities and other items of order which are at risk of credit, excluding those items which are deducted from own resources, shall be classified and weighted for the purposes of calculating the requirements of the The National Securities Market Commission, in the risk groups and with the weighting factors and surcharges to be established by the Minister of Economy and Finance or, with its express rating, the National Securities Market Commission.
2. The exercise of the powers granted in the preceding number shall be in accordance with the criteria set out in Article 26 of this Royal Decree.
Section 4.
Change Type Risk
Article 52. Demand for own resources for exchange rate risk.
1. The securities companies and agencies and the consolidated groups of securities shall, at all times, cover with sufficient own resources the risk of the exchange rate they assume. These own resources shall be additional to those required by other obligations set out in this Royal Decree.
2. The Minister for Economic Affairs and Finance or, with his express rating, the National Securities Market Commission shall establish the requirement for own resources to pay attention to that risk and its methods of calculation, in accordance with the provisions of Article 28 of this Royal Decree.
Section 5.
Base Requirement
Article 53. Demand for own resources for the level of activity.
1. Securities companies and agencies must have at all times, in order to cover the risks arising from their level of activity, their own resources not less than 25 per 100 of the cost of the structure charged to the profit and loss account. profit from the previous year.
2. The institution may adjust this amount, subject to the authorisation of the National Securities Market Commission, if its activity has decreased substantially from the previous financial year.
Similarly, the entity will have to adjust this amount if its activity is significantly increasing compared to the previous year; the new calculation basis will be submitted to the approval of the National Market Commission Values.
3. When the entity has not completed an exercise, it will be taken as a cal base
Article 3 of the business plan referred to in Article 3 (c) of Royal Decree 276/1989 of 22 March 1989, unless the National Securities Market Commission requires the modification of the that plan.
4. The Minister for Economic Affairs and Finance or, with his express rating, the National Securities Market Commission shall determine the accounting items that are members of the structure expenditure, the degree of variation in the activity referred to in paragraph 1. 2 above, as well as the circumstances in which the provisions of this Article may apply to the consolidated groups of companies and securities agencies.
Chapter IV
Other solvency rules
Article 54. Limits to the big risks.
1. The provisions of Article 30 shall also apply to companies and securities agencies and to their consolidated groups, subject to the amendments referred to in this Article. For these purposes, the statements made in that article to the consolidated groups of credit institutions, credit institutions and the Banco de España shall be construed as references to the consolidated groups of companies and to the Bank of Spain. securities agencies, companies and securities agencies and the National Securities Market Commission.
The limits of paragraphs 2 and 3 of that Article shall be calculated in relation to the definition of own resources referred to in Article 39, and shall be respected at all times by companies and securities agencies and for its consolidable groups.
2. The total risks of a consolidated entity or group against a single person or economic group shall be deemed to be the result of the aggregation of the risks arising from its portfolio of trading securities with which it is derived from the Other activities, calculated in accordance with Section III of Chapter III, may be calculated as the risk arising from the assets which are deducted from the own resources is nil.
For the purposes of this aggregation, the Minister of Economy and Finance or, with its express rating, the National Securities Market Commission shall establish the method for the calculation of the positions of risk that, against the same person or economic group, maintain in their portfolio of trading values the consolidated entities and groups.
This number shall not apply to companies and securities agencies and consolidated groups of securities and groups which do not apply the rules contained in Section II of Chapter III. These companies and securities agencies and consolidable groups shall be governed as regards the limits to the greatest risks, by the rules of Article 30, without further amendments than those arising from the provisions of paragraph 1 of this Article. Article.
3. Notwithstanding the foregoing, the Minister of Economy and Finance or, with his express rating, the National Securities Market Commission may establish an alternative method for the treatment of the large risks arising from the securities portfolio. (a) to allow such risks to exceed the limits referred to in paragraph 1, but calculated in relation to the alternative definition of own resources, based on the establishment of charges for concentration, and which may only be be used, where appropriate, by those companies and securities agencies and consolidable groups of These apply the rules contained in Section II of the previous Chapter. In any event, the risks outside the aforementioned portfolio of trading securities shall never exceed the reference limits calculated in relation to the definition of own resources in Article 39.
