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...

Read the untranslated law here: http://www.boe.es/buscar/doc.php?id=BOE-A-2015-9842

The first final provision of the Royal Decree-Law 17/2014, on December 26, measures of financial sustainability of the autonomous communities and local entities and other economic character introduced in the text revised the Act regulating local treasuries, approved by Royal Legislative Decree 2/2004, of March 5, the principle of financial prudence in the regime's debt through a new precept local authorities , article 48 bis. Its paragraph 1 has that it all of them operations financial that sign them corporations local are subject to that principle, understanding by such the set of conditions that must meet them operations financial to minimize your risk and cost.

This resolution defines the principle of financial prudence, applicable to all local entities. For the definition of this principle, is has had in has the principle of sustainability of them finance public established in the article 4 of the law organic 2 / 2012, of 27 of April, of stability budgetary and sustainability financial, that candle by the capacity of them administrations public to finance their commitments of expenditure present and future within them limits of deficit public debt and late payment of commercial debt, as well as it provides that compliance with the principle of financial sustainability for financial operations are subject to the principle of financial prudence.

The present resolution is structure in two chapters, referred to the conditions of prudence financial that are applicable to those guarantees, the first of those, and to them active financial, the second. Both cases define the respective spheres of application and operations that compose them, inter-administrative relations that materialize in the submission of information by local authorities with monitoring and control by the Ministry of finance and public administration, as well as the possible cases in which this authorization would be required.

(By all it earlier, this Secretariat General has determined: CHAPTER FIRST conditions of prudence financial for guarantees I. field of application the present chapter is apply to the operations of guarantees granted by them entities local in warranty of operations of credit to people physical or legal different of them collected in the field of application of the article 2.1. c) of the law organic 2 / 2012 April 27, budgetary stability and financial sustainability, without prejudice to authorizations required in application of paragraph 2 of article 20 of the LOEPSF.

II. definitions for the purposes of this chapter is means by: «guarantees»: operations of bail, endorsement, reaval or any other class of warranty, included the letters of commitment granted by the entities local.

"Local authority": set of entities belonging to the public administration Sector of a local Corporation in accordance with the definition and delimitation of the European system of national accounts and regional (SEC).

«Risk live»: balance live total of them main guaranteed, of them operations of credit entrenched through guarantees, reavales or other guarantees current and not executed, cancelled or released.

III. global limit guarantees 1. It claims and computation of global guarantees the total amount of guarantees authorized by each local authority boundary may not exceed 30% of your current income liquidated or accrued in the immediately preceding financial year or, in absence thereof, by the precedent to the latter when the computation to be carried out in the first half of the year and that budget have not been settled , according to the deducted figures of the consolidated financial statements of entities referred to in paragraph II of this chapter.

For the computation of this limit is considered the amount nominal of guarantees and rest of guarantees to 31 of December of each year more them authorizations of guarantees provided for the exercise following.

2. Fund for guarantees for the purposes of the limit planned in the point 1 earlier, not is considered those surety by endorsement or guarantees whose risk live is covered with a staffing differential in them budgets of expenses of the entity local of a fund affection to the payment by execution of them guarantees and guarantees provided. This Fund may be expandable to adapt is to them contingencies of the exercise and will be unavailable except for answer of them payments by execution of guarantees or guarantees, including which not have served of Foundation for its endowment.

If you equip this Fund, the basis for implementation of the budget of the local authority will establish characteristics of differentiated staffing and unavailability that make it ideal for the purposes specified in relation to the overall limit of guarantees. In addition, description should be detailed the relationship of warranty covered operations, indicating the formalized nominal amount and the pending live risk for each guarantee.

IV. obligations of information the financial controller of the local authority has the obligation to communicate the final terms of the operations of endorsements, reavales or other kind of guarantees public or measures of extrabudgetary support to the Ministry of finance and public administration at the Central of information of risks of the entities local.

V. limit per individual operations regardless of the provisions of the paragraph III, local authorities may not agree to guarantees operations when the extension of the warranty, for any reason, exceeds 15% of current income defined in the terms of paragraph III of this chapter.

The limit above is computed operation by operation. However, them guarantees that is granted by the entity local to a same person physical or legal or to any of them entities that form part of the same group of societies according to the criteria established in the article 42 of the code of trade during the year natural, is considered a single operation for the purposes of the computation of this limit. The same caution applies regarding the warranties that have as beneficiaries to entities which form the same group according to the order of HAP/1489/2013, 18 July, approved rules for the formulation of consolidated annual accounts within the scope of the public sector.

Also, must take into account the limits laid down in article 49 of the text revised regulatory law of local finances, approved by Royal Legislative Decree 2/2004, of 5 March.

