FELIPE VI

KING OF SPAIN

To all who present it and understand it.

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

INDEX

Chapter I. General provisions.

Article 1. Object and scope of application.

Article 2. Definitions.

Article 3. Objectives of the resolution.

Article 4. Principles of resolution.

Article 5. Assessment.

Chapter II. Early action.

Section 1. Early Action Planning.

Article 6. Recovery plan.

Section 2. Intragroup Financial Help.

Article 7. Financial aid agreements within a group.

Section 3. Early Take Action.

Article 8. Conditions for early action.

Article 9. Early action measures.

Article 10. Intervention or temporary replacement of administrators as an early action measure.

Article 11. Follow-up of early action measures and information to resolution authorities.

Article 12. Coordination of early action measures in groups of entities in the European Union.

Chapter III. Preventive phase of the resolution.

Section 1. Schedule of the resolution.

Article 13. Resolution plans.

Article 14. Group resolution plans.

Section 2. Resolvability Evaluation.

Article 15. Assessment of the resolutionability of entities.

Article 16. Assessment of group resolutionability.

Article 17. Obstacles to the resolutionability of entities.

Article 18. Obstacles to the resolutionability of groups.

Chapter IV. Resolution.

Article 19. Conditions for resolution.

Article 20. Concept of unviable entity.

Article 21. Opening of the resolution process.

Article 22. Replacement of the administrative body and directors-general or assimilated as a measure of resolution.

Article 23. Content of the decision regarding the initiation of the resolution processes.

Article 24. Notification and publication obligations.

Chapter V. Resolution instruments.

Section 1. Resolution Instruments.

Article 25. Definition of resolution tools and general rules.

Article 26. Sale of the entity's business.

Article 27. Bridge entity.

Article 28. Asset management company.

Article 29. Regime of the transmission of assets.

Article 30. Supervisory arrangements for asset management companies.

Section 2. Recapitalization Operations.

Article 31. Recapitalisation operations using the resources of the National Resolution Fund.

Article 32. Ordinary shares or contributions to social capital.

Article 33. Instruments convertible into ordinary shares or contributions to share capital.

Article 34. Special arrangements for the subscription or acquisition by the FROB of the recapitalisation instruments.

Chapter VI. Depreciation and conversion of capital instruments and internal recapitalisation.

Section 1. General Provisions.

Article 35. Depreciation and conversion of capital instruments and internal recapitalisation.

Article 36. Amount of the recapitalisation.

Article 37. Effects of the depreciation and conversion of capital instruments and internal recapitalisation.

Section 2. Th Amortization and conversion of capital instruments.

Article 38. Depreciation and conversion of capital instruments.

Article 39. Rules for the depreciation or conversion of capital instruments.

Section 3. Th Internal Recapitalization.

Article 40. Internal recapitalisation.

Section 4. Eligible Liabilities for Internal Recapitalisation.

Article 41. Liabilities eligible for internal recapitalisation.

Article 42. Liabilities compulsorily excluded from internal recapitalisation.

Article 43. Liabilities to be excluded from the internal recapitalisation by decision of the FROB.

Article 44. Determination of the minimum requirement for own funds and eligible liabilities.

Article 45. Removal of obstacles preventing internal recapitalisation.

Article 46. Contractual recognition of the internal recapitalisation.

Section 5. Application of the Internal Recapitalization Instrument.

Article 47. Treatment of shareholders.

Article 48. Sequence and special rules of internal recapitalization.

Article 49. Plan for reorganization of activities.

Section 6. Other contributions to the internal recapitalization.

Article 50. Conditions for the contribution of the National Resolution Fund.

Article 51. Alternative sources of funding.

Chapter VII. FROB.

Section 1. Nature, composition and legal status.

Article 52. FROB.

Article 53. Funding mechanisms and budget allocation.

Article 54. Commission Rector.

Article 55. President.

Article 56. Parliamentary control.

Article 57. Cooperation and coordination with other national competent authorities.

Article 58. Cooperation and coordination with other international authorities.

Article 59. Duty of secrecy.

Article 60. Application of the competition rules.

Article 61. Adoption of international recommendations.

Section 2. FROB Faculties.

Article 62. FROB faculties.

Article 63. Commercial faculties.

Article 64. General administrative powers.

Article 65. Executive character of the measures.

Article 66. Exclusion of certain contractual conditions in early action and resolution.

Article 67. Partial transmission of assets and liabilities.

Article 68. Emergency measures.

Article 69. Advertising.

Article 70. Powers of suspension of contracts and guarantees.

Chapter VIII. Procedural arrangements.

Article 71. Actions against the decisions and agreements of the FROB adopted in the exercise of their commercial powers provided for in Article 63.

Article 72. Specialties of the appeal against decisions and administrative acts dictated in the framework of early action and resolution processes.

Article 73. Specialties of the appeal against decisions and administrative acts in respect of depreciation or conversion of capital instruments and internal recapitalisation.

Article 74. Failure to execute a judgment given in the administrative and administrative proceedings referred to in Articles 72 and 73.

Chapter IX. Sanctioning regime.

Section 1. General Provisions.

Article 75. General provisions.

Article 76. Competence for case instruction.

Article 77. Limitation of infringements and penalties.

Section 2. Infractions.

Article 78. Classes of violations.

Article 79. Very serious infringements.

Article 80. Serious infringements.

Article 81. Minor infractions.

Section 3. Sanctions.

Article 82. Penalties.

Article 83. Penalties for the commission of very serious infringements.

Article 84. Penalties for the commission of serious infringements.

Article 85. Penalties for the commission of minor infractions.

Article 86. Penalties for those who are in charge of administration or management for the commission of very serious infringements.

Article 87. Penalties for those who are in charge of administration or management for the commission of serious infringements.

Article 88. Penalties for those who exercise administrative or management fees for the commission of minor infractions.

Article 89. Criteria for the determination of penalties.

Article 90. Responsibility for administration or management charges.

Article 91. Temporary appointment of members of the administrative body.

Section 4. General Rules of Procedure.

Article 92. Procedure for the imposition of sanctions.

Article 93. Enforcement of sanctions and impeachment on the administrative path.

Additional disposition first. Structure and operation of the preventive resolution authorities.

Additional provision second. Deadline for the allocation of the National Resolution Fund.

Additional provision third. Legal regime applicable to guarantees provided in favour of the FROB and the Deposit Insurance Fund of Credit Entities.

Additional provision fourth. Single Resolution Mechanism and Single Resolution Fund.

Additional provision fifth. Preservation of financial contract records by entities.

Additional provision sixth. Integration of the Deposit Guarantee Funds into savings banks, banking establishments and credit unions.

Additional provision seventh. References to Law 9/2012 of 14 November of restructuring and resolution of credit institutions.

Additional disposition octave. Spanish resolution authority in the scope of the Single Resolution Mechanism.

Additional provision ninth. Financial institutions and other types of companies.

Additional provision 10th. General feasibility plans.

Additional provision eleventh. Constitution of the FROB Rector Commission.

Additional disposition twelfth. Authorised capital for the conversion of capital instruments in the event of a trigger event.

Additional disposition thirteenth. Banco de España staff at the FROB.

Additional disposition fourteenth. Scheme applicable in the case of an entity's competition.

Additional provision 15th. Effects of early action and resolution processes on the continuity of the activities of an entity.

Additional provision sixteenth. Fee for the activities carried out by the FROB as the resolution authority.

Additional 17th disposition. Legal status of the Official Credit Institute.

First transient disposition. Regime applicable to certain procedures for restructuring, recovery and resolution.

Second transient disposition. Rules on internal recapitalisation.

Transitional provision third. Administrative and judicial procedures initiated prior to entry into force.

Transitional disposition fourth. Annual contributions to the deposit guarantee compartment.

Transient disposition fifth. Accrual of the fee for the activities carried out by the FROB as the resolution authority during the year 2015.

Transitional disposition sixth. Adaptation to the developments of Directive 2013 /50/EU of the European Parliament and of the Council of 22 October 2013.

Transitional disposition seventh. Application of the first final provision and of Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on the improvement of the settlement of securities in the European Union and central securities depositaries and by the amending Directives 98 /26/EC and 2014 /65/EU and Regulation (EU) No 236/2012.

Repeal provision.

Final disposition first. Amendment of the Law 24/1988, of July 28, of the Stock Market.

Final disposition second. Amendment of Law 6/1997 of 14 April of the Organization and the Functioning of the General Administration of the State.

Final disposition third. Amendment of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction.

Final disposition fourth. Amendment of Law 41/1999 of 12 November on payment systems and securities settlement.

Final disposition fifth. Amendment of Law 22/2003, dated July 9, Bankruptcy.

Final disposition sixth. Amendment of Law 35/2003 of 4 November of collective investment institutions.

Final disposition seventh. Amendment of Royal Decree-Law 5/2005 of 11 March 2005 on urgent reforms to boost productivity and improve public procurement.

Final disposition octave. Amendment of the Law of 22 April on the reorganisation and liquidation of credit institutions.

Final disposition ninth. Amendment of the Royal Decree 1/2010 of 2 July 2010 approving the recast of the Law on Capital Societies.

Final disposition tenth. Amendment of Royal Decree-Law 16/2011 of 14 October establishing the Deposit Insurance Fund of Credit Entities.

Final disposition eleventh. Amendment of Law 3/2012 of 6 July on urgent measures for the reform of the labour market.

Final disposition twelfth. Amendment of Law 10/2014 of 26 June of the management, supervision and solvency of credit institutions.

Final disposition thirteenth. Amendment of Law 22/2014 of 12 November 2014 on the regulation of risk capital institutions, other closed-rate collective investment entities and the management companies of collective investment entities of a closed type, and by which Law 35/2003, dated November 4, is amended by Collective Investment Institutions.

Final disposition fourteenth. Competitive titles.

Final disposition fifteenth. Incorporation of European Union law.

Final disposition sixteenth. Faculty of development.

Final disposition seventeenth. Entry into force.

PREAMBLE

I

The growing complexity of the financial system, due to the size of the entities that make it up, the greater sophistication of the products with which they operate, as well as their high interconnection, requires the public authorities to have strengthened mechanisms and powers to deal with the potential of difficulty in which credit institutions or investment firms can be found, while respecting the essential idea underlying the whole of the law, to avoid any impact on the taxpayer's resources.

During the financial crisis in recent years, most developed countries experienced, to a greater or lesser extent, the enormous challenge that the resolution of a credit institution carries out in an orderly and orderly manner. without putting public money into play. The above has shown that it is necessary to include in the legal systems specific powers that allow the public authorities to manage a process, the resolution of the entity, in an energetic and agile manner to the same time, with respect for the rights of shareholders and creditors, but based on the principle that these are, and not the citizens with their taxes, who should absorb the losses of the resolution.

The concreteness of this new branch of financial regulation has been progressively articulated from the experiences of recent years in processes of resolution of entities and the coordinating activity of the forums international competition in financial policy, and has crystallized in a series of principles which, ultimately, underpin the article of this Law, and which, because of its importance, should be made explicit.

A basic principle of the law is that the traditional procedures, carried out in court, are not, in many cases, useful for the restructuring or closure of a financial institution. infeasible. Given their size, the complexity and uniqueness of their sources of financing, which includes legally guaranteed deposits, and their interconnection with other entities, the ordinary liquidation of a financial institution could hardly prevent damage irreparable to the financial system and the economy of a country. It is therefore necessary to articulate a special, rigorous and flexible procedure in time, which allows the public authorities to have extraordinary powers in relation to the failed entity and its shareholders and creditors. A procedure, in short, that allows for a close and continuous monitoring of the entity to be resolved by the resolution authority, and that it is exclusively focused on the task of solving it efficiently.

The distinction between settlement and resolution of a financial institution is derived from the foregoing. In this sense, the liquidation of a financial institution refers to the finalization of its activities in the framework of an ordinary judicial process, a process that will be mainly given in the case of entities that, due to their small size and complexity, are In the absence of any public interest, the resolution of a financial institution is a singular process of an administrative nature, in which the infeasibility of such entities would be managed. credit and investment firms which cannot be affected by their liquidation Bankruptcy for reasons of public interest and financial stability.

The regime established in this Law constitutes, consequently, a special and complete administrative procedure, which seeks the utmost speed in the intervention of the entity, in order to facilitate the continuity of its essential functions, while minimizing the impact of their infeasibility on the economic system and on public resources.

The second general principle, integrated in this Law, is that of the necessary separation between supervisory and resolutive functions with the declared aim of eliminating the conflict of interests in which the authority could incur In the case of the supervisory authority, the supervisory authority shall be able to exercise its powers of decision. The classic mandate of the supervisory authorities is to ensure compliance with the rules that discipline the activity of the institutions and, in particular, of the solvency rules, with the ultimate aim of protecting stability financial. On this mandate, a new call is now added to ensure that if an entity becomes unable to remain active by its own means, despite traditional regulation and supervision, its closure will occur with the minimum distortions. on the whole of the financial system and, in particular, without any impact on public finances. It is time to articulate a new public-financial function aimed at ensuring that entities are de facto liquidable without dragging an economic impact of such a magnitude that it could harm the economy as a whole. It is not, therefore, a simple new supervisory approach, but a new area of public intervention which, autonomously, will require entities to exercise their activity in such a way that their resolution is feasible and respectful. in the general interest, in the case where traditional supervision is insufficient.

At this point it should be noted that the interest of supervision is, above all, that of the continuity of the entity while that of the resolution is more focused on the liquidation of those parts of the same one that result infeasible. This difference of approaches in the tasks to be carried out advises that both functions are carried out at the same time independently and with loyal collaboration between those responsible for the supervision and the resolution. In order to address these principles and at the same time not affect the restructuring and resolution processes still to be completed, this Law establishes a model which distinguishes between the functions of the resolution in the preventive phase, which are entrusted to the Bank of Spain and the National Securities Market Commission, and shall be exercised through internal bodies operating with operational independence, and the executive-stage resolution functions, which are assigned to the FROB. Without prejudice to the above, once the processes currently under way have been completed and taking into account the experience of the Single Resolution Mechanism and the resolution authorities of the Member States of the Euro Area, and the evolution of the financial situation, this institutional model will be assessed for the sake of greater efficiency.

A third principle that takes into account this Law, and which is also the result of a shared experience with the countries of our environment, is the convenience of having a thorough and thorough implementation of this law. as an early stage of action within the resolution process. It is, on the one hand, to integrate in the ordinary life of the entities the continuous reflection on their resolvability, that is, that, apart from any operational difficulty, their managers dedicate efforts and attention to guarantee that if the entity It should be resolved at a certain time, its structure or way of operation would allow such a resolution to be carried out without putting at risk financial stability, the economy and, in particular, deposits and public money. And, on the other hand, it tries to place particular emphasis on the need to allow supervisory and resolution authorities to act on an entity from a first moment, when the entity is still solvent and viable. At this early stage both public intervention and the adjustment of the institution itself will normally be much more effective than in the case of a more serious deterioration. Rigorous work on both lines of action, both preventive planning and early action, must necessarily facilitate a predictable and orderly resolution of the entities, which is what the least impact will have on the markets. financial.

Based on these criteria includes the law a truly comprehensive and forceful set of preventive measures such as recovery and resolution plans, early action measures or the analysis of resolutionability, that it even reaches the possibility that the resolution authority may impose on perfectly sound entities the adoption of structural, organisational, or other business lines, if necessary to ensure that the case that the entity becomes infeasible, its resolution can be done in an orderly manner and no cost to the taxpayer.

Finally, and as a fourth principle underpinning the law, the need for the entire entity resolution scheme to be credible in a cost assumption that does not exceed the limits of the industry itself is addressed. financial. In other words, the public and public resources cannot be affected during the process of the resolution of an entity, but it is the shareholders and creditors, or in their case the industry, who must assume the losses. To this end, it is essential to define the resources that will be used to finance the costs of a resolution procedure, which are sometimes enormously high. This Law, in line with the established in the countries of our environment, designs both the internal mechanisms of absorption of losses by the shareholders and creditors of the institution in resolution, as, alternatively, the constitution of a fund of resolution funded by the financial industry itself.

Deserves a special mention of the instrument of internal recapitalization, legal translation of the English term "bail in", which draws the scheme of absorption of losses by the shareholders and creditors of the entity. Its ultimate purpose is to internalize the cost of the resolution in the financial institution itself, so that, with the utmost legal certainty, its creditors know the impact that the infeasibility of the entity would have on them. The old problem of the implicit public guarantees which would protect the creditors of those entities which, because of their relevance in the financial system, would not in any case be liquidated, is ultimately pursued. To do this, we use a medium that is both an end in itself and one of the guiding principles of this Law: the special protection of bank deposits. In the event of an internal recapitalisation of the institution, these will be the last remaining loans which may be affected, and are also covered by an important measure by the Deposit Insurance Fund, in such a way that the vast majority of depositors is free in the event of a decision by a credit institution. On the other hand, the National Resolution Fund will be set up, called upon to be integrated into a European-wide fund in the near future, and will be funded by the contributions of the credit institutions themselves. This fund may supplement the effect of the internal recapitalisation and the other resolution instruments provided for in the standard, and, where appropriate, may be used to make the assumption of losses by shareholders more flexible or to be completed; and creditors.

The existence of these instruments resolves the question of how the resolution of a credit institution should be supported and articulates a procedure for the proper distribution of costs. financing shall be made, first, by the entity concerned and, secondarily, by the other entities, under the understanding that they also make a profit if the resolution of another entity is carried out in an orderly manner; and, in definitive, in a way that minimises the moral hazard of the entities if they presume that they will be rescued by means of taxpayer resources, gives credibility to the principle that the costs of the resolution of an entity cannot be borne by the public budget.

II

The understanding of the structure and content of this Law can only be complete if we add to the principles described above two other important circumstances. On the one hand, the essentially European dimension of the rule, as this law implies the transposition of European Union law on the resolution of credit institutions and investment firms. And, on the other hand, the continuity that this Law represents in respect of Law 9/2012, of 14 November, of restructuring and resolution of credit institutions, to which it partially repeals.

First, the law takes over the transposition of the Spanish law of Directive 2014 /59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the restructuring and the the resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001 /24/EC, 2002 /47/EC, 2004 /25/EC, 2005 /56/EC, 2007 /36/EC, 2011 /35/EU, 2012 /30/EU and 2013 /36/EU, and the Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council, (a) of the European Parliament and Council Regulation (EU) No 806/2014 of 15 July 2014 on the establishment of the Single Resolution Mechanism, established by Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules for the implementation of the Single Resolution Mechanism a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010, this one of the pillars of the so-called Banking Union.

In the European Union the effects of the financial crisis have been experienced under very particular conditions arising from the further integration of their financial markets and the concurrency of the sovereign debt crisis. within the monetary union. This complex situation led the whole of the Member States of the Union to push for greater integration of the financial rules, and the Member States of the Euro Zone to deepen the idea of the Banking Union, as guarantee of a genuine internal banking market subject to identical rules and supervised by the same authorities.

This inclusive momentum, unprecedented since the creation of the single currency, has not been restricted to the area of traditional prudential supervision, but has been extended with the same force in the area of institution resolution. financial. In this respect, in the same way as in the supervisory area, there was a strong advance in the harmonisation of capital adequacy regulations (taking into account the Basel III Agreements) and the Single Supervisory Mechanism was established, Under the auspices of the European Central Bank, in the field of the resolution of institutions, the above-mentioned directive fully harmonises the rules in this field, and opens the way for the establishment of a Single European Resolution Mechanism which, for the Member States of the Euro Zone will form the sole authority on the matter.

With this Law, therefore, the transposition of Directive 2014 /59/EU of 15 May 2014, as well as of Directive 2014 /49/EU of the European Parliament and of the Council of 16 April 2014 on the systems of guarantees of deposits, and those forecasts are introduced that allow the correct articulation and coordination of the Spanish system of resolution and the European system, which will have to be fully operational from the year 2016. Thus the law regulates collaboration between the European resolution authorities, in the event that an entity operating in different Member States of the Union is resolved, and the representation of the Spanish resolution authorities in the Mechanism Single Resolution.

Secondly, it is important to note that this standard clearly comes with a previously existing and operational regulation in Spain. In fact, this Law is the heir of Law 9/2012, of 14 November, in whose elaboration the preparatory works were already considered that then existed of today Directive 2014 /59/EU, of May 15, 2014. It is based on identical principles, it replicates a good part of its structure and articulated and it is not to be understood, therefore, but as an instrument that, while recasting all the regulation, completes the previous right in those areas of the European Union law which was not yet incorporated into our law. Thus, one of the provisions contained in that law of resolution, in which the explanatory statement was already provided for, is fulfilled " at the moment when the work carried out in the international forums is advanced and, in particular, when the In the field of the European Union a final text of the directive on the rescue and resolution of credit institutions is agreed, this standard will be adapted to the new regulations ".

Law 9/2012, dated November 14, has been robust since its approval in the framework of the Spanish assistance program for the recapitalization of the financial sector, the legal framework being used to carry out the largest the process of financial restructuring of the history of our country, during which its precepts have been applied effectively by the resolution authority and progressively consolidated by the jurisdictional doctrine, in the environment of The inevitable litigious that involves this type of process.

That is why the legislator opts with this Law to give as much continuity as possible to both the content and the structure of Law 9/2012, of November 14, completing only that which the correct transfer of the Directive 2014 /59/EU of 15 May 2014 makes it essential. The more novel aspects of this text can be grouped into three areas. First of all, the preventive phase of the resolution is reinforced, because all the institutions, and not only the non-viable entities, will have to have the recovery and resolution plans. Secondly, the absorption of losses which in the old law only amounted to the so-called subordinated debt, through the instruments of hybrid management, will affect all types of creditors with the new law, articulating the a new regime of maximum protection for depositors. And finally, it is a specific resolution fund that will be funded through contributions from the private sector.

It can be noted, in sum, that in those aspects in which this Law diverges from Law 9/2012, of November 14, it does so to ensure greater absorption of losses by the shareholders and creditors of the entity, and provide greater protection for depositors and public resources.

The fact that this Law opts for the repeal of the previous law instead of modifying it does not obey but the effort that the legislator has been making in recent times to improve the systematicity and clarity of the rules. financial.

III

The structuring by chapters of this rule mostly replicates, for the reasons mentioned above, that of Law 9/2012, of 14 November, which was successfully applied during the last years and with which it was given responding to the needs of the banking sector during the financial crisis.

Chapter I contains the general provisions, specifying the object, scope and definitions of the main concepts of the law. As a major novelty, unlike the previous regulations and in line with the directive being transposed, this law applies not only to credit institutions but also to investment firms.

This implies that the references to the competent supervisor should be understood to be made to the Banco de España, in the case of resolution of credit institutions, and to the National Securities Market Commission, in the case of a resolution of investment services companies. Without prejudice to the fact that, on occasion, the competent supervisor or the resolution authority shall be the European institutions, bodies and bodies established as single supervisory and resolution authorities.

On the other hand, it is distinguished in this Chapter between the functions of resolution in preventive and executive phase, corresponding the first to the Banco de España and the National Commission of the Market of Values, through the organs operationally independent to determine, and second to the FROB.

Chapter II regulates the procedure for early action, understood as the one that will apply to an entity when it is unable to comply with the solvency rules but is in a position to return to compliance with its own resources. One of the main instruments of early action is the recovery plans that will have to be drawn up by all entities. If under the previous rule the plans were only to be made by those entities that were experiencing difficulties, now that obligation extends to all entities, as it has an eminently preventive character.

Chapter III sets out the definition and process of drawing up the resolution plans, which will contain the measures that the FROB will, in principle, apply in the event that the entity is ultimately unviable and does not Insolvency proceedings. In these plans the existence of public financial support is completely excluded.

This Chapter also includes the capacity of the preventive resolution authority to indicate the concurrency of obstacles to the resolution and, where appropriate, the ability to impose on the entities measures for their removal.

In Chapter IV, the resolution procedure is regulated as the one that applies to an entity when it is unfeasible or foreseeable that it will be in the future and for reasons of public interest and financial stability. It is necessary to avoid its insolvency. The article of this Chapter determines how the opening of the resolution process occurs. To this end, it will be necessary for the FROB or the competent supervisory authority to determine that an entity is in a situation of infeasibility. Subsequently, it will be the FROB who will analyze if the other circumstances that must be present are given to initiate the resolution procedure.

From that point on, the FROB will activate, as it sees fit, but taking into account the resolution plans, the various resolution instruments that are set out in Chapter V. Except for the internal recapitalisation. that, due to its particularities, the next chapter is dedicated to the whole, the rest of the instruments were already collected in Law 9/2012, of 14 November. This Law, however, complements and improves regulation in accordance with European regulations.

Resolution instruments are, first and foremost, the transmission of the entity or part thereof to a private subject to protect essential services. Second, the creation of a bridge entity to which the salvageable part of the entity is transferred in resolution. And, third, the creation of an asset management company to which the entity's damaged assets are transferred in resolution.

Some provisions on the use of the National Resolution Fund are also included in this Chapter in the context of the implementation of the resolution instruments, without prejudice to the general regulation which is applicable to this fund. dedicates Chapter VII.

Chapter VI is intended for so-called internal recapitalization. This is a very substantive development between the resolution instruments. Its ultimate goal is, as already advanced, to minimize the impact of the resolution on taxpayers, ensuring adequate distribution of the costs between shareholders and creditors.

The great novelty of this instrument, as it is regulated in the Law, is that it allows to impose losses on all levels of the entity's creditor, and not only up to the level of subordinate creditors, as the Law 9/2012, of 14 November. Under the terms provided for in the law, the Resolution Fund may be used to supplement or replace the absorption of losses by creditors.

This need to impose losses on shareholders and creditors is compatible with the special protection of deposits to which reference has already been made. With this Law, the guaranteed deposits of less than 100,000 euros maintain the direct guarantee of the Deposit Guarantee Fund, and in addition, they will have a maximum preferential treatment in the hierarchy of creditors. Deposits of natural persons or small and medium-sized enterprises shall also be recognised as creditors, only lower than those granted to deposits of less than EUR 100 000.

Chapter VII introduces slight innovations in the composition of the FROB, since it extends the number of members of its Rector Commission and creates the figure of the President as its maximum representative, in charge of its management and management. The European Council of the European Council of the European Council of the European A member of the National Securities Market Commission is also incorporated, due to the extent of the subjective scope of law enforcement.

creation of a National Resolution Fund is another major feature of the transposition of the Directive. The purpose of this Fund is to finance the resolution measures implemented by the FROB, which will exercise its management and administration. The Fund shall be financed by the contributions of credit institutions and investment firms, and shall reach their financial resources, at least 1% of the guaranteed deposits of all entities.

As of 1 January 2016, when the Single European Resolution Authority is fully operational and the National Resolution Fund is merged with the rest of the National Funds of the Euro Zone Member States in a Single European Resolution Fund, Spanish credit institutions will make their contributions to this European Fund, and the National Resolution Fund will be solely for investment service companies.

Finally, Chapters VIII and IX contain specific regimes, a procedural and other sanctioning, respectively. In the first, the particularities of the resources against the acts dictated by the FROB and the decisions adopted in the processes of early action and resolution are regulated. Chapter IX closes the Law by regulating a sanctioning regime of its own for entities and persons who have administrative or management positions in them, in the event that they violate the obligations provided for in this Law.

In the final part of the rule, among the additional provisions, the regime applicable to deposits is collected in the event that a credit institution enters into a competition. The scheme provides maximum preferential treatment in the hierarchy of creditors to deposits secured by the Credit Entities Deposit Guarantee Fund, and a general privilege to all deposits of SMEs and individuals. This is a very important novelty in the Spanish insolvency regulation that is to strengthen the level of maximum protection of bank deposits. Also in relation to the insolvency regime of the entities, a reference is made to the different levels of subordination that may exist within the group of credits that are designated by the contractual pact as subordinated by the regulations This is limited to the collection of the practice that is customary in our legal order and in accordance with the solvency rules to distinguish different degrees of subordination within the same type of credits, provided that it is not done in injury to other creditors.

The final provisions include an amendment to the legal regime of the Deposit Insurance Fund as a result of the transposition of Directive 2014 /49/EU of 16 April 2014, which harmonises the functioning of the these funds at European level. Since the Directive provides that the functions which the deposit guarantee schemes may perform should be limited to the cover of deposits or the financing of the measures for early action or resolution, the Guarantee Fund Deposits have been divided into two watertight compartments: the deposit guarantee compartment, the funds of which will be used for the tasks entrusted by the Directive, and the securities guarantee compartment, which assumes the remaining functions This is the case for the Deposits Guarantee Fund. In addition, a minimum target level is set to be reached for the deposit guarantee compartment resources which will be 0.8 per cent of the guaranteed deposits, with this level being reduced to 0.5 per cent prior to authorisation. the European Commission.

CHAPTER I

General provisions

Article 1. Object and scope of application.

1. This Law is intended to regulate the processes of early action and resolution of credit institutions and investment firms established in Spain, as well as to establish the legal regime of the "FROB" as a resolution authority. executive and its general framework of action, in order to protect the stability of the financial system by minimizing the use of public resources.

2. This Law will apply to the following entities:

(a) Credit institutions and investment firms established in Spain.

(b) Financial institutions established in Spain, other than insurers and reinsurers, which are subsidiaries of a credit institution or an investment firm, or of an entity referred to in points (a) and (b) of the first subparagraph (c) or (d) and are regulated by the consolidated supervision of the parent undertaking in accordance with Articles 6 to 17 of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, and for which Regulation (EU) No 64/2014 is amended.  648/2012.

It shall also apply to financial institutions established in Spain, other than insurers and reinsurers, which are subsidiaries of the undertakings referred to in point (c) which are established in any country of the European Union or in point (d).

(c) Financial holding companies, mixed financial holding companies and mixed holding companies established in Spain.

(d) Financial holding companies and mixed financial holding companies in other Member States of the European Union whose supervision on a consolidated basis corresponds to one of the competent supervisors provided for in Article 2.1.b).

e) branches of entities referred to in point (a) that are established outside the European Union, in accordance with the specific conditions laid down in this Law.

3. The provision in this Law for investment firms will not be applicable:

(a) whose legally required minimum share capital is less than EUR 730,000, or

b) whose activity meets the following characteristics:

1. º Only one or more of the investment services or activities listed in Article 63.1.a), (b), (d) and (g) of Law 24/1988, of 28 July, of the Securities Market.

2. º Not to be authorized to provide the auxiliary service referred to in article 63.2.a) of Law 24/1988, of July 28.

3. Do not be able to deposit money or securities of your clients and, for this reason, never be able to be in a debtor situation with respect to such clients.

Article 2. Definitions.

1. For the purposes of this Law it is understood by:

(a) Entity: the entities provided for in Article 1.2.a), unless otherwise expressly provided for.

(b) Competent Supervisor: the Bank of Spain and the European Central Bank, within the Single Supervisory Mechanism, as authorities responsible for the supervision of credit institutions; and the National Market Commission Securities, as the authority responsible for the supervision of investment firms.

c) Preventive resolution authority: the Banco de España, in relation to credit institutions, and the National Securities Market Commission, in relation to investment firms, in both cases through their respective operationally independent bodies, as authorities responsible for the preventive phase of the resolution.

d) Executive resolution authority: the FROB, as the authority responsible for the executive phase of the resolution.

e) Competent resolution authorities: the preventive resolution authority and the competent executive resolution authority.

(f) Early action: the procedure applicable to an institution, in accordance with Chapter II, where it fails to comply or there are objective elements in accordance with which it is reasonably foreseeable that it cannot comply with the rules of solvency, management and discipline, but is in a position to return to compliance by its own means.

g) The preventive phase of the resolution: the set of procedures and measures that, in order to ensure resolutionability and facilitate the eventual resolution of an entity, are set out in Chapter III.

(h) Resolution: orderly restructuring or liquidation of an entity carried out under this Act when, in accordance with Chapter IV, the entity is not viable or is likely to be an unviable entity in a future, there is no reasonable prospect that measures from the private sector can correct this situation, and for reasons of public interest and financial stability it is necessary to avoid its insolvency liquidation.

i) Executive phase of the resolution: the set of procedures and measures that, in order to manage the resolution of an entity, are set out in Chapters IV to VI.

j) Extraordinary public financial support: the aid provided for in Article 107.1 of the Treaty on the Functioning of the European Union, as well as any other public aid at supranational level in order to preserve or restore the viability, liquidity or solvency of an institution which, provided at national level, has the consideration of State aid.

k) Financial holding company: a financial holding company as defined in Article 4.1.20 of Regulation (EU) No 575/2013 of 26 June 2013.

(l) Mixed financial holding company: a mixed financial holding company as defined in Article 2.7 of Law 5/2005 of 22 April of the supervision of financial conglomerates and amending other laws of the financial sector.

m) Mixed holding company: a mixed holding company as defined in Article 4.1.22 of Regulation (EU) No 575/2013 of 26 June 2013.

n) Group: a parent entity, a parent financial holding company or a parent mixed financial holding company, and its subsidiaries.

n) Financial conglomerate: a financial conglomerate as defined in Article 2.1 of Law 5/2005 of 22 April.

(o) Institutional protection system: a mechanism that meets the requirements set out in Article 113.7 of Regulation (EU) No 575/2013 of 26 June 2013.

