JOHN CARLOS I,

KING OF SPAIN

To all who present it and understand,

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

Reason exposure

Law 13/1985 of 25 May on coefficients of investment, own resources and information obligations of financial intermediaries, enshrined in our legal order the principle of the sufficiency of own resources of the groups of the deposit institutions, establishing, in addition, for such groups a mandatory system of consolidation of accounts that would allow to calibrate their true patrimonial situation. Subsequently, Law 26/1988 of 29 July on the discipline and intervention of credit institutions authorized the Government, in its Article 47.1, (b), to extend the said principle to all types of credit institutions, which it did by means of the Royal Decree 1044/1989 of 28 August on own resources of credit institutions other than those of deposit.

This Law takes a new step and extends the stated principle of the sufficiency of own resources on a consolidated basis to all groups of entities carrying out activities of a financial character. The Law encourages a clear homogenizing intention, in such a way that the same general rules apply to all types of financial institutions. The special regulatory regime to which credit institutions are subject, securities companies and agencies and insurance companies, however, make it appropriate to lay down special provisions for each of them, contained in the three First chapters of this Law, for which Title II of the Law 13/1985 is amended; Law 24/1988, of July 28, of the Market of Securities, and Law 33/1984, of 2 August, of the Management of Private Insurance, respectively.

This Law incorporates into our law several precepts of the most recent European Communities Directives relating to the solvency and the activity of credit institutions: The Own Funds Directive (89/299), the second Banking Directive (89/646), and the Solvency Coefficient Directive (89/647). Among these precepts, it is important to note the importance of the limitations of the so-called "qualifying holdings" of credit institutions in non-financial companies.

The faithful transposition of the Community legislation applicable to the consolidable groups of credit institutions has required that this Law not include in them the insurance institutions, a criterion which has also been applied to consolidated groups of companies and securities agencies. However, it has seemed appropriate to incorporate a final chapter to allow for particular monitoring of the effective level of own resources and the concentration of risks for those mixed groups within which financial institutions or groups exist which, In accordance with their specific rules, they should not consolidate their accounting statements. In this chapter it is therefore a sort of consolidation of limited scope which, pursuing objectives similar to those of the traditional supervisory technique on a fully consolidated basis, would not be in the serious difficulties of implementing this chapter. last to entities, such as insurance institutions and other financial institutions, whose activity and risks are so dissimilar.

This Law coordinates its precepts with those of the Commercial Code, avoiding especially financial institutions an overlap of consolidation obligations that, in addition to burdensome, could disturb the knowledge of the situation of financial groups by the public.

The eminently technical nature of the matter regulated by this Law has advised to leave to the subsequent regulatory development the precise delimitation of good part of its precepts, task in whose exercise the Government will be able, The Bank of Spain and the National Securities and Exchange Commission (Banco de España) and the National Securities and Exchange Commission (Banco de España) have been entrusted with extensive tasks. In order to avoid distortions of competition between financial institutions of different types, the second final provision number 3 orders the Government and the other bodies concerned to maintain, when carrying out such regulatory development, the uniform criteria for all types of financial institutions, in such a way that the solvency rules extend more to the objective nature of the risks inherent in each financial transaction than the type of entity that carries it out. Furthermore, in such regulatory development, it should be ensured that, as far as possible, Spanish financial institutions are not subject to a more onerous prudential supervision regime than the one receiving most of the institutions. (i) financial support from other Community countries with which they compete in the single market. This should not, however, imply the waiver of the application of stricter prudential requirements for Spanish entities where circumstances warrant.

Finally, this Law introduces certain amendments to Law 19/1988, of Audit of Accounts: Thus, the fourth additional provision adds a new paragraph to the final disposition of that, with a view to facilitating the control of financial institutions by their supervisory bodies, and the third amendment to Articles 17 and 18 thereof, in order to make the system of penalties applicable to auditors and companies more flexible and to improve audit, and in particular to include pecuniary penalties between such penalties.

Chapter I

Provisions concerning credit institutions and their groups

Article first

The second title of Law 13/1985, of 25 May, of investment coefficients, own resources and information obligations of financial intermediaries, is worded as follows:

" Title second. Solvency ratio and limitations on the activity of credit institutions for solvency reasons.

Article 6.

1. The consolidated groups of credit institutions, as well as credit institutions which are not integrated into a consolidated group of credit institutions, shall at all times maintain a sufficient volume of own resources in relation to investments. carried out and the risks assumed. In particular, they shall maintain a solvency ratio equal to or greater than the percentage which is determined. For these purposes, the solvency ratio is defined as the ratio between the own resources and the sum of the assets, positions and order accounts subject to risk, weighted according to the criteria laid down in the number next.

2. The risk classes to be covered by the coverage referred to in the preceding number, the weighting of the different investments, operations or positions, and any surcharges for concentration of risks shall be determined.

3. For the same procedure, maximum limits may be imposed on investments in immovable or other fixed assets; on shares and units; on assets, liabilities or positions in foreign currency; on risks which may be incurred by a the same person, entity or economic group; and, in general, those transactions or positions that involve high risks for the solvency of institutions. The limits may be graduated according to the characteristics of the different types of credit institutions.

Item seventh.

1. For the purposes of this Title, the own resources of the credit institutions and the consolidable groups of credit institutions shall comprise the equity, the fund, the reserves, the funds and the generic provisions, the funds of the benefit-social work of savings banks and those for the education and promotion of credit unions, subordinated financing and other items, payable or not, liable to be used in the coverage of losses.

From these resources, losses will be deducted, as well as any assets that may decrease the effectiveness of those resources for loss coverage.

2. Regulations shall determine the items to be included in the own resources and their deductions, and limitations or conditions may be imposed on those items which have reduced efficiency for the coverage of losses.

Article 8.

1. In order to comply with the solvency ratio and, where appropriate, the limitations laid down in the sixth and tenth articles of credit institutions, they shall consolidate their accounting statements with those of other credit institutions or institutions. financial institutions that constitute a decision unit with them.

2. For the purposes of this Law, in order to determine whether several entities constitute a unit of decision, the criteria laid down in Article 4 shall be met. of the Law 24/1988, of July 28, of the Stock Market.