VI. administrative authorization 1. Pursuant to article 48 bis of the consolidated text of the Act regulating local treasuries, approved by Royal Legislative Decree 2/2004, of 5 March, require authorization from the competent organ of public administration that has assigned the financial supervision of the local authorities, the formalization of guarantee operations which exceed the limits of financial prudence established in this chapter.

2. also will require authorization of that organ of guarantee operations referred to in article 20(2) of the organic law 2/2012, April 27, budgetary stability and financial sustainability. and it will be mandatory until it is found that it has fulfilled the objective of budgetary stability and public debt.

VII. processing of authorisations 1. Both for them authorizations by breach of the limit global planned in the paragraph III of this chapter as for them authorizations to is concerns the point 2 of the paragraph SAW, the organ administrator of it entity local must send to the organ competent of it administration public that have attributed it guardianship financial of that the request of authorization, in which is must do consist the list of them guarantees to provide by which is requests authorization (, indicating the following aspects of each a: to) entity SEC of the entity local that gives the guarantee.

(b) beneficiary of the guarantee.

(c) characteristics of the operation of credit guaranteed or secured: type, cost and time.

(d) calculation of the amount for the purposes of the limit to which it refers the paragraph III of this chapter.

2 application for authorization of individual operations referred to in paragraph V shall include, in addition to the above-mentioned indications in item 1 above, the following: to) the operation of credit guaranteed or entrenched features: type, total amount, cost, time and purpose or specific target of the guaranteed credit operation.

(b) counter guarantees, where applicable.

(c) relevant aspects of the security agreement, as an extension of warranties, covenants for the benefit of excursion, agreements in relation to the position of the guarantor or surety against the secured obligation, and any other aspect that affects the risk of the operation.

(d) the body of the public administration to grant or deny the authorization corresponding request report of feasibility of the operations financed by the operation of credit guaranteed, specifying the risks involved and the expected loss.

3. the organ of the Administration public that have attributed the guardianship financial of them entities local may require the information or documentation that consider timely to instruct the record, additional to it planned in them numbers earlier.


4. the deadline for approving the authorization agreement will be three months from the receipt of the request, whose computation is suspended in case if necessary upon request to the local authority to remedy the application until it is complete and by other delays that are attributable to the applicant.

5. for it award of it referred authorization is will attend, between others aspects, to the nature, features and purpose of them operations of credit to endorse and to it situation financial of it entity local, in particular to the compliance of them objectives of stability budgetary, of debt public and of the rule of expenditure and, in his case, to the grade of execution of it measures planned in them plans financial or , if necessary, adjustment plan. Also is considered them conditions with that is formalize them guarantees and, in particular, which pose an increase of the risk of the operation, and them relating, in his case, to the circumstances of solvency of the debtor entrenched.

SECOND CHAPTER conditions of financial prudence in relation to financial assets I. scope and definitions the conditions refer to loans in favour of third-party instruments of capital or net worth of other entities or debt securities whose owner is a local institution and whose return is a liability or equity account net of natural or legal persons other than the collected within the scope of article 2.1. c) of the Law organic 2 / 2012, of 27 of April, of stability budget and sustainability financial.

For the purposes of this chapter means: 'Financial assets': those who have this consideration in terms of national accounting.

"Local authority": set of entities belonging to the public administration Sector of a local Corporation in accordance with the definition and delimitation of the European system of national accounts and regional (SEC).

II. limits relating to financial assets 1. Local authorities which, at 31 December of each year with reference to the period immediately preceding, fail to comply with the limits for access to borrowing established in article 53 of the text revised regulatory law of local finances, approved by Royal Legislative Decree 2/2004, of 5 March, may not present a net increase of positive financial assets at the end of the financial year , provided that such failure to persist during the exercise in accordance with the report of the external auditor of the local authority. To these effects is considered the criteria collected in that precept in what is refers to the magnitudes financial.

2. the competent body of the public administration that has assigned the financial supervision of the local authorities may authorize the acquisition of financial assets consisting in participation in the capital of companies or debt securities when there is a risk that it will exceed the limits provided for in this section. That organ will be valued for this purpose, among others, the purpose of the operation and the degree of compliance with the objectives of stability, public debt, ruler of expenditure and average period of payments to suppliers.

III. actions of monitoring and controlling the financial controller of the local authority is required to certify and report to the Ministry of finance and public administration at the Central of information of risks of the entities local, before 31 March of each year, the net change in financial assets at the end of the previous year in terms of national accounting. By 2015, this obligation must comply before 1 November.

Final disposition. Entry in force.

This resolution shall enter into force the day following its publication in the "Official Gazette", except the limits provided in paragraph III of the first chapter, which will come into force on December 31, 2015.

Madrid, 9 September 2015.-the General Secretary of Local, regional and national coordination Rosana Navarro Heras.