2. In addition, the definitions contained in Article 3 of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 on the implementation of the provisions of this Law and its implementing provisions shall apply. establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending the Regulation (EU) No 1093/2010.

Article 3. Objectives of the resolution.

Entity resolution processes will pursue the following objectives, weighted in an equivalent manner and according to the circumstances present in each case:

(a) Ensure the continuity of those activities, services and operations whose disruption could disrupt the delivery of services essential to the real economy or financial stability, and in particular services (a) financial and systemic importance and payment, clearing and settlement systems, taking into account the size, market share, internal or external connections, complexity or cross-border nature of the entity or its group.

b) Avoid harmful effects for the stability of the financial system, preventing the contagion of the difficulties of an entity to the whole system and maintaining market discipline.

c) Ensure the most efficient use of public resources, minimizing public financial support which, with extraordinary character, may need to be granted.

d) Protect depositors whose funds are guaranteed by the Credit Entities Deposit Guarantee Fund and investors covered by the Investment Guarantee Fund.

e) Secure the repayable funds and other assets of the entities ' clients.

The achievement of these objectives shall, in any event, minimize the cost of the resolution and avoid any destruction of value, except where it is essential to achieve the objectives of the resolution.

Article 4. Principles of resolution.

1. The resolution processes shall be based, to the extent necessary to ensure compliance with the objectives set out in the previous article, in the following principles:

(a) The shareholders or partners, as appropriate, of the entities shall be the first to bear losses.

(b) The creditors of the institutions shall bear, where appropriate, losses arising from the resolution after the shareholders or shareholders and in accordance with the order of precedence established in the insolvency law, with the exception of the established in this Act.

c) Creditors of the same rank shall be treated in an equivalent manner except where otherwise provided in this Law.

(d) No shareholder or creditor shall bear any losses in excess of which it would have incurred if the entity was liquidated in the course of a bankruptcy procedure.

(e) The directors and directors-general or equivalent of the institution shall be replaced, unless, exceptionally, their maintenance is deemed strictly necessary to achieve the objectives of the resolution.

(f) The directors and directors-general or equivalent of the institution shall provide all necessary assistance in order to achieve the objectives of the resolution. For the purposes of this Law, persons who fulfil the conditions laid down in Article 6.6 of Law 10/2014 of 26 June 2014 on the management, supervision and solvency of entities shall be deemed to have been treated as such. credit.

(g) In application of the provisions of the insolvency, commercial and criminal law, the administrators of the entities and any other natural or legal person shall be liable for damages caused in proportion to their participation and the severity of those.

h) Guaranteed deposits will be fully protected.

i) The resolution measures to be adopted shall be accompanied by the corresponding guarantees and safeguards provided for in this Law and its implementing legislation.

2. For the purposes of applying the principles referred to in the preceding paragraph, and for the purpose of determining the appropriate allocation of the costs of resolution referred to in Chapter VI, the FROB shall not be considered as a case included among the shareholders, shareholders or creditors referred to in that paragraph.

3. The supervisor and the competent resolution authorities, when applying the instruments or requiring compliance with the obligations and requirements referred to in this Law, shall take into account the unique circumstances of each derivative entity, others, of their structure, nature and profile of activity, in terms to be determined in a regulated manner.

In particular, simplified requirements or exemptions from compliance with the preparatory measures provided for in Chapters II and III may be laid down, provided that:

a) the ability to impose, at any time, the full compliance of this Act, and the competent preventive resolution authority is attributed to the supervisor and the competent preventive resolution authority; and

(b) shall in no case be limited to the capacity of the supervisor and the competent resolution authorities to take an early action or resolution measure.

Article 5. Assessment.

1. The purpose of the valuation shall be to determine the value of the assets and liabilities of the institution, so that the competent supervisory authority or resolution authority can assess whether the conditions for the resolution and the adoption of any a resolution measure and, in particular, for the implementation of the resolution instruments, and the losses that may arise from the implementation of the instruments to be used are recognised.

2. Prior to the adoption of any measure of resolution and, in particular, for the purposes of determining whether the conditions for the resolution and the application of the instruments provided for in this Law are met, the value of the assets and liabilities of the institution on the basis of the valuation reports entrusted to one or more experts appointed by the FROB. Experts shall be independent of both the public authorities, including the resolution authorities, and of the entity subject to valuation.

3. The assessment shall be subject to the procedure and shall be carried out in accordance with the requirements, requirements and conditions laid down in the regulations.

Likewise, a provisional assessment procedure will be established for the cases of urgency which, in any case, will have to provide for a definitive and final assessment, and a procedure a valuation that determines the losses that shareholders and creditors would have incurred if the entity had been liquidated in the course of a bankruptcy procedure. The provisional assessment shall be based on the report which, if appropriate, is issued by the competent supervisor.

4. For the purposes of the tax rules, the market value shall be understood to be the result of the application of the valuation referred to in this Article.

CHAPTER II

Early Take Action

Section 1. Early Action Planning

Article 6. Recovery plan.

1. As a preventive measure, all institutions shall draw up and keep up to date a recovery plan which provides for the measures and actions to be taken by the institution in order to restore its financial position in the event of a recovery. significant deterioration of the same. The plan and its updates will be approved by the entity's management body, for further review by the competent supervisor.

2. The recovery plan shall include a set of indicators, quantitative and qualitative, to be taken into account as a reference for the actions envisaged. Under no circumstances may access to public financial aid be presumed.

3. The competent supervisor shall review the plan and its updates taking into account the possibilities it offers to maintain or restore the viability of the entity in an agile and effective manner.

If the competent supervisor considers that the plan has deficiencies or that there are impediments to the implementation of the plan, it may require the entity to introduce specific amendments. If it is not possible to remedy such deficiencies or impediments, it may require the institution to adopt any additional measure, which is necessary and proportionate taking into account its effect on the activity of the entity.

In particular, the competent supervisor shall, without prejudice to any other measures which it may apply in the field of its supervisory function, require the institution to take action to:

a) reduce your risk profile, including liquidity risk,

b) allow for the timely adoption of recapitalisation measures,

c) review your strategy and structure,

d) modify the funding strategy to improve the robustness of core areas of activity and essential functions, or

e) making changes to your corporate governance system.

4. The competent supervisor shall forward the recovery plan to the competent resolution authorities, who may make proposals for amendments in so far as the plan could adversely affect the resolutionability of the institution.

5. Recovery plans shall be updated, at least annually, and:

(a) whenever a change in the legal or organizational structure of the entity or in its financial situation could significantly affect the plan or require changes thereof, or

b) whenever the competent supervisor considers it appropriate.

6. Institutions that are part of a consolidable group or an institutional system for the protection of those provided for in the fifth additional provision of Law 10/2014 of 26 June 2014 will not be required to submit recovery plans. individual, except in circumstances that may be determined by regulation.

The parent group of entities shall develop and keep up to date a group-level recovery plan in which the measures to be applied by the parent and each of the subsidiaries are envisaged.

7. The content and procedures applicable to individual or group recovery plans shall be developed.

8. The recovery plan shall be considered a corporate governance procedure for the purposes of Article 29 of Law 10/2014 of 26 June.

Section 2. Intragroup Financial Help

Article 7. Financial aid agreements within a group.

1. Institutions and their subsidiaries incorporated in consolidated supervision may enter into arrangements for financial assistance to be provided, in the event that they incur any of the early action scenarios referred to in the following Article. These agreements shall be authorised by the competent supervisor.

In addition, these agreements must be approved by the shareholders ' meeting of each entity that intends to be a party.

These agreements may only be concluded if, at the time the authorization is sought, neither party has engaged in an alleged early action.

2. The competent supervisor shall forward the approved intra-group agreements to the competent resolution authorities.

3. Financial support agreements shall have an exclusive effect on the parties that have subscribed to them, and their compliance by no third party may not be required. Neither these agreements nor the rights or measures resulting therefrom may be transferred or transferred to third parties, except in cases of universal succession.

4. The competence to grant the financial aid corresponds to the entity's management body. This decision shall be reasoned, indicating the objective of the proposed aid and supporting the fulfilment of the conditions laid down. The decision to accept financial assistance in accordance with that agreement shall also be taken by the administrative body of the receiving entity.

5. The competent supervisor may prohibit or restrict the terms of the financial assistance granted in accordance with paragraph 4 if it considers, in evidence, that the conditions for its benefit have not been met.

6. The provisions of this Article and its implementing rules shall not apply to intra-group financial transactions, including centralised financing arrangements, in the event that none of the parties to such transactions comply with this Regulation. the conditions for early action.

7. The management body of each entity that is a party to the agreement shall report annually to the shareholders of its development and any decision taken under it.

The institutions shall also make public whether or not they have subscribed to a financial assistance agreement within a group and, where appropriate, shall make public, and annually update, a description of the general terms of the agreement and the participating entities.

8. The provisions of this Article and, in particular, the following elements of the intra-group financial support agreements shall be regulated:

a) its validity conditions,

(b) their content, and in particular the principles which shall inform the conditions laid down in the agreements

(c) the procedure for the authorisation of the same by the competent supervisor, and in particular their right of opposition to them,

(d) the conditions for its application and the procedure for that purpose, and

e) disclosure and disclosure obligations to the shareholders ' meeting.

Section 3. Early Take Action

Article 8. Conditions for early action.

1. Where an institution, or a parent of a consolidated group of entities, fails to comply with or exist objective elements in accordance with which it is reasonably foreseeable that it cannot comply in the near future with the solvency, management and discipline, but is in a position to return to compliance by its own means, the competent supervisor shall declare the situation of early action initiated and may adopt all or some of the measures laid down in this Regulation. Chapter.

In the case of investment firm undertakings, the non-compliance referred to in the preceding paragraph shall also include the breach of the provisions of Articles 3 to 7, 14 to 17, 24, 25 and 26 of Regulation (EU) No 600/2014. European Parliament and the Council of 15 May 2014 on the markets in financial instruments and amending Regulation (EU) No 648/2012 or in Title II of Directive 2014 /65/EU of the European Parliament and of the Council of 15 May 2014 on the markets for financial instruments and amending the Directive  2002 /92/EC and Directive 2011 /61/EU.

2. In order to assess the possibility of non-compliance with the requirements set out in the previous paragraph, the existence of a rapid deterioration of the financial or liquidity situation of the entity or an increase may be addressed, inter alia, to the existence of a (a) the level of leverage, default or concentration of exposures.

Other objective indicators may be specified which shall be used to determine the presence of the conditions laid down in that paragraph.

3. The measures contained in this Chapter shall be compatible with those laid down in the rules in force in the field of the management and discipline of credit institutions and Title VIII of Law 24/1988 of 28 July 1988 for service undertakings investment. However, the authorisation of an institution shall not be revoked from the moment when an early action process has been initiated in accordance with Article 9, unless the institution does not take the measures during that stage. which requires the supervisor or which such revocation has a sanctioning character.

4. Where the institution ceases to be in the circumstances described in paragraph 1, the competent supervisor shall declare the situation of early action complete.

Article 9. Early action measures.

1. Where an institution or a consolidated group or sub-group of entities is in one of the circumstances described in Article 8.1, it shall inform the competent supervisor immediately.

2. Without prejudice to the provisions of the preceding paragraph, from the moment the competent supervisor becomes aware that an entity or a consolidated group or sub-group of entities is in one of the situations described in the Article 8.1 may take the following measures:

(a) Require the entity's management body to apply one or more of the measures set out in its recovery plan within a specified period or to update such a plan and to implement one or more measures of the plan updated, where the circumstances that have triggered the early action differ from the assumptions provided for in that action.

(b) Require the entity's management body to examine its situation, determine the measures necessary to overcome the problems identified and draw up an action plan to address these problems, with a execution-specific calendar.

(c) Require the entity's management body to convene or, if the management body fails to comply with this requirement, to convene directly the entity's general meeting or assembly and, in both cases, to fix the order of the day and propose the adoption of certain agreements.

(d) Require the cessation or replacement of one or more members of the administrative body, general or equivalent directors, if it is determined that such persons are unfit to fulfil their obligations under the terms of the Eligibility requirements.

e) Designate a delegate of the competent supervisor in the entity with the right of assistance, with a voice but without a vote, to the meetings of the administrative body and its delegated committees and with the same powers of access to the information that is legally and legally provided for its members.

(f) Require the entity's management body to draw up a plan for the negotiation of debt restructuring with a party or all of its creditors, as appropriate, with the plan of recovery.

g) Require changes to the business strategy of the entity or group or consolidable subgroup.

h) Require changes in the legal or operational structures of the entity or group or consolidable subgroup.

i) To collect, including through on-site inspections, and to provide the competent resolution authorities with all the information necessary to update the resolution plan and to prepare for the possible resolution of the entity or group or a consolidated sub-group and the carrying out of an assessment of its assets and liabilities in accordance with Article 5.

(j) If the above measures were not sufficient, agree to the appointment of one or more interventors or the temporary replacement of the entity's management body or one or more of its members. compliance with the provisions of the following Article.

3. When adopting any of the measures referred to in points (a) to (h) of the previous paragraph, the competent supervisor shall set the time limit for its implementation by the institution, as well as for the assessment of the effectiveness of the measure or measures taken.

Article 10. Intervention or temporary replacement of administrators as an early action measure.

1. The competent supervisor may agree to the intervention of the institution or the temporary replacement of its administrative body or of one or more of its members, in accordance with the procedure laid down in Chapter V of Title III of the Law 10/2014, of June 26, and with the specialties provided for in this Chapter.

2. The intervention of the entity or the temporary replacement agreed under this Article shall remain in force for a period of one year. By way of exception, this period may be renewed for equal periods while the conditions justifying the intervention or temporary replacement are maintained. This should be adequately justified in the renewal agreement of the measure.

Article 11. Follow-up of early action measures and information to resolution authorities.

1. The institution shall, at the intervals specified by the competent supervisor and at least quarterly, send it a report on the degree of compliance with the measures adopted pursuant to Article 9. The competent supervisor shall transfer the report to the resolution authorities.

2. In order to enable the competent resolution authorities to exercise the powers provided for in this Law, the supervisor shall inform them:

a) That an entity or a consolidated group or subgroup of entities is in one of the circumstances described in Article 8.1.

(b) If any, the approval of the action plan referred to in Article 9.2 (b).

(c) Of the other measures required by the competent supervisor in accordance with Article 9.

d) From the completion of the early acting situation in accordance with Article 8.4.

3. During the early stage of action, the competent resolution authorities may request the competent supervisor for all information related to the entity or its consolidated group or sub-group that is necessary to prepare its eventual resolution.

The FROB may also perform during this early stage of action the necessary actions to prepare the assessment of the entity's assets and liabilities within the meaning of Article 5, as well as require the an entity that contacts potential buyers in order to prepare its resolution, without prejudice to the conditions set out in Article 19 and the confidentiality provisions set out in Article 59.

Article 12. Coordination of early action measures in groups of entities in the European Union.

1. The procedure for the imposition by the competent supervisor of any of the measures provided for in Article 9, in relation to the parent or to a Spanish subsidiary of a consolidated group of established entities, shall be determined. in the European Union.

2. The manner in which the competent supervisor shall participate in the procedures for the adoption of any of the measures provided for in Article 9 by another authority of the European Union in relation to the parent shall also be established. of a Spanish entity or a subsidiary of a Spanish group.

CHAPTER III

Preventive phase of resolution

Section 1. Planning for resolution

Article 13. Resolution plans.

1. On a preventive basis, the preventive resolution authority shall draw up and approve, after reporting by the FROB and the competent supervisor, and after consulting the resolution authorities of the jurisdictions in which they are established. significant branches, a resolution plan for each entity that is not part of a group under supervision on a consolidated basis. The plan shall contain the resolution actions which the FROB may apply in the event that the institution complies with the conditions laid down in Article 19, without prejudice to the fact that in the light of the circumstances the FROB may also apply other measures.

Where obstacles to resolvability are identified under Article 17, the obligation to draw up the resolution plan shall be suspended until appropriate measures are taken to remove such obstacles.

2. The procedure for drawing up and the specific content of the resolution plans will be developed. For this purpose, institutions shall be required to cooperate in the preparation and updating of plans, and the preventive resolution authority may require the entity to provide the necessary information for the preparation, approval and updating of the plans. resolution plans.

In any case, the resolution plan will never assume:

(a) The existence of extraordinary public financial support outside the financing mechanisms established in accordance with Article 53.

b) The existence of public support in the form of an urgent provision of central bank liquidity.

(c) The existence of public support in the form of liquidity provision of the central bank on the basis of non-conventional criteria for guarantees, maturity and interest rates.

3. The resolution plans shall be updated, in accordance with the procedure referred to in paragraph 2, at least annually, and in the following cases:

(a) whenever a change in the legal or organizational structure of the entity or in its financial situation could significantly affect the effectiveness of the plan or require changes thereof, or

(b) provided that the preventive resolution authority, on its own initiative or the FROB, considers it appropriate.

Article 14. Group resolution plans.

1. The competent preventive resolution authority at the group level, acting in conjunction with the resolution authorities of the subsidiaries in the resolution authority's colleges and after consulting the relevant competent supervisors, to the FROB and to the resolution authorities of the jurisdictions in which significant branches are established, shall approve and keep up to date the resolution plans of the groups whose supervision on a consolidated basis corresponds to a competent supervisor of those referred to in Article 2.1.b). The adoption of the resolution plan shall be reflected in a joint decision of the preventive resolution authority with the resolution authorities of the group's subsidiaries.

Where, pursuant to Article 17, obstacles to the resolutionability of an entity are assessed, the obligation to draw up the group resolution plan shall be suspended until appropriate measures are taken to eliminate such obstacles. obstacles.

2. For the purposes of the preceding paragraph, the preventive resolution authority, together with the FROB, shall assist the college of resolution authorities and shall contribute to the preparation and approval of the plan in accordance with the procedure laid down in the Article previous.

3. Group resolution plans may provide for resolution at the level of the parent undertaking or through the segregation and resolution of the subsidiaries.

4. The procedure for drawing up and the specific content of the group resolution plans, as well as the information which may be required from the institutions and which must be provided by the resolution authority, shall be determined. other resolution authorities, competent supervisors and the European Banking Authority, for their preparation and updating. In any case, the group resolution plans must identify the measures for the resolution of:

a) The parent company.

(b) The subsidiaries of the group with registered office in the European Union.

(c) Financial holding companies, mixed financial holding companies and mixed portfolio companies with registered offices in the European Union.

(d) subsidiaries of the group with registered office outside the European Union, within the framework of the provisions of Chapter VII on cross-border resolution.

5. By way of derogation from the previous paragraph, institutions which are subject to the direct supervision of the European Central Bank pursuant to Article 6.4 of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring on the European Central Bank specific tasks relating to policies relating to the prudential supervision of credit institutions, or which constitute a considerable part of the Spanish financial system, will also be the subject of resolution plans. individual as provided for in the previous article.

6. The competent preventive resolution authority, acting as the resolution authority of a subsidiary entity authorised in Spain whose parent is located in another Member State of the European Union and whose supervision on a consolidated basis does not correspond to one of the competent supervisors referred to in Article 2.1.b), it shall cooperate with the group-level resolution authority in the preparation, updating and approval of the group resolution plan in the terms that it regulates determine.

Section 2. Resolver Evaluation

Article 15. Assessment of the resolutionability of entities.

1. When drawing up the resolution plan, the preventive resolution authority, after reporting by the competent supervisor and the FROB, and after consulting the resolution authorities of the jurisdictions in which branches are established significant, it will determine that the entity is resolvable if, in the event that the conditions for the resolution are met, it could proceed to its liquidation in the framework of a court-supervised procedure or its resolution, making use of the different the instruments and powers of resolution referred to in this Law, in such a way that:

(a) No significant adverse consequences for the Spanish financial system, other Member States of the European Union or the European Union as a whole.

b) Ensuring the continuity of the essential functions developed by the entity.

2. For the purposes of the preceding paragraph, the preventive resolution authority shall carry out the relevant assessment and assess whether, in the event that the institution is satisfied with the conditions for the resolution, it could be carried out without the intervention of public support as provided for in Article 13.2. The result of this evaluation will be presented to the FROB.

3. In addition, the competent supervisor and the FROB may request the competent preventive resolution authority to carry out the assessment provided for in the previous paragraph whenever it considers that there may be major obstacles to the resolution of an entity.

4. If the competent preventive resolution authority concludes that an entity does not meet the conditions to be resolved, it shall immediately notify the European Banking Authority.

5. The system of assessment of the resolutionability provided for in this Section will be regulated.

Article 16. Assessment of group resolutionability.

1. The competent preventive resolution authority, where the resolution authority is at the group level, shall determine, on the basis of the assessment referred to in the following paragraph, that the group is resolvable if, in the event of compliance with the (a) the conditions for the resolution may be settled or settled in accordance with the provisions of paragraph 1 of the previous Article.

2. When drawing up the group resolution plan, the preventive resolution authority, after reporting by the competent supervisor and the FROB, together with the resolution authorities of the subsidiaries and after consulting the competent supervisors of the subsidiaries and to the resolution authorities of the jurisdictions in which significant branches are established, it shall assess to what extent a group may be the subject of a resolution without the intervention of public support as provided for in Article 13.2.

3. If the competent preventive resolution authority concludes that the group does not meet the conditions to be resolved, it shall immediately notify the European Banking Authority.

Article 17. Obstacles to the resolutionability of entities.

1. The competent preventive resolution authority shall, after examining the assessment carried out pursuant to Article 15, notify the competent supervisor, the institution and the resolution authorities in whose jurisdiction the branches are located. significant, the concurrency of major obstacles to the resolution of the entity. The result of this test will be presented to the FROB.

2. Within four months of receipt of the notification, the entities shall propose to the competent preventive resolution authority appropriate measures to reduce or eliminate the identified obstacles.

The competent preventive resolution authority shall without delay communicate such measures to the competent supervisor and to the FROB for its report.

Where the competent preventive resolution authority, after reporting by the competent supervisor and the FROB, does not consider such measures sufficient to remove the identified obstacles, it may request a reasoned request the entity to adopt alternative measures to remove obstacles. Such measures may include:

a) Require the entity to review the financing mechanisms or the development of agreements to ensure the development of their essential functions.

b) Set limits to the individual and global risks of the entity.

c) Impose additional information requirements relevant to the resolution.

d) Require the entity to dispose of specific assets.

e) Require the entity to limit or cease certain activities.

f) Restrict or impede the development of certain branches of activity or the sale of certain products.

g) Impose changes in the legal or operational structure of the entity or any entity of the group that is directly or indirectly under its control in order to reduce its complexity and ensure that the functions They can be legally and operationally separated from other functions through the application of resolution tools.

h) Require an institution or parent company to set up a parent financial holding company in Spain or a parent company in the European Union.

i) Require an entity to issue eligible liabilities to comply with the requirements set out in Article 44.

(j) Require an entity to take other measures to meet the minimum requirement of own funds and eligible liabilities as set out in Article 44. In particular, the preventive resolution authority may require the entity to renegotiate any eligible liabilities or Tier 1 or Tier 2 additional capital instrument to ensure that the repayment or conversion decisions are taken by the institution. The FROB shall be applied in accordance with the legislation governing the instrument.

(k) Where an entity is a subsidiary of a mixed holding company, require the mixed holding company to constitute a separate financial holding company to control the entity, if necessary to prevent the entity from making the application of the resolution instruments would have adverse effects on the non-financial part of the group.

3. Within one month of receipt of the notification of alternative measures imposed by the competent preventive resolution authority under the previous paragraph, the entity shall submit an implementation plan for such measures. measures.

4. For the purposes of this Article, the competent resolution authorities shall, among other factors, consider the risk to financial stability posed by the identified obstacles as well as the potential effect of the alternative measures proposed on the activity and stability of the institution, its capacity to contribute to the economy, the internal market in financial services and on financial stability in other Member States of the European Union and the European Union as a whole.

Furthermore, the competent resolution authorities, when determining alternative measures to the entity's proposals to remove the obstacles to resolutionability, must demonstrate why the measures proposed by the institution do not They would be able to remove such obstacles and how alternative measures can be proportionate to eliminate them.

Article 18. Obstacles to the resolutionability of groups.

1. The preventive resolution authority, where the resolution authority at the group level, in accordance with the assessment provided for in Article 16, shall endeavour to reach a joint decision with the other competent resolution authorities. on the appropriate measures to remedy the obstacles to resolutionability.

For such purposes, the preventive resolution authority, in cooperation with the competent supervisor on a consolidated basis, the FROB and the European Banking Authority, shall forward a report to the parent undertaking and to the resolution authorities. the subsidiaries and jurisdictions in which significant branches are established. That report shall analyse the impediments to the implementation of the resolution instruments and the exercise of the resolution powers in relation to the group and shall contain the measures deemed appropriate to remove such impediments.

2. Within four months of receipt of the report, the parent company of the group may propose alternative measures to the preventive resolution authority to remove the identified obstacles to its resolution. The preventive resolution authority shall communicate such measures without delay to the competent supervisor on a consolidated basis and to the FROB.

The preventive resolution authority and the resolution authorities of the subsidiaries, after consulting the FROB, the competent supervisors and the resolution authorities of the jurisdictions in which branches are located. They shall endeavour to reach within the college of resolution authorities a joint decision on the obstacles to the resolution, the assessment of the measures proposed by the parent undertaking and the measures to be taken to eliminate such obstacles. obstacles, taking into account the possible impact of these in the Member States of the European Union in which the group operates.

3. The preventive resolution authority, when acting as the resolution authority of a subsidiary entity authorised in Spain whose parent is located in another Member State of the European Union and whose supervision on a consolidated basis does not correspond to any of the competent supervisors referred to in Article 2 (2) (b), shall, in cooperation with the FROB, seek to reach a joint decision with the other competent resolution authorities on appropriate measures to remedy the obstacles to the resolvability in terms that are regulated by law.

CHAPTER IV

Resolution

Article 19. Conditions for resolution.

1. The resolution of an entity shall proceed when the following circumstances are present:

a) The entity is unviable or reasonably foreseeable to be so in the near future.

(b) There is no reasonable prospect of measures from the private sector, such as, inter alia, measures implemented by the institutional protection systems, such as, inter alia, action measures taken by the private sector. early; or the write-down or conversion of capital instruments in accordance with Section 2 of Chapter VI may impede the infeasibility of the institution within a reasonable period of time.

(c) For reasons of public interest, it is necessary or appropriate to undertake the resolution of the entity in order to achieve any of the objectives referred to in Article 3 for the dissolution and liquidation of the entity in the the framework of a court-supervised procedure would not reasonably be able to achieve those objectives to the same extent.

2. The resolution of a financial institution referred to in Article 1.2.b shall proceed when the conditions for resolution are given both in the financial institution and in the parent institution subject to consolidated supervision.

3. The decision of a company provided for in Article 1.2.c (c) or (d) shall be taken when the conditions of judgment are given in the company or in one of its subsidiaries which is an entity or, if the subsidiary is not established in the Union European, where the competent authority of the third State has determined that the conditions of resolution are given in accordance with the law of that State.

4. Where institutions that are subsidiaries of a mixed holding company are directly or indirectly held by an intermediary financial holding company, the group-level resolution actions shall apply to the financial holding company. and not on the mixed portfolio company.

5. Although a company as provided for in Article 1.2.c) or (d) does not comply with the conditions of resolution, the FROB may apply a resolution measure to them, where one of its subsidiaries which is an entity complies with the conditions of resolution and always which:

(a) Due to the nature of its assets and liabilities, its infeasibility poses a threat to the entity or to the group as a whole, and that the resolution measure is necessary for the resolution of subsidiaries that are entities or for the group as a whole.

(b) The insolvency law requires that the group be treated jointly and the resolution measure in relation to the company is necessary for the resolution of the subsidiaries that are entities or for the group in its set.

6. For the purposes of paragraphs 2 and 5, the FROB, in conjunction with the competent resolution authority, when determining whether the conditions of resolution in relation to a subsidiary which is an entity are met, may not have a account for intra-group capital or transfers of losses between institutions, as well as the exercise of amortisation or conversion.

Article 20. Concept of unviable entity.

1. An entity shall be deemed to be non-viable for the purposes of Article 19.1.a), if it is in any of the following circumstances:

a) The entity does not comply significantly or is reasonably foreseeable to significantly breach the solvency requirements or other requirements necessary to maintain its authorisation in the near future.

b) The entity's liabilities are higher than its assets or are reasonably foreseeable to be in the near future.

(c) The entity cannot or is reasonably foreseeable that in the near future it may not be able to meet its obligations in a timely manner.

d) The entity needs extraordinary public financial assistance.

2. By way of derogation from point (d) of the previous paragraph, the institution shall not be deemed to be infeasible if the extraordinary public financial assistance is granted to prevent or solve serious disturbances in the economy and to preserve stability. financial, and takes one of the following ways:

(a) State guarantee to support liquidity operations granted by central banks in accordance with the conditions of such operations.

b) State guarantee of new issuance liabilities.

(c) the injection of own resources or the acquisition of capital instruments at a price and under such conditions as not to give an advantage to the institution, provided that they are not given at the time of the granting of the public aid; circumstances referred to in points (a), (b) and (c) of the preceding paragraph, or the circumstances provided for in Article 38.2.

The aid provided for in this paragraph shall only be granted to solvent entities and shall be subject to authorisation in accordance with the State aid rules. They shall be of a precautionary nature, temporary, proportionate to prevent or remedy serious disturbances and shall not be used to compensate for losses incurred or incurred by the institution.

The aid provided for in point (c) shall be limited to those necessary to address the capital shortfall determined in the stress tests, in the quality of the assets or in equivalent exercises carried out by the capital. the European Central Bank, the European Banking Authority or the national authorities with the authorisation, where appropriate, of the competent supervisor.

3. The criteria set out in this article and the conditions under which the resolution of a group will be carried out will be developed regulatively.

Article 21. Opening of the resolution process.

1. The competent supervisor shall, after consulting the competent preventive resolution authority and the FROB, determine whether the entity is non-viable or reasonably foreseeable to be viable in the near future, in accordance with the provisions of the Article 19 (1) (a) The evaluation shall be carried out without delay by the FROB and the competent preventive resolution authority.

However, the FROB may urge the competent supervisor to make such a determination if, on the basis of the information and analysis provided by the competent supervisor, it considers that there are reasons for this. The competent supervisor shall reply within a maximum of three days by justifying his reply.

2. The FROB, in close cooperation with the competent supervisor, shall carry out an assessment of the condition referred to in Article 19.1.b. Similarly, the competent supervisor shall inform the FROB in this regard, where it considers that the condition laid down in that point is met.

3. On the basis of the above, the FROB shall check whether the other circumstances provided for in Article 19 are present and, in that case, agree to the immediate opening of the decision-making procedure, giving reasons for its decision to the Minister. of the Economy and Competitiveness, and the competent preventive resolution supervisor and authority.

4. Where the management body of an institution considers that it is unfeasible, it shall immediately inform the competent supervisor, who shall in turn inform the FROB and the preventive resolution authority without delay.

Article 22. Replacement of the administrative body and directors-general or assimilated as a measure of resolution.

1. Following the opening of the resolution process as provided for in the previous Article, the FROB shall agree and make public the replacement of the entity's management body and the directors-general or assimilated and the designation as the administrator of the institution to the natural or legal person or persons who, on their behalf and under their control, shall exercise the functions and powers of that person, with the scope, limitations and requirements which, where appropriate, are determined It is understood that all those powers which are legally or statutorily are attributed to it. they may correspond to the general meeting or assembly of the institution and which are necessary for the exercise of the powers provided for in this Law in relation to the instruments of resolution referred to therein. In the event of a conflict, the exercise of these powers of resolution shall take precedence over any other duty or obligation arising from the statutes of the entity or the applicable law.

The FROB may not replace the administrative body, or the directors-general or the like, in those extraordinary cases where, in the light of the composition of the shareholders or the management body of the entity at the time of the opening of the resolution process, its maintenance is strictly necessary to ensure the proper development of the resolution process and, in particular, where the FROB is in the position to control the body of the entity's administration under the political rights available to it.

2. The FROB shall approve the special administrator's framework of action, including the regular information to be drawn up on its performance in the performance of its tasks.

3. The appointment of the special administrator shall be enforceable as soon as it is issued and shall be immediately published in the Official Gazette and the registration in the relevant public registers. The publication in the "Official State Gazette" will determine the effectiveness of the agreement against third parties.

4. The replacement measure shall remain in force for a period not exceeding one year, but the FROB may, exceptionally, extend this period where it considers it necessary to complete the process of resolution.

Article 23. Content of the decision regarding the initiation of the resolution processes.

The decision to start or not a resolution process must have at least the following content:

(a) The reasons for the decision, with a reference to whether the entity complies with the conditions of resolution provided for in Article 19.

(b) The measures that the FROB has, as the case may be, the intention to adopt, be they the resolution provided for in this Law or other measures that are applicable in accordance with the insolvency law.

c) The reasons which, if any, justify requesting the initiation of an ordinary insolvency proceedings.

Article 24. Notification and publication obligations.

1. The FROB shall notify without delay the full text of the decision to decide on the opening of a resolution process, as well as that of the decision adopting resolution measures, with an indication of the date from which the decision is to be taken. take effect on the measures taken, on the institution under resolution, on the authorities provided for in Article 69 and on the authorities which are determined to be regulated.

