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Resolution Of September 9, 2015, Of The General Secretariat Of Regional And Local Coordination, Which Defined The Principle Of Financial Prudence Of The Local Authorities Of The Financial Operations Relating To Active End...

Original Language Title: Resolución de 9 de septiembre de 2015, de la Secretaría General de Coordinación Autonómica y Local, por la que se define el principio de prudencia financiera de las entidades locales de las operaciones financieras que tengan por objeto activos fin...

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TEXT

The final provision of Royal Decree-Law No 17/2014 of 26 December 2014 on measures for the financial sustainability of autonomous communities and local and other economic entities introduced into the recast text of the Law of the Local Government, approved by Royal Legislative Decree 2/2004 of 5 March, the principle of financial prudence in the system of indebtedness of local authorities by means of a new precept, Article 48a. Paragraph 1 provides that the entire financial operations to be subscribed by the Local Corporations are subject to that principle, meaning the set of conditions to be met by the financial operations to minimise their risk and cost.

This Resolution defines the principle of financial prudence applicable to all local entities. For the definition of this principle, the principle of sustainability of public finances as set out in Article 4 of the Organic Law 2/2012 of 27 April 2012 on budgetary stability and financial sustainability has been taken into account. " Vela's ability to finance its present and future spending commitments within the limits of deficit, public debt, and commercial debt delinquencies, as well as for compliance with the principle of financial sustainability financial operations shall be subject to the principle of prudence financial.

This Resolution is structured in two chapters, referring to the conditions of financial prudence that apply to the endorsements, the first of those, and to the financial assets, the second. In both cases, the respective fields of application and the operations that integrate them are defined, the interadministrative relations that are concretized in the referral of information by the local authorities and monitoring and control by the of the Ministry of Finance and Public Administrations, as well as the possible scenarios in which the authorization of the latter would be required.

For all of the above, this General Secretariat has resolved:

CHAPTER FIRST

Financial prudence conditions for endorsements

I. Scope of application

This Chapter shall apply to the operations of guarantees granted by local authorities in respect of credit operations to natural or legal persons other than those listed in the scope of the Article 2.1.c) of the Organic Law 2/2012 of 27 April 2012 on budgetary stability and financial sustainability, without prejudice to the authorisations required pursuant to Article 20 (2) of the LOEPSF.

II. Definitions

For the purposes of this chapter:

"Avales": Bail operations, collateral, collateral, or any other kind of collateral, including commitment letters granted by local entities.

"Local Entity": A set of entities belonging to the Public Administrations Sector of a local corporation in accordance with the definition and delimitation of the European System of National and Regional Accounts (ESA).

"Live Risk": Total live total of the principal collaterals, credit operations secured through collateral, collateral or other collateral in place and not executed, cancelled or released.

III. Global Aval Limit

1. Amount and computation of the global limit of endorsements

The total amount of collateral authorised by each local entity may not exceed 30% of its current income or accrued in the immediately preceding financial year or, failing that, in the preceding year. where the calculation is to be carried out in the first half of the year and the budget for that year has not been settled, according to the figures deducted from the consolidated accounting statements of the entities referred to in paragraph II of this Article chapter.

For the calculation of this limit, the nominal amount of guarantees and other guarantees shall be considered as of 31 December of each year plus the authorisations of guarantees provided for the following year.

2. Background for endorsements

For the purposes of the limit set out in point 1 above, any guarantee or guarantee whose living risk is covered by a differentiated allocation in the expenditure budgets of the local authority shall not be considered as such. a fund affected the payment for the execution of the guarantees and guarantees provided. This fund may be extensible to be adapted to the contingencies of the financial year and shall be unavailable except in order to respond to payments for the execution of guarantees or guarantees, including those which have not been used as a basis for their allocation.

If this fund is to be established, the local authority's budget implementation bases shall establish the differentiated allocation and unavailability characteristics which make it appropriate for the purposes of the budget. global limit of endorsements. In addition, the ratio of covered collateral operations shall be detailed, indicating the nominal amount formalised and the outstanding outstanding risk for each guarantee.

IV. Reporting obligations

The local entity's financial controller has an obligation to communicate the final terms of all collateral, collateral or other public guarantees or non-budgetary support measures to the Ministry of Finance. Hacienda y Administraciones Públicas, a la Central de Información de Risks de las Entities Locales.

V. Limit by individual operations

Regardless of the provisions of paragraph III, local authorities may not arrange for collateral transactions where the extension of the guarantee, by any concept, is greater than 15% of the current income defined in the terms of paragraph III of this Chapter.

The above limit will be computed by operation. However, the guarantees granted by the local authority to the same natural or legal person or to any of the entities forming part of the same group of companies according to the criteria laid down in Article 42 of the Trade Code during the calendar year, a single operation shall be considered for the purposes of calculating this limit. The same caution shall apply with respect to guarantees which have as beneficiaries the entities forming the same group in accordance with the HAP/1489/2013 Order of 18 July 2013 laying down the rules for the formulation of annual accounts consolidated in the field of the public sector.