3. A group of financial institutions shall be deemed to be a consolidated group of credit institutions when any of the following circumstances arise:

a) That a credit institution controls the other entities.

(b) The parent entity is an entity whose principal activity is to have holdings in credit institutions.

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

When a credit institution which is eligible to join a Deposit Insurance Fund is integrated into a group of financial institutions and, for exceptional reasons duly accredited on the occasion of the authorisation of its constitution or takeover, do not know of any of the circumstances mentioned in the preceding paragraph, the Minister of Economy and Finance, at the proposal of the Banco de España, prior to the report of the National Commission of the Market of Securities or, if any, The Directorate-General for Insurance, may agree that the group should be considered as a group credit institutions can be consolidated and therefore subject to supervision on a consolidated basis by the Banco de España.

4. The types of financial institutions to be included in the consolidated group of credit institutions referred to in the preceding number shall be determined.

In any case, they will be part of the consolidable group:

a) Credit entities.

b) Securities Companies and Agencies.

(c) Mobilic Investment Companies.

(d) The Management Companies of Collective Investment Institutions, as well as the Pension Fund Managers whose sole object is the administration and management of the aforementioned funds.

e) The Portfolio Management Societies.

f) Venture Capital Societies and Risk Capital Funds Managers.

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

In addition, the consolidated group of financial instruments whose principal activity involves the extension of the business of any of the entities included in the consolidation, or includes the provision to those companies, shall also be part of the consolidated group. ancillary services.

The Banco de España may authorise the individual exclusion of a credit institution or a financial institution from the consolidable group of credit institutions when any of the assumptions provided for in issue 2 of the Article 43 of the Trade Code, or where the inclusion of that entity in the consolidation is inappropriate for the fulfilment of the objectives of the supervision of that group.

5. Insurance institutions shall not in any case form part of the consolidable groups of credit institutions.

6. Regulation may be regulated the way in which the rules laid down by this Law on own resources and supervision of the consolidable groups of credit institutions should be applicable to the sub-groups of credit institutions, those who, including entities of such nature, are in turn integrated into a larger group.

The way in which these rules will apply to credit institutions affiliated to a central body may be regulated, provided that it controls, directs, guarantees its obligations and meets the other requirements. requirements to be provided for.

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

7. Where foreign entities are eligible to be integrated into a consolidated group of credit institutions, the scope of supervision on a consolidated basis by the Bank of Spain shall be regulated, inter alia, in accordance with criteria, the Community or non-Community character of the entities, their legal nature and degree of control.

8. The consolidation obligation laid down in Article 42 of the Code of Commerce shall be understood to be fulfilled by the consolidation referred to in this Article in those groups of companies whose dominant entity is a credit institution or a credit institution. a company whose principal activity is the holding of shares in credit institutions.

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

Article ninth.

1. The determination of the rules for the consolidation of the accounts of the consolidated groups of credit institutions shall be carried out in accordance with the procedure laid down in accordance with Article 48 (1) of Law No 26/88 of 29 April 1988. of July, of Discipline and Intervention of the Credit Entities. This determination shall be carried out in compliance with the principles on the presentation of the accounts of the groups of companies contained in the First Book of the Trade Code and its implementing provisions, although the (a) the obligation to comply with the requirements of the credit institution groups

The obligation to formulate and approve the consolidated accounts and the consolidated management report, and to proceed to its deposit, shall be the responsibility of the dominant entity; however, in the case referred to in point (c) of paragraph 3 of the Article 8 above, the required entity shall be designated by the Banco de España, among the credit institutions of the group.

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

2. The Banco de España, as well as the Autonomous Communities in the field of its powers, may require the institutions subject to consolidation of a consolidated group of credit institutions to be required to verify the information required. consolidation and analysis of the risks taken by the whole of the consolidated entities; they may also, with the same object, inspect their books, documentation and records.

When of the economic, financial or managerial relationships of a credit institution with other entities, the existence of a control relationship in the indicated sense is presumed, without the entities having carried out the consolidation of its accounting statements, the Banco de España, as well as the Autonomous Communities in the field of their powers, may request information from or inspect those entities for the purposes of determining the origin of the consolidation.

3. The Banco de España, as well as the Autonomous Communities in the field of its powers, may request information from natural persons and inspect non-financial institutions with which there is a control relationship in the sense of established by Article 2 (2), for the purpose of determining its impact on the legal, financial and economic situation of credit institutions and their consolidated groups.

4. Irrespective of the adequacy of own resources at consolidated level, the Banco de España shall monitor the individual solvency situation of each credit institution that consists of the groups defined in this Law.

When the special situation of a credit institution integrated into a consolidated group of credit institutions advises it, as well as in those cases that are determined to be determined, the Banco de España may require the individual compliance with the solvency ratio at levels below or even equal to that established for credit institutions which are not integrated into a consolidated group of credit institutions. The Bank of Spain may also take the necessary measures to ensure an adequate distribution of the own resources and risks between the entities that make up the consolidable group.

Article 10.

1. In terms that are determined in a regulation, they shall be deducted from the own resources of the consolidated group of credit institutions, or from a non-consolidated credit institution, the largest of the amounts:

(a) The total amount of their qualifying holdings in companies that do not have the character of credit institutions, insurance entities or other financial institutions, or of financial institutions of the former in accordance with Article 8 (4), in the part where that total amount exceeds 60 per 100 of the own resources of the consolidating entity or group.

(b) The amount of qualifying holdings in each undertaking or group of undertakings which do not have the character of credit institutions, insurance undertakings or other financial institutions, or of financial institutions of the above, in the part of each holding that exceeds 15 per 100 of the own resources of the consolidating entity or group.

2. For the purposes of this Article, qualified participation shall mean holding, directly or indirectly, of at least 10 per 100 of the capital or voting rights of an undertaking, or the possibility of exercising, in terms of Regulation is established, a notable influence on the management of a company from which it is a partner.

3. The rules contained in the previous number one shall not include holdings which do not have the character of financial assets. Other exceptions to those rules shall be laid down in the light of the temporality in the possession of the units due to financial assistance operations to firms in difficulty, insurance and subscription of securities, both on their own account and on behalf of others or on other special causes which justify it in a sufficient manner.