Article 55. Limits to operations and risk control.
1. The Minister of Economy and Finance or, with his express rating, the National Securities Market Commission may establish, in relation to securities companies and agencies and their consolidated groups, rules of mandatory compliance for the risk coverage of the same or similar nature by reverse-sign operations, as well as express prohibitions or limitations to certain open positions or asset headings. In particular, they may lay down rules to be followed for the full or partial coverage of exchange rate risk by maintaining the corresponding proportions between asset and liability balances in each currency resulting from transactions both spot and forward.
2. Securities companies and agencies and their consolidated groups shall establish an internal system for the continuous monitoring and evaluation of all their risks, in particular the interest rate risk of all their activities.
The results of that internal system shall be reported, at least monthly, to the Board of Directors of the company or securities agency, or of the entity required to present the consolidated accounts. The National Securities Market Commission will be informed of the organization of such a system and its results. The National Securities Market Commission is also empowered to lay down the minimum requirements to be met by such internal risk assessment systems, as well as the frequency and extent of the information to be provided to it. provided.
Article 56. Adoption of measures to return to the fulfilment of the requirements of own resources and of the major risks.
1. Where a securities company or a securities agency or a consolidated group of securities is present a level of own resources lower than the minimum required by virtue of the provisions of this Title and provisions which develop it, it shall inform the The National Securities Market Commission will present a program in which its plans to return to compliance will be put into effect. This programme must at least refer to the following aspects: identification of the causes of non-compliance with the level of own resources required; plan to return to compliance, which will include both the limitation to the development of activities involving high risks as measures to be taken for the increase in their own resources level, and time limits for returning to compliance.
This program should be approved, if appropriate, within a maximum of three months from its presentation, by the National Securities Market Commission, who will be able to set additional measures for the proposals, in order to ensure the return to the required levels. After the period specified without any express resolution, the programme submitted shall be deemed to have been approved.
2. Where a company or securities agency or its consolidated groups fail to comply with the limitations referred to in Article 54 or those which are established in accordance with Article 55 (1), a similar procedure shall be followed. (a) to the above paragraph.
Article 57. Implementation of results in the event of non-compliance with the requirements of own resources.
1. Where the level of own resources of a company or securities agency or of its consolidated groups falls below 80 per 100 of the minimum required by virtue of the provisions of this Title and the provisions that develop it, the institution shall: in question, or each and each of the entities belonging to the consolidated group, must allocate to reserves the totality of its profits.
The subsidiaries in which the entities included in the consolidable group have at least 90 per 100 of the voting rights and the capital, which at the individual level meet the minimum required level, are exempted from this obligation. of own resources.
2. Where the deficit referred to in the preceding number is equal to or less than 20 per 100, the institution, or any and all entities belonging to the consolidable group, with the exception indicated therein, shall subject their distribution of results to the prior authorisation of the National Securities Market Commission, which shall establish the minimum percentage to be allocated to reserves on the basis of the programme of the consolidated entity or group to return to the minimum levels; this percentage shall be equal to 50%. for 100 of the profits. The National Securities Market Commission may require a higher percentage when the circumstances of the entity or group result in no other effective measures to return to compliance with the rules in breach or when the Proposals for this programme are insufficient to do so. The authorisation shall be deemed to have been granted if no specific resolution has been taken after one month.
3. The provisions of this Article and the foregoing shall be without prejudice to the application of the penalties which, if appropriate, may be applicable.
Title III
Provisions regarding insurance entities and their groups
Article 58. Consolidated groups of insurance companies.
1. The consolidable groups of insurance entities are those financial groups in which any of the following conditions are present:
a) That an insurance entity controls one or more financial institutions.
(b) The dominant entity is an entity whose principal activity is to have holdings in insurance institutions.
c) That a natural person, a group of persons acting systematically in concert, or a non-consolidated entity controls several entities, all of which are insurers.