2. The FROB shall also publish the act by which the resolution measures or a summary communication of the effects of these measures are agreed, in particular on retail customers, and, where appropriate, the modalities and duration of the suspension. or restriction referred to in Article 70.

3. The reporting and publication obligations provided for in this Article shall be developed.

CHAPTER V

Resolution instruments

Section 1. Resolution Instruments

Article 25. Definition of resolution tools and general rules.

1. The resolution tools are:

a) The sale of the entity's business.

b) Transmission of assets or liabilities to a bridge entity.

c) The transmission of assets or liabilities to an asset management company.

d) The internal recapitalization.

2. The FROB may adopt the above instruments individually or jointly, except for the transmission of assets or liabilities to an asset management company, which shall be applied in conjunction with another instrument.

3. The buyer, the bridge entity, the asset management company and the institution subject to the resolution may continue to exercise their rights of participation and access to the payment, clearing and settlement systems, admission to trading, fund of investment guarantee and deposit guarantee fund of the institution under resolution, provided that it meets the criteria for participation and regulation to participate in such systems.

Notwithstanding the foregoing, access shall not be refused on the grounds that the buyer or the bridge entity does not qualify as a credit rating agency, or that such a rating does not reach the required levels for have access to the systems referred to in the preceding paragraph.

When the buyer or the bridge entity does not satisfy the criteria for participation or access to a relevant system of payment, clearing or settlement, stock exchange, investor compensation system or systems of deposit guarantees, the rights referred to in the first subparagraph shall be exercised over a period of time to be determined by the FROB, not exceeding 24 months and renewable at the request of the buyer or the bridge entity.

4. The FROB, as well as any financing mechanism established in accordance with Article 53, may recover any reasonable expenditure incurred in connection with the use of the instruments or the exercise of the powers of resolution provided in this Law, in the following ways:

(a) By deducting it from any consideration paid by an acquirer to the institution under resolution or, as the case may be, to owners of shares or other capital instruments.

b) By the institution under resolution, as a preferred creditor.

(c) In charge of any revenue generated as a result of the cessation of the activities of the bridge entity or the asset management company, as a preferred creditor.

5. Any amount paid by the buyer shall be in the interest of:

(a) The owners of the shares or other capital instruments, in the event that the sale of the business or the transfer to the bridge entity has been effected by transmitting shares or capital instruments issued by the entity object of resolution.

(b) The institution under resolution, in the event that the sale of the business or the transfer to the bridge entity has been effected by transmitting to the acquirer part or all of the asset or liability of the entity under consideration resolution.

(c) The institution under resolution, in the case of the asset management company. The equivalent may be paid in the form of debt issued by the company.

6. Where the resolution instruments referred to in points (a) and (b) of paragraph 1 are used, and are applied in order to carry out a partial transfer of the assets and liabilities of the institution, the residual entity shall be subject to a insolvency procedure. a reasonable time taking into account the need for the residual entity to collaborate to ensure the continuity of the services by the acquirer and the best fulfilment of the objectives and principles of resolution.

7. The transfer of shares or other capital instruments, assets and liabilities to be carried out pursuant to the resolution instruments referred to in paragraph 1 shall be carried out without the need to obtain the consent of the shareholders of the entity under resolution or from third parties other than the purchaser and without having to comply with other procedural requirements required by corporate or securities legislation beyond those expressly provided for by this Act.

8. Without prejudice to the rules on safeguards provided for in law, when applying one of the resolution instruments provided for in this Article, the shareholders and creditors of the institution in resolution, as well as third parties whose assets or liabilities have not been transferred, shall not have any right over the assets and liabilities that have been transferred.

9. The operations by which the resolution measures are implemented and, in particular, the measures resulting from the application of the instruments listed in this Article, shall not be rescinded under the provisions of Article 71 of the Treaty. Law 22/2003, dated July 9, Insolvency.

Article 26. Sale of the entity's business.

1. The FROB may agree and execute the transmission to an acquirer other than a bridge entity, of:

(a) Shares or contributions to the share capital or, as a general rule, instruments representing the capital or equivalent of the entity or convertible into them, whatever their holders.

b) All or part of the entity's assets and liabilities.

2. The legal constraints or obligations referred to in Article 34.1 shall not apply to persons or entities which, in accordance with the provisions of the relevant resolution plan, have acquired the shares, contributions or instruments.

3. The FROB may apply this resolution instrument on one or more occasions and in favour of one or more acquirers. Once this instrument has been used, the FROB may, with the consent of the buyer, return the shares or instruments of capital, assets and liabilities transferred to the institution in resolution or, in the case of shares or instruments of capital, to the former owners, who will be obliged to accept them.

4. To select the acquirer or acquirer, the FROB shall develop a competitive procedure with the following characteristics:

a) It shall be transparent, taking into account the circumstances of the specific case and the need to safeguard the stability of the financial system.

b) You will not favor or discriminate against any of the potential acquirers.

(c) The necessary measures shall be taken to avoid conflict of interest situations.

d) Take into consideration the need to apply the resolution instrument as quickly as possible.

e) You will have between your goals to maximize the selling price.

The transfer will take place on market terms, taking into account the specific circumstances and in accordance with the State aid rules.

Any requirement of advertising for the sale of the entity in resolution that is required in accordance with the provisions of Article 17 (1) of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014, on market abuse and repealing Directive 2003 /6/EC of the European Parliament and of the Council and Commission Directives 2003 /124/EC, 2003 /125/EC and 2004 /72/EC may be delayed in accordance with the terms of the paragraphs 4 and 5 of that Article.

5. Where, in accordance with the terms laid down in Article 68, the development of the procedure referred to in the preceding paragraph may make it more difficult to achieve one of the objectives listed in Article 3 and, in particular, where justified. adequately that there is a serious threat to the stability of the financial system as a result of, or aggravated by, the situation of the entity or it is noted that the development of such a procedure may hinder the effectiveness of the instrument the selection of the acquirer or acquirer may be carried out without the need for comply with the procedural requirements set out in the previous section.

6. Where the transmission of shares or other capital instrument due to the application of the entity's business selling instrument, the acquisition or the increase of a holding in an entity in such a way as to be applicable rules on significant holdings, the competent supervisor shall carry out the assessment of the acquisition or the increase within a period not exceeding 5 working days.

7. In the event that the business sale instrument of the entity has been applied without the assessment provided for in the previous paragraph, the following rules shall apply:

(a) The transmission of shares or other legal instruments of capital shall have immediate legal effectiveness.

(b) During the assessment period and throughout the divestment period provided for in point (f), the acquirer's right to vote on such shares or other capital instruments shall be suspended and conferred solely on the FROB, which shall have no obligation to exercise any of those voting rights or any responsibility for exercising or refraining from exercising those rights.

(c) During the assessment period and throughout the period of the divestment provided for in point (f), the penalties and other measures for infringement of the requirements for the acquisitions or disposal of the significant participations, as referred to in Law 10/2014, of 26 June, or in Law 24/1988, of 28 July.

(d) The competent supervisor shall, immediately after the evaluation has been carried out, notify the FROB and the buyer in writing if it approves or opposes the transmission.

e) If the competent supervisor approves the transfer, the right to vote on the shares or other capital instruments shall be deemed to be fully vested in the buyer from the time the FROB and the buyer receive the notification.

f) If the competent authority objects to the transmission:

1. The FROB shall retain the right to vote on such actions or other instruments.

2. The FROB may require the buyer to return such shares or other capital instruments in the divestiture period that the FROB determines taking into account the conditions prevailing on the market.

3. º If the acquirer does not carry out such disinvestment within the period established by the FROB, the competent supervisor, with the consent of the FROB, may impose on the buyer sanctions and other measures for infringement of the requirements for the acquisitions or disposal of qualifying holdings referred to in Law 10/2014 of 26 June, or in Law 24/1988 of 28 July.

8. For the purposes of exercising the rights to provide financial services or to establish themselves in another Member State in accordance with Law 10/2014 of 26 June and Law 24/1988 of 28 July, the purchaser shall be deemed to be a continuation of the institution under resolution and may continue to exercise the rights previously exercised by the institution in relation to the assets and liabilities transmitted.

Article 27. Bridge entity.

1. The FROB may agree and execute the transmission to a bridge entity:

(a) All or part of the shares or contributions to the share capital or, as a general rule, of the instruments representing the capital or equivalent of the institution or convertible into them, whatever their headlines.

(b) All or part of the assets and liabilities of an entity under resolution.

2. A bridging entity is considered to be an anonymous company that may be involved in the FROB or by another public financing authority or mechanism, the object of which is the full or partial development of the entity's activities in resolution, and the management of shares or other capital instruments or of all or part of their assets and liabilities.

The FROB shall exercise control over this resolution instrument or its application in the prescribed terms.

3. The transfer to a bridge entity shall be carried out on behalf of the shareholders of the entity, but without the need to obtain their consent or that of third parties other than the bridge entity and without having to comply with the requirements of the the procedure required for structural modifications of the commercial companies or the rules on the stock market.

4. The total value of the liabilities transmitted to the bridging entity shall not exceed the value of the rights and assets transmitted from the institution under resolution or from any other source.

5. The FROB may apply this instrument on one or more occasions and in favour of one or more bridge entities, as well as transmit assets and liabilities of a bridge entity to the institution under resolution or to a third party.

6. The FROB may agree to the return of the shares or other capital instruments, or of the assets or liabilities of a bridge institution to the institution under resolution, where the following circumstances occur:

a) If this possibility is expressly stated in the act by which the transmission has been ordered.

(b) If shares or other capital instruments, or assets or liabilities, are not a party or do not conform to the conditions for transmission specified in the act by which the transmission has been ordered.

7. For the purposes of exercising the rights to provide services or to establish in another Member State in accordance with Law 10/2014 of 26 June, and Law 24/1988 of 28 July, the bridge entity shall be deemed to be a continuation of the the institution under resolution and may continue to exercise the rights previously exercised by the latter in relation to the assets and liabilities transmitted. For other purposes, the FROB shall require the competent supervisor to request recognition of such continuity.

8. The bridge entity shall obtain the appropriate authorisation to carry out the activities or services acquired in accordance with the provisions of Law 10/2014 of 26 June and with Law 24/1988 of 28 July, as appropriate, and shall be subject to the supervision of the European Central Bank, the Banco de España or the National Securities Market Commission. The bridging entity shall also adjust its operation to the State aid rules and to that end, the resolution authority may place restrictions on its activities.

However, at the beginning of its operation and for the time strictly necessary, the bridge entity may be established and authorised without the need to meet the requirements for access to the activity. (a) where necessary in order to achieve the objectives of the resolution. To this end, the FROB shall submit a request to the competent supervisor who, if authorised, shall indicate the period of time during which the institution is exempted from fulfilling those requirements.

9. The tasks of the bridge entity shall not entail any liability or liability to the shareholders and creditors of the institution in resolution, and the management or management body shall have no liability to such shareholders and creditors. shareholders and creditors for acts or omissions in compliance with their obligations unless such act or omission implies a serious fault or breach that directly affects the rights of shareholders and creditors.

10. The bridging entity shall be managed and managed in order to maintain access to and sell the essential functions, or to sell its assets and liabilities, where the conditions are appropriate and, in any case, within the maximum period and in accordance with the assumptions to be laid down in regulation.

11. The sale of the bridge entity or its assets or liabilities shall be developed in the framework of competitive, transparent and non-discriminatory procedures and shall be carried out on market conditions, taking into account the specific circumstances and compliance with the State aid rules.

12. Where the activities of the bridge entity are terminated, the bridge entity shall be subject to a court-supervised procedure. Any income generated by the cessation of the activities of the bridge entity will benefit the shareholders of the entity itself.

13. Where the bridging entity is used for the purpose of transferring the assets and liabilities of more than one institution in resolution, the settlement shall be made on an individual basis for the assets and liabilities of each of the institutions, to which they are will be previously segregated from the bridge entity.

Article 28. Asset management company.

1. In the terms provided for in this Law, the FROB may, as an administrative act, require an institution under resolution or a bridging entity to transmit to one or more asset management companies certain categories of assets. which are included in the institution's balance sheet. It may also take the necessary measures for the transfer of assets which appear on the balance sheet of any entity on which the institution exercises control within the meaning of Article 42 of the Trade Code, in the case of assets particularly damaged or whose permanence in such balance sheets is considered to be detrimental to its viability or to the objectives of the resolution in order to discharge those assets and to allow for the independent management of their performance.

The FROB will only exercise those powers in the following cases:

(a) if the market for the assets of the institution under resolution or of the bridge entity is of such a nature that its liquidation under ordinary insolvency proceedings could have a negative impact on the markets financial,

(b) if the transmission is necessary to ensure the proper functioning of the entity object of resolution or of the bridge entity, or

c) if a transmission is required to maximize revenue from settlement.

2. The criteria for defining the categories of assets which may be transmitted according to, inter alia, the activity to which they are linked, their age in balance and their accounting classification shall be determined. On the basis of these criteria, the FROB shall specify for each entity the assets that may be transmitted.

3. Each asset management company shall be an anonymous company which may be involved in the FROB or by another public financing authority or mechanism, which is constituted for the purpose of receiving all or part of the assets and liabilities of an asset. or multiple entities object of resolution or of a bridge entity.

The FROB shall exercise control over this resolution instrument or its application in the prescribed terms.

4. The performance of actions in compliance with the objectives of the asset management company shall not entail any obligation or liability to the shareholders and creditors of the institution in resolution and the management body. or address shall have no liability in respect of such shareholders and creditors for acts or omissions in compliance with their obligations unless they result from a serious lack or infringement directly affecting the rights of shareholders and creditors.

5. The asset management company shall be subject to corporate governance obligations that ensure the exercise of its functions in accordance with the objectives and principles set out in Articles 3 and 4, in the terms that are provided for. regulentarily.

6. The company may issue bonds and securities that recognize or create debt without the application of the limit provided for in Article 405 of the Recast Text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010, of 2 July.

7. For the purposes of the asset management company, the reference to assets shall also include the liabilities that need to be transmitted.

8. The provisions of this article will be developed.

Article 29. Regime of the transmission of assets.

1. The transfer of assets to one or more asset management companies shall not be applicable to existing statutory or contractual terms that restrict the transmissibility of the units, and none of them may be required. liability and claim no compensation based on the non-compliance with such clauses.

2. Prior to the transfer, institutions shall make the valuation adjustments for the assets to be transmitted in accordance with the criteria to be determined in accordance with the rules. Similarly, with the same pre-transmission character, the FROB shall determine the value of the assets transferred to the asset management company in accordance with the principles laid down in Article 5 and, where appropriate, in the framework of the rules of State aid.

For the purposes of the Recast Text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010, of July 2, the previous assessment will replace that carried out by an independent expert.

3. The FROB may require that, prior to its transmission to the company, the assets are grouped in a company or any kind of operation that facilitates the transmission is carried out on them.

4. The transmission of assets shall be subject to the following special conditions:

(a) The transmission may in no case be the subject of termination by application of the reintegration measures provided for in the insolvency legislation.

(b) For the transmission of credits which are considered as litigious, the provisions of Article 1535 of the Civil Code shall not apply.

(c) The acquiring company shall not be required to make a public takeover offer in accordance with the securities markets.

(d) The transfer of assets shall not constitute an assumption of succession or extension of tax liability or of social security, except as provided for in Article 44 of the recast of the Law of the Workers ' Statute, approved by the Royal Legislative Decree 1/1995 of 24 March.

(e) The asset management company shall not be liable, in the event of the transfer, of the tax obligations arising prior to such transfer arising from ownership, exploitation or management. of the same by the transmitting entity.

(f) In the event of credit claims being made to the asset management company, the institution shall not be liable for the solvency of the relevant debtor, and in the event that the transfer is carried out by means of excision operations. or segregation, the provisions of Article 80 of Law No 3/2009 of 3 April 2009 on structural modifications of commercial companies shall not apply.

5. The FROB may transmit the assets of the institution under resolution to one or more asset management entities on more than one occasion and agree to the return of the assets from one or more asset management companies to the entity that is the subject of resolution must be accepted by the latter, when one of the following circumstances occurs:

(a) When the possibility of returning the rights, assets or liabilities is expressly stated in the act by which the transmission has been ordered.

(b) Where rights, assets or liabilities are not a party or do not conform to the conditions for the transmission of the rights, assets or liabilities that are specified in the act by which the transmission has been ordered.

The refund may be made within the time limits laid down in the act by which the transmission has been ordered, in accordance with the conditions laid down therein, and in accordance with the assessment that had been made. in accordance with Article 5 for the original transmission.

Article 30. Supervisory arrangements for asset management companies.

1. The monitoring of compliance shall be the responsibility of the FROB:

(a) The sole object of the asset management company in order to identify deviations from it that endanger the achievement of the general objectives legally established for it.

(b) The specific requirements to be laid down for the assets and, where applicable, liabilities to be transferred to the asset management company.

(c) The rules relating to the transparency and the constitution and composition of the governing bodies and the control of the management of assets provided for in their regulatory rules, as well as those relating to the requirements of commercial and professional honorability of members of his board of directors.

2. For the purposes of the supervisory functions assigned in the previous paragraph, the FROB may:

(a) carry out the inspections and checks that it considers appropriate in the framework of the functions provided for in the previous paragraph

and

(b) require the asset management company to provide information that is necessary for the development of its functions, including the collection of reports from independent experts that it considers to be accurate.

Access to the information and data required by the competent supervisor shall be understood as covered by Article 11.2.a) of the Organic Law 15/1999 of 13 December on the Protection of Personal Data.

Section 2. Recapitalization Operations

Article 31. Recapitalisation operations using the resources of the National Resolution Fund.

1. In the event that, in accordance with Article 50 (1) (b), the application of the resolution instruments implies the use by the FROB of the resources from the National Resolution Fund to recapitalise an institution, it shall be carried out agreement with the provisions of this Section, without prejudice to the other applicable rules provided for in this Law.

2. The FROB shall carry out the acquisition and disposal of the assets or liabilities according to the value of the institution as provided for in Article 5, and in accordance with the European Union's competition and aid rules Status.

3. The instruments to be acquired by the FROB shall be eligible, subject to compliance with the applicable requirements, as Common Equity Tier 1, Additional Tier 1 capital or Tier 2 capital, as provided for in Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013.

4. Where the FROB carries out recapitalisation actions pursuant to Articles 20.2.c) and 51, the provisions of this Section shall apply.

5. For the purposes of the application of Law 22/2003, of July 9, Bankruptcy, the credits of the FROB will be considered credits with general privilege.

Article 32. Ordinary shares or contributions to social capital.

1. Prior to the acquisition by the FROB of ordinary shares or the making of contributions to the share capital, the institution which is subject to a resolution procedure shall take the necessary measures to ensure that such acquisition or (a) provide a share in its share capital that is in line with the value of the entity resulting from the valuation process.

2. The legal status of the FROB shall not be extended to the entities by the investee in accordance with the provisions of this Article, which shall be governed by the applicable private legal system.

3. The subscription or acquisition of these instruments shall, in any event, determine by itself and without any other act or agreement, except the notification corresponding to the Commercial Register of the votes that correspond to it, the attribution to the FROB of the relevant political rights and their incorporation into the administrative body of the issuing institution. The FROB shall appoint the natural person or persons who represent its representation to that effect and shall have the authority of so many votes as those resulting from the application of the total number of votes to the percentage of the vote. entity, rounded to the nearest integer.

4. In order to ensure greater efficiency in the use of public resources and in compliance with the Spanish and European Union rules on competition and State aid, the divestment by the FROB of the instruments to which it is This section will be carried out through its disposal through procedures that ensure competition.

The FROB may adopt any of the instruments referred to in Article 53.2 to support the competitive divestment procedure.

The FROB may participate together with some or some of the other partners or shareholders of the entity to any process of selling securities on the same terms as these may be concluded.

5. The disposal shall be carried out after a report of the General Intervention of the State Administration, concerning compliance with the applicable rules of procedure for its implementation. Also, the divestment processes of significant shareholdings carried out by credit institutions controlled by the FROB, in accordance with the relevant resolution plans, through direct or indirect shareholdings, and irrespective of whether these entities are subject to private law, they shall be the subject of a report by the Ministry of Finance and Public Administrations concerning their suitability for the principles of publicity and competition. The definition of the concept of significant participation shall be the responsibility of the FROB Rector Commission.

Article 33. Instruments convertible into ordinary shares or contributions to share capital.

1. At the time of the adoption of the emission agreement for these instruments, the issuing entity shall approve the necessary arrangements for the capital increase or the subscription of capital injections in the amount necessary.

2. Unless the FROB determines different disinvestment conditions, the entity shall purchase or write down the instruments subscribed or acquired by the FROB, through the National Resolution Fund, as soon as it is in a position to do so. in the terms envisaged, and in any case in time compatible with the State aid rules.

Article 34. Special arrangements for the subscription or acquisition by the FROB of the recapitalisation instruments.

1. Where the FROB subscribes or acquires any of the recapitalisation instruments identified in this Section, it shall not apply to it:

(a) The statutory limitations of the right of assistance to general meetings or assemblies or the right to vote.

b) Limitations on the acquisition of contributions to the social capital of credit unions.

(c) The obligation to present a takeover bid in accordance with the securities markets regulation.

2. Where the FROB subscribes or acquires contributions to the social capital of a credit union, the quorum of attendance at the assembly and the majorities necessary for the adoption of agreements shall be calculated, and the voting rights shall be attributed, in proportion to the amount of contributions to the social capital of the cooperative.

3. Should the deletion of the shareholder's right of preferential subscription be agreed upon, it will not be necessary to obtain the report of the auditor of accounts required by the recast of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010 of 2 July.

Also, in the event that the instruments referred to in Article 33 are issued, the auditor's report required by the Recast Text of the Capital Companies Act, approved by the Royal, will not be required either. Legislative Decree 1/2010 of 2 July on the basis and modalities of conversion.

CHAPTER VI

Amortization and conversion of capital instruments and internal recapitalisation

Section 1. General Provisions

Article 35. Depreciation and conversion of capital instruments and internal recapitalisation.

1. The FROB shall proceed to the amortisation and conversion of capital instruments of an institution or to the application of the internal recapitalisation instrument, by agreeing to the amortisation of any of its liabilities or its conversion into shares or other capital instruments of the entity or other entity by which it is involved, in the terms provided for in this Act. The acts which the FROB adopts pursuant to the provisions of this Chapter shall be of a administrative nature.

2. Provided that the FROB adopts resolution measures resulting from the assumption of losses by creditors, prior to, or at the same time, the repayment or conversion of the capital instruments into the terms provided for in this Act.

Article 36. Amount of the recapitalisation.

1. Before agreeing on the amortisation and conversion of capital instruments or the internal recapitalisation, the FROB shall carry out an assessment of the assets and liabilities of the institution in accordance with Article 5, which shall form the basis of the calculation of the amount to which the affected entity will need to be recapitalised.

2. For the purposes of the preceding paragraph, the FROB shall calculate, taking into account the assessment carried out in accordance with paragraph 1, the aggregate sum of:

(a) the amount by which the eligible liabilities should be amortised to ensure that the entity's net active value in resolution is equal to zero, and

(b) the amount by which eligible liabilities in shares or other capital instruments should be converted to restore the Common Equity Tier 1 ratio of the institution under resolution or the institution bridge.

3. The calculation provided for in the preceding paragraph shall determine the amount by which eligible liabilities are to be amortised or converted to restore the institution's Tier 1 Common Equity Ratio (tier 1) or, where applicable, the amount of the the bridging entity, and to maintain sufficient market confidence in them, and to enable them to comply, for at least one year, with the conditions for their authorisation and to continue the activities for which they are authorized.

4. The calculation made shall take into account, where appropriate, the capital contribution made by the National Resolution Fund and, if the FROB proposes to use the instrument for the transmission of assets or liabilities provided for in Article 29, a prudent estimation of the capital needs of the asset management company, as appropriate.

5. Once the internal recapitalisation has been carried out, if the level of depreciation based on the preliminary assessment provided for in Article 38 is found to exceed the requirements compared to the final valuation, a mechanism will be established. to compensate the creditors and then to the shareholders to the extent necessary.

Article 37. Effects of the depreciation and conversion of capital instruments and internal recapitalisation.

1. Where the FROB exercises the powers provided for in this Chapter, the reduction of the principal amount or outstanding due, conversion or cancellation of liabilities shall be immediately enforceable.

2. Where the principal amount of a relevant capital instrument is amortised, the following effects shall occur:

(a) The reduction of the principal amount shall be permanent, without prejudice to the compensation mechanism which may, where appropriate, be applied in accordance with the provisions of Article 36.5.

(b) In relation to the holder of the liability concerned, there shall be no obligation on the amount of the instrument which has been amortised, except in the case of an obligation already due or an obligation arising from the the damages arising as a result of the judgment which resolves the action against the exercise of the competition for the depreciation and conversion of capital instruments or the internal recapitalisation, all without prejudice to the application to that holder of the provisions of Article 39.3.

(c) No compensation shall be paid to the holder of the liabilities concerned, except in accordance with Article 39.3.

3. The FROB shall be empowered to carry out or require the completion of the formalities to make the exercise of those powers effective.

4. Where the FROB reduces to zero the principal amount or the outstanding amount of a liability, this or any obligations or rights arising therefrom which have not expired at the time of the reduction shall be deemed to be extinguished for all purposes and may not be taken into account in any subsequent liquidation of the entity or another company that succeeds it.

5. Where the FROB reduces only in part the principal amount or the outstanding amount of an eligible liability, the extinction of the eligible liability and the instrument or arrangement which it has created shall be produced only to the extent that the amount is reduced and prejudice to any changes to the conditions of the same which the FROB may take by virtue of the powers conferred on it.

6. Where the depreciation or conversion of capital instruments or the application of the recapitalisation instrument results in the acquisition or increase of a qualifying holding in an institution, the assessment required by Law 10/2014, of 26 June, and in Law 24/1988, of 28 July, shall be carried out within a period not exceeding 5 working days.

Section 2. Th Amortization and Conversion of Capital Instruments

Article 38. Depreciation and conversion of capital instruments.

1. The FROB, after consulting the competent supervisor, may make the amortisation or conversion of the relevant capital instruments of an institution:

a) Regardless of any resolution measures, including internal recapitalization.

(b) Together with any measure of resolution, where the circumstances provided for in Article 19 are provided.

2. The FROB shall, after consulting the competent supervisor, proceed without delay to the amortisation and conversion of capital instruments, where any of the following circumstances arise:

(a) That the entity complies with the conditions of resolution provided for in Article 19.

b) That, unless this competence is exercised, the entity will become unviable. In the case of Spanish subsidiaries belonging to consolidable groups, the assessment of this circumstance must be carried out jointly with the appropriate authority of the Member State of the supervisor on a consolidated basis according to the the procedure to be regulated.

(c) the institution needs extraordinary public financial assistance, except where it takes the form provided for in Article 20.2.c).

(d) In the case of capital instruments issued by a Spanish subsidiary and if such capital instruments are recognised for the purposes of compliance with the own funds requirements on an individual and consolidated basis, the appropriate authority of the consolidating supervisor's Member State and the FROB, on its own initiative or of the competent preventive resolution authority or supervisor, to carry out, after meeting the information and consultation requirements In the case of the Court of Justice, the Court held that the Court of Justice held that depreciation or conversion in relation to those instruments, the group would become unviable.

(e) In the case of capital instruments issued by a Spanish parent and where such instruments are recognised for the purposes of compliance with the own funds requirements on an individual basis at the level of the parent undertaking or on a consolidated basis, that the FROB, on its own initiative or the competent supervisory authority or supervisory authority, appreciates that, unless the competition for depreciation or conversion is exercised in relation to those instruments, the group would become unfeasible.

3. For the purposes of this Article, an entity shall be deemed to be non-viable if it is in any of the circumstances provided for in Article 20 and, in addition, the condition laid down in Article 19.1.b) is met.

In the case of groups of entities, it is understood that the provisions of Article 20 are met if the group infringes, or there are objective elements that make it likely to be in breach in the near future, its solvency requirements consolidated level in such a way as to justify the adoption of shares by the competent supervisor, including in the event that the group has incurred losses that exhaust all or a significant part of its own resources.

4. Capital instruments issued by a subsidiary shall not be amortised or converted to a higher degree or in more unfavourable terms, in the case referred to in paragraph 2 (d), than other instruments of capital of the same range issued by the subsidiary. array.

5. The competent supervisory and resolution authorities shall, at the individual or consolidated level, cooperate and carry out the relevant notifications in order to determine whether the circumstances and conditions laid down therein are fulfilled. Article.

6. The depreciation and conversion of capital instruments shall be preceded by the appropriate valuation, in accordance with the terms of Article 5, which shall also serve as a basis for applying the depreciation and conversion ratios.

Article 39. Rules for the depreciation or conversion of capital instruments.

1. The FROB shall exercise the competence to write down or convert the capital instruments in accordance with the terms laid down in this Law and in its implementing rules, in accordance with the ranking of the appropriations applicable to the insolvency proceedings. The following results will occur:

(a) In the first place, the items of Common Equity Tier 1 shall be amortised in proportion to the losses and as far as possible, the measures provided for in Article 47.1 shall be adopted.

(b) If the above amount is not sufficient for the recapitalisation, the principal amount of Tier 1 additional capital instruments shall be amortised or converted into Common Equity Tier 1 instruments, or both (a) to the extent that it is necessary to achieve the resolution objectives, or if the amount is lower, as far as possible.

(c) If the above amounts are not sufficient for the recapitalisation, the principal amount of Tier 2 capital instruments shall be amortised or converted into Common Equity Tier 1 instruments, or both (a) to the extent that it is necessary to achieve the resolution objectives or, if the amount is lower, as far as possible.

The FROB shall not convert a class of capital instruments into capital or write down a class of capital instruments while another subordinate class has not been converted into capital or amortised in its entirety.

2. Where the depreciation or conversion of the principal of the capital instruments is carried out:

(a) The reduction of the principal shall be permanent, without prejudice to the mechanism to compensate the creditors provided for in Article 36.5.

(b) No obligation shall remain in respect of the holder of the capital instruments in respect of the amortised amount, except the obligations already accrued or the liability arising as a result of an application against the legality of the exercise of amortisation competition.

The provisions of this letter shall not prevent the provision of Common Equity Tier 1 instruments for a holder of capital instruments in accordance with paragraph 3.

(c) No compensation shall be paid to the holder of the capital instruments, without prejudice to paragraph 3.

3. For the purposes of the conversion of the relevant capital instruments in accordance with paragraph 1 (b), the FROB may, under conditions to be laid down in regulation, require the institutions concerned to issue instruments of common capital Level 1 for the holders of the Additional Tier 1 and Tier 2 capital instruments. For these purposes, the FROB may require such entities to maintain at all times the prior authorisation required for the issue.

Section 3. Th Internal Recapitalization

Article 40. Internal recapitalisation.

1. In the terms provided for in this Law, the FROB may exercise the powers which are necessary, and in particular those provided for in Article 35 and Section 2 of Chapter VII, in order to recapitalise the institution which is the subject of resolution, in compliance with the objectives of the resolution and in accordance with the principles set out in Articles 3 and 4.

2. The internal recapitalisation measures may be adopted for:

a) Recapitalize the entity in such a way that it can meet the conditions to continue its activities, maintaining market confidence.

(b) Convert capital or reduce the principal of debt credits or instruments transmitted when applying resolution instruments consisting of the constitution of a bridge entity, the sale of business or segregation of assets.

3. The internal recapitalisation of the institution shall be carried out in accordance with point (a) of the previous paragraph, where there is a reasonable prospect that the application of that instrument, in conjunction with other appropriate measures, shall be including measures implemented in accordance with the business reorganisation plan provided for in Article 49, in addition to achieving the relevant resolution objectives, restoring the financial soundness and long-term viability of the entity.

Otherwise, the institution's internal recapitalisation shall be carried out as provided for in point (b) of the previous paragraph, in conjunction with the resolution instruments provided for in Article 25.

4. The internal recapitalisation shall be carried out in compliance with the legal form of the affected entity unless the FROB considers it necessary to alter it.

Section 4. Eligible Liabilities for Internal Recapitalization

Article 41. Liabilities eligible for internal recapitalisation.

1. All liabilities which are not expressly excluded or which have not been excluded by the decision of the FROB, in accordance with the provisions of this Law, shall be subject to amortisation or conversion in capital for the internal recapitalisation of the institution. affected. The eligibility criteria for liabilities shall be determined, taking into account, in particular, the maturity of the instrument, its nature, its level of priority, the guarantees with which it may be counted, and provided that it is an instrument issued that is fully paid-up.

2. The preventive resolution authority, after reporting by the FROB, may limit the possession, by other entities, of liabilities eligible for the internal recapitalisation of an institution, except if both entities are part of the same group and without prejudice to the rules on large exposures that are applicable.

Article 42. Liabilities compulsorily excluded from internal recapitalisation.

1. The following liabilities are excluded from the internal recapitalisation:

(a) Guaranteed deposits, up to the level guaranteed by the Deposit Insurance Fund regulations.

(b) Guaranteed liabilities, including covered bonds, in particular, credit cards and mortgage, territorial and internationalisation bonds, and liabilities in the form of financial instruments used for hedging purposes, which are an integral part of the hedging portfolio and which, in accordance with national rules, are guaranteed by the assets of the covered bond portfolio.