Item 11th.

1. Where a credit institution or a consolidated group of credit institutions does not reach the minimum levels of established own resources, the institution, or any and all of the consolidating entities, shall allocate to the formation of reserves the percentages of its profits or liquid surpluses that are regulated, subject to this effect its distribution to the prior authorization of the Banco de España.

The authorization shall be deemed to have been granted if one month after the receipt by the Bank of Spain of the timely request, no express resolution has been produced.

2. A credit institution or a consolidated group of credit institutions which infringes any limitations which may be established pursuant to Article 6 (3) shall, in accordance with the conditions laid down in the rules laid down in this Regulation, adopt measures necessary to return to compliance with the violated rules.

3. The opening of new offices by the credit institutions which are incurred in the cases referred to in numbers 1 and 2 above shall be subject to the prior authorisation of the Banco de España or, if necessary and after a favourable report by the Banco de España, to the the Autonomous Communities competent in this field.

4. The savings banks shall be required to allocate to reserves, or to non-chargeable provision funds, a minimum of 50 per 100 of their liquid surpluses. This percentage may be reduced by the Banco de España when the own resources exceed the established minima by more than one third.

5. The Minister for Economic Affairs and Finance, acting on a proposal from the Bank of Spain and after consulting the authorities responsible for monitoring the social welfare of savings banks, may, by way of exception, authorise the application of percentages of the stock of reserves lower than the figure in the preceding number 4, or to those established according to the number 1 of this Article, where the investment or maintenance of previously authorised social works, or in collaboration, could not be met with the fund for the benefit-social work that would result from the application of the numbers quoted. In such cases, these boxes may not include investments in new, own or collaborative works in their budgets.

6. The provisions of the preceding numbers 1 and 2 are without prejudice to the application of the penalties provided in each case according to Law 26/1988 of 29 July, of Discipline and Intervention of the Credit Entities.

Article twelfth.

1. Where, in a consolidated group of credit institutions, there are other types of financial institutions subject to specific own resources requirements, the group shall, for the purpose of sufficiency of such resources, be the highest of the financial institutions. The following measures:

(a) The necessary to achieve the percentage that is established as provided for in Article 6 (1).

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

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

In the case of credit institutions integrated into the consolidable group, the provisions of Article 9 (4) shall be provided.

3. Any rule that is dictated in development of what this Law provides and may directly affect financial institutions subject to the supervision of the National Securities Market Commission or the Directorate General of Insurance will be given prior report of these.

4. Provided that in a consolidated group of credit institutions there are entities subject to supervision on an individual basis by a body other than the Banco de España, the latter, in the exercise of the powers conferred on it by this Law, must act in a manner coordinated with the supervisory body which in each case corresponds. The Minister for Economic Affairs and Finance may lay down the rules necessary to ensure proper coordination.

Item 13th.

1. The own resources requirements and the limits to the concentration of risks or to the holding of qualifying holdings established or provided for in this Title shall not apply to branches of credit institutions which have their head offices. in other Member States of the European Communities and are subject to the prudential supervision of those Member States.

2. In the terms that are determined to be determined, the obligations to be established under this Title shall also not be required for branches of other foreign credit institutions subject to equivalent requirements. '

Article second

The transitional provision of Law 13/1985, of 25 May, on investment ratios, own resources and information obligations of financial intermediaries, shall be amended as follows:

" Credit institutions which, on 1 January 1993, exceed the percentages laid down in Article 10 (1), shall, as from that date, have a period of 10 years during which the deductions shall not apply. provided for in that Article.

The Banco de España will monitor the evolution of the assets subject to the aforementioned limits and may, during the period indicated, prohibit those credit institutions from the provisions of the preceding paragraph of the increase or extension of the designated qualifying holdings. "

Third Article

The number 1 of article 16 of Law 26/1988, of July 29, of Discipline and Intervention of the Credit Entities is amended, which will have the following wording:

" Where the offences referred to in Articles 4 (4) (c) and (5) (h) relate to the consolidated accounts and the consolidated management report as required under Title II of Law 13/1985, Investment ratios, own resources and reporting obligations of financial intermediaries shall be subject to the obligation of the entity required to formulate and approve those accounts and report, and, if appropriate, to its administrators and managers. '

Chapter II

Provisions relating to Securities Companies and Agencies; Corporate Securities and Securities Exchange; Clearing and Settlement Services, and their groups

Article 4

The following modifications are introduced in the Law 24/1988 of 28 July of the Stock Market:

1. Article 4 shall adopt the following

:

" Article 4

For the purposes of this Law, entities that constitute a unit of decision shall be considered to belong to the same group because some of them are, directly or indirectly, the control of the others, or because such control corresponds to one or more natural persons acting systematically in concert.

It will be presumed that there is in any case a unit of decision when one of the cases referred to in Article 42 of the Commercial Code is present, or at least one half of the members of the are Directors or senior managers of the dominant, or otherwise dominated by the parent.

As provided for in the preceding paragraphs, the rights of the parent shall be added to those held by other entities or through persons acting on behalf of the parent or other entities. dominated, or those of whom you have concertfully with anyone else. "

2. The following wording is given to Article 73:

" Article 73

1. Companies or Securities Agencies, and the consolidated groups of the same referred to in Article 86 of this Law, must maintain at all times a volume of own resources provided to that of their activity and expenses of structure and to the assumed risks.

2. Regulations shall be made in relation to Companies and Securities Agencies to:

(a) Regular, as not provided for in this Law, the activities listed in Article 71, in accordance with the principles contained in Article 13 and Titles III, IV and VII, for which the incompatibilities may be established which, by way of exception, are advisable in the development of the various activities referred to in Articles 70 and 71, or the special conditions to which their simultaneous development is subject.

(b) Establish the minimum social capital limits provided for in Article 66, and may fix that a percentage of this is the minimum level for the own resources of the Companies and Securities Agencies.

c) Regular forms of financing other than participation in its capital, and may in particular limit the modalities and time limits for obtaining public resources in the form of deposits, loans, transfers temporary assets or other similar operations.

d) Authorize the own account operations that the Securities Agencies may exceptionally be able to perform.

e) Regulate the requirements to be met by those who act on the market as Power of Companies or Securities Agencies, as well as the proxies that are conferred on them.