2. For the purposes of the preceding number, the principal activity of an institution shall be understood to consist of holdings in insurance institutions where the following two requirements are met at the same time:
(a) The entity shall be as referred to in paragraph 1 (h) of Article 3 of this Royal Decree.
b) That more than half of its portfolio of permanent financial investments in capital is constituted by shares or other types of securities representing shares in insurance institutions or in undertakings, is its name or status, which, in accordance with the rules applicable to it, carries out the typical activities of the insurance institutions.
Article 59. Prudential supervision.
The consolidated groups of insurance companies will be subject to supervision by the Directorate General of Insurance of the Ministry of Economy and Finance on a consolidated basis.
Article 60. required entity.
The required entity of a consolidable group of insurance entities shall be its dominant entity, provided that it is an insurer. Where the parent is a non-insurance entity and in the cases referred to in paragraph 1 (c) of the previous Article 58 (1), the required entity shall be designated by the Directorate-General for Insurance.
Article 61. Obligation to have the solvency margin.
1. Article 76.1 of the Regulation on the Management of Private Insurance, approved by Royal Decree 1348/1985 of 1 August 1985, as amended by Royal Decree 2021/1986 of 22 August 1986, is amended as follows:
< 1. An insurance institution must provide, at all times, as a solvency margin, an uncommitted own equity sufficient in relation to the risks assumed by all or outside of the operations in Spain. >
2. In Article 76 of the Regulation, paragraph 4 of the following wording is added:
< 4. The consolidated groups of insurance companies referred to in Article 25 of the Law shall have at all times, as a solvency margin, a consolidated capital not committed sufficient to cover the sum of the requirements the solvency laws applicable to each of the entities in the group.
The same solvency margin requirement shall apply to the consolidated sub-groups of insurance entities referred to in Article 25.7 of the Act.
In compliance with the group or, where applicable, the sub-group of the provisions of the preceding paragraphs shall not exempt insurance institutions from the obligation to comply with their requirements to one or the other. of own resources. >
Article 62. Uncommitted own estate.
1. Article 77 of the Regulation on the Management of Private Insurance is amended, which is worded as follows:
1. The non-committed own equity, for the purposes of the individual solvency margin referred to in Article 25.1 of the Act, includes the items listed below, deducted as specified in the number 2 of this Article:
a) The paid-up share capital or the mutual fund.
b) Half of the subscribed capital part outstanding.
c) The stock issue premium reserve, the differences for asset updates and the equity reserves.
(d) The part of the credit balance of the profit and loss account which is intended to increase the institution's own funds.
e) The creditor balance of the permanent fund with the central house, for the delegations of foreign companies.
(f) The passive spill, where the mutualists are required, in the terms of Article 25 of this Regulation, with the limit of 50 per 100 of the net quotas for direct insurance cancellations. This sum may not exceed 50 per 100 of the uncommitted own equity, assessed before the incorporation of this item.
g) The capital gains resulting from the underestimation of assets and the overestimation of the liabilities, to the extent that such capital gains are not exceptional and have been accepted by the General Directorate of Insurance, upon request and justification by the entity.
h) 50 per 100 of the future benefits, referred exclusively to the life class. For the calculation of the amount, the arithmetic mean of the ordinary results obtained in the field for the last five years shall be found, and the average thus obtained shall be multiplied by the factor representing the average residual duration of the contracts, without such a factor being greater than 10. Where the institution is unable to justify the average residual duration of the contracts, the factor to be used shall be 5.
i) Uncounted commissions that are technically outstanding to write down, with the cap per policy of 3.5 per 100 of the difference between the insured capital and the mathematical provision. The amount of the discounted commissions to be activated must be deducted from the figure.
(j) 75 per 100 of the excess of the current risk provision, calculated by the procedures provided for in Article 57.1, (b) and (c), on the amount which would result from the application of the policy-based policy procedure provided for in the Article 57 (1), (a). The amount to be computed for such excess shall not exceed 20 per 100 of the solvency margin, as assessed before the entry of this item.