(c) Liabilities resulting from the holding by the affected entity of assets or clients ' money, including those deposited on behalf of collective investment institutions, venture capital entities or collective investment entities of a closed type where such customer is protected under insolvency law.

(d) Liabilities resulting from a fiduciary relationship between the entity or company concerned, as a trustee, and another person, as a beneficiary, when such a client is protected under insolvency law.

(e) Liabilities to institutions, excluding companies that are part of the same group, with an initial maturity of less than seven days.

(f) Liabilities having a remaining maturity of less than seven days in respect of systems or system operators designated in accordance with Law 41/1999 of 12 November on payment and settlement systems values, or their participants, and resulting from participation in one of these systems.

g) Liabilities to:

1. Employees, in terms of salaries, pensions or other fixed remuneration payable. This exclusion shall not apply in the case of the variable component of remuneration which is not governed by collective agreements or collective agreements or covenants.

2. No. Commercial creditors, for the supply to the affected entity of goods and services that are essential for the daily development of their activities, including information technology services, supplies basic public, and the rental, maintenance and cleaning of premises.

3. The Tax Administration or Social Security.

4. Deposit guarantee systems arising from contributions due in accordance with Royal Decree-Law 16/2011 of 14 October establishing the Deposit Insurance Fund of Credit Entities and with their regulations

2. Guarantee assets related to a covered bond portfolio shall remain unchanged and segregated and provide sufficient financing. This rule and the exclusion provided for in point (b) of the previous paragraph shall not affect the part of the secured bond that exceeds the value of the assets that guarantee it.

Article 43. Liabilities to be excluded from the internal recapitalisation by decision of the FROB.

1. In exceptional circumstances, and after communication to the European Commission, the FROB, in the terms and conditions laid down in this Law and in accordance with the procedure to be determined, may exclude from the recapitalisation internally, in whole or in part, certain liabilities or categories of eligible liabilities where any of the following circumstances arise:

(a) It is not possible to write down or convert such liabilities within a reasonable time.

b) Exclusion is strictly necessary and proportionate for:

1. Ensure the continuity of essential functions and core branches of activity in such a way as to maintain the ability of the institution to continue operations, services and services. main transactions, or

2. Avoid spreading widespread contagion, in particular in respect of eligible deposits held by individuals, micro-enterprises and small and medium-sized enterprises, which seriously disrupts the functioning of markets financial services, including their infrastructure, in such a way that a serious disruption to the economy of a Member State or that of the European Union can be caused.

(c) When the application of the internal recapitalisation instrument to such liabilities would result in the destruction of the value such that the losses incurred by other creditors would be higher than if those liabilities were excluded from the internal recapitalisation.

2. When exercising the discretion provided for in paragraph 1, the FROB shall take due account of the following elements:

(a) The principle that the losses must be assumed first by the shareholders and then, in general, by the creditors of the institution under resolution, in order of preference.

(b) The level of the loss absorption capacity that the institution under resolution would continue to have if the liability or liability category were excluded.

c) The need to maintain sufficient resources for resolution funding.

3. Where the FROB decides to exclude all or part of an eligible liability or a category of eligible liabilities in accordance with this Article, the level of amortisation or conversion applied to other eligible liabilities may be increased to account for such exclusions, provided that the level of depreciation and conversion applied to other eligible liabilities complies with the principle set out in Article 4.1.d).

4. Where losses that could have been incurred by the liabilities excluded by the FROB decision under this Article have not been fully passed on to other creditors, the National Resolution Fund may make a contribution to the object entity. of resolution in the terms and conditions set out in Section 6.

Article 44. Determination of the minimum requirement for own funds and eligible liabilities.

1. The preventive resolution authority, after reporting by the FROB and the competent supervisor, shall set the minimum requirement for own funds and eligible liabilities payable to each institution and shall verify that the institutions comply at all times. requirement. Such determination and verification shall be carried out on the occasion of the elaboration, assessment and maintenance of the resolution plans and shall be communicated to the European Banking Authority. Where the decision-making authority at the group level or the individual subsidiary is a member of another Member State, a joint decision shall be taken in accordance with the terms laid down in regulation.

The minimum requirement shall be calculated as the amount of own funds and the eligible liabilities expressed as a percentage of the total liabilities and own funds of the institution. The form of calculation of the said requirement shall be determined.

Derivatives will be included in total liabilities on the basis of full recognition of contractual compensation rights.

2. The minimum requirement shall be set according to the following criteria:

(a) The need to ensure the resolution of the entity by the application of any of the resolution instruments.

(b) The need to ensure that, where appropriate, the institution has sufficient eligible liabilities for an effective implementation of the internal recapitalisation instrument.

(c) The need to ensure that, if the resolution plan anticipates that certain categories of eligible liabilities could be excluded from the internal recapitalisation under the provisions of Article 43, or could be fully transmitted to an acquirer by virtue of a partial transfer, the institution has sufficient eligible liabilities to ensure that the internal recapitalisation instrument can be effectively implemented.

d) The size, type of company, financing model, and risk profile of the entity.

e) The extent to which the deposit guarantee system can contribute to the financing of the resolution.

(f) The extent to which the infeasibility of the institution would have an adverse effect on financial stability due to, inter alia, the phenomenon of contagion as a consequence of its interconnection with other entities or with the rest of the system financial.

3. Eligible liabilities may be computed for the purposes of complying with the minimum requirement, where they meet the conditions to be determined by regulation.

4. Where a liability is governed by the rules of a third country, the competent preventive decision-making authority may require the institution to demonstrate that any decision to write down or convert such a liability would be effective under the rules of that third country. If the preventive resolution authority, after consulting the FROB, has doubts as to its eligibility, that liability shall not be computed for the minimum requirement of own funds and eligible liabilities.

5. Institutions shall comply with the minimum requirement laid down in this Article on an individual basis. In addition, the European Union's parent companies shall comply with the minimum requirement laid down in this Article also on a consolidated basis in terms of their rules.

The preventive resolution authority, after consulting the FROB and the competent supervisor, may decide to apply the minimum requirement to the entities referred to in Article 1.2.b), (c) and (d)

The minimum requirement at consolidated level shall be determined at least on the basis of the criteria set out in paragraph 2, and taking into account whether the group's subsidiaries in third countries are the subject of a separate resolution or not in accordance with the resolution plan.

6. The preventive resolution authority shall, after consulting the FROB, be able to fully exempt from compliance with the minimum requirement laid down in this Article to parent and subsidiary of the European Union in the cases and conditions to be determined regulentarily.

7. The preventive resolution authority may authorise, after consulting the FROB, under the conditions to be determined by regulation, that the minimum requirement for own funds and eligible liabilities shall be partially met, either consolidated or individual, by means of contractual internal recapitalisation instruments. These instruments shall be determined, checked and communicated to the European Banking Authority in the same way as the rest of the minimum requirement.

Article 45. Removal of obstacles preventing internal recapitalisation.

1. The preventive resolution authority, after reporting by the FROB and the competent supervisor, and as a result of the analysis of the development and maintenance of the resolution plan, may require institutions to maintain at all times an amount of sufficient authorised social capital, or other Common Equity Tier 1 instrument, so that, in the event that the internal recapitalisation powers are to be exercised in respect of that entity or any of its subsidiaries, the institution may issue a sufficient quantity of new shares or other capital instruments in order to ensure the conversion of liabilities into shares or other capital instruments is carried out in an effective manner.

2. In any event, if the resolution plan provides for the possible application of the internal recapitalisation instrument, the authorised social capital or other Common Equity Tier 1 instrument shall be sufficient to cover the sum of the amounts referred to in Article 36.2.

In the event that the maximum amount of the authorized capital provided for in Article 297.b) of the Recast Text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010, of July 2, will be insufficient, that limit may be exceeded at the request of the preventive decision-making authority carried out in the exercise of the powers provided for in the preceding paragraph. In the exercise of those powers, it may also require that the maximum period laid down in that Article be exceeded. The requirement that the contributions should be cash shall not be applicable either.

Article 46. Contractual recognition of the internal recapitalisation.

1. Institutions shall include in contracts which conclude a clause for the holding of liabilities which they believe to be the exercise of the right to amortisation and conversion of the FROB as well as compliance by the creditor or the party of the contract. they give rise to liabilities, any reduction in the principal amount or due and any conversion or cancellation arising from that financial year, provided that the liabilities concerned:

(a) Not excluded in accordance with Article 42.

(b) Do not constitute a deposit of those referred to in point (b) of paragraph 1 of Article 14 (1).

(c) Be regulated by the rules of a non-European Union State.

d) Be issued or contracted after the entry into force of the rules on amortization of capital instruments and internal recapitalisation contained in this Chapter.

The FROB may require the entity to submit a report from an independent expert on the validity of the clauses provided for in this paragraph.

2. Failure to comply with the obligation laid down in the previous paragraph by the institution shall not preclude the exercise of the amortisation and conversion competition on a given liability. Such an obligation may be excluded by the preventive resolution authority, following the report of the FROB, where, either under the law of the State concerned, or under a convention concluded with it, the said obligations are guaranteed. submission and compliance.

Section 5. Internal Recapitalization Instrument Application

Article 47. Treatment of shareholders.

1. The FROB, in the exercise of its powers to implement the internal recapitalisation instrument, taking into account the outcome of the valuation of the institution and once the amount of that recapitalisation is fixed in accordance with the provisions of the This Law shall take either or both of the following measures:

(a) Amortise the shares or other existing capital instruments or transmit them to the creditors subject to internal recapitalisation.

(b) Provided that, in accordance with the valuation carried out in accordance with Article 5, the institution under resolution has a positive value, diluting the participation of shareholders and holders of other instruments of existing capital by conversion into shares or other capital instruments of:

1. the capital instruments issued by the entity, or

2. º eligible liabilities issued by the entity.

The conversion shall be carried out in such a way that the nominal value of the shares or other existing capital instruments is substantially reduced.

2. The measures referred to in the previous paragraph shall also apply to shareholders and holders of other capital instruments issued or granted in the following circumstances:

(a) For the conversion of debt instruments into shares or other capital instruments, in accordance with the contractual clauses of the original debt instruments, upon the occurrence of a prior or simultaneous event to the time when the FROB determined that the conditions for the resolution were met.

b) For the purpose of the conversion of capital instruments into Common Equity Tier 1 instruments in accordance with the provisions of this Act.

3. The FROB shall decide on the specific actions to be taken in the light of:

a) The valuation carried out in accordance with Article 5.

(b) The amount by which the Common Equity Tier 1 is estimated to be amortised or the capital instruments to be amortised or converted.

(c) The assessment of the assets and liabilities referred to in Article 36.

4. Where the application of the internal recapitalisation instrument or the conversion of capital instruments of place to the acquisition or the increase of a holding in an institution in such a way as to apply the rules on shares significant, the competent supervisor shall carry out the assessment of the acquisition or increase within a time limit which does not delay, hinder or impede the implementation of the measures taken by the FROB.

Where the internal recapitalisation instrument or the conversion of capital instruments is applied without the assessment provided for in the preceding paragraph being carried out, the rules shall apply. provided for in Article 26.7.

Article 48. Sequence and special rules of internal recapitalization.

1. The FROB shall apply the internal recapitalisation instrument to absorb losses and cover the amount of the recapitalisation determined in accordance with the provisions of this Law, by amortising or reducing the amount of the shares, instruments of capital, or eligible liabilities according to the following sequence:

(a) The items of Common Equity Tier 1 in proportion to the losses and as far as possible.

b) The principal amount of Tier 1 additional capital instruments to the extent necessary and as far as possible.

c) The principal amount of Tier 2 capital instruments to the extent necessary and as far as possible.

(d) The principal amount of subordinated debt that is not additional Tier 1 or Tier 2 capital, in accordance with the ranking of the credit rights provided for in Law 22/2003 of 9 July, Insolvency, to the extent necessary and up to where possible.

(e) The principal amount or outstanding amount of the eligible liabilities, in accordance with the ranking of the credit entitlements provided for in Law 22/2003 of 9 July, including the deposits referred to in paragraph 1 of the Additional disposition fourteenth.

2. When exercising the depreciation or conversion powers, the FROB shall allocate losses in a fair manner between the shares, other capital instruments and the eligible liabilities of the same range, reducing the principal amount or the outstanding amount of such shares, other capital instruments and eligible liabilities to a degree proportional to their value, except where the option provided for in Article 43.3 is used.

This is not an obstacle to the fact that the liabilities excluded in accordance with this Law are treated more favourably than the eligible liabilities of the same rank in ordinary insolvency proceedings.

3. The FROB shall not convert a class of liabilities into capital or write down a class of liabilities while other subordinated debt has not been converted into capital or amortised in its entirety, except in the case of liabilities excluded from the recapitalisation.

4. The amortisation and conversion of derivatives arising from derivatives shall be made only at the time they are settled or after that settlement. To this end, agreed upon the resolution of an entity, the FROB may declare the anticipated maturity and settlement of any derivative contract.

If derivative transactions are made within the framework of a contractual netting agreement, the FROB or an independent expert shall determine, in the framework of the assessment provided for in Article 5, the net balance of the liability. arising from the settlement of the transactions, in accordance with the terms provided for in that agreement.

The FROB shall determine the value of the liabilities arising out of derivatives in accordance with the rules and principles that are regulated.

5. The FROB, in exercising the powers provided for in Articles 38 and 40, may apply different conversion ratios to different types of capital and liabilities instruments, taking into account the following principles:

(a) The conversion ratio shall constitute appropriate compensation for losses incurred by the creditor due to depreciation or conversion.

b) Higher creditors will have a higher conversion ratio than lower-ranking creditors.

Article 49. Plan for reorganization of activities.

1. In applying the internal recapitalisation measure, the FROB shall require the institution's management body, or the person or persons designated for that purpose, to submit a plan for the reorganisation of activities containing the measures, taking into account the situation of the economy and of the markets in which the institution operates, intended to restore the long-term viability of the institution, or part of its activities, over a reasonable period of time.

2. Among other measures, the activity reorganization plan may include:

a) The entity's reorganization of activities.

b) Changes to the entity's operating systems and infrastructure.

c) Cese of loss-making activities.

d) Restructuring activities that can be competitive.

e) The sale of assets or business lines.

3. It is for the FROB, after consulting the preventive resolution authority and the competent supervisor, for the approval of the reorganisation plan and its amendments.

If the FROB, after consulting the preventive resolution authority and the competent supervisor, considers that the plan will not achieve the objectives set out in paragraph 1, it shall notify the management body of the institution or the persons concerned. designated in that paragraph, and require that the plan be amended in such a way as to enable those objectives to be met.

4. The FROB, in collaboration with the resolution authority and the competent supervisor, shall assess and ensure compliance with the approved reorganisation plan.

5. The deadline and procedure for the submission of such plans as well as their minimum content, their execution and eventual review, as well as the rules applicable in the case of groups of entities, shall be determined.

Section 6. Other contributions to internal recapitalization

Article 50. Conditions for the contribution of the National Resolution Fund.

1. In the case referred to in Article 43.4, the National Resolution Fund provided for in Article 53.1.a) may make a contribution to the institution under resolution for the purpose of:

(a) cover any loss that has not been absorbed by eligible liabilities and restore the net value of the assets of the institution under resolution by matching it to zero, or

(b) acquire shares or other capital instruments of the institution under resolution in order to recapitalise it.

2. The National Resolution Fund may only make a contribution referred to in the previous paragraph where the following conditions are met:

(a) which, by means of the reduction of capital, conversion or otherwise, has been made by the shareholders and the holders of other capital instruments and other eligible liabilities, a contribution to the loss absorption and internal recapitalisation for an amount equal to at least 8% of the total liabilities, including the own funds of the institution determined at the time of the decision in accordance with the valuation provided for in the Article 5, and

(b) that the contribution of the financing mechanism of the resolution does not exceed 5% of the total liabilities, including own funds, of the institution under resolution, calculated in accordance with the valuation provided for in Article 5, at the time the resolution action is taken.

3. Compliance with the condition set out in point (a) of the previous paragraph may be replaced by the following conditions:

(a) that the contribution to the absorption of losses and the internal recapitalisation provided for in point (a) above is of an amount not less than 20 per cent of the risk-weighted assets of the institution that is treat,

b) that the National Resolution Fund has at its disposal an amount that is at least equal to 3 percent of the amount of deposits guaranteed by the Credit Entities Deposit Guarantee Fund of all entities authorised in Spain, obtained through ex ante contributions in accordance with Article 53.1.a), not including contributions made to a deposit guarantee scheme, and

(c) the entity in question has assets of less than EUR 900 billion on a consolidated basis.

4. Alternatively or in addition to the provisions of Article 51, the National Resolution Fund may make a contribution from resources which have been obtained through the ex ante contributions provided for in Article 53,1 (a) and which would not have been used yet, provided the following circumstances are present:

a) The 5 percent limit set in 2.b) has been reached.

(b) All non-secured, non-preferred liabilities, other than eligible deposits, have been amortised or converted in full.

Article 51. Alternative sources of funding.

1. In exceptional circumstances, the FROB may obtain financing from alternative sources of financing, after the circumstances provided for in paragraph 4 (a) and (b) of the previous Article have been given.

2. In case the action of the FROB has an impact on the General Budget of the State, the FROB will raise to the Minister of Finance and Public Administrations and to the Minister of Economy and Competitiveness an economic memory in which the impact is detailed financial support for the funds provided to the FROB from the State Budget.

3. The actions carried out by the FROB in accordance with this Article may be carried out in cash, through the delivery of securities representing public debt, or securities issued by the FROB itself. In addition, the FROB may satisfy that price by offsetting the claims against the relevant entities.

The granting of guarantees by the FROB will be subject to the limits that will be established in the corresponding annual laws of the State General Budget.

CHAPTER VII

FROB

Section 1. Nature, composition and legal status

Article 52. FROB.

1. The FROB shall aim to manage the resolution processes of the entities in its executive phase and, in any case, exercise the powers conferred on it by this Law, the rest of the national legal order and the law of the European Union.

2. The FROB is an entity governed by public law with its own legal personality and full public and private capacity for the development of its purposes, which shall be governed by the provisions of this Law.

3. The FROB shall be subject to private law, unless it acts in the exercise of the administrative powers conferred by this Law, the law of the European Union or other rules with the law. The decision-making measures taken by the FROB shall, where appropriate, be communicated to the European Commission or to the National Markets and Competition Commission for the purposes of the provisions laid down in the State aid and defence policy. the competence.

4. The FROB shall not be subject to the provisions of Law 6/1997 of 14 April of the Organization and the Functioning of the General Administration of the State in the exercise of its functions as a resolution authority, the rest of the provisions of the other tenth provision.

5. The FROB, for the purposes of its budgetary regime, shall apply the provisions of Articles 64 to 68 of Law 47/2003, of 26 November, of General Budget, as not provided for in this Law.

Notwithstanding the foregoing, the FROB shall not be subject to the general rules governing the economic and financial, accounting and control arrangements of public bodies that are dependent on or linked to the General Administration of the State, with the exception of the external audit of the Court of Auditors, in accordance with the provisions of the Organic Law 2/1982 of 12 May of the Court of Auditors, and the submission of the internal arrangements for its management in the field economic-financial to the permanent financial control of the General Intervention of the State Administration as provided for in Chapter III of Title VI of Law 47/2003 of 26 November, General Budget.

6. The FROB shall not be subject to the provisions of Law 33/2003 of 3 November of the Heritage of Public Administrations in the exercise of its resolution functions. In any event, the FROB shall not be subject to the provisions of Title VII of the Law of 33/2003 of 3 November, referring to the business assets of the General Administration of the State.

The shares, shares, securities and other instruments which the FROB may acquire in the exercise of its powers of resolution shall not form part of the General Administration's Heritage.

7. The staff of the FROB shall be selected in accordance with the principles of equality, merit, capacity and publicity, and shall be linked to it by a relationship of labour law. Without prejudice to the foregoing, the official staff who are to provide services in the FROB may do so in the situation of special services. The expenditure of staff of the FROB and its managers shall be subject to the limits laid down for public sector entities.

8. The FROB shall, for tax purposes, have the same treatment as the Credit Entities Deposit Insurance Fund.

9. Exceptionally, the FROB may contract with third parties to carry out any material, technical or instrumental activities, where necessary for the proper development of its powers as a resolution authority provided for in the This law, in accordance with the principles of advertising and competition, except in emergency or urgent cases. For the remainder of the contracts, the applicable contracting regime will be the one established in the Royal Legislative Decree 3/2011 of 14 November, approving the recast of the Law on Public Sector Contracts for Power Contracting entities that do not have the status of Public Administrations.

Article 53. Funding mechanisms and budget allocation.

1. For the financing of the measures provided for in this Law, the FROB will have the following funding mechanisms:

(a) A "National Resolution Fund", without legal personality, administered by the FROB and constituted as a separate equity, the financial resources of which shall be at least 1% of the amount of the deposits guaranteed for all entities.

In order to achieve this level, the FROB shall collect, at least annually, ordinary contributions from institutions, including their branches in the European Union, in accordance with the following criteria:

1. The contribution of each entity shall correspond to the proportion that it represents on the aggregate total of the entities, of the following concept: total liabilities of the institution, excluding own resources and the amount guaranteed deposits in accordance with the provisions of Royal Decree-Law 16/2011 of 14 October.

2. The contributions shall be in accordance with the risk profile of each institution, in accordance with the criteria to be determined in a regulated manner.

The available financial resources to be taken into account to reach the target level may include irrevocable payment commitments in full backed by guarantees of low-risk assets free of charge. loads, freely available and allocated for the exclusive use of the FROB for the purposes specified in the following paragraph. The part of irrevocable payment commitments shall not exceed 30% of the total amount raised in accordance with this Article.

When the ordinary contributions of the institutions are insufficient for the financing of the measures provided for in this Law, the FROB may raise extraordinary contributions.

(b) The possibility of applying for loans to the financing mechanisms of the other Member States of the European Union, in accordance with the procedure laid down in regulation.

Only a loan to other financing mechanisms may be requested in the event that the ordinary contributions are not sufficient to cover the costs of the resolution, the extraordinary contributions are not immediately accessible and the alternative financing arrangements provided for in paragraph 5 cannot be used on reasonable terms.

The FROB may also grant loans to financing mechanisms from other Member States of the European Union under the National Resolution Fund.

2. The FROB may only use the financing mechanisms provided for in this Article to the extent necessary to ensure the effective implementation of the resolution instruments, in order to meet the objectives and with the necessary limitations. Regulation. In particular, funding mechanisms may be implemented, inter alia, in one or more of the following measures:

a) The granting of guarantees.

b) The granting of loans or loans.

c) The acquisition of assets or liabilities, being able to maintain its management or to entrust it to a third party.

d) The realization of contributions to a bridge entity or to the asset management company.

e) Payment of compensation to shareholders and creditors.

f) The realization of contributions to the entity when deciding to exclude certain liabilities from the internal recapitalisation.

g) The granting of loans to other financing mechanisms.

h) The recapitalization of an entity, in terms and with the limitations provided for in this Act.

The use by the FROB of financial support instruments shall not reduce the losses arising from the resolution that is to be borne by the shareholders and subordinated creditors in accordance with the provisions of this Law. and in particular, taking into account the principles listed in Article 4.1 (a) and (b).

The use by the FROB of financial support instruments shall be subject to the procedure provided for in the second paragraph of Article 54.6 in the event that it has an impact on the General Budget of the State.

3. In the event of a resolution of a group integrating Spanish entities with other European Union entities, the FROB shall contribute to the financing of its resolution in accordance with the criteria and procedures to be regulated.

4. For the coverage of its operating expenses, the FROB shall require the entities to charge a fee, in accordance with the terms laid down in the additional sixteenth provision.

Also, the FROB's own funds may be increased through the capitalization of loans, loans or any other borrowing operation of the FROB in which the General Administration of the State is listed as accretive.

5. The FROB may also, for the purposes of its purposes, seek alternative means of financing such as issuing fixed income securities, receiving loans, requesting the opening of loans and carrying out any other operations of debt, provided that the ordinary contributions are not sufficient to cover the costs of the resolution and the extraordinary contributions are not immediately accessible or sufficient.

The foreign resources of the FROB, whatever the mode of their implementation, will not exceed the limit that will be established in the annual laws of the State General Budget.

6. The non-committed assets of the National Resolution Fund shall be in the form of public debt or other assets of high liquidity and low risk. Subject to the provisions of this Law and, in particular, to the provisions of Chapter V in relation to the application of the instruments of resolution, any profit accrued and accounted for in its annual accounts shall become part of the assets of the Fund.

7. Where the FROB undertakes a resolution measure, the deposit guarantee scheme to which the institution is affiliated shall assume, in addition to the responsibilities laid down in accordance with the rules laid down in Article 11 of the Royal Decree-Law 16/2011 of 14 October, the following costs:

(a) Where the internal recapitalisation instrument is applied, the amount in which the guaranteed deposits would have to have been amortised to absorb the losses of the institution in accordance with Article 48, if the guaranteed deposits would have been included in the scope of the internal recapitalisation instrument and would have been amortised to the same extent as the claims of creditors with the same rank in the hierarchy of agreement creditors with the insolvency legislation.

(b) Where one or more instruments of resolution other than those for internal recapitalisation are applied, the amount of losses incurred by the collateralised depositors in the event that they have suffered losses in proportion to those suffered by creditors with the same rank in the hierarchy of creditors in accordance with insolvency law.

Article 54. Commission Rector.

1. The FROB shall be governed and administered by a Rectoring Commission composed of 11 members:

a) The President.

(b) Four members appointed by the Bank of Spain, one of whom shall be the Deputy Governor, who shall hold the first Vice-Presidency of the Rectoring Commission, and shall replace the President in his/her duties in the event of vacancy, absence or disease.

c) Three representatives of the Ministry of Economy and Competitiveness, appointed by the Minister, with the least rank of Director General.

d) The Vice President of the National Securities Market Commission.

e) Two representatives of the Ministry of Finance and Public Administrations, appointed by the Minister, with the least rank of Director General.

Attend the sessions of the Rectoring Commission, with a voice but without a vote, a representative appointed by the General Controller of the State Administration and another by the State Advocate General-Director of the Service Legal status of the State.

The Executive Board of the Bank of Spain shall appoint the members of the Board of Directors other than the Deputy Governor.

In addition, the Rectoring Commission may authorize participation in its observer sessions, provided that such participation does not create conflicts of interest that may interfere with the development of the functions provided for by the FROB in this Law. The Rectoring Commission itself shall establish the terms in which the participation of these observers shall be unwrapped, which shall in any event be without a vote and shall be subject to the duty of secrecy.

2. The duties of the Registrar of the Rector's Commission shall be exercised by the person appointed in accordance with the rules of procedure of the FROB's internal rules.

3. Without prejudice to the provisions of the President in the following Article, the members of the Rectoring Commission shall cease in their status as such for the following reasons:

a) Cese in the respective charges.

(b) Cese agreed by the Executive Board of the Banco de España, in the case of the member designated by the Commission different from the Subgovernor.

4. The Rectoring Commission shall meet each time it is convened by its President, either on his own initiative or at the request of any of its members. It shall also be empowered to establish its own system of calls.

5. The Commission is responsible for the adoption of decisions concerning the powers and functions conferred on the FROB, without prejudice to the delegations or proxies which it considers appropriate to be adopted for the proper exercise of those decisions. In any case, the following functions will not be delegated:

(a) The decision-making functions attributed to the FROB in relation to the institution resolution plans and the equity and capital instruments amortization actions.

(b) The approval of the decision to carry out the financing operations provided for in Article 53.1.

c) The approval of the annual accounts of the FROB that will be sent annually to the Minister of Economy and Competitiveness and to the General Intervention of the State Administration for integration into the General Account of the State and its transfer to the Court of Auditors, as well as the report to be raised to the Minister for Economic Affairs and Competitiveness for referral to the Economic and Competitiveness Committee of the Congress of Deputies.

d) The adoption of the necessary decisions for the use of the National Resolution Fund in accordance with the provisions of this Law.

(e) Decisions whereby the FROB agrees to divestiture or disinvestment in an entity of the instruments provided for in Article 32.4.

6. For the valid constitution of the Rector Commission for the purposes of the holding of meetings, deliberations and adoption of agreements, at least half of its members with the right to vote shall be required to attend. Their agreements shall be adopted by a majority of the members in attendance, with the President having a vote of quality in the event of a tie in the number of votes.

However, in order to make decisions affecting the General Budget of the State, the Rectoring Commission will take its decisions with the following composition:

a) The President.

b) The three representatives of the Ministry of Economy and Competitiveness.

c) The two representatives of the Ministry of Finance and Public Administrations.

7. The Rectoring Commission will approve an internal rules of procedure of the FROB where the essential rules of its performance in the economic, financial, patrimonial, budgetary, accounting, organizational and procedural fields will be collected. The rules will collect the basic lines of your ownership policy on the entities to which you have provided public financial support and will include internal control mechanisms of the government of the FROB. These rules will be based on principles of good management, objectivity, transparency, competition and publicity.

Article 55. President.

1. The President of the FROB will develop the functions of representation, management and ordinary management of the National Resolution Fund, and the other delegates to the Rector Commission. It shall be designated among persons with sufficient capacity, technical preparation and experience to develop the functions of this office.

It will be appointed and separated by royal decree of the Council of Ministers, on the proposal of the Minister of Economy and Competitiveness, heard the supervisory authorities, and after the appearance of the person proposed for the position before the Committee on Economics and Competitiveness of the Congress of Deputies, in order to give an account of the conditions of experience, training and capacity that make it appropriate for the office.

2. The President shall have exclusive dedication, shall be subject to the regime of incompatibilities of the senior positions of the General Administration of the State, and shall be incompatible with the exercise of any public or private professional activity, paid or no, unless they are inherent in their status as President of the FROB.

3. The term of office of the President shall be 5 years and shall not be renewable. The President shall only cease for the following reasons:

a) To end the period for which he was appointed.

b) By resignation accepted by the Government.

c) By being incourseable in some cause of incompatibility.

d) For inability to come over for the exercise of their functions.

e) For felony conviction.

f) For gross non-compliance with its obligations. In this case, their separation will be agreed upon by the government, after having been instructed by the Ministry of Economy and Competitiveness, who will put it to the attention of the Economic and Competitiveness Committee of the Congress of Deputies, and in the that the remaining members of the Rectoring Commission will be heard.

4. The President shall be responsible for the following tasks:

a) Chair the Rector Commission and monitor and monitor all operations that under this Act must execute the FROB.

b) To direct the ordinary, economic and administrative management of the FROB, including the administration of the National Resolution Fund, and to show the legal representation of the Fund.

c) Formulate, submit to audit by auditor and raise for approval by the Rectoring Commission the annual accounts of the FROB.

(d) Propose to the Rectoring Commission the adoption of the decisions corresponding to it in accordance with the provisions of this Law, without prejudice to the fact that the Rector's Commission may also adopt them ex officio.

e) To execute the agreements of the Rectoring Commission and how many functions it is delegated to it, in accordance with the provisions of Article 54.5.

f) To be accountable to the Governing Commission for the exercise of their duties.

g) Represent the FROB in the international institutions and bodies in which its participation is planned and, in particular, in the Single Resolution Board of the Single Resolution Mechanism.

Article 56. Parliamentary control.

1. At least half-yearly, the President of the FROB will appear before the Economic and Competitiveness Committee of the Congress of Deputies, in order to report on the evolution of the activities of the FROB and on the fundamental elements of their economic and financial performance and on the management of the financial mechanisms provided for in this Law.

2. In addition, the President of the Board of the FROB will appear, under conditions to be determined by the Economic and Competitiveness Committee of the Congress of Deputies, to report specifically on the resolution measures. implemented by that Fund.

3. The Rectoring Commission will raise a quarterly report on the management and performance of the FROB to the Ministers of Finance and Public Administration and the Economy and Competitiveness, where it will take due account, among other aspects, of the actions of the the economic and budgetary nature of the greatest impact on the FROB during that period. The Minister of Economy and Competitiveness will give the report to the Economic and Competitiveness Committee of the Congress of Deputies.

Article 57. Cooperation and coordination with other national competent authorities.

1. The FROB shall cooperate with the authorities entrusted with tasks related to the supervision or resolution of entities and in particular to the supervisory bodies or authorities and to the preventive resolution of the entities in question. in the field of application of this Law. It will also collaborate with the General Directorate of Insurance and Pension Funds, the authorities designated by the Autonomous Communities to perform some of the above functions, the Insurance Compensation Consortium, the Guarantee Fund of Deposits of Credit Entities and the Investment Guarantee Fund. To this end, it will be able to conclude with all of them the appropriate collaboration agreements, as well as to request all the information necessary for the exercise of the powers conferred on them.

In particular, the competent preventive resolution authority and supervisor shall cooperate with the FROB in the preparation, planning and implementation of the resolution measures provided for in this Act.

The FROB shall also provide the authorities referred to in the preceding paragraph with the information necessary for the exercise of their powers in accordance with the rules in force.

2. In case of resolution of entities belonging to a group or financial conglomerate:

(a) The FROB, in adopting the measures and exercising the powers conferred upon it by this Law, will minimize the impact that such measures and powers may have on the other entities of the group or conglomerate and in the group or conglomerate as a whole.