(f) Establish the minimum levels of own resources required of the Securities Companies and Agencies, the risk classes under cover, the weightings applicable to the different positions in each risk class, and the surcharges for risk concentration against a person, entity or group of entities.

g) Determine the elements that integrate the own resources of the Companies and Securities Agencies, and the deductions that affect them, and may establish limitations or conditions for the inclusion of those liabilities, (a) whether or not to be required for reduced coverage for loss coverage.

(h) Determine quantitative criteria and rules that directly or indirectly limit certain categories of investments, operations or positions that involve high risks to the solvency of the Companies or Agencies Values.

i) Establish the conditions under which the requirements, criteria and rules referred to in paragraphs (f), (g) and (h) above shall apply to groups of entities required to consolidate their accounts as a result of the provisions of the The preceding number 1 and in Article 86 of this Law.

j) Establish limitations on the distribution of profits of the Securities Companies or Agencies, or any and all of the entities belonging to their consolidated groups as referred to in Article 86, when they or The consolidated group does not reach the minimum levels of own resources required, submitting to this effect the distribution to the approval of the National Commission of the Market of Values. In this case, and also where the limits to be established as provided for in point (h) above, the Securities Companies and Agencies or the consolidable groups of such companies are not to be met, under the conditions laid down in the (a) to be determined, the measures necessary to return to compliance with the rules infringed. This is without prejudice to the application of the penalties provided for in each case.

k) Determine the criteria and rules that, in order to safeguard the liquidity of the Securities Companies and Agencies, impose the maintenance of minimum investment volumes in certain categories of liquid and securities low risk. In no case may this power be used in such a way as to result in a generic obligation to invest in financial assets whose profitability does not meet market conditions. '

3. The following numbers 3, 4 and 5 are added to the list contained in Article 84

" 3. The entities that are part of the consolidated groups of Companies or Securities Agencies referred to in Article 86 of this Law, to the sole effects of the compliance at the consolidated level of the requirements of own resources and of the limitations that may be established on investments, operations or positions involving high risks.

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

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

The expression "the two preceding numbers" contained in the initial sentence of the last paragraph of Article 84 shall be replaced by "the first two numbers".

4. The following wording is given to Article 86:

" Article 86

1. The individual and consolidated accounts and management reports for each financial year of the institutions referred to in Article 84 (1) (a), (b) and (c) shall be approved within four months of the end of the that, by its corresponding General Board, after audit of accounts.

2. Without prejudice to the provisions of Title III of book I of the Commercial Code, the Minister of Economy and Finance is empowered and, with his express rating, the National Securities and Exchange Commission, for the prior report of the Institute of Accounting and Audit of Accounts to establish and modify in relation to the entities mentioned in the previous number the accounting rules and the models to be adjusted to their financial statements, as well as those related to the compliance of the coefficients to be established, the frequency and detail with which the data is to be established they must be supplied to the Commission or made public by the entities themselves. This power shall have no more restrictions than the requirement that the advertising criteria be homogeneous for all entities of the same category and similar for the various categories.

Likewise, the Minister of Economy and Finance is empowered and, with his express rating to the National Securities Market Commission, to regulate the records and documents to be carried by the Securities and Exchange Companies and other entities referred to in Article 76 in relation to their stock market operations.

3. The Minister of Economy and Finance and, with his express rating, the National Securities Market Commission, after reporting by the Accounting and Audit Institute of Accounts, will have the same powers provided for in the previous paragraph in relationship with the consolidated groups of Securities Companies or Agencies referred to in the following number and with the consolidable groups whose parent entity is one of the groups referred to in points (a) and (b) of Article 84 (1

.

4. For the fulfilment of the minimum levels of own resources and limitations required under Article 73 or, where applicable, for compliance with the provisions of Article 86a, the Companies and Securities Agencies shall consolidate their states. accounting with those of other companies and securities agencies and financial institutions that constitute a unit of decision with them, as provided for in Article 4.

A group of financial institutions shall be deemed to constitute a consolidated group of Securities Companies and Agencies when any of the following circumstances arise:

a) That a Company or Securities Agency controls the other entities.

(b) The parent entity is an entity whose principal activity is to have holdings in Companies and Securities Agencies.

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

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

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

5. The types of financial institutions to be included in the consolidated group of Securities Companies and Agencies referred to in the preceding number shall be determined.

In any case, they will be part of the consolidable group:

a) Securities Companies or Agencies.

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

(c) Mobilic Investment Companies.

(d) The Management Societies of Collective Investment Institutions, as well as the Pension Fund Managers, whose sole purpose is the administration and management of the aforementioned funds.

e) The Portfolio Management Societies.

f) Capital-Risk Societies and Capital-Risk Fund Managers.

g) The entities whose principal activity is the holding of shares or units.

In addition, they shall be part of the consolidated group of Securities Companies or Securities Agencies whose principal activity involves the prolongation of the business of any of the entities included in the consolidation, or include the provision to these ancillary services.

The National Securities Market Commission may authorize the individual exclusion of an entity from the consolidated group of Securities Companies and Agencies when any of the assumptions set forth in the number 2 of the Article 43 of the Trade Code, or where the inclusion of that entity in the consolidation is inappropriate for the purposes of the objectives of the supervision of that group.

6. Insurance institutions shall not in any case form part of the consolidated groups of companies and securities agencies.

7. Regulation may be regulated the way in which the rules that this Law provides for own resources and supervision of the consolidable groups shall be applicable to the subgroups of Societies and the Agencies of Securities understood by such those that, including entities of such nature, are in turn integrated into a larger, consolidated group.

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

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

When of the economic, financial or managerial relations of a Company or Securities Agency with other entities, the existence of a control relationship within the meaning of this Article shall be presumed without the entities have made the consolidation of their accounts, the National Securities Market Commission may request information from or inspect those entities for the purposes of determining the source of the consolidation.

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

10. Compliance by the consolidated group of the provisions of the preceding numbers shall not exempt the Company or the Securities Agencies from individually complying with its own resource requirements.