2. The items to be deducted from the previous items for the non-committed own equity computation are as follows:
(a) The costs of establishment, which appear on the assets of the balance sheet. Expenditure relating to the establishment, first establishment, capital increase and other expenditure of a similar nature shall be the expenditure of establishment.
(b) Expenses to be distributed in several financial years appearing on the balance sheet asset for future economic projection, except where they have the status of liability clearing accounts.
c) The debtor balance of the profit and loss account.
d) The negative results of previous exercises.
e) The minusses resulting from the overestimation of the assets or the underestimation of the liabilities. Obligations, provisions or debts that may not have been accounted for under any legal provision shall be included in this item.
f) In general, any other items that do not have a realization value. >
2. A new Article 77a is added to the Private Insurance Management Regulation as follows:
1. For the purposes of Article 25 (2) of the Act, the non-committable equity of the consolidable groups of insurance institutions shall comprise the following items:
(a) The paid-up share capital or the mutual fund of the dominant company.
b) Half of the subscribed capital part outstanding of the dominant company.
c) The reserve for the share issue premium, the differences for updates of the asset and the equity reserves of the consolidable group.
d) The creditor balance of reserves in consolidated companies.
e) The credit balance of the consolidated profit and loss account, with the limit of the part intended, in each company of the consolidated group, to increase its own resources.
f) Negative consolidation differences, except where they have the nature of provision for risks and expenses.
g) The minority interests, with the limit, for those that correspond to their participation in the results of the dependent societies, of the part destined to increase their own resources.
(h) The capital gains arising from the underestimation of asset items or the overestimation of liability items are or are not reflected in the consolidated balance sheet.
i) The passive spill, where the mutualists of the dominant entity are required, in the terms provided for in Article 25 of this Regulation, with the limit of the net shares of the direct insurance cancellations of that entity dominant. This sum may not exceed 50 per 100 of the uncommitted consolidated own equity, as assessed before the incorporation of this item.
j) 50 per 100 of the sum of the future profits, referring exclusively to the class of life, of the dominant society and of the dependents. For the calculation of the amount, the arithmetic mean of the ordinary results obtained in the class for the last five years shall be found in each company, and the average thus obtained shall be multiplied by the factor representing the residual duration. average of the contracts, without the factor being higher than 10. Where any of the companies cannot justify the average residual duration of the contracts, the factor to be used shall be 5.
(k) The sum of the discounted commissions which, in the dominant company and in the subsidiaries, are technically outstanding to write down, with the policy limit of 3.5 per 100 of the difference between the capital and the mathematical provision. The amount of the discounted commissions to be activated must be deducted from the figure.
l) 75 per 100 of the excess which, in the dominant company as well as in the dependent companies, represents the ongoing risk provision calculated by the procedures provided for in Article 57.1, (b) and (c) above the amount which would have resulted from the application of the policy-based policy procedure provided for in Article 57.1 (a). The amount to be computed for such excess shall not exceed 20 per 100 of the solvency margin, as assessed before the entry of this item.
2. The items to be deducted from previous items for the uncommitted consolidated own equity computation are as follows:
(a) The costs of establishment, as defined in Article 77.2 (a), which appear on the assets of the balance sheet of the dominant company and of the subsidiaries.
(b) The expenses to be distributed in various financial years which, due to their future economic projection, are included in the assets of the balance sheet of the dominant company and of the dependents.
c) The debtor balance of the consolidated profit and loss accounts.
d) The negative results of previous exercises of the consolidable group.
(e) The handicaps resulting from the overestimation of the assets or the underestimation of the liabilities of the dominant company and of the subsidiaries. Obligations, provisions or debts that may not have been accounted for under any legal provision shall be included in this item.
(f) In general, any other items of the parent company or of the dependents that lack the value of the undertaking.
The negative difference between the accounting value of the holding of the parent in the capital of the dependent company and the value of the proportional share of the shares is defined as a negative consolidation difference. own funds of the aforementioned dependent company, attributable to that holding on the date of the taking of the same.