(b) The FROB shall assume the function of the resolution coordinator when the Spanish competent supervisor is entrusted with the supervision and supervision functions of the consolidable group in which the dominant entity of the conglomerate or, failing that, the dominant entity itself considered individually.

Article 58. Cooperation and coordination with other international authorities.

1. In the exercise of its powers and, in particular, in the case of a resolution of entities belonging to international groups, the FROB and the preventive resolution authority shall cooperate with the institutions of the European Union, including the Board Single Resolution, the European Central Bank, the European Banking Authority, and the foreign authorities entrusted with tasks related to the supervision or resolution of entities, and may be able to conclude with them the appropriate collaboration agreements, as well as requesting and exchanging information on the measure necessary for the exercise of the powers conferred on them in relation to the planning and implementation of measures for early action or resolution.

In any case, the FROB and the preventive resolution authority shall participate in the colleges of resolution authorities that can be established to ensure the necessary cooperation and coordination with resolution authorities. foreign.

In general, the FROB shall be the Spanish contact and coordination authority for all the purposes of cooperation with the relevant international authorities, and in particular those of the other Member States of the European Union.

2. Where the competent foreign authorities do not belong to a Member State of the European Union, the exchange of information shall require that there be reciprocity, that the competent authorities are subject to a duty of secrecy in the conditions which, at least, are comparable to those laid down by the Spanish laws and that the information necessary for the exercise by the foreign authority of functions related to the supervision, recovery or resolution of financial institutions, under their national rules, to be comparable to that established by law

The transmission of information reserved to the authorities referred to in the preceding paragraph shall be conditional, where the information has originated in another Member State of the European Union, to the express conformity of the the authority which has disclosed it, and the information may be communicated only for the purposes for which that authority has given its conformity. Such compliance shall also be required where the information that has been provided by a third country resolution authority is requested from the FROB or the competent preventive resolution authority.

Relations with the competent authorities of non-EU Member States may be concluded in bilateral agreements and shall include rules for the mutual recognition and enforcement of resolution procedures. of these countries, as well as on the resolution of branches of third countries in Spain.

3. In the case of a resolution of entities belonging to a financial conglomerate or group operating in other Member States of the European Union and whose consolidated supervision does not correspond to Spanish authorities, before declaring the opening a resolution process, the FROB or the competent supervisor shall consult the resolution authority at the group level, the authority of the European Union responsible for the consolidated supervision of the group to which the institution belongs and the members of the group resolution authorities of the group.

In the event of a resolution of a parent entity of the European Union that is established in Spain, the FROB shall act as the group-level executive resolution authority.

4. The FROB, the competent preventive resolution authority or the competent supervisor shall promote the necessary actions to facilitate the adoption of a joint decision with the resolution authorities of other Member States of the Union. European.

5. In the case of a resolution of entities belonging to a financial conglomerate or group operating in other Member States of the European Union, the FROB, the competent preventive resolution authority and the competent supervisor when adopting measures and exercise the powers conferred on it by this Law, to minimise the harmful effects which such measures and powers may have on the stability of the financial system of the European Union and, in particular, the of the Member States of the European Union where the group or conglomerate operates.

6. The coordination and cooperation regime regulated in this article as well as the assumptions in which the FROB is to be exercised as a resolution authority in relation to a branch located in Spain shall be regulated.

Article 59. Duty of secrecy.

1. The data, documents and information held by the FROB under the functions entrusted to it by this Law shall be reserved and, with the exceptions provided for in the current regulations, may not be disclosed to any person or authority, nor used for purposes other than those for which they were obtained. This reserved character shall cease from the moment when the persons concerned make public the facts to which the data, documents and information relate.

2. The authorities and persons who, in accordance with the provisions of the foregoing Articles, may receive information from the FROB or access reserved information, as well as auditors, legal advisors and other experts (a) independent persons who may be designated by the FROB in connection with the execution of resolution measures, shall also be required to keep secret and not to use the information received for purposes other than that for which they were supplied. They shall also be required to adopt internal rules on confidentiality, with the scope and in the terms provided for in regulation.

3. Without prejudice to Article 58 of this Law, the provisions on confidentiality and secrecy applicable to the Banco de España and, in particular, those laid down in Article 82 of the Treaty, shall apply to the FROB, Law 10/2014, of June 26.

4. Without prejudice to the provisions of the above paragraphs:

(a) the employees and experts of the bodies or entities referred to in paragraph 2 may exchange information within each body or entity, and

b) the resolution authorities and competent supervisors, including their employees and experts, may exchange information with each other and with other resolution authorities of the European Union, other supervisory authorities of the Union, competent ministries, central banks, deposit guarantee schemes, investor compensation schemes, authorities responsible for the proceedings, authorities responsible for maintaining the stability of the financial system through the use of macroprudential rules, people responsible for carrying out regulatory audits, as well as with the European Banking Authority or, in accordance with Article 58.2, third country authorities carrying out functions equivalent to those of the resolution authorities, or, subject to strict confidentiality requirements, to those of a potential acquirer, in order to plan or implement a resolution measure.

5. The exchange of information will also be authorized:

a) conditional on strict confidentiality requirements, with any person when necessary for the purposes of planning or executing a resolution measure;

(b) with the parliamentary committees, the Court of Auditors or other public authorities in charge of investigations, under appropriate conditions of confidentiality.

6. This Article shall be without prejudice to the rules on the exchange of information for the purposes of judicial proceedings.

Article 60. Application of the competition rules.

In the exercise of its powers, the FROB and the competent supervisory and preventive resolution authority shall minimise any distortions that their measures may cause under the conditions of competition, in order to comply with the the Spanish and European Union rules on competition and State aid. To this end, the competent resolution and supervisory authorities shall cooperate with the European Commission by providing them with the necessary information in the framework of the authorisation procedures provided for in European Union legislation on of competition and State aid.

Article 61. Adoption of international recommendations.

In the exercise of its powers and provided that they are not inconsistent with the provisions of this Law and the current regulations, the FROB and the competent supervisory and preventive resolution authorities may take in consideration of recommendations and other initiatives developed at international level in the area of institution resolution.

Without prejudice to the foregoing, the Minister of Economy and Competitiveness, or with his or her enablement, the competent supervisory and preventive resolution authorities, may incorporate the recommendations into law. and guidelines for resolution issued by international bodies, committees or authorities. In the case of a rating, the relevant circular must be reported by the other authorities.

Section 2. FROB Faculties

Article 62. FROB faculties.

The FROB will exercise the powers necessary for the implementation of the instruments and measures provided for in this Law. Such powers shall be of a commercial or administrative nature.

Article 63. Commercial faculties.

The FROB shall exercise the powers conferred by commercial law in general:

a) To the entity's management body, when assuming such a condition.

b) To shareholders or holders of any securities or financial instruments, where the FROB has subscribed or acquired such securities or instruments.

(c) To the general meeting or assembly in the cases in which it impedes or rejects the adoption of the agreements necessary to bring the resolution measures into effect, as well as in the cases where for reasons of extraordinary urgency is not possible to meet the requirements required by the current regulations for the valid constitution and adoption of agreements by the general meeting or assembly. In such cases, they shall be construed as being attributed to the FROB, directly or through the natural or legal persons it designates, all powers that may be legally or legally applicable to the board or general assembly of the entity and which are necessary for the exercise of the functions provided for in this Law in relation to the resolution of entities.

Article 64. General administrative powers.

1. The FROB shall have the following general administrative powers, in addition to the other powers provided for in this Law:

(a) Approve the value of the entity's assets and liabilities, for the purposes of the implementation of the measures and instruments provided for in this Act.

b) Require any person any information necessary to prepare and implement a measure or instrument of resolution.

(c) Transmit or order the transfer of shares, contributions to the share capital or, as a general rule, instruments representing the capital or convertible into them, whatever their holders, as well as other instruments financial instruments, assets and liabilities of the institution.

d) Carry out capital increase or reduction operations, and total or partial issuance and amortization of obligations, including convertible instruments, and any other securities or financial instruments, as well as statutory amendments relating to these transactions, which may determine the exclusion of the right of preferential subscription in capital increases and the issuance of convertible debentures even in the cases provided for in the Article 343 of the Recast Text of the Law of Capital Societies, approved by the Royal Decree Legislative 1/2010 of 2 July.

e) Take stock of amortisation or conversion of capital instruments or internal recapitalisation, and take all necessary ancillary measures to carry them out.

(f) Determine the instruments in which the resolution measures are implemented, including, in particular, those involving structural modifications of the institution, the entity's dissolution and liquidation.

g) Dispose immediately, upon the report of the National Securities Market Commission, the transfer of the securities deposited in the entity to another entity enabled to develop this activity, even if such assets are they are deposited in third entities in the name of the entity providing the deposit service.

For these purposes, the FROB, or the natural or legal persons representing it, as the entity's administrator, shall take the necessary steps to facilitate the access of the entity to which the deposits of securities or their custody to the accounting and accounting records and records necessary to make the transfer effective.

h) Exercise, in relation to the transmission of securities, financial instruments, assets or liabilities of the institution, all or any of the following powers:

1. Force the entity and the acquirer to provide the necessary information and assistance.

2. º Require any entity in the group to which the entity belongs to provide the acquirer with the necessary operational services to enable it to effectively operate the transmitted business. Where the entity of the group is already providing such services to the entity, it shall continue to provide them under the same terms and conditions and, if not, provide them in market conditions.

(i) Apply, suspend, remove or modify certain rights, obligations, terms and conditions of all or any of the issues of debt instruments and other eligible liabilities issued by the institution under resolution.

j) obligate the entity to repurchase securities issued by the entity at the price and under conditions determined by the FROB.

(k) To order that the transmission of shares or contributions to the share capital or, as a general rule, the financial instruments, assets and liabilities of the institution, are carried out free of any charge or charge; to abolish the rights of choice and of preferential acquisition, without the existence of existing statutory or contractual clauses.

(l) Require the National Securities Market Commission to suspend admission to trading on a regulated market or the admission to official listing of financial instruments pursuant to Law 24/1988 of July 28, and of the other applicable rules.

m) Cancel or modify the terms of a contract to which the entity is a part of the resolution, or to be a party rather than the acquirer.

n) Adopt the necessary measures to ensure the continuity of the transmitted business and the contracts concluded by the entity in such a way that the acquirer assumes the rights and obligations of the entity under resolution.

n) Review any operation or action carried out by the institution in resolution of which any liability may arise in respect of the exercise of shares falling within the scope of Article 4.1.g. effects shall be legitimate for the exercise of any action which may be necessary to ensure the repair of the damage caused.

or) obligate the institution to take the necessary actions to ensure that the resolution measures taken take effect in relation to the shares or other capital instruments, assets and liabilities located in third parties countries.

When the FROB considers that the measures taken will not have an effect on certain assets located in a third country or with certain actions or other capital instruments, assets or liabilities regulated by the the legislation of that country, shall paralyse the adoption of the measures, by revoking those adopted in relation to shares or other capital instruments, assets or liabilities.

2. In order for the FROB to be able to achieve the objectives and principles of the resolution, as set out in Articles 3 and 4, in the exercise of the general administrative powers set out in the previous paragraph and the other provisions laid down in this Law, the limitations and other conditions required in the Recast Text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010 of 2 July, or in the legislation applicable to the cooperatives, will not apply. In the case of the capital increase and the reduction of capital, the conversion of instruments of capital or internal recapitalisation. Nor will it be necessary to draw up the mandatory reports that the rules may provide for.

Article 65. Executive character of the measures.

1. The administrative acts dictated by the FROB for the implementation of the instruments provided for in Chapter V, as well as the agreements adopted pursuant to Article 63 (c), shall be effective immediately after their adoption without the need for a compliance with any procedure or requirement established, normative or contractually, without prejudice to the requirements laid down in this Law and the formal obligations of constancy, registration or publicity required by the current regulations, to whose An attestation of the administrative act or the agreement shall be sufficient corresponding, without the need for independent expert reports or auditors.

2. The execution of such acts shall also not be affected by the rules on banking secrecy.

Article 66. Exclusion of certain contractual conditions in early action and resolution.

1. The adoption of any measure of early action or of resolution, as well as any event directly related to the application of such a measure, shall not in itself constitute a case of non-compliance or allow itself to no counterparty shall declare the maturity, modification, suspension or early termination of the transactions or contracts made with the institution, to urge the execution of a guarantee on any asset of the institution or the clearing of any rights or obligations arising out of the operation or the contract, or affect any another way to the latter, having the clauses that so establish are not put in place.

In particular, the application by the resolution authorities or the competent supervisor of the measures and powers provided for in this Law shall not have the status of a bankruptcy procedure for the purposes of Law 41/1999, On 12 November, on payment systems and securities settlement systems, and for the purposes of Section 3 of Chapter II of Royal Decree-Law 5/2005 of 11 March 2005, urgent reforms to boost productivity and improve of public procurement.

By way of derogation from the foregoing paragraphs, the counterparty may declare, in the terms and conditions set out in the relevant contract, the maturity or early termination of the contract or the corresponding contract. operation as a result of an alleged breach before or after the adoption or exercise of the relevant measure or power and not necessarily linked to it.

2. The provisions of the preceding paragraph shall apply in relation to the subsidiaries of a group, the obligations of which are guaranteed or otherwise endorsed by the group entity, or in relation to any entity in the group in relation to contracts containing cross-provisions on non-compliance.

Article 67. Partial transmission of assets and liabilities.

1. In cases where only part of the entity's assets and liabilities are transmitted, the FROB shall take the necessary measures to achieve the following purposes:

a) Avoid resolution, novation or transmission of only part of assets and liabilities that may be offset under a financial collateral arrangement with change of ownership or compensation agreement of the contract referred to in Chapter II of Title I of Royal Decree-Law 5/2005 of 11 March 2005 or of a compensation agreement.

b) Allow obligations with collateral and the assets that guarantee them to be transmitted together or remain both in the entity.

c) Avoid the resolution or novation of the pignoraticia guarantee agreement if this implies that the corresponding obligation is no longer guaranteed.

d) Avoid resolution, novation or transmission of only part of the assets and liabilities covered by structured finance agreement, except where they affect only assets or liabilities related to the deposits of the entity.

However, the FROB, in order to facilitate the resolution and give adequate protection to depositors, may transmit the guaranteed deposits that are part of the agreements provided for in the letters. without transmitting the assets and liabilities that are part of the same agreement, or transmitting, modifying or resolving those assets and liabilities without transmitting the guaranteed deposits.

2. The implementation of any measure or faculty of early or resolution action shall not affect the functioning of the Spanish payment and clearing systems and the settlement of securities and financial instruments recognised under the Law 41/1999 of 12 November 1999 and those designated by other Member States for the purposes of Directive 98 /26/EC of the European Parliament and of the Council of 19 May 1998 on the determination of the settlement of payment and payment systems the settlement of securities, including the arrangements managed by the central counterparties, when the FROB:

a) transmits part of an entity's assets or liabilities in resolution, or

b) cancel or modify the terms of a contract that the entity is a party to in resolution or replace a buyer as a party.

In particular, it shall not affect the irrevocability, firmness and validity of the settlement orders or their compensation, or the funds, securities or commitments referred to in Law 41/1999 of 12 November, or the guarantees constituted in favour of the system operators or the participating entities. It shall also not affect the exercise of the right of compensation or the execution of guarantees provided for the Bank of Spain, the European Central Bank or any national central bank of the European Union.

Article 68. Emergency measures.

For reasons of urgency and in order to ensure the objectives set out in Article 3, the FROB may:

(a) Adopt, in advance of the approval of the relevant resolution plan, the instruments provided for in Article 25.1.a) and b), as well as, within the framework of the Spanish and European Union rules on (a) competition and State aid, taking into account the principle of the most efficient use of public resources and the minimisation of public financial support, the aid provided for in Article 20 (1) (d)

(b) Use a procedure to estimate the value of the institution in which independent expert reports are not collected, to carry out the provisional assessment referred to in Article 5.3, in order to apply the Resolution measures or exercise of competence to write down or convert capital instruments.

Article 69. Advertising.

1. Without prejudice to Article 24, the FROB shall carry out the necessary measures to give publicity to the measures adopted pursuant to Chapter IV, and in particular to the application of the instruments of resolution and the exercise of the the relevant powers, in order to enable them to be known to the shareholders, creditors or third parties who may be affected by the relevant measures.

2. Without prejudice to the above paragraph, the FROB shall notify the measures taken to the institution, the Ministry of Economy and Competitiveness and the competent supervisory and preventive resolution authority.

In addition, where appropriate, the FROB shall report on the measures taken to the European Banking Authority and the European Union authority responsible for the supervision of the group concerned.

3. During the preparation of the measures for early action and resolution, and in particular the assessment referred to in Article 5 and during the stages of the study or negotiation of any operation in which it may be carried out, If any of the resolution instruments are implemented, the entity shall be exempted from the obligation to make public and disseminate any information that may be considered relevant for the purposes of the provisions of the resolution. Article 82 of Law 24/1988 of 28 July.

Article 70. Powers of suspension of contracts and guarantees.

1. The FROB may suspend, as an administrative act, any payment or delivery obligation arising out of any contract concluded by the institution for a maximum period which starts with the publication of the exercise of this right up to midnight on the following business day.

2. Where a payment or delivery obligation has been due to be carried out during the period of suspension, the payment or delivery shall be effected immediately after the expiry of that period.

When the payment or delivery obligations arising out of a contract concluded by the institution are suspended pursuant to the first subparagraph, the payment or delivery obligations of the counterparties of the institution in accordance with the above contract will also be suspended for the same time period.

3. The provisions of paragraph 1 shall not apply:

(a) to the guaranteed deposits, as provided for in Royal Decree-Law 16/2011 of 14 October;

(b) to payment or delivery obligations in respect of:

1. systems or system operators designated in Law 41/1999 of 12 November, or those designated by other Member States for the purposes of Directive 98 /26/EC of the European Parliament and of the Council of 19 May 1998, on the firmness of settlement in payment and securities settlement systems,

2. Central Counterparty Entities, and

3. central banks.

(c) to the credits included in the Investment Guarantee Fund in accordance with the provisions of Article 77 of Law 24/1988 of 28 July and its implementing legislation.

4. Without prejudice to Chapter VI, the FROB may, as an administrative act, prevent or limit the execution of guarantees on any of the assets of the institution for a maximum period of time which starts with the publication of the exercise of this power until midnight on the following working day.

The FROB shall not exercise this competence in respect of collateral on or presented in terms of collateral or collateral by the entity in resolution of:

(a) systems or system operators designated in Law 41/1999 of 12 November on payment and securities settlement systems, or those designated by other Member States for the purposes of the provisions of the Directive 98 /26/EC of the European Parliament and of the Council

19 May 1998

(b) central counterparties, and

c) central banks.

5. The FROB may suspend, as an administrative act, the right of a party to declare the anticipated maturity, the resolution or the termination of a contract concluded with an institution in resolution for a maximum period starting with the publication of the exercise of this power until midnight on the following working day.

The FROB will not exercise this competence with respect to:

(a) systems or system operators designated in Law 41/1999 of 12 November on payment and securities settlement systems, or those designated by other Member States for the purposes of the provisions of the Directive 98 /26/EC of the European Parliament and of the Council

19 May 1998

(b) the central counterparties and

c) central banks.

6. The provisions of the preceding paragraph shall also apply to contracts concluded with a subsidiary of the institution under resolution where:

(a) The obligations created by such a contract are guaranteed or endorsed by the institution in resolution.

(b) The rights of early maturity, termination or termination of such a contract have as their sole reason the insolvency or financial situation of the institution in resolution.

(c) Where the power to transfer shares or other capital instruments, assets or liabilities has been exercised or may be exercised, where the assets and liabilities of the subsidiary relating to the contract have been transferred or they may be transferred to a buyer or where the FROB confers in any way protection against such obligations.

7. By way of derogation from paragraph 5, a person may exercise the right to declare the anticipated maturity, termination or termination of the contract before the end of the period of suspension, provided that the FROB notifies him in advance. the assets and liabilities covered by the contract shall not be transmitted to another entity or subject to the internal recapitalisation instrument.

In the event that the right of suspension is not exercised and the notification provided for in the preceding paragraph is not made, the right to declare the anticipated maturity, resolution or termination of the contract may be exercised:

(a) If the assets and liabilities have been transmitted to another entity, only in the event of an event that results in the anticipated maturity, resolution or termination of the contract by the receiving entity continuously or subsequently.

b) If the institution in resolution maintains the assets and liabilities and the FROB does not apply the internal recapitalisation instrument to them, when the suspension period ends.

CHAPTER VIII

Procedural regime

Article 71. Actions against the decisions and agreements of the FROB adopted in the exercise of their commercial powers provided for in Article 63.

1. The decisions and agreements adopted by the FROB under Article 63 shall only be contested in accordance with the rules and procedures laid down for the challenge of the social agreements of the capital companies which are contrary to the law. The action of challenge shall, in any event, expire within 15 days from the date on which the FROB proceeds to give publicity to the said actions in accordance with the provisions of Article 69.

2. Shareholders, members, obligationists, creditors or any other third parties who consider that their legitimate rights and interests have been injured by decisions taken by the FROB, directly or through natural persons or the legal entities that represent it, in its capacity as administrator may request, in accordance with article 241 of the Recast Text of the Law of Companies of Capital, approved by the Royal Legislative Decree 1/2010, of July 2, that they will be compensated the damage suffered. The social action of liability may not be exercised in respect of the actions taken by the supervisory authorities, the preventive resolution authorities or the FROB in the context of an early action or resolution of the institution.

3. If, in accordance with Article 72, there has been an administrative dispute against any of the acts which the FROB may issue under this Law, the competent judicial body shall suspend the proceedings initiated in virtue of this Article until the decision of the administrative-administrative appeal when the contested administrative act covered the decisions taken by the FROB under Article 63. In this case, the competent judicial body shall be bound by the decision taken by the judicial-administrative court on the question referred for a preliminary ruling.

Article 72. Specialties of the appeal against decisions and administrative acts dictated in the framework of early action and resolution processes.

1. The approval of recovery and resolution plans by the competent supervisor or the competent preventive decision-making authority shall terminate the administrative route and shall be brought to the attention of the Board of the Administrative Board of the National Hearing.

2. The acts and decisions of the supervisor and of the competent authorities responsible for decision-making within the framework of the procedures for early action and the preventive and executive stages of the resolution shall put an end to the administrative procedure and shall be The Chamber of the Administrative-Administrative of the National Court.

The assessment accompanying the acts and decisions of the supervisor and of the competent resolution authorities referred to in the preceding paragraph may not be the subject of a separate appeal, being only impugable on the basis of the (a) to be against those acts and decisions. If it is not contested, it shall be used by the court as the basis for its own assessment of the acts or decisions which are the subject matter of the administrative dispute.

3. The processing of the procedures for the impeachment of decisions of the competent resolution authorities shall be of a preferential nature, except in respect of the special procedure for the protection of fundamental rights and preference (a) recognised as direct actions against general provisions laid down in Article 66 of Law 29/1998 of 13 July, regulating the Administrative-Administrative Jurisdiction.

4. In the exercise of resolution instruments and powers, the competent resolution authorities may request and the competent court shall suspend, for the period of time necessary to ensure the effectiveness of the pursued, any action or court proceedings to which the institution under resolution is a party.

Article 73. Specialties of the appeal against decisions and administrative acts in respect of depreciation or conversion of capital instruments and internal recapitalisation.

1. They shall be entitled to bring proceedings against the acts and decisions of the FROB for the depreciation or conversion of capital instruments and internal recapitalisation:

(a) The shareholders or members of the issuer of the capital instruments and eligible liabilities representing at least 5% of the share capital and, where applicable, the fully-owned entity through which the issue has been instrumented.

(b) the holders of securities falling within the scope of the redemption or conversion of capital instruments and internal recapitalisation.

(c) The commissioner or representative of the trade union or assembly grouping the holders of the securities of a given issue affected by the action, provided that he is entitled to do so under the terms and conditions of the action issue and the rules governing the operation of such a union or assembly.

d) The depositors and creditors of the entity.

2. The order for which, if applicable, the adoption of precautionary measures is agreed shall be published in the "Official State Gazette" and the entity and the FROB shall give the same publicity to that order as to the action of amortisation or conversion of instruments of capital and internal recapitalisation.

3. In the event that the legal-administrative action brought by the holders of securities falling within the scope of the action for the depreciation or conversion of capital instruments and internal recapitalisation or by the Commissioner or representative of the union or assembly that the group is estimated to be, the ruling will only have effects with respect to the emission or emissions in which they would have invested.

4. The institution and the FROB shall give the same publicity to the judgment as to the action of amortisation or conversion of capital instruments and internal recapitalisation.

Article 74. Failure to execute a judgment given in the administrative and administrative proceedings referred to in Articles 72 and 73.

1. The supervisor and the competent decision-making authorities may plead to the judicial authority the reasons which determine the material impossibility of carrying out a judgment declaring that they are contrary to any of the decisions or acts provided for in Articles 72 and 73. The Judge or the Court shall assess whether or not the reasons for such action are satisfied and shall determine, where appropriate, the compensation to be paid. The amount of the said compensation shall, at most, be the difference between the damage actually suffered by the appellant and the loss which would have been incurred if, at the time of the adoption of the relevant decision or agreement, it would have resulted in the liquidation of the entity in the framework of a court-supervised procedure.

2. In assessing the causes which determine the material impossibility of executing a judgment, as provided for in the preceding paragraph, the Judge or Court shall take particular account of:

a) The especially significant volume or complexity of the operations affected or that might be affected.

b) The existence of damages that, if the sentence is executed in its strict terms, would be derived for the entity and for the stability of the financial system.

(c) The existence of legitimate rights or interests of other shareholders, partners, obligationists, creditors or any other third parties, covered by the legal order.

CHAPTER IX

Sanctioning Regime

Section 1. General Provisions

Article 75. General provisions.

1. The entities, as well as those who have administrative or management positions in them, who violate the rules provided for in this Law, shall incur punishable administrative liability in accordance with the provisions of this Chapter.

2. The liability to an entity and to the management or management positions of the entity shall be independent. The failure to initiate a sanctioning file or the filing or dismissal of the case against an entity shall not necessarily affect the liability in which the administrative or management charges may be incurred, and vice versa.

3. Where the infringements relate to obligations of the consolidable groups of entities, the parent institution shall be punished and, if applicable, its administrators and managers.

Article 76. Competence for case instruction.

1. The processing of the sanctioning procedures and the imposition of the penalties resulting from the infringements established in this Law corresponds to the following authorities:

(a) to the FROB in the case of offences relating to its functions as an executive decision-making authority, and in particular those involving breaches of the rules laid down in Chapters IV to VII.

(b) to the Banco de España in the case of offences relating to its functions as supervisory and preventive authority, in particular those which constitute a breach of the rules laid down in the Chapters II and III.

(c) The National Securities Market Commission in the case of infringements related to its functions as a supervisory authority and a preventive resolution, in particular those involving the violation of the rules provided for in Chapters II and III.

2. The Banco de España, the Comisión Nacional del Mercado de Valores and the FROB will collaborate with each other in all those sanctioning procedures that, by their nature, may affect the different authorities in a concurrent manner.

3. The supervisor and the competent resolution authorities shall give reasoned account to the Minister for Economic Affairs and Competitiveness of the imposition of penalties for very serious infringements and, in any event, shall forward the information to him on a quarterly basis. essential on the procedures in question and the resolutions adopted.

Article 77. Limitation of infringements and penalties.

1. Very serious infractions will be prescribed at five years, the serious ones at four years and the mild ones at two years.

2. The limitation period shall be counted from the date on which the infringement was committed. In violations resulting from a continued activity or omission, the initial date of the computation shall be that of completion of the activity or of the last act with which the infringement is consumed.

3. The limitation period shall be interrupted by the initiation, with the knowledge of the person concerned, of the sanctioning procedure, the time limit being resumed if the file remained paralyzed for six months for reasons not attributable to those against whom route.

It shall not be understood that there is a standstill for the purposes of the preceding paragraph, in the event that it occurs as a result of the adoption of a suspension of the procedure by concurrence with a criminal proceedings.

4. The system of limitation of penalties shall be that provided for in Law 30/1992 of 26 November 1992 on the Legal Regime of Public Administrations and the Common Administrative Procedure.

Section 2. Infractions

Article 78. Classes of violations.

The administrative violations provided for in this Law will be classified as very serious, serious and minor.

Article 79. Very serious infringements.

The following will be very serious violations:

(a) Refuse or resist the performance of the supervisor or the competent resolution authorities in the exercise of the functions conferred upon them by this Law, provided that it is not merely occasional or isolated.

(b) The lack of the required collaboration or obstruction by the entity with respect to the early action measures that the competent supervisor has decided to implement, where they are not occasional or isolated.

(c) The lack of necessary collaboration by the entity with the competent preventive resolution authority, for the purposes of the elaboration of the resolution plans, where it is not occasional or isolated.

(d) The lack of the required collaboration or obstruction by the entity in the application of the resolution measures decided by the FROB, where it is not occasional or isolated.

e) Any action that seriously hinders or hinders the economic valuation of the entity entrusted to independent experts, provided that it is not occasional or isolated.

(f) Do not refer to the supervisor or to the competent resolution authorities how much data or documents are to be sent or required in the performance of their duties, or to refer them in an incomplete or inaccurate manner, when makes it difficult to assess the viability of the entity or that of the consolidable group or financial conglomerate to which it belongs. For the purposes of this point, it shall also be understood as a lack of remission, the reference to be made outside the time limit laid down in the relevant rule or the time limit granted by the competent body, where appropriate, where appropriate.

In particular, they are understood to be included in this letter:

1. The lack of referral to the competent supervisor of the recovery plan, as well as the lack of referral of the plan reviews that have been required by the competent supervisor.

2. The lack of referral to the competent supervisor by the institution of the report on the degree of compliance with the measures referred to in the action plan and the other measures for early action.

3. The lack of referral to the competent preventive resolution authority by the entity of the information necessary for the elaboration of the resolution plan.

g) Failure to fulfil the duty of information due to the supervisor and the competent resolution authorities, provided that, by the number of persons concerned or by the importance of the information, the failure.

h) Failure to comply with the duty of confidentiality on data obtained in the context of an early action or resolution process, or its use for purposes other than those provided for in law, provided that, by the number of or because of the importance of the information, the non-compliance is particularly relevant.

i) Lack of communication or manifestly delayed communication, by an entity or a consolidated group or subgroup of entities, that it is in any of the circumstances of early action, when it is known or, given the objective circumstances, should be known to the administrative organ; provided that due to the seriousness of the circumstances in which the entity is located or the period of time elapsed, it must be considered an infringement very severe.

j) the lack of communication or communication clearly delayed by the administrative body to the supervisor or the competent resolution authorities that the institution is in a situation of infeasibility, when is known or, given the objective circumstances, should be known to the administrative organ; provided that due to the seriousness of the circumstances in which the entity is located or the period of time elapsed, it should be considered very serious infringement.

(k) Not to propose to the competent preventive resolution authority appropriate measures to reduce or eliminate obstacles to the resolutionability and non-implementation of alternative measures proposed by the resolution authority preventive competent to reduce or eliminate obstacles, where it is not occasional or isolated.

l) Do not maintain the updated recovery plan annually or after a change in the legal or organizational structure of the entity that requires changes in the plan has occurred, provided that the circumstances of the entity have significantly varied and warrant a substantial alteration of the plan.

m) Failure to comply with the obligations, requirements and limitations provided for in this Act in relation to intra-group financial assistance. In particular, it has granted group financial assistance without having the authorisation of the competent supervisor or having obtained such authorisation with a distortion of the circumstances and requirements; having concluded a support agreement intra-group financial transactions where some of the parties are in an early action scenario; the entities belonging to a group have not published information on whether or not they have subscribed to a financial assistance agreement; and the lack of communication to the competent supervisor of the agreements adopted to provide assistance group financial; when, in all cases, it has no occasional or isolated character.

n) The non-payment of the contributions referred to in Article 53.1.a) or their payment outside the required time limit.

n) Perform acts or operations without authorization where it is mandatory, without observing the basic conditions of the same, or having obtained the authorization by means of false statements or by another irregular means, when not is occasional or isolated.

(o) Serious infringements, where fraudulent acts were carried out in the event, or used natural or legal persons.

p) In relation to the asset management company, and without prejudice to the application of the rest of the letters:

1. The carrying out of activities other than their social object that endanger the achievement of the general objectives legally established for it in this Law and in its development regulations, unless it has a character occasional or isolated.

2. Carishing the accounting required legally or carrying it with essential irregularities that prevent knowing its financial and patrimonial situation.

3. The failure to comply with the obligation to submit annual accounts to audit accounts in accordance with current legislation.

4. ° The refusal or resistance to the inspector's performance, provided that I measure the express and written requirements in this respect.

5. The failure to comply with its transparency obligations, unless it is merely occasional or isolated.

6. The lack of referral to the FROB, of how much data or documents should be sent to or required in the exercise of its functions, or its lack of veracity, when the appreciation of the patrimonial situation is made difficult of the company. For the purposes of this number, it shall be understood that there is a lack of referral where it does not occur within the time limit granted to the effect by the competent body when recalling the obligation or reiterating the requirement in writing.

Article 80. Serious infringements.