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

12. The consolidation obligation laid down in Article 42 of the Code of Commerce shall be understood as being fulfilled by the consolidation referred to in the earlier numbers by those groups of companies whose dominant entity is a Company or Agency of Securities, or by others who have a parent company whose principal activity is the holding of shares in Companies and Securities Agencies. This duty shall also be deemed to be fulfilled for the groups of the governing bodies of the official secondary markets and the Securities Clearing and Settlement Service. '

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

5. An Article 86a is added, with the following wording:

" Article 86 bis

1. Where other types of entities subject to specific requirements of own resources exist in a consolidated group of companies or securities agencies, the group shall, for the purposes of the sufficiency of such resources, reach the highest of the The following measures:

(a) The necessary to achieve the minimum levels to be established as provided for in point (f) of Article 73 (2

.

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

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

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

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

5. The Minister of Economy and Finance, after a report of the National Securities Market Commission, on a proposal from the Banco de España, may agree that a group of companies and securities agencies in which one or more credit institutions are integrated eligible to join a Deposit Insurance Fund is considered a consolidated group of credit institutions and is therefore subject to supervision on a consolidated basis by the Banco de España. '

6. New wording is given to points (e), (k) and (m) of Article 99:

(e) Failure to comply with the consolidation obligation laid down in Article 86 of this Law, as well as the lack of the companies referred to in that Article of the accounting and records legally required, essential irregularities that prevent the financial and financial situation of the institution or group from being known, or do not account for the operations they perform or in which they mediate.

(k) The reduction of the own resources of the Securities Companies and Agencies and their groups at a level below 80 per 100 of the minimum required, remaining in this situation for at least six consecutive months.

m) Non-compliance by the entities referred to in Articles 35 and 86 of the Law of the obligation to submit their individual and consolidated accounts and management reports to audit accounts. "

7. A second paragraph is added to Article 99:

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

8. New wording is given to points (c), (g) and (h) of Article 100:

c) Non-compliance by the entities covered by Article 86 of the rules in force on the accounting of transactions, the formulation of accounts or the manner in which official books and records are to be taken, as of the consolidation rules.

g) Non-compliance by Securities Companies and Agencies and their groups of the rules referred to in Article 73, where it does not constitute a very serious infringement in accordance with the previous Article.

h) the reduction of the own resources of the Companies and Securities Agencies and their groups at a level below 80 per 100 of the minimum required, remaining in this situation for a period of more than two months but less than six. "

9. A second paragraph is added to Article 100:

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

Chapter III

Provisions regarding insurance entities and their groups

Article 5

Articles 22, 25, 42 and 43 of Law 33/1984, of 2 August, of Private Insurance Management, are amended as follows:

Article twenty-two

Number 1 is worded as follows:

" 1. The exercise of the activity, its publicity, the financial situation and the state of solvency of the insurance institutions are subject to the control of the State Administration, through the Ministry of Economy and Finance. Institutions shall provide the Ministry with the documentation and information necessary for the exercise of that control with the requirements, in the form, and with the periodicity to be determined. "

The following numbers are added:

" 4. Without prejudice to the provisions of Title III of book I of the Trade Code, the Minister of Economy and Finance is empowered to submit, on a proposal from the Directorate-General for Insurance, a report from the Accounting and Audit Institute of Accounts to establish and amend the accounting standards, valuation criteria and the models of the annual accounts of insurance institutions.

5. The consolidation obligation laid down in Article 42 of the Code of Commerce shall be understood to be fulfilled by the consolidation referred to in this Article in those groups of companies whose dominant entity is an insurance undertaking or an institution. entity whose principal activity is the holding of holdings in insurance institutions.

This is without prejudice to the obligation to consolidate one another, which may exist for subsidiaries which are not financial institutions in the cases where applicable in accordance with Article 42 of the Trade Code.

6. (a) Where the dominant entity of a consolidated group of insurance entities as defined in Article 25 is an insurance undertaking, the obligation to formulate and approve the annual accounts and the management report shall be the same. consolidated and proceed to your deposit. Where the parent is a non-insurance entity, it shall be the responsibility of the Directorate-General for Insurance of the Ministry of Economy and Finance to designate the required entity.

(b) The consolidated accounts and management report of the groups of insurance institutions shall be subject to the audit of auditors in the terms laid down in Article 42 of the Trade Code and other rules applicable. However, the appointment of the auditors shall in any event be the responsibility of the entity required to formulate and approve those accounts and report in accordance with the provisions of the preceding subparagraph.

(c) The obligations laid down in the preceding letters in respect of the annual accounts and the consolidated management report do not exempt the group's entities from fulfilling their specific obligations.

(d) For the purposes set out in the preceding paragraphs, where an insurance undertaking is controlled, directly or indirectly, by the same person or entity, it shall inform the Ministry of Economy and Finance of this circumstance, with an indication of the group to which it belongs, the address and the social reason of the company exercising the control, or of its name, if it is a natural person.

7. The Minister of Economy and Finance, on a proposal from the Directorate-General for Insurance, prior to the report of the Accounting and Audit Office, will have the same powers provided for in the number 4 of this article in relation to the consolidable insurance entities as defined in Article 25.4 of this Law.

The Minister of Economy and Finance, on a proposal from the Directorate-General for Insurance, will also determine the frequency and manner in which the information should be provided.

8. The Directorate-General for Insurance may require the institutions subject to consolidation of a consolidated group of insurance institutions to take all necessary information to verify the consolidations made and to analyse the risks assumed by the institution. set of consolidated entities, as well as, with the same object, to inspect their books, documentation and records.

When of the economic, financial or managerial relationships of an insurance entity with other entities, the existence of a control relationship within the meaning of Article 25 of this Law is presumed, without the entities have made the consolidation of their accounts, the Directorate-General for Insurance may request information from or inspect those entities for the purposes of determining the source of the consolidation.

9. The Directorate-General for Insurance may require natural persons or non-financial institutions with which, as provided for in this Law, there is a control relationship, any information which may be useful for the exercise of the supervision of the consolidable groups of insurance entities defined in Article 25 of this Law, and inspect them for the same purposes. "

" Article twenty-five

1. An insurance institution must have at all times, as a solvency margin, an uncommitted own equity sufficient in relation to the risks assumed.