The reserves generated by the dependent companies since the date of the first consolidation, including those that have not passed through their profit or loss accounts, are understood by reserves in consolidated companies. deduced the share of those reserves that correspond to the external partners. >
Article 63. Precautionary measures.
A paragraph 5 is added to Article 120 of the Private Insurance Management Regulation with the following text:
< 5. The provisions of paragraph 2 of this Article may apply to the consolidable groups of insurance institutions where one of the situations specified in points (b), (c), (d), (e) or (f) of the group is assessed, with reference to the group this article.
The situation referred to in point (b) of paragraph 1 (b) of this Article shall be deemed to be in the consolidated group of insurance entities where there is a deficit in the calculation of the provisions referred to in that Article. letter, in the percentages shown in it, in any of the entities that integrate the consolidable group of insurance entities.
In order to assess the possible concurrency in the consolidated group of insurance entities of the situation referred to in point (c) of the first paragraph of this Article, the state of coverage of technical provisions of the consolidable group, which will be obtained by the aggregation of the individual coverage states of each of the entities in the group. The General Directorate of Insurance may require the parent entity to present the indicated status of coverage of technical provisions referred to the entire consolidated group of insurance entities.
It shall be understood that any of the situations referred to in points (e) and (f) of paragraph 1 of this Article may be found in the consolidated group of insurance entities where such situations have occurred in any of the entities that integrate the group. >
Title IV
Provisions concerning other consolidable groups of financial institutions
Article 64. Definition.
1. The consolidated groups of financial institutions referred to in Chapter IV of Law 13/1992 of 1 June on Own Resources and Supervision on the Consolidated Base of Financial Institutions are those consolidated groups of entities. of this nature in which none of the following circumstances are present:
(a) A credit institution, a securities company or a securities agency, or an insurance institution, controls one or more financial institutions.
(b) the dominant entity is an entity whose principal activity consists of having units in credit institutions, or an entity whose principal activity consists of having holdings in companies and agencies of securities, or an entity whose principal activity consists of having holdings in insurance institutions.
c) That a natural person, a group of persons acting systematically in concert, or a non-consolidated entity controls several entities, all of which are credit institutions, or all of them, or all of them, or all of them; insurers.
2. In any event, in order for a group to be considered a consolidated group of financial institutions, it must include at least one financial institution subject to special status, which is understood by the Bank on an individual basis. of Spain, either by the National Securities Market Commission or by the Directorate-General for Insurance.
Article 65. Prudential supervision.
1. The supervision of the consolidable groups of financial institutions covered by this Title shall be the responsibility of the State body responsible for the supervision and control of the dominant entity of the group.
2. Where the dominant entity is not supervised on an individual basis by a Spanish State body, the Minister for Economic Affairs and Finance, after reporting the directly affected supervisory bodies, shall appoint the person responsible for the supervision of the group, taking into account both the type and relative importance of the various activities carried out by the group, and the relative size of the different financial institutions integrated into it, measured on the basis of total assets, income and expenditure, and risks incurred, and the importance of foreign funds or securities, held or managed by the entities.
All the foregoing is without prejudice to the provisions of the second subparagraph of Article 8 (3) of Law 13/1985 of 25 May 1985.
Article 66. Required entity.
The entity that is required to perform the duties of a consolidated group of financial institutions of those regulated in this Title shall be its dominant entity, provided that it is subject to special status. In other cases it shall be designated by the body responsible for the supervision of the group.
Article 67. Implementing rules.
1. The rules on minimum own resources requirements, the composition of own resources and their deductions and limitations, limits on major risks shall be applicable to the consolidated groups of financial institutions covered by this Title. and other operations or positions, consolidation of accounts, supervisory arrangements, sanctioning procedure and rules of action in the event of insufficient own resources corresponding to its required entity.
2. By way of derogation from the preceding number, where, in a consolidated group of financial institutions which has as its parent company, the main activity of which is to have shares in financial institutions, and in the same a credit institution, the limits on qualifying holdings in non-financial undertakings, as referred to in Article 24, shall be respected on a consolidated basis, except where the deduction of assets is applicable to that group. Illiquid established in Article 40.