The following are serious violations:

(a) Refuse or resist the performance of the supervisor or the competent authorities in the exercise of the functions conferred on them by this Law, unless, as such, it is not merely occasional or isolated; very serious infringement.

(b) The lack of the required collaboration or obstruction by the entity of the early action measures that the competent supervisor has decided to apply, where it is purely occasional or isolated.

(c) The lack of necessary collaboration by the entity with the competent preventive resolution authority, for the purposes of the elaboration of the resolution plans, where it is purely occasional or isolated.

d) The lack of the required collaboration or the obstruction by the entity of the resolution measures that the FROB has decided to apply, when it is merely occasional or isolated.

(e) Any action that hinders or hinders the economic valuation of the entity entrusted to independent experts, unless it is a very serious infringement because it is not merely occasional or isolated.

(f) Do not refer to the supervisor or the competent resolution authorities the data or documents to be sent to the supervisor or the competent resolution authorities, or which he or she requires in the performance of his duties, or his incomplete or inaccurate remission, except that the commission of a very serious infringement. For the purposes of this letter, it shall also be understood as a failure to refer, the reference to be made outside the time limit laid down in the relevant rule or the time limit granted by the competent authority, where appropriate, where appropriate.

g) Failure to comply with the duty of information due to the supervisor and the competent resolution authorities, as well as the breach of the duty of confidentiality on the data obtained in the context of a process of early action or resolution, or its use for purposes other than those provided for in law; unless it constitutes a very serious infringement.

h) Lack of communication or delayed communication, by an entity or a consolidated group or sub-group of credit institutions, that it is in any of the circumstances of early action, when it is known or, given the objective circumstances, should be known to the administrative organ; except that it should be considered a very serious infringement.

i) the lack of communication or the communication delayed by the administrative body to the supervisor or the competent resolution authorities that the institution is in a situation of infeasibility, where it is known or, Given the objective circumstances, it should be known to the administrative body, unless serious infringement is to be considered.

(j) Not to propose to the competent preventive resolution authority appropriate measures to reduce or eliminate obstacles to the resolutionability and non-application of alternative measures imposed by the resolution authority. preventive to reduce or eliminate obstacles, where it is purely occasional or isolated.

k) Not to maintain the updated recovery plan annually or after a change in the legal or organisational structure of the entity requiring updates to the plan, unless it constitutes a very serious infringement severe.

(l) Failure to comply with the obligations, requirements and limitations provided for in this Act in relation to intra-group financial assistance, unless it constitutes a very serious infringement.

m) Conduct or operations without authorisation where it is mandatory, without observing the basic conditions of the act, or having obtained the authorisation by means of false statements or by another irregular means, when has a purely occasional or isolated character.

n) The non-compliance merely occasional or isolated from the other obligations due in accordance with the provisions of this Law and in its development regulations by means of prior notice of the supervisor or the authorities of the competent resolution.

n) Incurring minor infractions when during the two years prior to its commission it would have been imposed on the entity at least one firm sanction on administrative basis for the same type of infringement.

or) In relation to the asset management company, and without prejudice to the application of the other letters:

1. The carrying out of activities other than their social object that endanger the achievement of the general objectives legally established for it in this Law and in its development regulations, provided that they do not have the Very serious consideration.

2. º The non-compliance merely occasional or isolated from its obligations of transparency, mediating prior requirement of the supervisory authority.

3. The lack of referral to the FROB of the data or documents to be sent to or requiring in the exercise of their functions, as well as the lack of veracity in them, unless this involves the commission of a very serious infringement serious. For the purposes of this number, it shall be understood that there is a lack of referral where the referral does not occur within the time limit granted to the competent body by the competent body in writing the obligation or reiterating the requirement.

4. Non-compliance with the existing rules on accounting for transactions and on the formulation of balance sheets, profit and loss accounts and financial statements of mandatory communication to the administrative body competent.

5. The failure to comply with corporate governance obligations and those relating to the organizational structure of the asset management company imposed by this Act or its development regulations.

Article 81. Minor infractions.

Minor infringements shall be those breaches of obligations specifically laid down in this Law which do not constitute very serious or serious infringements as provided for in the two preceding Articles.

Section 3. Sanctions

Article 82. Penalties.

1. The penalties imposed by the FROB in the exercise of the functions that correspond to it in accordance with this Law, as well as those imposed by the Banco de España and the National Securities Market Commission in the exercise of its functions as the authority of the Preventive resolution will be provided for in this section.

2. The penalties imposed by the Bank of Spain and the National Securities Market Commission in the exercise of the functions referred to in Chapter II shall be those provided for in Title IV of Law 10/2014 of 26 June 2001 on the credit institutions; and Chapter II of Title VIII of Law 24/1988 of 28 July 1988 on investment service undertakings.

3. The penalties imposed, as well as any action brought against them and the results of those resources, shall be communicated to the European Banking Authority, in the case of credit institutions, and to the European Securities and Exchange Authority. Markets, in the case of investment firms.

Article 83. Penalties for the commission of very serious infringements.

1. For the commission of very serious infringements the offending entity shall be imposed, one or more of the following penalties:

a) Multa, which may be, in the judgment of the competent body to resolve:

1. º Of up to twice the benefits derived from the breach, when such benefits can be quantified, or

2. of up to 10 percent of the total annual net turnover, including gross income from interest receivable and assimilated income, stock yields and other fixed or variable income securities and the fees or charges to be paid by the institution in the previous financial year.

When the entity is a subsidiary of a parent company, the relevant turnover shall be that resulting from the consolidated accounts of the parent undertaking in the previous financial year.

b) Revocation of the authority of the entity, after report of the competent supervisor.

In the case of branches of entities authorised in another Member State of the European Union, the sanction for revocation of the authorisation shall be understood as being replaced by the prohibition on the initiation of new operations in the territory of the European Union.

(c) Suspension or limitation of the type or volume of the operations or activities that the infringer may perform on the securities markets for a period not exceeding five years.

2. In addition to the penalties provided for in the preceding paragraph, the following ancillary measures may be imposed:

a) Requirement the offender to terminate his or her conduct and refrain from repeating it.

b) Public assembly with publication in the "Official State Gazette" of the identity of the offender, the nature of the infringement and the penalties imposed.

Article 84. Penalties for the commission of serious infringements.

1. For the commission of serious infringements, one or more of the following penalties shall be imposed on the offending entity:

a) Multa, which may be, in the judgment of the competent body to resolve:

1. of up to 1.5 times the benefits arising from the breach, when such benefits can be quantified, or

2. of up to 5 percent of the total annual net turnover, including gross income from interest receivable and assimilated income, stock yields and other fixed or variable income securities and the fees or corretages to be charged by the institution in the previous financial year.

When the entity is a subsidiary of a parent company, the relevant turnover shall be that resulting from the consolidated accounts of the parent undertaking in the previous financial year.

(b) Suspension or limitation of the type or volume of the operations or activities that the infringer may perform on the securities, credit or capital markets, for a period not exceeding one year.

2. In addition to the penalties provided for in the preceding paragraph, the following ancillary measures may be imposed:

a) Requirement the offender to terminate his or her conduct and refrain from repeating it.

b) Public assembly with publication in the "Official State Gazette" of the identity of the offender and the nature of the infringement, and the penalties or ancillary measures imposed; or private admonition.

Article 85. Penalties for the commission of minor infractions.

1. For the commission of minor infractions the entity shall be imposed a fine which may be, in the judgment of the competent organ to resolve:

a) of up to 1.2 times the amount of profits arising from the infringement, where such benefits can be quantified, or

(b) up to 1% of the total annual net turnover, including gross income from interest to be collected and income assimilated, income from shares and other fixed or variable income securities and fees or corretages to be charged by the institution in the previous financial year.

When the entity is a subsidiary of a parent company, the relevant turnover shall be that resulting from the consolidated accounts of the parent undertaking in the previous financial year.

2. In addition to the penalties provided for in the preceding paragraph, the following ancillary measures may be imposed:

a) Requirement the offender to terminate his or her conduct and refrain from repeating it.

b) The private assembly.

Article 86. Penalties for those who are in charge of administration or management for the commission of very serious infringements.

1. Irrespective of the sanction which, where appropriate, it is appropriate to impose on the offending entity by the commission of very serious infringements, one or more of the following penalties may be imposed on those who, exercising administrative or managerial positions, are done or right in the event, be responsible for the infringement:

a) Multa each one of them for amount of up to 5,000,000 euros.

(b) Suspension in the exercise of the management or management charge in the entity for a term of not more than three years.

c) Separation of the position in the entity, with disablement to exercise management or management positions in the same entity for a maximum period of five years.

(d) Disqualification to exercise management or management positions in any credit institution or financial sector, with separation, where appropriate, from the management or management position of the infringer in an entity, by period not exceeding 10 years.

2. In addition to the penalties provided for in the preceding paragraph, the following ancillary measures may be imposed:

a) Requirement the offender to terminate his or her conduct and refrain from repeating it.

b) Public assembly with publication in the "Official State Gazette" of the identity of the offender, the nature of the infringement and the penalties or ancillary measures imposed.

Article 87. Penalties for those who are in charge of administration or management for the commission of serious infringements.

1. Irrespective of the sanction which, where appropriate, is to be imposed on the offending entity by the commission of serious infringements, one or more of the following penalties may be imposed on those who, exercising administrative or managerial positions, are done or right in the event, be responsible for the infringement:

a) Multa each one of them for amount of up to 2,500,000 euros.

(b) Suspension in the exercise of the term of office not exceeding one year.

c) Separation of the charge, with disablement to exercise management or management positions in the same entity for a maximum period of two years.

(d) Disqualification to exercise management or management positions in any credit institution or financial sector, with separation, where appropriate, from the management or management position of the infringer in an entity, by period not exceeding five years.

2. In addition to the penalties provided for in the preceding paragraph, the following ancillary measures may be imposed:

a) Requirement the offender to terminate his or her conduct and refrain from repeating it.

b) Public assembly with publication in the "Official State Gazette" of the identity of the offender, the nature of the infringement and the penalties or ancillary measures imposed.

Article 88. Penalties for those who exercise administrative or management fees for the commission of minor infractions.

1. Irrespective of the sanction which, where appropriate, it is appropriate to impose on the offending entity by the commission of minor offences, a fine of up to EUR 500 000 may be imposed on those who, in the exercise of administration or management, in fact or in law in fact, are responsible for the infringement.

2. In addition to the penalties provided for in the preceding paragraph, the following ancillary measures may be imposed:

a) Requirement the offender to terminate his or her conduct and refrain from repeating it.

b) The private assembly.

Article 89. Criteria for the determination of penalties.

1. Where the FROB is the competent sanctioning body, or where the Banco de España and the National Securities Market Commission act in the exercise of their functions as a preventive resolution authority, the penalties applicable in each case shall be Commission of very serious, serious or minor infringements will be determined on the basis of the following criteria:

a) The nature and entity of the violation.

b) The degree of responsibility in the facts.

c) The severity and duration of the violation.

(d) The importance of the benefits obtained or the losses avoided, if any, as a result of the acts or omissions constituting the infringement.

(e) The financial soundness of the legal person responsible for the infringement reflected, among other objectivable elements, in the total turnover of the responsible legal person.

(f) The financial soundness of the natural person responsible for the infringement reflected, among other objectivable elements, in the annual income of the responsible natural person.

g) The unfavorable consequences of the facts for the financial system or the national economy.

h) The subhealing of the infringement on its own initiative of the offender.

i) Repair of damages caused.

j) Losses caused to third parties by the infringement.

k) The level of cooperation with the competent authority.

l) The systemic consequences of the infringement.

m) The level of representation that the offender has in the offending entity.

n) In the case of insufficient own resources, the objective difficulties that may have been encountered in order to achieve or maintain the legally required level.

n) The offender's previous conduct in relation to the early action and resolution processes that have affected him, taking into account the firm sanctions that would have been imposed on him, over the last five years.

2. The penalties imposed by the Bank of Spain and the National Securities Market Commission in the exercise of the functions referred to in Chapter II shall be determined in accordance with the criteria laid down in Title IV of Law 10/2014 of 26 May 2014. of June, in relation to credit institutions; and Chapter II of Title VIII of Law 24/1988, of 28 July, in relation to investment services companies.

Article 90. Responsibility for administration or management charges.

1. The person who carries on the entity charges of administration or management shall be liable for the offences when they are attributable to his or her intentional or negligent conduct.

2. Its administrators or members of its administrative bodies shall not be held liable for the infringements in the following cases:

(a) Where those who are part of the administrative bodies have expressly voted against or have expressly saved their vote in relation to the decisions or agreements which have resulted in the infringements.

(b) Where such offences are solely attributable to executive committees, members of the administrative body with executive functions, general managers or similar bodies, or other persons with executive functions in the entity.

Article 91. Temporary appointment of members of the administrative body.

In the event that, by the number and position of the persons affected by the sanctions of suspension or separation, it is strictly necessary to ensure continuity in the administration and direction of the entity, the supervisor or supervisors and the competent resolution authorities may provide for the appointment, on a provisional basis, of the members who are required to enable the administrative body to adopt agreements or of one or more administrators, specifying their functions. Such persons shall exercise their positions until, by the competent body of the institution, which must convene immediately, the corresponding appointments are provided and the persons appointed, where appropriate, shall be appointed until the time limit has elapsed. suspension.

Section 4. General Procedure Rules

Article 92. Procedure for the imposition of sanctions.

1. The instruction and resolution by the Banco de España and the FROB of the sanctioning procedures of their respective jurisdiction shall be carried out in accordance with the rules of procedure, publicity and notification provided for in Chapter IV. of Title IV of Law 10/2014 of 26 June, without prejudice to the particularities contained in this Law.

2. The instruction and resolution by the National Securities Market Commission of the sanctioning procedures of their jurisdiction shall be carried out in accordance with the rules of procedure, publicity and notification provided for in the Title VIII of the Law 24/1988, of July 28, without prejudice to the particularities contained in this Law.

3. The procedure and principles laid down in Law 30/1992 of 26 November shall apply.

4. In any case, the penalties imposed for serious and serious infringements will be published in the "Official State Gazette", once they are firm on the administrative side.

Article 93. Enforcement of sanctions and impeachment on the administrative path.

The resolutions of the FROB put an end to the administrative route and will be potentially appealable in replenishment, as provided for in Articles 116 and 117 of Law 30/1992.

Additional disposition first. Structure and operation of the preventive resolution authorities.

1. The Bank of Spain and the National Securities Market Commission shall take the necessary measures to ensure that their organisational structure ensures operational independence and that conflicts of interest between supervisory and supervisory functions are avoided. preventive resolution that this Act attributes to them.

In the exercise of the preventive resolution functions, the Banco de España and the National Securities Market Commission shall pursue exclusively the fulfilment of the objectives set out in Article 3. The performance of these functions shall be functionally and hierarchically separate from the exercise of supervisory functions. Both institutions shall draw up a regulation for the management of potential conflicts of interest so that they are properly identified, managed, controlled and, where appropriate, eliminated.

2. The provisions of Articles 57 to 59 shall apply to the Banco de España and the National Securities Market Commission as preventive resolution authorities. In particular, they shall provide the information that the FROB requires for the exercise of the powers provided for in Article 21, and in general terms, of those it holds as the executive decision-making authority.

Additional provision second. Deadline for the allocation of the National Resolution Fund.

The level of financial resources of the National Resolution Fund required in accordance with this Law, will begin to be provided during the year 2015 and will be reached no later than December 31 of 2024.

Without prejudice to the provisions of the preceding paragraph, the obligation of institutions to contribute to the National Resolution Fund shall only be born when the FROB requires, specifying for each entity the corresponding amount, the ordinary or extraordinary contributions, without any general contribution obligations arising from prior to that time.

The FROB may dictate all acts that are necessary to require contributions to the National Resolution Fund in the terms provided for in this Act.

Additional provision third. Legal regime applicable to guarantees provided in favour of the FROB and the Deposit Insurance Fund of Credit Entities.

The legal regime established in the additional provision of Law 13/1994, of 1 June 1994, of the Autonomy of the Banco de España, will also apply to guarantees formed in favour of the FROB and the Guarantee Fund Deposits of Credit Entities in the exercise of their functions.

Additional provision fourth. Single Resolution Mechanism and Single Resolution Fund.

1. This Law shall be applied in a manner compatible with the provisions of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 as such provisions enter into force, in accordance with Article 99 of the Regulation, in particular as regards the role of the European authorities in the framework of the Single Resolution Mechanism, and the duty to cooperate with the national authorities with the European authorities for the correct implementation in Spain the decisions taken by the European authorities in the exercise of their powers.

2. In accordance with the provisions of Regulation (EU) No 806/2014 of 15 July 2014, the rest of the applicable European Union law and the Agreement on the transfer and mutualisation of contributions to the Single Resolution Fund On 21 May 2014, the corresponding part of the National Resolution Fund shall be transferred to the Single Resolution Fund in the amount and form set out in the above rules and agreement.

The provisions of the preceding paragraph shall be produced within the time limits corresponding to the relevant entries in force, and in particular as provided for in Articles 96 and 99.6 of Regulation (EC) No 3.3, 11 and 12 of the Agreement.

Additional provision fifth. Preservation of financial contract records by entities.

Supervisors and competent resolution authorities may require entities to maintain a record that includes detailed information on financial contracts on securities and commodities, forward contracts and futures and swap agreements in which they are a party, as well as a copy of the supporting documents. The competent supervisors may determine the minimum information to be included in that register for their respective supervised entities.

Additional provision sixth. Integration of the Deposit Guarantee Funds into savings banks, banking establishments and credit unions.

The provisions of this Law do not alter any of the effects of the integration and subrogation of rights and obligations of the pre-existing Deposit Insurance Funds in Savings Banks, Banking and Cooperative Establishments. Credit, operated since the entry into force of Royal Decree-Law 16/2011 of 14 October.

Additional provision seventh. References to Law 9/2012 of 14 November of restructuring and resolution of credit institutions.

The references that are made in the legal order to Law 9/2012, of 14 November, will be construed as being made to the corresponding precept of this Law.

Additional disposition octave. Spanish resolution authority in the scope of the Single Resolution Mechanism.

The FROB and the preventive resolution authorities, in accordance with the powers conferred on this Law, shall be the Spanish resolution authorities for the purposes of the provisions of Regulation (EU) No 806/2014 of 15 December 2014. July 2014.

The FROB will represent the Spanish resolution authorities in the Single Resolution Board of the Single Resolution Mechanism. The Banco de España may participate in the same with the status of observer.

Additional provision ninth. Financial institutions and other types of companies.

This Law shall apply to the entities and companies provided for in Article 1.2.b), (c) and (d) to the extent necessary to make fully effective the objectives and principles of resolution provided for in Articles 3 and 4, and to give strict compliance with the provisions of Directive 2014 /59/EU of 15 May; and in particular Articles 3, 4, 5, 6.6, 7, 14, 16, 18, 21, 24, 25, 38 to 40, 42, 45, 46, 49, 58, 63 to 65, 67, 70 and 71 shall apply to them. Additional provision 5, paragraphs 2 and 3, additional provision and the additional provision Fifteenth, without prejudice to those other provisions of the law whose literality includes or requires their application to these entities and companies.

Additional provision 10th. General feasibility plans.

The obligation to draw up a general feasibility plan referred to in Article 30 of Law 10/2014 of 26 June and Article 70b (2) (g) of the Law 24/1988 of 28 July 1988 shall be deemed to be met with the the recovery plans provided for in Article 6 of this Law.

Additional provision eleventh. Constitution of the FROB Rector Commission.

The Board of the FROB shall be constituted in the terms provided for in Chapter VII within the maximum period of two months from the entry into force of this Law.

As long as the Rectoring Commission is not constituted in accordance with the provisions of Chapter VII, it will be the Rectoring Commission existing at the entry into force of this Law who will exercise all the functions provided for in this Law.

Additional disposition twelfth. Authorised capital for the conversion of capital instruments in the event of a trigger event.

In case the maximum amount of the authorized capital provided for in Article 297.1.b) of the Recast Text of the Capital Companies Act, approved by the Royal Legislative Decree 1/2010, of 2 July, will be insufficient for the conversion provided for in point (n) of Article 52 (1) of Regulation (EU) No 575/2013 of 26 June 2013, and a trigger event occurs, that limit may be exceeded, subject to the report of the auditor. The maximum period laid down in that Article may also be exceeded and the requirement that the contributions must be in cash shall not apply. At the time of the call of the general meeting, the report of the auditor of accounts stating the need to apply those derogations shall be made available to the shareholders at the registered office.

This same exceptional regime and requirements will apply to Tier 2 capital instruments that include conversion clauses in the event of a trigger event.

Additional disposition thirteenth. Banco de España staff at the FROB.

The FROB may incorporate staff providing services into the Banco de España, without prejudice to the autonomy of the Bank of Spain's personnel policy and in accordance with the principles of equality, merit, capacity and advertising, which in the terms referred to in Article 52.7 should govern the selection of the staff of the FROB. In no case shall the incorporation of personnel be liable to prejudice the necessary operational independence or to give rise to conflicts of interest between supervisory and resolution functions.

When the staff of the Banco de España, prior to the authorization of this institution, is incorporated into the FROB, it will be left in a forced surplus with a reserve of the place, computers and the time remaining in it for the purpose of seniority.

The staff who join the FROB from other Administrations or Public Entes will have the right to receive in charge of this and in concept of seniority an amount equivalent to that which for this same concept perceiving up to its incorporation into it.

Additional disposition fourteenth. Scheme applicable in the case of an entity's competition.

In case of an entity contest:

1. They shall be considered as credits with general privilege, subsequently in the order of precedence to the credits with general privilege provided for in Article 91.5. of Law 22/2003, of July 9:

(a) deposits secured by the Deposit Insurance Fund and the rights in which the Deposit Insurance Fund has been subrogated if the guarantee has been effective; and

b) the part of the deposits of natural persons and of micro, small and medium-sized enterprises exceeding the guaranteed level provided for in Royal Decree-Law 16/2011 of 14 October and the deposits of persons physical and micro, small and medium-sized enterprises which would be guaranteed deposits if they were not constituted through branches located outside the European Union of entities established in the European Union.

2. The subordinated credits included in Article 92.2. of Law 22/2003, of July 9, will have, in the case of contest of entities included in the scope of this Law, the following ranking:

(a) The principal amount of subordinated debt other than additional Tier 1 or Tier 2 capital.

b) The principal amount of Tier 2 instruments.

c) The principal amount of Tier 1 additional capital instruments.

Additional provision 15th. Effects of early action and resolution processes on the continuity of the activities of an entity.

1. From the opening of the proceedings for early action and resolution, the judges shall not be allowed to accept the applications for the contest of an entity, with full rights for judicial proceedings which infringe the provisions of this provision.

2. Entities falling within the scope of this Law may not submit a request for a voluntary declaration of competition without having carried out the communication provided for in Articles 9.1 and 21.4 and without the competent supervisor and the FROB decide whether to open an early or resolution process of the entity. The two-month period provided for in Article 5 of Law 22/2003, of 9 July, is to be suspended until such time as this decision is taken.

If any of these processes are to be opened or if the request for a declaration of contest is not accompanied by the communication provided for in the preceding paragraph, the competent judicial body shall not accept the procedure. request.

3. If the necessary contest has been requested from an entity, the competent court, suspending the processing of the application, shall notify the competent supervisor and the FROB to inform it within seven days of the exercise of the powers provided for in this Law, will open a process of early or resolution of the entity. In the event that any of these proceedings are to be opened, the competent judicial body shall not accept that application.

4. The resolution instruments applied by the FROB shall be considered to be for the purposes of the provisions of the Ley 6/2005 of 22 April on the reorganisation and settlement of credit institutions.

Additional provision sixteenth. Fee for the activities carried out by the FROB as the resolution authority.

1. The fee for the activities carried out by the FROB as a resolution authority shall be governed by the provisions of this Law and, failing that, by Law 8/1989, of 13 April, of Public Fees and Prices, and by Law 58/2003, of December 17, General Tax.

2. Taxable fact. It constitutes the taxable fact of the fee for the activities carried out by the FROB as the resolution authority, the exercise of the functions of surveillance, reporting and implementation of the resolution instruments, during the preventive and executive of the resolution.

3. Accrual. The fee shall be paid on 1 January of each year, except for cases of the establishment of institutions, in which the fee shall be payable on the date of its establishment.

4. Taxable persons. The entities referred to in Article 1.2.a shall be subject to the charge of the fee.

5. Tax base. The taxable amount shall be the amount that each institution has to provide in terms of annual ordinary contribution to the National Resolution Fund or, where appropriate, to the Single Resolution Fund.

6. Tax quota. The tax rate will be the result of applying a tax rate of 2.5 per cent on the tax base.

7. Management, settlement and recovery. The competence for the management, settlement and collection of the fee shall be the responsibility of the FROB, in terms of its regulatory development.

8. The income derived from the fee for the activities carried out by the FROB as a resolution authority has the nature of the budget revenue of the FROB.

Additional 17th disposition. Legal status of the Official Credit Institute.

In accordance with Article 2.2 of Directive 2014 /59/EU, the Institute of Official Credit is excluded from the scope of this Act provided for in Article 1.

First transient disposition. Regime applicable to certain procedures for restructuring, recovery and resolution.

1. The restructuring and resolution procedures initiated prior to the entry into force of the Law, as well as all the ancillary measures that have accompanied them, including financial support instruments and instrument management Hybrids will continue to be regulated, until their conclusion, by the rules of application prior to the entry into force of this Law.

2. Recovery and resolution procedures to be initiated before 1 January 2016 shall continue to be regulated, in relation to financial support instruments and the management of hybrid instruments, by the rules of application prior to the the entry into force of this Law, without any application of the rules on internal recapitalisation provided for in Chapter VI.

Second transient disposition. Rules on internal recapitalisation.

The rules on internal recapitalisation contained in Chapter VII of Law 9/2012 of 14 November 2015 shall remain in force until 31 December 2015.

Transitional provision third. Administrative and judicial procedures initiated prior to entry into force.

The administrative and judicial procedures initiated prior to the entry into force of this Law will be dealt with and resolved in accordance with the regulations applicable before the entry into force.

Transitional disposition fourth. Annual contributions to the deposit guarantee compartment.

1. The Bank of Spain shall develop by 31 May 2016 the methods necessary to ensure that the annual contributions of the entities to the deposit guarantee compartment of the Deposit Insurance Fund are proportionate to their profiles. risk.

2. As long as the Bank of Spain does not develop such methods, the annual contributions will be calculated in accordance with the provisions of the Royal Decree-Law 16/2011 of 14 October, which creates the Credit Entity Deposit Insurance Fund.

Transient disposition fifth. Accrual of the fee for the activities carried out by the FROB as the resolution authority during the year 2015.

During the year 2015, the accrual of the fee for the performance of activities and the provision of services by the FROB as the resolution authority, will occur on the day of the entry into force of this Law.

Transitional disposition sixth. Adaptation to the developments of Directive 2013 /50/EU of the European Parliament and of the Council of 22 October 2013.

1. The time limits referred to in the amendments to Articles 35.1 and 35.2 in paragraphs 1 and 2 of point B of the first provision shall apply to the annual financial reports and semi-annual financial reports which are must be published six months after the entry into force of this Law.

2. The amendments introduced by paragraph 6 (B) of the first provision of the first paragraph of Article 53.3 shall not apply until the date laid down in the rules for the development of this Law.

Transitional disposition seventh. Application of the first final provision and of Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on the improvement of the settlement of securities in the European Union and central securities depositaries and by the amending Directives 98 /26/EC and 2014 /65/EU and Regulation (EU) No 236/2012.

1. The amendments introduced by paragraphs 4 to 8, 10, 12, 13, 15, 21, 22 and twenty-nine of the first subparagraph of point (A) shall not apply to official secondary markets. Multilateral trading and central securities depositaries which, at the entry into force of this Law, are constituted and operating in Spain until the date that they determine the rules for the development of this Law.

2. The obligations arising from Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on the improvement of the settlement of securities in the European Union and central securities depositaries and by which it is amend Directives 98 /26/EC and 2014 /65/EU and Regulation (EU) No 236/2012 shall be enforceable in accordance with Articles 69 and 76 of that Regulation.

3. Securities represented by physical securities admitted to trading on official secondary markets or multilateral trading systems shall modify their form of representation to be taken into account in accordance with the provisions of the Article 76.2 of Regulation (EU) No 909/2014 of 23 July 2014.

Repeal provision.

As many rules of the same or lower rank are repealed, they are contrary to the provisions of this Law and, in particular, Law 9/2012 of 14 November of restructuring and resolution of credit institutions, except for its provisions amending other rules and the second, third, fourth, sixth to thirteenth, fifteenth, seventeenth, eighteenth and 21st provisions.

Final disposition first. Amendment of the Law 24/1988, of July 28, of the Stock Market.

Law 24/1988 of 28 July of the Stock Market is amended as follows:

A) In terms of clearing, settlement and securities registration:

One. Article 5 is amended as follows:

" Article 5. Representation of the values.

1. Marketable securities may be represented by means of notes on account or by means of securities. The chosen mode of representation shall apply to all values integrated in the same emission.

2. Securities admitted to trading on official secondary markets or in multilateral trading systems shall be necessarily represented by taking into account.

As an exception to the provisions of the previous paragraph, the necessary specialties will be established so that foreign securities represented by securities can be traded on secondary markets. (a) official or multilateral Spanish trading systems and be registered with the central securities depositories established in Spain.

3. Both the representation of values by means of annotations, and the representation by means of titles will be reversible. The reversion of the representation by means of annotations in account of securities will require the prior authorization of the National Securities Market Commission, in terms that are regulated. The step to the account-taking system may be made as the holders are giving their consent to the transformation. "

Two. Article 6 is amended as follows:

" Article 6. Document of the issue.

1. The representation of securities by means of an account shall require the establishment by the issuing entity of a document containing the information necessary for the identification of the values integrated in the issue.

In the case of participatory values, the document will be raised to public writing and may be the writing of the issue.

In the case of non-equity securities, the increase in public deed of the issuance document will be a potestative one. This document may be replaced by:

(a) The information leaflet approved and registered by the National Securities Market Commission, in accordance with the provisions of this Law.

(b) The publication of the characteristics of the issue in the corresponding official gazette, in the case of the debt issues of the State or the Autonomous Communities, as well as in those other cases in which it is located set.

(c) The certification issued by the persons empowered in accordance with the current regulations, in the case of emissions that will be subject to admission to negotiation in a multilateral negotiation system established in Spain, the provisions of Article 30b 4.

2. The issuing entity shall deposit a copy of the issuance document and its modifications to the entity in charge of the accounting record and to the National Securities Market Commission. In the case of securities admitted to trading on an official secondary market or in a multilateral trading system, a copy shall also be deposited with its governing body.

3. The issuing entity and the accounting officer shall have at all times available to the holders and to the general public a copy of the said document.

4. The drawing up of the issuance document for financial instruments which are traded on official secondary markets for futures and options or on other assumptions, and with the conditions which, where appropriate, are determined, shall not be required. regulentarily. "

Three. Article 7 is amended as follows:

" Article 7. Entities in charge of the accounting record.

1. The carrying out of the accounting record of the securities represented by means of account entries for an issue shall be attributed to a single entity which shall ensure the integrity of the accounting record.

2. In the case of securities not admitted to trading on official secondary markets or in multilateral trading systems, that entity shall be freely designated by the broadcaster between the investment services companies and the credit authorised to carry out the activity referred to in Article 63.2.a). The designation must be entered in the Register of the National Securities Market Commission provided for in Article 92 as a prerequisite for the commencement of the accounting record. Central securities depositaries may also assume such a function in accordance with the requirements laid down in the applicable regulations and in their regulations.

3. In the case of securities admitted to trading on official secondary markets or in multilateral trading systems, the entity in charge of the holding of the securities accounting register shall be the central depositary of designated securities. which shall exercise such a function together with its participating entities.

4. The entities referred to in this Article shall respond to those who have been harmed, by the lack of practice of the corresponding entries, by the inaccuracies and delays in them and, in general, by the non-compliance. or by negligence of their legal obligations. Compensation for damage caused, as far as possible, shall be made in kind. "

Four. A new Article 7a is added with the following wording:

" Article 7a. System of record and tenure of values.

1. Any central securities depository providing services in Spain shall adopt a registration system consisting of a central register and the detailed records by the entities participating in that system.

2. The central registry shall be in charge of the central securities depository and shall recognise each participating entity that requests the following account types:

a) One or more own accounts in which the securities balances whose ownership corresponds to the participating entity shall be entered.

(b) One or more general third-party accounts in which the securities balances corresponding to the clients of the participating entity, or to the clients of a third entity entrusted to it by the participating entity, shall be entered on a global basis. the requesting entity custody and the record of details of the securities of such clients.

(c) One or more individual accounts in which securities balances corresponding to those clients of participating entities that request the holding of such accounts in the accounts shall be entered in a segregated manner. central register.

3. Each participating entity with general third-party accounts shall keep a record of detail, in which it shall be reflected to which clients account for the stocks of securities entered in those accounts in the central register.