Reglamentarily the calculation of the legally enforceable minimum amount of the solvency margin, the items that are computed by the insurance institutions as members of their own uncommitted assets and the elements which, by their nature or characteristics, are to be deducted for the purposes of the calculation of the solvency margin.

2. The consolidated groups of insurance institutions must have at all times, as a solvency margin, a consolidated assets not committed sufficient to cover the sum of the legal solvency requirements applicable to each of the entities in the group.

Dealing with consolidated groups of insurance entities in which entities of other nature are integrated, specific requirements for the sufficiency of own resources at the consolidated level may be regulated.

3. Compliance by the group of the provisions of the preceding number shall not exempt financial institutions that are integrated into the financial institutions to individually or subconsolidate their own resources requirements. To this end, such entities shall be supervised on an individual basis by the body corresponding to its nature.

4. (a) For compliance with the solvency margin set out in the preceding number 2, the insurance institutions shall consolidate their accounting statements with those of the other insurance institutions or financial institutions which constitute a unit of decision.

(b) For the purposes of this Law, in order to determine whether several entities constitute a unit of decision, the criteria provided for in Article 4 of Law 24/1988 of 28 July of the Stock Market shall be met.

(c) A group of financial institutions shall be deemed to be a consolidable group of insurance entities when any of the following circumstances arise:

-That an insurance entity controls the other entities.

-That the parent entity is an entity whose principal activity is to have holdings in insurance entities.

-That a natural person, a group of natural persons acting systematically in concert, or a non-consolidated entity as provided for in this Act, controls several entities, all of which are insurers.

5. The types of financial institutions to be included in the consolidated group of insurance institutions referred to in the preceding number shall be determined.

In any case, they will be part of the consolidable group:

a) The Assurance Entities.

b) The Mobilia Investment Companies.

(c) Collective Investment Institutions Management Societies, as well as the Pension Fund Managers whose sole purpose is the administration and management of the Funds.

d) The Portfolio Management Societies.

e) Capital-Risk Societies and Capital-Risk Funds Managers.

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

In addition, the financial instruments whose principal activity involves the extension of the business of the entities included in the consolidation or the understanding shall be part of the consolidated group of insurance entities. provision to these ancillary services.

The Directorate-General for Insurance may authorise the individual exclusion of an insurance or financial institution from the consolidable group of insurance entities when any of the assumptions referred to in issue 2 of the Article 43 of the Trade Code, or where the inclusion of that entity in the consolidation is inappropriate for the purposes of the objectives of the supervision of that group.

6. Regulations shall be determined by the consolidated groups of insurance companies as members of their own uncommitted assets and the elements which, by their nature or characteristics, are to be deducted from the equity for the purposes of the calculation of the solvency margin.

7. Regulation may be regulated the way in which the rules contained in this Law on own resources and supervision of the consolidable groups must be applicable to the sub-groups of insurance entities, which are understood by those who, including entities of that nature, are integrated, in turn, into a larger, consolidable group.

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

8. Any rule that is dictated in development of what this Law provides for and may directly affect financial institutions subject to the supervision of the National Securities Market Commission or, where appropriate, the Banco de España, will be given prior report of these organisms.

9. Provided that in a consolidated group of insurance institutions there are entities subject to supervision on an individual basis by a body other than the Directorate-General for Insurance, the latter, in the exercise of the powers conferred on it by this Law on those entities, it shall act in a coordinated manner with the supervisory body which in each case corresponds. The Minister for Economic Affairs and Finance may lay down the rules necessary to ensure proper coordination.

10. Where there are foreign entities which may be incorporated into a consolidated group of insurance institutions, the scope of supervision on a consolidated basis shall be regulated by the Directorate-General for Insurance, on the basis of, among other criteria, the Community or non-Community character of the entities, their legal nature and degree of control. "

Article forty-two

The following section is added:

" 6. The provisions of paragraph 2 of this Article may be applied to the consolidable groups of insurance institutions where the group of insurance undertakings is assessed with reference to any of the situations specified in points (b), (c), (d), (e) or (f) of the first subparagraph of this Article. this article. "

Article forty-three

The following paragraph is added to paragraph 1:

" The provisions of the preceding paragraph shall apply to the dominant insurance entities of groups that are consolidated in the terms defined in Article 25 of this Law, and, where appropriate, to the entities to be formulated and approve the consolidated accounts and reports of such groups. "

Chapter IV

Provisions concerning other consolidable groups of financial institutions

Article 6

The provisions of this Chapter shall apply to groups of financial institutions which, by reason of their structure or the nature of the entities which integrate them, are not subject to the special rules on groups. consolidated credit institutions contained in Title II of Law 13/1985, on consolidated groups of Companies and Securities Agencies contained in Article 86 of Law 24/1988, or on consolidated groups of insurance entities contained in Article 25 of Law 33/1984.

Item Seventh

1. In order to meet the minimum own resources requirements laid down in the following Article 9, financial institutions shall consolidate their accounting statements with those of the other financial institutions which constitute a unit of decision.

2. In order to determine whether several entities constitute a unit of decision, the criteria provided for in Article 4 of Law 24/1988 of 28 July of the Stock Market shall be met.

3. The types of financial institutions subject to the duty of consolidation regulated in this Chapter shall be determined.

In any case, they will be part of the consolidable group:

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

b) Securities Companies and Agencies.

(c) Mobilic Investment Companies.

(d) The Management Societies of Collective Investment Institutions, as well as the Pension Fund Managers whose sole object is the administration and management of the Funds.

e) The Portfolio Management Societies.

f) Capital-Risk Societies and Capital-Risk Fund Managers.

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

Insurance entities shall not be integrated into a consolidated group of those provided for in this Chapter when a credit institution or a Securities Company or a Securities Agency is part of that group.

Item Eighth

1. The supervision of the consolidable groups of financial institutions referred to in this Chapter shall be the responsibility of the State body responsible for the supervision and control of the dominant entity of the group.

Where such an entity is not a financial institution subject to special status and is therefore not subject to prudential supervision, the Minister for Economic Affairs and Finance shall appoint the body responsible for the supervision of the group taking into account, among other criteria, the relative size of the different financial institutions integrated into it.