3. Without prejudice to the provisions of paragraph 1 of this Article, where the dominant entity of a consolidated group of financial institutions is one of those referred to in Article 3 (1) (h) of this Royal Decree, and more than half of its portfolio of permanent financial investments in capital consists of shares or other types of securities representing shares in non-financial institutions, the own resources of the consolidable group reduce the amount of the amount resulting from the application of the own resources of the dominant entity; the proportion of their holdings in non-financial institutions on the total of their permanent financial investments in capital.
4. If, in the group, only movable investment companies, management companies of collective investment institutions, holding companies and financial corporations of any of them or carrying out their activities shall be integrated into the group typical, the regulations on collective investment institutions will be taken as a reference in the terms established by the Minister of Economy and Finance or, with his express rating, the National Securities Market Commission.
Additional disposition first. Institute of Official Credit.
. Notwithstanding the nature of the credit institution to the Official Credit Institute, the provisions of this Royal Decree shall not be required, without prejudice to the provisions applicable to it in respect of compliance with the minimum level of resources. own.
To this end, the Minister of Economy and Finance, or, with his approval, the Banco de España, will concretize the way to carry out this compliance, in accordance with the principles that result from what is foreseen in this Royal Decree. for credit institutions.
2. In the securities issued by the Institute of Official Credit that are to be represented by notes, the publication of the characteristics of the issue in the "Official State Gazette" will replace the public deed with Article 6, fourth paragraph, of Law 24/1988, of 28 July, of the Stock Market, the publication of the effect provided for in Article 10 of Royal Decree 116/1992 of 14 February 1992 on the representation of securities by means of annotations in accounts and clearing and settlement of stock transactions.
Additional provision second. Relationship of companies.
The Banco de España and the Comisión Nacional del Mercado de Valores, in the field of their respective competences, shall bear a relationship of the companies whose main activity consists in having participations in financial institutions. which are the dominant companies of a group subject to its supervision.
These bodies shall report annually to the competent authorities of the other Member States of the European Communities and to the Commission of the European Communities.
Additional provision third. Agricultural Credit Bank-Rural Banks.
Notwithstanding the provisions of Article 19 of this Royal Decree, the associated group Agricultural Credit Bank-Rural Banks will have the consideration of a central agency.
First transient disposition. Concentration of risks.
1. Without prejudice to the provisions of paragraph 1 of the third final provision, and until 31 December 1998:
(a) The maximum limit to the concentration of risks with a single person or foreign economic group, as set out in the first subparagraph of Article 30 (2), shall be 40 per 100 of the own resources;
(b) the maximum risk concentration limit with the group itself, as set out in the second subparagraph of Article 30 (2), shall be 30 per 100, and
(c) the percentage from which a major risk, as set out in Article 30 (1), shall be deemed to be incurred shall be 15 per 100.
2. The consolidated groups of credit institutions or credit institutions which do not belong to one of these groups, which, on the date of entry into force of Article 30, do not adapt to the provisions of this Article, shall submit to the Bank of Spain adaptation, applying a scheme equivalent to that of Article 34 of this Royal Decree.
Second transient disposition. Period of adjustment.
The consolidated groups of credit institutions and credit institutions which do not belong to one of these groups which, on 1 January 1993, exceed the limit laid down in Article 31, shall, as from that date, provide for a period of seven years in order to comply with that limitation, and shall submit to the Bank of Spain adaptation schedules, applying in respect of the same a scheme equivalent to that of Article 34.
Transitional provision third. Companies and securities agencies.
The provisions of the first transitional provision shall also apply to securities companies and agencies and their consolidated groups in relation to the provisions of Article 54, without prejudice to the date of the date of the first The entry into force of the last article is anticipated on 1 January 1993. In this case, the powers conferred on the Banco de España will correspond to the National Securities Market Commission.
Single repeal provision. Repeal clause.