4. The Government shall develop, in relation to the various entities entrusted with the conduct of the accounting records and the different types of securities, admitted or not to trading on official secondary markets or in multilateral systems (a) the rules governing the organisation and operation of the relevant registers, the legal status of the different accounts of qualifying securities, the guarantees and other requirements which are required for them, the identification and control of the values represented by account, as well as the relationships of those entities with the issuers and their intervention in the administration of securities. The conditions and assumptions in which the central securities depositories may be authorised to carry out the direct holding of client securities accounts in the central register may be determined. '

Five. Article 12a is amended, which is worded as follows:

" Article 12a. Transfer of values and rule of the prorrata.

1. Declared the contest of an entity in charge of the holding of the securities register represented by an account or a participating entity in the registration system, the holders of securities entered in those records shall enjoy the the right of separation in respect of the securities entered in his favour and may be exercised by him requesting his transfer to another entity, without prejudice to the provisions of Articles 44 bis.8 and 70 ter.2.f).

2. For the purposes of this Article, the Judge of the contest and the organs of the insolvency administration shall ensure that the rights arising from transactions in the course of liquidation are held at the time of the declaration of the contest of any of the entities referred to in the preceding paragraph, taking into account the rules of the corresponding clearing, settlement and registration system.

3. Central securities depositaries and other entities entrusted with the conduct of the securities registry represented by an account shall ensure the integrity of the securities issues. Registration systems managed by central securities depositaries shall provide sufficient guarantees for the absence of any neglect between the central register and the detailed records. To this end, in addition to the provisions of this Law, the supervision mechanisms by the central securities depositories and the control systems of their participating entities will be established, in addition to the situations in which the possible incidents will have to be notified to the supervisory authorities, as well as the mechanisms and time limits for the resolution of such incidents.

4. In any case, and without prejudice to the provisions of the previous paragraph, where securities balances with the same ISIN (International Securities Identification Number) code are entered in the set of general third-party accounts of a the institution participating in the central register is not sufficient to fully satisfy the rights of the holders of the securities with the same ISIN identification code entered in the detail record held by that institution participant, the balance noted in that set of general third-party accounts shall be distributed pro rata according to the rights of the holders entered in the detail register. The injured holders shall have a credit claim against the institution participating in the non-delivered securities.

5. Where there are limited real rights or other types of charges on securities, and without prejudice to the covenants between the guarantor and the collateral beneficiary, once the pro rata rule is applied, such charges shall be construed as constituting on the result of the pro rata and the claims against the participating institution which, where appropriate, exist on the part not satisfied in securities. '

Six. Article 31a (2) (g) and Article 31a (7), which are as follows, are amended and a new paragraph 8 is added with the following wording:

" g) Develop a draft market regulation containing at least the applicable rules on marketable financial instruments, issuers, members, guarantee arrangements, classes of transactions, trading, rules on clearing, settlement and registration of transactions, distribution of dividends and other corporate events, market supervision and discipline and organisational measures relating, inter alia, to conflicts of interest and risk management. Provision should also be made for the consultation of issuers of financial instruments admitted to trading on the market and to market members when a substantial modification of their regulation is proposed.

7. The securities whose transactions in the multilateral contracting segments of the official secondary markets shall be subject to mechanisms shall be determined, subject to mechanisms permitting their orderly liquidation and good end. by the necessary intervention of a central counterparty.

8. In order to take account of the settlement of transactions on marketable securities executed on official secondary markets, their collecting societies shall conclude agreements with at least one central securities depository and, where appropriate, one or more of the following: central counterparties, without prejudice to the right of issuers to have their securities registered with any central securities depositary in accordance with Article 49 of Regulation (EU) No 909/2014 and the right of the issuers Member of the official secondary markets to designate the settlement system in accordance with the established in Article 44d of this Law. "

Seven. A new Article 36a is added, with the following wording:

" Article 36a. Settlement of transactions.

1. Buyers and sellers of marketable securities admitted to trading on official secondary markets shall be bound by the rules of that market to the delivery of cash and marketable securities since their respective orders are executed, even if their actual settlement is effected at a later date.

2. The buyer of marketable securities admitted to trading on an official secondary market shall acquire ownership where those securities are entered in their name in the securities accounts in accordance with the rules of the registration system.

3. The official secondary markets shall determine in their regulations the theoretical date of settlement of the transactions executed and may set different dates on the basis of the securities to be settled, the trading and trading segments. other criteria, in accordance with applicable European rules and in coordination, where appropriate, with central counterparties and with central securities depositaries involved in settlement processes. '

Eight. A new Article 36b is added, with the following wording:

" Article 36b. Settlement of rights or obligations of economic content associated with securities.

1. The issuing institution shall communicate in sufficient time to the governing company of the official secondary markets where, at its request, its securities are admitted to trading as well as to the central securities depository responsible for the registration. of the same, the rights or obligations of economic content that the securities generate as soon as the relevant agreement has been adopted.

2. Taking into account the rules applicable to the procurement, clearing, settlement and registration of transactions on securities admitted to trading on those markets, these communications shall specify the dates relevant to the trading of securities. recognition, exercise, compliance and payment of the relevant rights and obligations.

3. Without prejudice to the foregoing, the benefits, rights or obligations inherent in the ownership of shares and securities equivalent to shares shall be of account and benefit of the acquirer from the date of purchase in the relevant market (a) official secondary, whereas it shall be from the date of settlement of the relevant purchase transaction in the case of fixed income securities and other securities not equivalent to shares. In the event of delays or other incidents in the settlement process, appropriate adjustments may be made to the settlement of such rights or obligations. '

Nine. A new Article 36c is added, with the following wording:

" Article 36c. Guarantees aimed at mitigating the risk of liquidation.

1. The members of the official secondary markets, the members of the central counterparties and the participating institutions of the central securities depositaries shall enjoy the right to a financial guarantee for the following: collected in Royal Decree-Law 5/2005 of 11 March, of urgent reforms for the boost to productivity and for the improvement of public procurement, exclusively on the securities or the cash resulting from the liquidation of transactions by the account of natural or legal persons when those entities have had to to anticipate the cash or securities necessary to meet the settlement of such transactions for non-compliance or the declaration of the tender of their clients.

2. This right of guarantee falls exclusively on the securities and the cash resulting from the transactions not satisfied by the customers and will exclusively ensure the amount that the entities benefiting from this right would have had to bring forward the settlement of the above transactions, including where appropriate the price of the securities which they would have had to deliver and any penalties and penalties which they would have had to pay as a result of the non-compliance your clients.

3. The establishment and execution of the said right of guarantee shall not require any formality, without prejudice to the obligation of the beneficiary entities to keep at the disposal of their clients the accrediting information of the concurrency of the requirements referred to in this paragraph and in the above.

4. The members of the official secondary markets, in the event of a declaration of the contest of any of their clients, may enter into those markets and on behalf of the person concerned, orders to buy or sell sign-in values contrary to the transactions contracted on behalf of the latter, where the declaration of competition occurs in the course of the winding-up. The members of the central counterparties and the participating institutions of the central securities depositaries shall enjoy the same right in respect of their clients, who shall exercise the right to apply to the members of the secondary markets. the introduction of the counter-sense orders referred to in this paragraph.

5. The provisions of the above paragraphs are without prejudice to the measures of discipline in the liquidation referred to in Articles 6 and 7 of Regulation (EU) No 909/2014 of 23 July 2014, and without prejudice to the guarantees to This law is in favour of official secondary markets, central securities depositaries and central counterparties, which shall be given preference in respect of the rights referred to in the preceding paragraphs. "

Ten. Article 44a is amended and read as follows:

" Article 44a. Central securities depositories.

1. The authorisation as a central securities depository, its revocation and its functioning when that entity is established in Spain, shall be governed by the provisions of Regulation (EU) No 909/2014 of 23 July 2014 on the provisions of that Regulation. Law and any other Spanish or European legislation that would be applicable to you.

The National Securities Market Commission shall be the competent authority responsible for the authorisation, supervision and sanction of central securities depositories in accordance with Regulation (EU) No 909/2014 of 23 July 2014. of 2014.

Central securities depositaries shall provide the National Securities and Exchange Commission and the various supervisory public bodies in the field of their respective powers with information on the activities of the securities market. clearing, settlement and registration in the systems managed by them that are requested by them, provided that such information is at their disposal and in accordance with applicable regulations.

2. Central securities depositaries which are established in Spain shall be the form of a public limited liability company. Its social statutes and modifications, with the exceptions that will be regulated in its case, will require the prior approval of the National Securities Market Commission. The appointment of the members of the Management Board, Directors-General and Assimilated of Central Securities Depositories shall be subject to the prior authorisation of the National Securities Market Commission.

Participation, either directly or indirectly, in the capital of central securities depositories shall be subject to the system of significant participations provided for in Article 69 for investment firms, in the terms to be determined, on the understanding that, in any event, such a character shall be such as to be directly or indirectly involved, at least one per cent of the capital or the voting rights of the central depositary; (a) the value of the securities or the one which, without reaching that percentage, makes it possible to exert a significant influence on itself, in terms that are determined to be regulated.

Without prejudice to Article 69.6, the National Securities Market Commission may object to the acquisition or transfer of a significant holding in the capital of the central securities depository. where it considers that it is necessary to ensure the proper functioning of the markets or the systems of clearing, settlement and registration of securities or to avoid distortions in securities, as well as for not giving equivalent treatment to institutions in the country of origin of the acquirer.

Central securities depositories shall have the bodies and committees provided for in Regulation (EU) No 909/2014 of 23 July 2014.

3. The central securities depositaries shall also be governed by an internal regulation whose approval and that of their amendments, with the exceptions which, where appropriate, are to be laid down in regulation, shall be the responsibility of the National Commission for the Market Securities, prior to the Bank of Spain report. Such rules of procedure shall govern the arrangements for the operation of central securities depositories, the services provided by them, their economic arrangements, the procedures for fixing and communicating tariffs, the conditions and principles under which they are to be applied. which shall provide the services concerned, the records relating to the services provided and the legal status of its participating entities. The Regulation shall also regulate procedures for managing the delivery of securities and their payment, the determination of the time for settlement instructions, the risk management policy as well as guarantees of all types of securities. they may have to be the participating entities in the light of the activities they develop.

The rules of procedure may be developed by means of circulars approved by the central securities depository itself. These circulars must be communicated to the National Securities and Exchange Commission and the Banco de España, in the terms that they regulate. The National Securities Market Commission may object to the same, as well as suspend or leave them without effect when it considers that they infringe the applicable law, or impair the prudent and safe functioning of the central securities depository. and of securities markets or investor protection.

4. The rules of procedure and the statutes shall have the character of rules for the management and discipline of the securities market, and shall specify the obligations and organisational and procedural requirements necessary to comply with the provisions of the Regulation (EU) No 909/2014 of 23 July 2014. The Minister of Economy and Competitiveness or, by means of his express rating, the National Securities Market Commission, may develop the structure and minimum content that the rules of procedure should have.

Also, central securities depositaries shall draw up a report detailing how they shall comply with the technical, organisational, operational and risk management requirements required by the Regulation (EU) No 909/2014 of 23 July 2014 to carry out its tasks. The Minister of Economy and Competitiveness or, by means of his express rating, the National Securities Market Commission, may regulate the model to which the said memory is to be adjusted. The central securities depository shall keep this memory up to date, the amendments of which shall be referred to the National Securities Market Commission, duly substantiated.

5. The specific tasks of monitoring and control to be exercised by the central securities depositaries on their participating entities, the solvency requirements required of their participating entities, the following shall be determined. types of entities that will be able to access the status of a participating entity, accounting organization requirements, technical means, specific reporting obligations to the National Securities Market Commission and how many other aspects consider necessary for their proper functioning, taking into account, inter alia, proportionality criteria based on their level of activity.

Likewise, the central securities depositories shall forward to the National Securities Market Commission, on the terms that they regulate, their annual estimate budget, in which they will be expressed in detail. prices and commissions to be applied, as well as the subsequent changes to their economic arrangements. The National Securities Market Commission may require the central securities depository to extend the documentation received and may provide for exceptions or limitations to the maximum prices of those services where they may affect the financial solvency of the central securities depository, causing disturbing consequences for the development of the stock market or the principles governing it, or introducing unjustified discrimination between the different users of the securities entity services.

6. Central securities depositories may outsource their core services, establish conventions with central counterparties, official secondary markets and multilateral trading systems or links with other depositaries. (a) central securities in accordance with the provisions of Regulation (EU) No 909/2014 of 23 July 2014 in this Law, in its implementing rules and in the regulation referred to in paragraph 3 above.

7. Declared the contest of a participating entity in the systems managed by the central securities depositaries, the latter shall have absolute right of separation in respect of the goods or rights in which the securities are materialised. constituted by those entities participating in the systems managed by the central securities depositaries. Without prejudice to the foregoing, any remaining remaining after the settlement of the secured transactions shall be incorporated into the active mass of the participant's contest.

8. Declared the contest of a participating entity in the systems referred to in this article, the National Securities Market Commission, without prejudice to the powers of the Bank of Spain and the Banking Resolution Fund, may provide, immediately and at no cost to the investor, the transfer of their securities accounting records to another entity that is enabled to carry out this activity. If no entity is in a position to take charge of the records indicated, this activity shall be assumed by the central securities depository concerned on a provisional basis, until the holders request the transfer of the registration of the their values. For these purposes, both the judge of the contest and the insolvency administration shall provide the access of the entity to which the securities are to be transferred to the accounting and computer records and records necessary to make the transfer effective. The existence of the insolvency proceedings shall not prevent the customer from reaching the securities purchased in accordance with the rules of the clearing, settlement and registration system or cash arising from the exercise of economic rights or of the sale of the securities. "

Once. Article 44b (2) and (3) are amended as follows:

" 2. The central counterparty must take the form of a public limited liability company and must be recognised as a system for the purposes of Law 41/1999 of 12 November on payment and securities settlement systems.

In order to facilitate the exercise of their functions, central counterparties may access the status of a participant of the central securities depositaries which they admit as such, from any other system of settlement of securities and financial instruments or of a regulated market or multilateral trading system, where they comply with the conditions required by each system and provided that the participation of the central counterparty in the does not compromise the security or the solvency of that entity.

3. Central counterparties may not be authorised as a central securities depository. '

Twelve. Article 44 septies is added, with the following wording:

" Article 44 septies. Information system for the supervision of trading, clearing, settlement and registration of marketable securities.

1. Central securities depositaries providing services in Spain shall establish a system of information, transmission and storage of data to serve as a tool for the exchange and processing of information for the performance of the data. activities for clearing, settlement and registration of securities admitted to trading on an official secondary market and allowing the proper conduct of the securities register to be monitored, at both the central and the registers of the securities detail.

2. The system provided for in the preceding paragraph shall include at least the operations, events and annotations likely to result in changes in the balance of values of each holder in both the central register and in the records of the detail.

3. The information system for the supervision of trading, clearing, settlement and registration of marketable securities shall comply with the following:

(a) Ensure the traceability of transactions made on securities admitted to trading on an official secondary stock market from procurement to their entry into the securities register and vice versa, as well as know the status of them.

b) Facilitate the transmission of the information necessary to perform the clearing, settlement and securities registration as well as the status of such transactions.

(c) Facilitate the control of the risks and guarantees required by the relevant market entities and infrastructures.

d) To inform the issuing entities on a daily basis about the ownership of the securities issued by them when they so request.

4. The central securities depository, in its capacity as responsible and manager of the data, transmission and storage system, shall fulfil the following obligations:

a) Set the necessary means for the information to be entered into the system according to the established rules and be complete.

b) Allow the introduction of the necessary information within the time limit.

c) Give sufficient security and confidentiality to the information provided, so that the entities that enter information into the system access only the data strictly necessary for their activity or those for which they are authorized.

d) Ensure system maintenance and continuity.

e) Allow non-discriminatory access of market infrastructures and entities involved in securities clearing and settlement processes.

5. The information system shall be subject to the information required to provide, in accordance with the rules laid down in law, the official secondary markets, the central counterparties, the central securities depositaries as well as their respective participating members or entities. Those entities shall be responsible for the integrity and veracity of the information communicated by each of them through such a system and shall retain ownership of such information.

6. The information stored in the system may not be used or transmitted for purposes other than those provided for in the law, unless it is authorized by the respective supplying entity, without prejudice to the obligations of information to the National Securities Market Commission or the Bank of Spain in the exercise of their respective powers.

7. Central securities depositories shall enter into the relevant contracts in which they shall establish the legal relations necessary for the proper functioning of the system. They shall also publish the rules of operation of the information system by establishing the rights, obligations and responsibilities of the persons they shall manage and which shall make use of the information stored in the system. The National Securities Market Commission will approve these rules and their modifications. Both the rules and their modifications will be previously examined by the users ' committee of the central securities depository, who will be able to make their observations on the National Securities Market Commission.

8. In full respect of the principles of equal treatment and non-discrimination, central counterparties and central depositaries of foreign securities with which central securities depositories conclude conventions or establish links (a) may access this system by being obliged to supply the information necessary for the purposes of the system to be fulfilled, in accordance with the provisions of this Article. Such infrastructure shall require its members or participants to provide the necessary information to properly perform its function. "

Thirteen. Article 44 octies is added, with the following wording:

" Article 44 octies. Monitoring and control of the proper functioning of the trading, clearing, settlement and securities registration systems.

1. Without prejudice to the powers of supervision, inspection and sanction corresponding to the National Securities Market Commission in accordance with Title VIII, the companies governing the official secondary markets, the Central counterparties and central securities depositaries providing services in Spain shall, in the field of their respective powers, ensure the proper functioning and efficiency of the processes of negotiation, clearing and settlement settlement of transactions and the settlement of securities.

2. The Government is empowered to regulate the content of the function provided for in the previous paragraph, including obligations and powers for its proper exercise. "

Fourteen. Article 54 is deleted.

Fifteen. Article 57 is amended as follows:

" 1. The registration of securities traded on the Public Debt Market in Annotations shall be the responsibility of the Company for the Management of the Systems of the Services of Registration, Compensation and Settlement of Securities to which the additional provision refers. seventeenth and its participating entities authorized to do so by virtue of their status as managing entities of the Public Debt Market.

2. They may be holders of account in their own name in the Public Debt Market in Annotations and maintain account as participating entities in their own name in the System Society registration system, in addition to the Banco de España, the systems and clearing and settlement bodies of official secondary markets and interbank clearing systems for the purpose of managing the collateral system, as well as those who meet the requirements set out in the market regulation. "

Sixteen. A new paragraph 7 is added to Article 60 with the following wording:

" 7. The provisions of this Article shall not apply in the case of the use of the instruments, powers and resolution mechanisms established by Law 11/2015 of June 18, recovery and resolution of credit institutions and companies of investment services. "

seventeen. The second subparagraph of Article 70b (2) (f) is amended, which shall be read as follows:

" Initiated with the insolvency proceedings of a securities depository institution, the National Securities Market Commission, without prejudice to the powers of the Bank of Spain and the Banking Resolution Fund, may immediately and without cost to the investor the transfer to another entity enabled to carry out this activity, of the securities deposited on behalf of its clients, even if such assets are deposited in third entities on behalf of the entity providing the deposit service. For these purposes, both the competent court and the court of insolvency shall provide the entity with which the securities are to be transferred to the accounting and accounting records and records necessary to make the transfer. The existence of the insolvency proceedings shall not prevent the customer from being sent, in accordance with the rules of the system of clearing, settlement and registration, the securities purchased or the cash from the exercise of economic rights or of the sale of the securities. "

Eighteen. Article 84 (1) (a) and (b) are amended as follows:

" (a) Companies governing the official secondary markets, the contracting entities of multilateral trading systems, central counterparties and central securities depositories. The Bank of Spain is excluded.

(b) The Stock Exchange Company and the companies holding the ownership of all the shares or of a holding that attribute the direct or indirect control of the entities provided for in the preceding subparagraph. "

nineteen. The final paragraph of Article 95 is amended, which is read as follows:

" In particular, standards for the management and discipline of the stock market shall be considered:

1. Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.

2. Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on the prudential requirements of credit institutions and investment firms and amending Regulation (EU) No 648/2012

3. Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on the improvement of securities settlement in the European Union and central securities depositories and amending Directives 98 /26/EC and 2014 /65/EU and Regulation (EU) No 236/2012. '

Twenty. A new wording is given to paragraph 3a and paragraphs 3b and 3c of Article 98 are added, with the following wording:

" 3 bis. Information on the type and nature of the offence and the identity of the natural person shall be included in the publication of the sanctions, both on the website of the National Securities Market Commission and in the "Official State Gazette". or the legal entity on which the sanction is placed.

3 ter. In relation to the provisions of the previous paragraph, the National Securities Market Commission may agree, when in its judgment, any of the assumptions contained in paragraph 3c:

(a) that the penalties imposed for the application of the rates applicable to investment firms contained in paragraphs (d), (e), (e), (e), (b), (e), (c), (c), (k), (l), (a), (m), (q), (u), (w), (c), (h), (c), (h), (c), (h), (c), (h), (z), (z), (z), (z) and (z), (c), (c), (c), (g), (g), (a), (k), (n), (n), (p), (t) and (z)) of Article 100 and Article 107c (3) to (7), as well as those imposed under the provisions of the Treaty. Law 11/2015, of June 18, of recovery and resolution of credit institutions and investment services companies, publish the identity of the sanctioned subjects with confidentiality.

b) the penalties imposed for the application of the rates laid down in Article 99 (m) and (p), Article 100 (j) and Article 101.1, relating to non-compliance with the obligations contained in the Articles 35, 35a, 53 and 53a shall be published while keeping the identity of the subject matter confidential, or their publication shall be deferred.

(c) In relation to the penalties imposed for the application of the rates set out in paragraphs 1 to 4 of Article 107d:

1. Demoate the publication of the sanction imposed until the time the reasons for the delay of the publication cease.

2. Publish anonymously the sanction imposed if that anonymous publication guarantees effective protection of the personal data in question. In this case, the publication of the relevant data may be deferred for a reasonable period of time if it is expected that in the course of that period the reasons for a publication with the protection of anonymity shall cease to exist.

3. Do not publish in any way the sanction imposed if the options referred to in (a) and (b) above are considered insufficient to ensure that the stability of the financial markets is not jeopardised, as well as the proportionality of the publication of those sanctions against measures that are considered to be of minor importance.

3 quater. The National Securities Market Commission may agree on the measures referred to in paragraph 3b where one of the following cases is present:

(a) Where the penalty is imposed on a natural person and, in the case of the penalties referred to in point (c) of paragraph 3b, where the sanction is imposed on a legal person, and after a prior assessment, the publication of personal data is considered to be disproportionate.

(b) Where publication may endanger the stability of financial markets or an ongoing official or criminal investigation.

(c) Where the publication may cause disproportionate damage to the entities or natural persons involved, to the extent that the damage can be determined. This shall not apply to the penalties referred to in point (c) of paragraph 3b. '

Twenty-one. The following wording shall be added:

c), (c), (c), (c), (c), (c), (c), (c), (c), (c), (c) and (c).

" c quinquies) Non-compliance by central securities depositaries and by entities participating in the registration systems, of the securities registration rules of Chapter II of Title I and Chapter I of the Title IV, when property damage occurs to a plurality of investors.

(c) the failure by the members of the central counterparties to comply with their obligations in respect of the provision of guarantees where the non-compliance jeopardises the risk management of the institutions; central counterparties, except where such non-compliance is a consequence of the insolvency or contest situation of such counterparties.

(c) the non-compliance, by the members of the official secondary markets and the members of the multilateral trading systems, of the obligations referred to in Article 31a.7 and the Article 125.3 respectively or its inadequate coordination with central counterparties and their members, where such conduct is not merely occasional or isolated.

(c) the non-compliance by the governing companies of official secondary markets, of the contracting entities of multilateral trading systems, of the central counterparties, of the depositaries central securities and institutions providing investment services for their discipline in the field of settlement as referred to in Articles 6 and 7 of Regulation (EU) No 909/2014 of 23 July 2014.

c nonies) Non-compliance by central securities depositaries of the obligations set out in Article 44 septies, where such conduct is not merely occasional or isolated.

(c) Non-compliance by official secondary markets, multilateral trading systems, central counterparties and central securities depositaries as well as their own funds, as well as their own funds. the respective members and entities involved, the obligations laid down in Article 44 septies.5, where this is not a purely occasional or isolated non-compliance or when it seriously affects the functioning of the information system; referred to in that Article. '

Twenty-two. The words 'z octies', z nonies), z decies), z undecies) and z odudecies are added to Article 100 with the following wording:

" z octies) Non-compliance by central securities depositaries and by participating entities in the registration systems, of the securities registration rules of Chapter II of Title I and Chapter I of the Title IV, where it does not constitute a very serious infringement.

z nonies) Failure by members of central counterparties to fulfil their obligations in respect of the provision of guarantees where it does not constitute a very serious infringement, except where such non-compliance is a consequence of the insolvency or competition situation of the same.

z-decisions) Non-compliance by members of official secondary markets and members of multilateral trading systems, of the obligations referred to in Articles 31 bis.7 and 125.3 or their inadequate coordination with central counterparties and their members, where such conduct is of a purely occasional or isolated nature.

z undecies) Non-compliance by official secondary markets, multilateral trading systems, central counterparties, their respective members and participating entities central securities depositories, of the obligations laid down in Article 44 septies.5, where this is not a very serious infringement.

z duodecies) Non-compliance by central securities depositaries of the obligations set out in Article 44 septies where it does not constitute a very serious infringement. "

Twenty-three. Two paragraphs are added to Article 102 (1) (a), with the following wording:

" In the case of central securities depositories and designated credit institutions referred to in Article 54.2.b) of Regulation (EU) No 909/2014 of 23 July 2014, which commit the very serious infringements Article 107 (1) and (3), the fine to be imposed shall be at least twice the amount of gross profit obtained as a result of the acts or omissions in which the infringement consists, in the event that it may to be determined, and at most, to the greatest of the following quantities: the quintuple of gross profit obtained as a result of the acts or omissions in which the infringement consists; ten per cent of the total annual turnover of the offending entity, according to the last available accounts approved by the management body; the five per the total funds, own or foreign, used in the infringement, or EUR 20,000,000. If the infringing entity is a parent or subsidiary of the parent undertaking which has to draw up consolidated financial statements, the total annual turnover applicable shall be that of the last available consolidated financial statements.

In the event of breaches of the obligations contained in Articles 35, 35a, 53 and 53a, which constitute a very serious infringement, the fine to be imposed shall be:

i) In the case of legal persons, it shall be in the amount of up to the maximum of the following amounts:

-€ 10,000,000 or five per cent of its total annual turnover, according to the latest approved annual accounts available. If the legal person is a parent undertaking, or a subsidiary of a parent undertaking, which has to establish consolidated financial accounts in accordance with the business rules, the total turnover to be taken into account shall be the volume of the total annual business or the corresponding revenue type, in accordance with the applicable accounting rules, according to the most recent annual consolidated account available, approved by the ultimate parent undertaking.

-Double the amount of profits earned or lost losses due to non-compliance, in case they can be determined.

(ii) In the case of natural persons, it shall be the amount of up to the maximum of the following amounts: EUR 2,000,000, or twice the amount of the profits made or the losses avoided due to non-compliance, in the case that they can be determined. "

Twenty-four. A fourth subparagraph is added to Article 103 (1) (a), with the following wording:

" In the case of central securities depositories and designated credit institutions referred to in Article 54.2.b) of Regulation (EU) No 909/2014 of 23 July 2014, which commit serious infringements to Article 107 (2) and (4), the fine to be imposed shall be at least twice the amount of gross profit obtained as a result of the acts or omissions in which the infringement consists, in the event that it may determined, and at most, up to the maximum of the following quantities: twice the profit obtained as of the acts or omissions in which the infringement consists; five per cent of the total annual turnover of the offending entity, according to the last available accounts approved by the management body; two per cent of the total, own or foreign funds used in the infringement, or EUR 10,000,000. If the offending entity is a parent or subsidiary of the parent undertaking which has to draw up consolidated financial statements, the total annual turnover applicable shall be the total turnover in the last available consolidated financial statements. '

Twenty-five. A third subparagraph is added to Article 105 (1) (a), with the following wording:

" In the case of central securities depositories and designated credit institutions referred to in Article 54.2.b) of Regulation (EU) No 909/2014 of 23 July 2014, which commit the very serious infringements in respect of Article 107 (1) and (3), the fine to be imposed shall be the amount of up to EUR 5,000,000. '

Twenty-six. A third subparagraph is added to Article 106 (1) (a), with the following wording:

" In the case of central securities depositories and designated credit institutions referred to in Article 54.2.b) of Regulation (EU) No 909/2014 of 23 July 2014, which commit serious infringements to The fine to be imposed shall be the amount of up to EUR 2,500,000, as referred to in Article 107 quinquies.2 and 4. '

Twenty-seven. Article 106 (1) (f) and (j) are amended as follows:

" (f) The gains obtained or, where appropriate, the losses avoided as a result of the acts or omissions constituting the infringement, to the extent that they can be determined.

j) Collaboration with the National Securities Market Commission, provided that the natural or legal person has provided relevant elements or data for the clarification of the facts investigated, without prejudice to the need to ensure the return of the profits made or the losses avoided by it. "

Twenty-eight. Article 107d is added with the following wording:

" Article 107 quinquies. Infringements of Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014.

1. Without prejudice to the infringements referred to in Article 99, they constitute a very serious infringement of the central securities depositaries, as well as those who have administrative or management positions in those entities, the following: non-compliance with Regulation (EU) No 909/2014 of 23 July 2014:

(a) The provision of the services provided for in Sections A, B and C of the Annex to the Regulation, in breach of Articles 16, 25 and 54 unless it is of a purely occasional or isolated nature.

(b) obtaining the authorisation provided for in Articles 16 and 54 by means of false declarations or any other unlawful means.

c) Non-compliance with the capital requirements set out in Article 47.1, where the solvency or viability of the offending entity or its group is put at risk.

(d) Non-compliance, not merely occasional or isolated, or with substantial irregularities, of the organisational requirements contained in Articles 26 to 30.

e) Non-compliance, not merely occasional or isolated, or with substantial irregularities, of the rules of conduct included in Articles 32 to 35.

(f) Failure to comply with the requirements to be met by the services provided, contained in Articles 37 to 41, where the integrity of the settlement or registration system is seriously compromised, or is impaired the interests of the participants or the holders of securities, or the values of the participants or their clients are seriously jeopardising.

g) Non-compliance with the prudential requirements contained in Articles 43 to 47, where the solvency or viability of the offending entity or its group is put at risk.

(h) Failure to comply with the requirements to be met by the links between central securities depositaries contained in Article 48, where the integrity and functioning of the system of securities is seriously compromised. settlement or registration.

i) Failure to grant access after having been required by the National Securities Market Commission pursuant to Articles 49 to 53.

2. Without prejudice to the infringements referred to in Article 100, they constitute a serious infringement of the central securities depositaries, as well as of those who have administrative or management positions in those entities, the failure to comply with the obligations referred to in paragraph 1 (a) to (h), except point (b), where they do not constitute a very serious infringement.

3. They constitute a very serious infringement of the designated credit institutions, as well as of those who hold administrative or management positions in those entities, the following breaches of Regulation (EU) No 909/2014 of 23 July 2014:

(a) Non-compliance with the specific prudential requirements for credit risk contained in Article 59.3, where the solvency or viability of the offending entity or its group is put at risk.

(b) Non-compliance with the specific prudential requirements for liquidity risk contained in Article 59.4, where the solvency or viability of the offending entity or its group is put at risk.

4. It constitutes a serious infringement of the designated credit institutions, as well as those who have administrative or management positions in those entities, the non-compliance with the requirements referred to in paragraph 3 (a) and (b), where it does not constitute very serious infringement.

5. The infringements provided for in this Article shall be sanctioned in accordance with the scheme provided for in this Law. "

Twenty-nine. Article 125 is amended to read as follows:

" Article 125. Central counterparties and clearing and settlement agreements.

1. In order to take account of the settlement of transactions on marketable securities executed in multilateral trading systems, their contracting entities shall conclude agreements with at least one central securities depository and, where appropriate, one or more of the following: several central counterparties, without prejudice to the right of issuers to have their securities registered with any central securities depositary in accordance with Article 49 of Regulation (EU) No 909/2014.

The contracting entities of a multilateral trading system may subscribe, after communication to the National Securities Market Commission, agreements with central counterparties and central securities depositaries. of another Member State, for the clearing or settlement of some or all transactions concluded with market members of their respective systems. The National Securities Market Commission may oppose the conclusion of such agreements only when it considers that they may undermine the orderly functioning of the multilateral trading system or, in the case of a system of settlement, technical conditions do not ensure the effective and economic settlement of transactions.

2. It shall apply to multilateral trading systems as set out in Articles 36a, 36b, 36c and 44 septies for official secondary markets.

3. Regulations shall determine the marketable securities whose operations in the multilateral contracting segments of the multilateral trading systems shall be subject to mechanisms that permit their orderly liquidation and good end by means of the necessary intervention of a central counterparty.

4. The National Securities Market Commission shall take into account the work of the clearing and settlement system carried out by the Banco de España or the other authorities with jurisdiction in the matter, for the purpose of avoiding unnecessary repetitions of controls. "

Thirty. The additional 17th provision introduced by Law 24/2001 of 27 December, of Fiscal, Administrative and Social Order Measures, which is worded as follows:

" Additional 17th Disposition. The Company for the Management of the Systems of Registration, Compensation and Settlement of Securities and the owning companies of central counterparties, central securities depositaries and Spanish official secondary markets.