Also, the limits set out in Article 49 of the recast of the Local Government Law Regulatory Law, approved by Royal Legislative Decree 2/2004 of 5 March, must be taken into account.

VI. Prior administrative authority

1. In accordance with Article 48a of the recast text of the Local Government Law, approved by Royal Decree-Law No 2/2004 of 5 March, it will require the approval of the competent authority of the Public Administration, which has been assigned the financial protection of the Local Entities, the formalisation of the collateral operations that exceed the financial prudence limits set out in this Chapter.

2. The approval operations provided for in Article 20.2 of the Organic Law 2/2012 of 27 April, of budgetary stability and financial sustainability shall also be required of that body. and it shall be required until it is established that it has been met the objective of budgetary stability and public debt.

VII. Processing of the authorizations

1. For authorisations for non-compliance with the overall limit laid down in paragraph III of this Chapter and for the authorisations referred to in paragraph VI (2), the financial organ of the local authority shall refer the matter to the body. the competent authority of the public administration which has assigned the financial protection of the application for authorization, in which the list of the guarantees to be provided for which authorization is sought must be stated, indicating the following aspects of each:

a) The SEC entity of the local entity that grants the warranty.

b) Guarantee beneficiary.

c) Characteristics of the secured or secured credit operation: Type, cost and time frame.

(d) Calculation of the amount for the purposes of the limit referred to in paragraph III of this Chapter.

2. The application for the authorisation of individual operations provided for in paragraph V shall include, in addition to the information referred to in point 1 above, the following:

a) Characteristics of the secured or secured credit operation: Type, total amount, cost, time and purpose or specific destination of the secured credit operation.

b) Contragarantias, if any.

c) Relevant aspects of the guarantee contract, as an extension of the guarantee, covenants relating to the benefit of excision, agreements in relation to the position of the guarantor or guarantor in the face of the guaranteed obligation, and any other aspect that affects the risk of the operation.

(d) The body of the public administration to which the authorization is granted or refused may request the feasibility report of the operation financed by the guaranteed credit operation, explaining the risks assumed and expected loss.

3. The authority of the Public Administration which has the financial protection of the local authorities may require the information or documentation it deems appropriate to instruct the file, in addition to that provided for in the above.

4. The time limit for approving the approval agreement shall be three months from the receipt of the application, the computation of which shall be suspended if necessary by requiring the local authority to remedy the application until it is complete. and for other delays that are attributable to the applicant.

5. For the granting of such authorization, among other aspects, the nature, characteristics and purpose of the credit operations to be approved shall be addressed and the economic and financial situation of the local entity, in particular compliance with the the objectives of budgetary stability, public debt and the rule of expenditure and, where appropriate, the extent to which the measures provided for in the economic and financial plans are implemented or, where appropriate, the adjustment plan. The conditions under which guarantees are formalised, and in particular those involving an increase in the risk of the transaction, and those relating, where appropriate, to the solvency circumstances of the established debtor, shall also be considered.

CHAPTER SECOND

Financial prudence conditions in relation to financial assets

I. Scope and definitions

The conditions relate to loans in favour of third parties, capital instruments or equity instruments of other institutions or debt securities, the holder of which is a local entity and whose counterpart is a liability or a liability. the net worth of natural or legal persons other than those listed in the scope of Article 2.1.c) of the Organic Law 2/2012 of 27 April 2012 on budgetary stability and financial sustainability.

For the purposes of this chapter:

"Financial Assets": Those who have such consideration in terms of national accounting.

"Local Entity": A set of entities belonging to the Public Administrations Sector of a local corporation in accordance with the definition and delimitation of the European System of National and Regional Accounts (ESA).

II. Limits in relation to financial assets

1. Local authorities which, at 31 December of each year, taking as a reference the previous immediate financial year, do not comply with the limits for the access to indebtedness laid down in Article 53 of the recast of the Law on the Local estates, approved by Royal Legislative Decree No 2/2004 of 5 March, may not submit a net change of positive financial assets at the end of the financial year, provided that such non-compliance persists during the financial year in accordance with the report of the financial controller of the local authority. For these purposes, the criteria laid down in that provision shall be considered as regards the financial measures.

2. The competent authority of the public administration which has the financial protection of the local authorities may authorise the acquisition of financial assets consisting of participation in the capital of undertakings or representative securities. of debt where there is a risk that the limits provided for in this paragraph are to be exceeded. That body shall assess for these purposes, inter alia, the purpose of the operation and the degree of compliance with the objectives of stability, public debt, expenditure rule and average period of payment to suppliers.

III. Follow-up and control actions

The local entity has an obligation to certify and report to the Ministry of Finance and Public Administrations, to the Risk Information Center of the Local Entities, before 31 March each year. year, the net change in financial assets at the close of the previous financial year in terms of national accounting. In 2015, this obligation must be met by 1 November.

Final disposition. Entry into force.

This Resolution shall enter into force on the day following that of its publication in the Official Gazette of the State, with the exception of the limits provided for in paragraph III of Chapter 1 which shall enter into force on 31 December 2015.

Madrid, September 9, 2015. -General Secretariat of Autonomous and Local Coordination, Rosana Navarro Heras.