At the date of entry into force of this Royal Decree all provisions of the same or lower rank that are opposed to its content and, in particular, the following shall be repealed:
1. Royal Decree 1370/1985 of 1 August 1985 on the own resources of the Deposit Entities, with the exception of Article 7 (1), (2) and (3), and without prejudice to the provisions of the limit for the concentration of risks in the (b) of paragraph 1 of the third final provision of this Royal Decree. 2. Royal Decree 1044/1989 of 28 August 1989 on the own resources of credit institutions other than those of deposit, without prejudice to the provisions of the companies in the market for money in the money market in paragraph 1 (a) of the third final provision of this Royal Decree.
3. Royal Decree 1371/1985 of 1 August, which regulates the consolidation of the accounting statements of the deposit institutions.
4. Articles 16 to 19, inclusive, of Royal Decree 276/1989 of 22 March 1989 on companies and securities agencies.
Final disposition first. Basic character.
This Royal Decree is of a basic nature in accordance with the provisions of Article 149.1, 11. and 13. of the Constitution.
Final disposition second. Potestades del Banco de España.
1. In addition to the powers attributed to it by the articles of this Royal Decree, the Banco de España may exercise the following:
a) Set the frequency and shape of the re control declarations
own courses and compliance with the limitations required under this Royal Decree. In particular, the Bank of Spain shall regulate the system of notification of major risks, as defined in Article 30 (1).
(b) Except for the limits to the concentration of risks laid down in Article 30 for the disposals of funds by credit institutions in order to systematically channel resources to the interbank market through another intermediary credit institution, in the framework of an agreement approved by the Banco de España itself.
(c) In accordance with the provisions of Article 13 of Law 13/1985 of 25 May, assess the equivalence of the requirements or limitations required of foreign credit institutions in relation to their obligations (a) to the effect of the application of Article 107 (1) (a) of the Law of the European Parliament and of the Council [1].
d) Define the accounting concepts that have to integrate the own resources and their deductions and the different categories of risks, assets and commitments subject to the obligations set out in this Royal Decree and in their standards for development.
2. In addition to the powers attributed to it by the foregoing Articles, the National Securities Market Commission may exercise the following:
(a) Establish the frequency and form of the declarations of control of own resources and of compliance with the limitations required under this Royal Decree.
(b) Establish the periodicity and the manner in which securities companies or agencies and their consolidated groups shall report the major risks they assume, as referred to in Article 54.
(c) Define the accounting concepts that have to integrate the own resources and their deductions and the different categories of risks, assets and commitments subject to the obligations set out in this Royal Decree and in their standards for development.
Final disposition third. Entry into force.
1. This Royal Decree will enter into force on 1 January 1993. However, they shall enter into force on 1 January 1994:
(a) The provisions of Article 27, remaining in force, in the meantime, for the Money Market Mediators, as provided for in the last sentence of Article 3 (1) (c) of Royal Decree 1044/1989, 28 of August;
(b) the provisions of Article 30 on limits to major risks, in the meantime the limit laid down in Article 10, and the rules agreed for its application, of Royal Decree 1370/1985 of 1 January 1985, August.
2. Without prejudice to the date of entry into force set out in the preceding number, securities companies and agencies and their consolidated groups may submit to the approval of the National Securities Market Commission no later than 31 December. December 1992, programmes adapting to the provisions of this Royal Decree. These programmes shall be subject to the provisions of Article 56.
Final disposition fourth. Powers for development.
1. Without prejudice to the specific forecasts contained in this Royal Decree, the Minister of Economy and Finance or, with his express rating, the Banco de España and the National Securities Market Commission will dictate the necessary provisions for its development and implementation.
2. Any rule that is dictated in the development of what is provided for in this Royal Decree and may directly affect financial institutions subject to the supervision of the Banco de España, the National Securities Market Commission or the Directorate General of Insurance will be given prior report of these.
3. The Minister for Economic Affairs and Finance is hereby authorized to amend the amount of pesetas referred to in Article 44 (1), where this is imposed by changes in Community legislation or in the assessment of the unit of account. "
Given in Madrid to November 6, 1992.
JOHN CARLOS R.
The Minister of Economy and Finance,
CARLOS SOLCHAGA CATALAN