2. The obligation to formulate and approve the consolidated accounts and the consolidated management report, as well as the deposit, shall be the responsibility of the dominant entity of the group, provided that the group is a financial institution subject to special status; case, the required entity shall be determined by the body responsible for the supervision of the group.

3. They shall apply to the consolidated groups of financial institutions referred to in this Chapter, the rules on own resources, consolidation and, in general, the supervisory and sanction arrangements laid down in the special legislation. for the entity required to formulate and approve consolidated accounts. Exceptions to this principle may be laid down in such a case, with the rules to be applied in such a case.

Article ninth

1. The own resources of the consolidable group of financial institutions shall not be less than the highest of the following measures:

a) The minimum own resources that are required by the rules applicable to the group.

b) The sum of the own resources requirements established for each class of entities, calculated according to their respective specific rules. Where entities are integrated into a sub-group of financial institutions, their requirements shall be calculated on the consolidated financial statements of that sub-group.

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

3. Compliance by the group of the provisions of the preceding number 1 shall not exonerate the financial institutions which are integrated into the financial institutions of individual or subconsolidation of their own resources requirements.

4. The supervisory bodies shall act in a coordinated manner, cooperate with each other and exchange any information which may be useful for the monitoring and control of the consolidated groups of financial institutions covered by this Chapter and, in For the determination of the group's own resources.

The Minister of Economy and Finance will be able to lay down the rules necessary to ensure proper coordination.

Article 10

1. Very serious infringements of the consolidable groups of financial institutions regulated in this Chapter shall be considered as follows:

(a) Failure to comply with the consolidation obligation provided for in this Chapter.

b) Failure to comply with the obligation to submit your accounts and report management to audit accounts.

(c) The reduction of own resources at a level below 80 per 100 of the minimum required, remaining in this situation for at least six consecutive months.

2. Serious infringements of the consolidable groups of financial institutions covered by this Chapter shall be considered as follows:

a) Failure to comply with the applicable consolidation rules.

b) The reduction of own resources at a level below 80 per 100 of the minimum required, remaining in this situation for a period of more than two months, but less than six months.

3. The penalties for the offences referred to in the preceding numbers shall be imposed on the entity required to formulate and approve the consolidated accounts and the consolidated management report and, if applicable, its administrators and managers.

4. Irrespective of the imposition of the penalties provided for in the preceding paragraphs, in the event of insufficient resources of the group, the institutions incorporated therein shall allocate the percentages of their reserves to the formation of reserves. benefits to be established, subject to such an effect from distribution to the prior authorisation of the competent supervisory body.

You must also adopt such entities, in the terms that they regulate, the other measures necessary to return to compliance with the rules that have been infringed.

Chapter V

Special surveillance rules applicable to non-consolidated mixed groups

Item 11th

The provisions of this Chapter shall apply to non-consolidated mixed groups of financial institutions. These are those made up of financial institutions which constitute a unit of decision and of which they are a party, either as a dominant entity, or as a dominant entity, insurance entities or consolidable groups of insurance undertakings, or other entities. financial institutions or groups which, by virtue of the special rules applicable to them, are not required to consolidate their accounting statements with those of the rest of the mixed group.

For these purposes, in order to determine whether several entities constitute a unit of decision, the criteria set out in Article 4 shall be met. of the Law 24/1988, of July 28, of the Stock Market.

Item 12th

1. Non-consolidable mixed groups referred to in this Chapter shall comply with the rules on prudential supervision which may be regulated and, in any case, the following:

First. That the actual amount of the own resources of the non-consolidated mixed group, once the deductions for cross-shareholdings or other similar transactions within its own resources, does not fall below the the sum of the own resources and solvency margin requirements that are payable according to their specific rules for each class of financial institutions or groups integrated into the non-consolidated mixed group.

Second. The risk concentration of the joint group which is not consolidated as a whole in relation to its own resources shall not exceed that which would be permitted if the joint group is considered to be consolidated and the least-established group shall be strict limitations applicable to financial institutions or groups integrated into it.

2. The supervision of the non-consolidated joint groups referred to in this Chapter shall be the responsibility of the supervisory body of the consolidating entity or group holding the dominant position, unless the Minister for Economic Affairs and Finance, prior to the report of the supervisory bodies or bodies concerned, provides otherwise.

When the dominant entity is not a financial institution subject to special legislation and is therefore not subject to the specific supervision of the Banco de España, Comisión Nacional del Mercado de Valores, or Directorate-General for Insurance, the Minister for Economic Affairs and Finance, taking into account predominantly the relative size of the various entities or financial groups integrated into the non-consolidated joint group, shall appoint the body or body responsible for their surveillance.

3. Those entrusted with the supervision referred to in this Chapter shall be required to obtain from the other bodies responsible for the control of the consolidated entities or groups integrated in the joint group all the information and precise collaboration to carry it out.

Item 13th

1. If, in the case of the appropriate calculations, the body responsible for monitoring the non-consolidated mixed group understands that the latter does not meet the criteria referred to in the preceding article, it shall inform the other bodies of the other bodies. (a) to ensure that, by common agreement, each of them, within the scope of their respective powers, exercises the necessary control powers so that the non-consolidated joint group can meet the criteria set out above.

The Minister of Economy and Finance will be able to lay down the rules necessary to ensure proper coordination.

2. The lack of adoption by an institution within a period of six months from the appropriate request of the measures required in accordance with the provisions of this Chapter by its supervisory body shall be considered as a very serious infringement. severe.

Additional disposition first

An additional provision is added third to Law 8/1987 of 8 June of Regulation of Pension Plans and Funds, with the following text:

" Additional provision third. Without prejudice to Title III of book I of the Trade Code, the Minister for Economic Affairs and Finance shall be entitled to, on a proposal from the Directorate-General for Insurance, after reporting by the Institute of Accounts and Audit of Accounts, establish and amend the accounting standards, valuation criteria and the models of the annual accounts of the managing bodies and the pension funds, providing the frequency and detail of information to be provided by those institutions to provide the Administration. "

Additional provision second

The following paragraph is added to Article 48 (1) of Law 26/1988, of July 29, of Discipline and Intervention of Credit Entities:

"For the establishment and modification of the above mentioned standards and models, with the exception of the reserved accounting states, the prior report of the Accounting and Audit Institute will be required."

Additional provision third

Articles 17 and 18 of Law 19/1988, of July 12, of Audit of Accounts, are worded as follows:

" Article 17.

1. For the commission of serious infringements, one of the following penalties shall be imposed on the infringer:

(a) Multa for up to 10 per 100 of the fees charged for auditing of accounts in the last financial year closed prior to the imposition of the penalty, and may in no case be less than 500,000 pesetas.

(b) Temporary low for no longer than five years in the Official Register of Auditors.

c) Definitive low in the Official Register of Auditors.

Where the infringer is an audit firm, only the penalties provided for in (a) and (c) above shall apply to it.

The whole of the partners will respond in the alternative and in solidarity with the financial penalties imposed on the audit firm.

2. For the commission of minor infractions will be imposed on the infringer fine of up to 500,000 pesetas.

3. The penalties applicable in each case for the commission of serious infringements shall be determined on the basis of the following criteria:

a) The nature and importance of the infringement.

b) The severity of the damage or damage caused or that they may cause.

c) The existence of intentionality.

d) The importance of the audited entity, measured according to the total number of assets, their annual turnover or the number of employees.

e) The unfavorable consequences for the national economy.

f) The previous conduct of the offenders.

g) The circumstance of having carried out own-initiative actions aimed at remedying the infringement or to undermine its effects.

4. In addition to the appropriate sanction to be imposed on the audit firm by the commission of serious infringements, one of the following penalties shall be imposed on the partner or partners of the audit firm who are responsible for the infringement:

a) Multa of up to 2,000,000 pesetas, not being able to be inferior in any case to 500,000 pesetas.

(b) Temporary low for a period equal to or less than five years in the Official Register of Auditors.

c) Definitive low in the Official Register of Auditors.

To determine the applicable penalty from those provided for in this paragraph, the criteria set out in paragraph 3 above shall be taken into consideration.

The partner or partners who have signed the report will be considered directly responsible for the violation, when the violation is derived from a particular audit job.

5. Where the imposition of a penalty for a serious infringement is the result of an audit of accounts to a particular undertaking or entity, such a sanction shall lead to the incompatibility of the auditor or audit firm with for the annual accounts of the said undertaking or entity corresponding to the first three financial years starting after the date on which the penalty is acquired on an administrative basis.

Article 18.

1. The decisions by which any of the penalties listed in Article 17 (1) (b) and (c) are imposed shall be enforceable only if they have been established on an administrative basis; in the case of serious infringements They shall be fully registered in the Official Register of Auditors, published in the "Accounting and Audit Institute Bulletin".

2. In the case of temporary or permanent discharge in the Official Register of Auditors, the Accounting and Audit Institute of Accounts shall take the necessary measures to safeguard the documentation concerning those audits accounts which, carried out by the audited Audit Board or Audit Company, the Accounting and Audit Institute of Accounts are aware of in any civil liability claim by a third party. "

Additional provision fourth

The following amendments are introduced in Law 19/1988, of July 12, of Audit of Accounts:

1. The following paragraph is added to the first provision:

" When the Auditors of the annual accounts of institutions subject to the supervisory regime provided for in Law 13/1992 on own resources and supervision on a consolidated basis of financial institutions, they knew and verify the existence of alleged irregularities or situations which may seriously affect the stability, solvency or continuity of the audited entity, shall immediately issue the relevant annual accounts audit report; the audited entity required to forward a copy of the same to the Banco de España, Commission National of the Securities Market or General Directorate of Insurance. If, within one week, the auditor is not satisfied with the fact that the referral has occurred, he shall send the report directly to the said organ or institution. '

2. The following point is added to Article 16 (2

:

"(j) Failure to comply with the provisions of the first provision of this Law."

Additional provision fifth

The first transitional provision of Law 13/1989, of 26 May, of Credit Unions is amended, which is worded as follows:

" Credit Unions must adapt their Statutes to the provisions of this Law before December 31, 1993, without prejudice to the mandatory rules of this Law and to regulate them Other dates for achieving the own resources required under prudential rules, which shall be considered in particular the case of local and local credit cooperatives in municipalities with less than 100,000 inhabitants. '

Final disposition first

This Law shall be of a basic nature in accordance with the provisions of Article 149.1, 11. and 13. of the Constitution.

Final disposition second

1. The Council of Ministers shall make the necessary arrangements for the implementation and development of this Law, the approval of which has not been expressly entrusted to the Minister for Economic Affairs and Finance.

In the exercise of that power, the Council of Ministers may, in particular with regard to the determination of solvency ratios, percentages of weighting or risk limits, or accounting items and their deductions. which are to be considered as own resources, to be limited to setting general criteria, maximum or minimum limits, or ranges of variation.

2. The Banco de España and the Comisión Nacional del Mercado de Valores, for the proper exercise of the powers conferred upon them by this Law, may lay down the provisions necessary for the development or implementation of the provisions adopted by the Council of Ministers or the Minister for Economic Affairs and Finance, provided that these rules also enable them to express their views.

3. The provisions applicable to the various types of financial institutions shall be properly coordinated in accordance with the regulatory development of this Law in such a way that the requirements of own resources and the possible limitations of the operations meet criteria that are homogeneous for all types of financial institutions and essentially address the objective nature of the risks inherent in such operations.

Third end disposition

1. This Law shall enter into force on 1 January 1993, with the exception of Chapter V thereof, which shall do so on 1 January 1994.

2. The duty of consolidation provided for in this Regulation shall apply to the number of accounting statements to be submitted as from 1 January 1993.

3. Within three months, from the complete publication of this Law, the Government, on the proposal of the Minister of Economy and Finance, will approve the regulatory provisions that will develop it.

Repeal provision

The additional provision of Law 13/1985, dated May 25, is hereby repealed.

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this Law.

Madrid, 1 June 1992.

JOHN CARLOS R.

The President of the Government,

FELIPE GONZÁLEZ MARQUEZ