1. The 'Company for the Management of Securities Registration, Clearing and Settlement Systems', hereinafter referred to as the Systems Society, shall act as the central securities depository in accordance with Article 44a and shall carry out those other securities. the government's duties, prior to the report of the National Securities Market Commission.

2. The references contained in this Law or other provisions to the "Society of Management of the Systems of Registration, Compensation and Settlement of Securities", to the "Society of Systems", to the "Service of Compensation and Settlement of Securities", will be understood made to central securities depositaries other than those provided for in Articles 57 and 58.

3. Without prejudice to the powers conferred on the Autonomous Communities in respect of the systems of clearing, settlement and registration of securities and secondary markets, the Government may authorise, after reporting by the National Commission of the Securities Market, heard the Autonomous Communities with competence in the field and on the proposal of the Minister of Economy and Competitiveness, that one or more entities acquire, directly or indirectly, the totality of the capital or a participation that attribute to the acquirer or to the acquirers the direct or indirect control of all or some of the companies that administer central counterparties, central securities depositories and secondary Spanish secondary markets, and which, on the basis of such acquisition, correspond to that or those entities ownership of the said capital.

It will have the consideration of controlling participation which, in accordance with Chapter V of Title IV and its implementing rules, would require the formulation of a public procurement offer on the entire capital of the corresponding company.

It will be up to the National Securities Market Commission to authorize the statutes governing those acquiring entities and their modifications, with the exceptions to be established regulatively, as well as to authorize the the appointment of the members of its board of directors and its directors-general, who shall meet the requirements of Article 67.2.f. If the acquiring institutions did not have their registered office in Spain and their statutes and amendments and the requirements of the members of the board and directors-general have been verified by the competent authority of another Member State of the European Union or the supervisory authority of a non-Member State of the European Union whose arrangements for organisation and operation are similar to that of the National Securities Market Commission shall be the responsibility of the latter. check such verifications.

The government, by means of royal decree, will determine the arrangements applicable to the bids for the acquisition of the shares representing the capital of the said entities, the advertising regime to be submitted to them. shareholdings, the scheme to which the said entities are to be subject to collect in their social statutes any limitation or specialty to the rights deriving from their shares and any other aspect that is necessary for the the application of this provision and to ensure the proper supervision of those entities.

It will be necessary for the government to authorize the entity or, where appropriate, entities that own, directly or indirectly, the entire capital or a controlling interest of all or, where appropriate, some of the companies referred to in the first subparagraph of this paragraph, may carry out any act whereby they no longer hold, directly or indirectly, the whole of the share capital which they hold in each of the said companies or by the they lose control, direct or indirect, of the latter. This authorization will be granted to the Autonomous Communities with competence in the field, prior to the report of the National Securities Market Commission and on the proposal of the Minister of Economy and Competitiveness.

The regime of significant shareholdings provided for in Articles 31.6 and 44 bis.2 shall not apply to transmissions subject to the administrative authorisations provided for in this provision.

The supervision of these entities shall be the responsibility of the National Securities Market Commission. "

Thirty-one. The additional 17th duplicate provision introduced by Law 44/2002 of 22 November of Reform Measures of the Financial System is deleted.

Thirty-two. An additional twenty-second provision is added with the following literal tenor:

" Additional Twenty-second Disposition. Smooth operation of the clearing, settlement and securities registration systems.

1. In accordance with international standards and with European Union law on central counterparties, central securities depositaries and other financial market infrastructures, the National Market Commission Securities and the Banco de España shall ensure that the functioning of the national securities clearing, settlement and securities systems preserves the stability of the financial system as a whole. To this end, these authorities will assess the degree of adaptation of the procedures of Spanish market infrastructures to international best practices and recommendations, and develop and publish a biennial report.

2. The National Securities Market Commission and the Banco de España, within 18 months of the entry into force of this Law, will sign a collaboration agreement with the aim of developing the work provided for in the previous paragraph. This agreement will determine their respective roles and responsibilities in the matter, as well as the system of exchange of information between the two authorities.

3. The provisions of this provision shall not alter the respective powers granted to each of these authorities by their regulatory regulations. "

B) For improving the transparency of securities issuers:

One. A new wording is given to the first subparagraph of Article 35 (1), in the following terms:

" 1. Where Spain is a home Member State, issuers whose securities are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall make public and disseminate their annual financial report to the European Union. the maximum period of four months from the end of each financial year, and shall ensure that it is kept at the disposal of the public for at least 10 years. They shall also submit their annual accounts to audit accounts. The audit report shall be made public in conjunction with the annual financial report. '

Two. A new wording is given to the first subparagraph of Article 35 (2), in the following terms:

" 2. Where Spain is a home Member State, issuers whose debt securities or shares are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union shall make public and disseminate a report (a) six months after the end of the financial year of the first six months of the financial year. Issuers shall ensure that the report is kept at the disposal of the public for at least 10 years. '

Three. Article 35 (5) (a) is amended as follows:

" (a) The Member States of the European Union, the Autonomous Communities, the local authorities and the other similar entities of the Member States of the European Union, the international public bodies of which it is at least one Member State of the European Union, the European Central Bank, the European Financial Stabilisation Facility (EFSF) established by the EFSF Framework Agreement and any other mechanism established with the aim of preserving the financial stability of the European monetary union by providing financial assistance temporary to Member States whose currency is the euro and the national central banks of the Member States of the European Union, whether or not they issue shares or other securities; and '

Four. The first subparagraph of Article 35a (1) is amended as follows:

" 1. Issuers whose securities are admitted to trading on an official secondary market or on another regulated market domiciled in the European Union, when Spain is a Member State of origin, shall make public and disseminate any changes made in the the rights inherent in those securities. Issuers shall forward to the National Securities Market Commission such information for incorporation into the official register as provided for in Article 92.g. '

Five. Article 35a (3) is deleted.

Six. A new wording is given to Article 53 (3), in the following terms:

" 3. Similarly, the provisions of the preceding paragraphs shall apply, directly or indirectly, to the holder, directly or indirectly, of other securities and financial instruments conferring the unconditional right or the discretion to acquire shares. to attribute voting rights or financial instruments that are referenced to shares that attribute voting rights and have a similar economic effect to the aforementioned securities and financial instruments, regardless of whether entitle or not to be settled by physical delivery of the underlying securities, in the terms and the breakdown to be determined by regulation. "

Seven. A new paragraph is added to Article 91 (1), with the following wording:

" By exercising its sanctioning and investigative powers, the National Securities Market Commission will cooperate with other competent authorities of the European Union to ensure that sanctions or measures produce the desired results and coordinate their action with other authorities in the case of cross-border cases. "

Final disposition second. Amendment of Law 6/1997 of 14 April of the Organization and the Functioning of the General Administration of the State.

The first paragraph of the additional provision of Law 6/1997, of 14 April, of the Organization and the Functioning of the General Administration of the State, is amended as follows:

" 1. The National Securities Market Commission, the Nuclear Safety Council, the Untransferred Universities, the Spanish Data Protection Agency, the Consortium of the Canary Special Zone, the National Commission for Markets and Competition, The Council of Transparency and Good Government, the National Museum of the Prado, the Museo Nacional Centro de Arte Reina Sofía and the FROB will be governed by their specific legislation and supplanted by this Law.

The Government and the General Administration of the State shall exercise in respect of such bodies the powers that the regulations of each of them assign to them, in their case, with strict respect to their corresponding fields of autonomy. "

Final disposition third. Amendment of Law 29/1998 of July 13, regulating the Administrative-Administrative Jurisdiction.

Article 11 (1) (g) of Law 29/1998 of 13 July, regulating the Administrative-Administrative Jurisdiction, is amended, with the following wording:

" g) Of the remedies against the acts of the Banco de España, the National Securities and Exchange Commission and the FROB adopted in accordance with the provisions of Law 11/2015 of 18 June, of recovery and resolution of entities of Credit and investment services companies. '

Final disposition fourth. Amendment of Law 41/1999 of 12 November on payment systems and securities settlement.

The first paragraph of Article 6 of Law 41/1999 of 12 November on payment and securities settlement systems is amended as follows:

" The Bank of Spain and the National Securities Market Commission shall notify the European Securities and Markets Authority of systems recognised under this Law that are managed by them or by entities subject to the law. to their supervision or surveillance, and shall be the bodies responsible for receiving or sending the communications referred to in Article 6.2 and 3 of Directive 98 /26/EC of the European Parliament and of the Council of 19 May 1998 on the firmness of the settlement in the payment and settlement systems of securities. They shall also provide the European Securities and Markets Authority without delay, upon request, with all the information necessary for the performance of their tasks in accordance with Article 35 of Regulation (EU) No 1095/2010. The European Parliament and the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716 /2009/EC and repealing Commission Decision 2009 /77/EC. '

Final disposition fifth. Amendment of Law 22/2003, dated July 9, Bankruptcy.

The second provision of Law 22/2003, dated July 9, is amended, which happens to have the following wording:

" Additional Disposition Second. Special arrangements applicable to credit institutions, investment firms and insurance undertakings.

1. In the case of credit institutions or entities legally assimilated to them, investment firm and insurance undertakings, as well as institutions which are members of official securities markets and entities participating in the credit institutions. clearing and settlement of securities shall apply the specialities which are established in their specific legislation for the purposes of such situations, other than those relating to the composition, appointment and operation of the administration insolvency.

2. Special legislation, for the purposes of the application of paragraph 1, is considered to be governed by the following rules:

(a) Articles 10, 14 and 15 of Law 2/1981 of 25 March of Regulation of the Mortgage Market, as well as the regulatory norms of other securities or instruments to which the same solvency regime is legally attributed Applicable to mortgage cards.

b) Article 16 of Royal Decree Law 3/1993 of 26 February on urgent measures in budgetary, tax, financial and employment matters.

(c) Law 24/1988 of 28 July 1988 on the Securities Market, as regards the arrangements applicable to the system of clearing, settlement and registration in the securities market, and to the entities participating in such systems, and in particular, Articles 12a, 36c, 44a, 44b, 58 and 70 ter.2.f).

d) The additional fifth provision of Law 3/1994 of 14 April, adapting Spanish legislation on credit institutions to the Second Banking Coordination Directive.

(e) Law 13/1994, of 1 June, of Autonomy of the Banco de España, in respect of the arrangements applicable to guarantees formed in favour of the Banco de España, the European Central Bank or other national central banks of the European Union, in the exercise of its functions.

(f) The additional third provision of Law 1/1999, of 5 January, regulating capital-risk entities and their management companies.

g) Law 41/1999 of 12 November on payment systems and securities settlement.

(h) Articles 26 to 37, inclusive, 39 and 59 of the recast of the Law on the Management and Supervision of Private Insurance, approved by Royal Decree-Law 6/2004 of 29 October, and the Recast Text of the Statute Legal of the Insurance Compensation Consortium, approved by the Royal Legislative Decree 7/2004, of October 29.

i) Chapter II of Title I of Royal Decree Law 5/2005 of 11 March 2005 on urgent reforms to boost productivity and improve public procurement.

j) Act of April 22 on Sanitation and Settlement of Credit Entities.

k) Law 11/2015 of 18 June 2015 on the recovery and resolution of credit institutions and investment firms.

l) Article 34 of Law 14/2013 of 27 September, supporting entrepreneurs and their internationalisation.

3. The legal rules referred to in the preceding paragraph shall apply with the subjective and objective scope provided for in the operations or contracts referred to therein, and in particular those relating to operations relating to the payment and settlement and securities clearing systems, double transactions, repurchase agreement transactions or financial transactions relating to derivative instruments. '

Final disposition sixth. Amendment of Law 35/2003 of 4 November of collective investment institutions.

Article 54a (1) and (2) are worded as follows:

" Article 54a. Conditions for the cross-border management of IIC by management companies authorised in Spain in accordance with Directive 2011 /61/EU of the European Parliament and of the Council of 8 June 2011 and for the provision of services in other States members.

1. The SGIICs authorised in Spain in accordance with Directive 2011 /61/EU of the European Parliament and of the Council of 8 June 2011 may manage IICs established in another Member State, either directly or through the establishment of a branch, provided that the SGIIC is authorised to manage this type of IIC. In addition, the services referred to in Article 40.2 for which it has been authorised may be provided in another Member State.

2. Any manager who intends to manage IICs established in another Member State for the first time shall communicate to the National Securities Market Commission the following information:

(a) The Member State in which the IICs are proposed to manage directly or through the establishment of a branch or if they are to provide services referred to in Article 40.2 for which it has been authorised, and

(b) a programme of activities indicating, in particular, the services to be proposed and identifying the IICs that it intends to manage. "

Final disposition seventh. Amendment of Royal Decree-Law 5/2005 of 11 March 2005 on urgent reforms to boost productivity and improve public procurement.

One. The second article of Royal Decree-Law 5/2005, of 11 March, of urgent reforms for the boost to productivity and for the improvement of public procurement, which happens to have the following wording:

" Article second. Object.

The purpose of this Chapter is to incorporate into Spanish law the provisions of Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements, as well as to order and systematize the current rules applicable to contractual netting agreements and financial guarantees. The effects resulting from the opening of a bankruptcy procedure or an administrative settlement procedure on such agreements and guarantees are also established.

Articles 6 (2), 6 (2) to (5), (11), (4), (4) and 16 (1) shall not apply in cases where the implementation of the guarantee agreements is prevented or limited. financial or limit the effectiveness of the agreements on pledged assets, the settlement agreements for compensation or the netting agreements, as provided for in Chapters VI and VII of Law 11/2015 of 18 June 2015, recovery and resolution of credit institutions and investment firms and their rules of development, or in the terms provided for in other applicable regulations, that pursue purposes and have safeguards equivalent to those contained in that Act.

The provisions of this Chapter shall be without prejudice to the applicable rules on consumer credit and the rules on the recovery and resolution of credit institutions and investment firms. "

Two. Article 4 (1) (d) is amended, which shall be amended as follows:

d) the governing bodies of official secondary markets or of multilateral trading systems and companies managing systems for clearing, settlement and registration of securities and financial instruments; as well as the central counterparties, clearing agents or clearing houses referred to in Law 41/1999 of 12 November on payment and securities settlement systems and similar entities acting in the securities options, futures and derivatives markets, as well as participating members and entities all previous infrastructure when acting in its capacity as such. '

Three. Point (f) of Article 5 (2) is added with the following wording:

" (f) Cash operations on the marketable securities provided for in the first paragraph of Article 2 of Law 24/1988 of 28 July of the Stock Market admitted to trading on an official secondary market or in another regulated market domiciled in the European Union or in a multilateral trading system. '

Final disposition octave. Amendment of the Law of 22 April on the reorganisation and liquidation of credit institutions.

The 6/2005 Act of 22 April on the reorganisation and settlement of credit institutions is amended as follows:

One. In Article 2, the following paragraphs are

:

" 1.d) Investment service companies, as defined in Article 4.1 of Royal Decree 217/2008, and their branches established in Member States other than those in which they are based.

2. In case of application of the instruments of resolution and exercise of the powers of resolution provided for by Law 11/2015, of June 18, of recovery and resolution of credit institutions and companies of investment services, the provisions of this Law will also apply to financial institutions, companies and parent companies falling within the scope of Law 11/2015, of 18 June.

3. Articles 6 and 13 of this Law shall not apply where Article 21 of Law 11/2015 applies, of 18 June.

4. Article 4 of this Law shall not apply when applying Article 59 of Law 11/2015, of June 18. "

Two. In Article 3, the following paragraphs are added:

" 7. Consolidation measures include the implementation of the instruments and the exercise of the powers of resolution referred to in Law 11/2015 of 18 June.

8. For the purposes laid down in this Law, a branch is defined as a branch of a holding which is a party, devoid of legal personality, of an entity, and which carries out directly, in whole or in part, the transactions inherent in the activity of an entity.

9. For the purposes set out in this Law, financial instrument is defined as:

(a) a contract that gives rise to both a financial asset for a party and a financial liability or capital instrument for the other party,

(b) an instrument specified in Section C of Annex I to Directive 2014 /65/EU of the European Parliament and of the Council of 15 May 2014 on the markets in financial instruments and amending the Directive 2002/92/EC and Directive 2011 /61/EU.

c) a derivative financial instrument,

d) a primary financial instrument, or

e) a cash instrument.

The instruments referred to in points (a), (b) and (c) shall be considered as financial instruments only where their value is derived from the price of an underlying financial instrument, another underlying item, a type or an index. '

Three. Article 8 (1) (d) and (e) shall be worded as follows:

" (d) The exercise of property rights or other rights in financial instruments whose existence or transfer involves an entry in a register, an account or a centralised deposit system held or located in a Member State of the European Union, shall be governed by the law of the Member State in which the registration, account or centralised deposit system in which those rights are registered is established or situated. For this purpose, financial instruments are defined as all those indicated in Section C of Annex I to Directive 2014 /65/EU of the European Parliament and of the Council of 15 May 2014 on the markets for financial instruments and on the amending Regulation (EU) No 648/2012.

Without prejudice to the foregoing and the provisions of Articles 66 and 70 of Law 11/2015 of 18 June 2015, transactions with repurchase agreements and transactions carried out within a regulated market or an organized system Multilateral trading arrangements shall be governed exclusively by the law applicable to the contract governing such pacts or transactions.

(e) Without prejudice to Articles 66 and 70 of Law 11/2015 of 18 June 2015, the contractual and novation compensation agreements shall be governed exclusively by the law applicable to the contract governing the said contract. agreements. "

Final disposition ninth. Amendment of the Royal Decree 1/2010 of 2 July 2010 approving the recast of the Law on Capital Societies.

An additional tenth provision is added to the Recast Text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010 of 2 July, with the following wording:

" Additional Disposition 10th.

1. For the purposes of Law 11/2015 of 18 June 2015 on the recovery and resolution of credit institutions and investment firms, the general meeting of listed companies subject to this Law may, by a majority of two thirds of the votes validly issued, agree or amend the social statutes indicating that the general meeting in which the decision on an extension of capital is decided is convened within a period of less than that laid down in Article 176 of this Law, provided that the the meeting is not held within a period of less than 10 days from the date of the call, the conditions of Articles 8 to 10 of Law 11/2015 of 18 June 2015 and the extension of capital is necessary to avoid the conditions of resolution set out in Articles 19 to 21 of that Law.

2. For the purposes of the above paragraph, the time limits provided for in Articles 179.3 and 519.2 of this Law shall not apply. '

Final disposition tenth. Amendment of Royal Decree-Law 16/2011 of 14 October establishing the Deposit Insurance Fund of Credit Entities.

The Royal Decree-Law 16/2011 of 14 October, establishing the Credit Entities Deposit Insurance Fund, is amended as follows:

One. Article 5 is worded as follows:

" Article 5. Entities attached.

1. All Spanish credit institutions will be legally owned by the Credit Entities Deposit Insurance Fund provided for in this Royal Decree-Law.

The obligation set out in the preceding paragraph shall not apply to the Institute of Official Credit.

The Bank of Spain shall communicate to the European Banking Authority as soon as possible the accession of a credit institution to the Fund.

2. Branches of credit institutions of non-EU Member States operating in Spain shall be incorporated into the Fund in the cases and in the form that they are regulated. Notwithstanding the foregoing, where such entities offer a level of protection to depositors equal to or greater than that established in this Royal Decree-Law and in their development regulations, their non-adherence to the Fund may be made available.

3. Failure to comply with the obligations of a credit institution against the Deposit Insurance Fund of Credit Entities shall be classified as a serious infringement in accordance with the provisions of Law 10/2014 of 26 June of the supervision and solvency of credit institutions, unless such non-compliance has an occasional or an isolated character or is remedied within a reasonable period of time.

These defaults will be communicated by the Credit Entities Deposit Guarantee Fund to the Banco de España, who, after consulting the Fund, will impose the necessary measures to ensure that the institution returns to the their obligations.

Credit institutions may be excluded from the Fund once the measures taken under the previous paragraph have failed. The holder of the Ministry of Economy and Competitiveness, on a proposal from the Bank of Spain and prior to the report of the Fund's Management Committee, shall be competent to agree to the exclusion.

4. Credit institutions wishing to transfer their business to another Member State of the European Union shall report it to the Fund at least six months in advance. During the period until the transfer, the entity shall contribute to the deposit guarantee compartment in the terms provided for in this Royal Decree-Law and in its development regulations.

The contributions to the Fund's deposit guarantee compartment by credit institutions that transfer their activity to other Member States of the European Union and are therefore subject to another guarantee scheme deposits shall be transferred to such a system on the terms that are regulated.

In no case shall any contributions paid before the 12 months prior to the transfer or those made under Article 6.2.b be repaid, owing to the entity in question, before transferring its activity, which would be outstanding for contributions approved in accordance with that Article. "

Two. Article 6 is amended as follows:

" Article 6. Heritage.

1. For the fulfilment of its tasks, the Fund shall be provided with the following resources:

(a) The annual contributions provided for in the following paragraphs.

(b) The branches that the Fund makes between the entities attached to it, distributed according to the basis of calculation of the contributions and with the limits to be determined. These branches will be registered as assets once they are agreed.

(c) Resources collected in securities markets, loans or any other borrowing operations.

In any event, where the Fund's assets are insufficient for the development of its functions, the Fund shall carry out the necessary actions to restore its sufficiency.

In addition, the deposit guarantee compartment may be nourished by the payment commitments of the entities against the Fund provided that such commitments:

(a) They are fully supported by guarantees of low-risk, charge-free and free-disposal assets for the Fund.

b) Do not exceed 30% of the total available resources of the compartment.

2. The resources obtained under the previous paragraph shall be allocated to one of the following separate compartments in which the Fund shall be divided:

a) Deposit Guarantee Share

b) Value Warranty Share.

Each compartment will respond exclusively to the costs, expenses and obligations expressly attributed to it by this Royal Decree-Law and its implementing regulations.

In any event, the Fund shall assign to each compartment the obligations arising from the collection of the resources obtained in accordance with point (c) of the previous paragraph, taking into account the intended use of the resources collected.

Additionally, the contribution of each compartment to the costs, expenses and obligations that have not been expressly attributed to any compartment shall be calculated on the basis of the amount of deposits or securities that ensures each compartment, in the terms that are regulated.

3. The Management Commission shall determine the amount of the institutions ' annual contributions to the deposit guarantee compartment.

Annual contributions shall be calculated on the basis of the amount of the guaranteed deposits of each institution and its risk profile.

The Banco de España will develop the necessary methods for the contributions to be proportional to the risk profile of the entities. For these purposes, it shall take into account, inter alia, the following factors:

(a) The difference between the expected legal level for the main indicators derived from the solvency rules and the one effectively maintained by the institution.

(b) The difference between the volume of own funds and liabilities for the minimum requirement of own funds and eligible liabilities, required by the institution in accordance with Law 11/2015 of 18 June of recovery and the resolution of credit institutions and investment firms, and the resolution effectively maintained by the institution.

(c) Guidelines which, where appropriate, have been established by the European Banking Authority pursuant to Article 13.3 of Directive 2014 /49/EU of the European Parliament and of the Council of 16 April 2014 on the deposit guarantee schemes.

d) The phase of the economic cycle and the impact of pro-cyclical contributions.

4. The available financial resources of the deposit guarantee compartment shall be at least 0,8% of the amount of the guaranteed deposits.

However, the Fund may ask the European Commission to reduce this level to 0.5%, taking into account factors such as:

a) The low probability that a significant portion of the deposit guarantee compartment resources will be used for protection measures of depositors other than resolution procedures.

(b) The likelihood of credit institutions being subject to resolution procedures in the event of bankruptcy due to the high degree of concentration of the banking sector and the large volume of assets of the principal entities.

5. The annual contributions provided for in paragraph 1 (a) to the securities guarantee compartment shall not exceed 0,3% of the amount of the securities secured.

6. Contributions to a compartment shall be suspended where the non-committed equity fund in its own operations for the purpose of that compartment equals or exceeds 1% of the total amounts secured by the compartment. '

Three. Article 8 (1) and (2) shall be worded as

:

" 1. The Fund, which shall be charged only to the deposit-guarantee compartment, shall satisfy its holders the amount of the deposits guaranteed in the terms laid down in regulation where one of the following events occurs:

(a) That the entity has been declared or is judicially requested for the declaration in the contest of creditors.

(b) That, having been defaulted on deposits, the Banco de España determines that the institution is unable to restore them immediately for reasons directly related to its financial situation. The Bank of Spain shall make such a determination as soon as possible and in any event must resolve within the maximum period to be determined by regulation, after having verified that the institution has failed to restore the deposits. expired and enforceable.

2. The Fund, which shall be charged only to the securities holding compartment, shall satisfy the holders of securities or other financial instruments entrusted to a credit institution with the amounts secured when any of the following occurs facts:

(a) That the credit institution has been declared or is judicially requested for the declaration of the tender of creditors, and such situations entail the suspension of the return of the securities or instruments However, the payment of these amounts shall not be paid if, within the time limit laid down for the purpose of initiating the payment, the said competition is lifted.

(b) That, having produced the non-return of the securities or financial instruments, the Banco de España determines that the credit institution is unable to restore them in the immediate future for reasons directly related to their financial situation. The Bank of Spain shall make such a determination as soon as possible and in any event shall decide on the provenance of the compensation within the maximum time limit to be determined by regulation. "

Four. A new paragraph is added at the end of Article 10 (1) with the following wording:

" In addition, the following deposits shall be guaranteed regardless of their amount for three months from the moment the amount has been paid or from the time such deposits have been paid have become legally transferable:

a) Those from transactions with real estate of a residential nature and private character.

(b) Those arising from payments received by the depositor on a timely basis and are linked to marriage, divorce, retirement, dismissal, invalidity or death.

(c) Those based on the payment of insurance benefits or compensation for damages resulting from a crime or a judicial error. "

Five. Article 11 is worded as follows:

" Article 11. Measures to support the resolution of a credit institution.

1. In order to fulfil the function provided for in Article 4 and in the defence of depositors whose funds are guaranteed and the Fund itself, the Fund may adopt measures to support the resolution of a credit institution under the deposit guarantee.

For these purposes, when a credit institution is in a resolution process in accordance with the provisions of Law 11/2015 of June 18, the Fund, within the framework of the approved resolution plan, will participate in the financing of the resolution of credit institutions in accordance with Article 53.7 of that law.

2. The Fund may request the FROB Rector Commission for information regarding the resolution process necessary to facilitate its participation in accordance with the provisions of this Article. With the transfer of this information, the Fund shall be subject to the duty of secrecy regime provided for in Article 59 of Law 11/2015 of 18 June.

3. The FROB shall determine, after consultation with the Fund, the amount of the Fund responsible. In any event, the Credit Entities Deposit Insurance Fund may not assume a financial cost higher than the lower of the following amounts:

(a) The amount of the disbursement that would have had to be made, at the time of the opening of the resolution process, to make the payment of the amounts secured in the event of liquidation of the institution. If, in accordance with the subsequent assessment provided for in Article 5.3 of Law 11/2015, of 18 June, it is concluded that the contribution of the Fund to the resolution has been greater than the net losses incurred in the event of the settlement under the insolvency law, the National Resolution Fund will pay the Credit Entities Deposit Guarantee Fund the difference between the two amounts.

b) 50 percent of the target level set for the deposit guarantee compartment under Article 6.4.

4. Where the Fund makes payments in the context of a bank resolution procedure, it shall be entitled to claim to the credit institution concerned an amount equal to its disbursements.

5. Exceptionally, provided that a resolution process has not been initiated, the Fund may use its resources to prevent the liquidation of a credit institution when:

(a) the cost of this intervention would be lower than the payment of the amounts secured in the event of the liquidation.

(b) the credit institution is required to provide specific measures for the return to compliance with the solvency, management and discipline rules.

c) the intervention to the entity's commitment to ensure access to the secured deposits is conditioned.

d) the fund considers the cost charged to the ordinary or extraordinary contributions of the attached entities.

Reglamentarily, the above conditions may be specified. "

Six. A new Article 12 is added with the following wording:

" Article 12. Stress tests.

1. The Bank of Spain shall submit to the Fund, at least every 3 years, evidence of resistance to its ability to meet its obligations to pay in situations of stress.

2. The Fund shall provide the Bank of Spain with the information necessary to carry out the stress tests. The Banco de España may only use this information for the performance of such tests and shall not keep it longer than is necessary for such purposes. "

Seven. An additional provision is added with the following wording:

" Additional disposition first. Division in equity compartments of the Credit Entities Deposit Insurance Fund.

The acquired rights and obligations incurred by the Deposit Insurance Fund of Credit Entities before the date of entry into force of Law 11/2015, of June 18, of recovery and resolution of entities of Credit and investment services undertakings shall be attributed exclusively to the deposit guarantee compartment. '

Eight. An additional provision is added with the following wording:

" Additional Disposition Second. Deadline for the deposit of the Deposit Insurance Fund in credit institutions.

1. The level of financial resources of the Deposit Insurance Fund in credit institutions required by Article 6.4 shall be reached no later than 3 July 2024.

Without prejudice to the provisions of the preceding paragraph, the obligation for institutions to contribute only shall be born where the Fund requires, specifying for each institution the corresponding amount, the ordinary or extraordinary, without any general contribution obligations arising from prior to that time.

2. In the event that in the period from the entry into force of Law 11/2015, of 18 June, recovery and resolution of credit institutions and investment services companies, and on 3 July 2024 the financial resources available the level provided for in the previous paragraph, but subsequently reduced to below two-thirds of that level, the annual contributions to the deposit guarantee compartment shall be set at such a level as to enable recovery of the target level within a maximum of six years.

3. In addition, the period provided for in paragraph 1 may be extended until 3 July 2028 if the payments made by the deposit guarantee compartment between the entry into force of Law 11/2015 of 18 June and 3 July 2024 exceed 0,8% of the guaranteed deposits as at 3 July 2024. '

Final disposition eleventh. Amendment of Law 3/2012 of 6 July on urgent measures for the reform of the labour market.

The additional provision, seventh of Law 3/2012 of 6 July, of urgent measures for labour market reform, is worded as follows:

" Additional provision seventh. Rules applicable to credit institutions.

One. Compensation for termination of the contract.

1. Entities which are mainly or financially supported by the Banking Ordered Restructuring Fund (hereinafter referred to as FROB), or those which are subject to resolution measures, require funding from the National Resolution Fund. or from the Single European Resolution Fund, may not in any case satisfy any termination of a contract which exceeds the minimum of the following amounts: (a) twice the maximum level resulting from, respectively, the rules 3 and 4. of Article 5.3 (a) of Royal Decree-Law 2/2012 of 3 February, of consolidation of the financial sector; or (b) two years of the fixed remuneration stipulated.

2. Except for the previous rule, the case of managers and directors who have been incorporated into the entity or their group after or at the same time as the participation or financial support of the FROB or the financing of the National Resolution Fund or the Single European Resolution Fund, in which case the Banco de España, in the light of the contractually stipulated conditions and the results of the reorganisation plan, may authorise amounts exceeding the as a result of the application of the bases resulting from the rules 3 and 4. of Article 5.3 (a) of the Royal Decree-Law  2/2012, of 3 February, but always with the limit of two years of the fixed remuneration originally stipulated.

Two. Termination of the contract of persons exercising management or management positions in a credit institution on the basis of the imposition of sanctions.

1. The imposition of the penalties referred to in Articles 100 and 101 of Law 10/2014 of 26 June 2014 on the management, supervision and solvency of credit institutions and Articles 86 and 87 of Law 11/2015 of 18 June 2014 on recovery and the resolution of credit institutions and investment firms, persons carrying out administration or management positions in a credit institution under a contract of employment, including special employment relationships of senior staff, shall be deemed, for the purposes of labour law, as non-compliance a serious and guilty contract and thus cause disciplinary dismissal, and may result in the termination of the contract by the employer.

2. Likewise, the imposition of such sanctions shall be considered as a fair cause of extinction or termination of contracts that have a distinct nature of the work.

3. In the case of termination of the contract in accordance with the provisions of the preceding paragraphs, persons carrying out administration or management positions in a credit institution shall not be entitled to any compensation for such termination, whatever the amount or form thereof, and regardless of the legal standard, contract, individual or collective agreement or agreement of origin and contract, agreement or agreement of a civil or commercial nature in which the payment of the compensation.

Three. Suspension of the contract of persons exercising management or management positions in a credit institution.

1. The contract of employment or of any other nature of persons exercising management or management positions in a credit institution may be suspended for the following reasons:

(a) When, in accordance with Article 112 of Law 10/2014, of June 26, the provisional suspension of persons who, holding administration or management positions in the credit institution, appears as suspected persons responsible for very serious infringements.

(b) Where, in the cases provided for in Law 10/2014 of 26 June, or in Law 11/2015 of 18 June, the supervisor or the competent resolution authorities agree to the temporary replacement of the organs of administration or management of the credit institution.

2. The suspension of the contract referred to in the preceding paragraph shall be of the same duration as the provisional suspension or temporary replacement agreed and shall entail mutual exemption from the obligations to work or provide services and pay for work or for the provision of those. "

Final disposition twelfth. Amendment of Law 10/2014 of 26 June of the management, supervision and solvency of credit institutions.

Law 10/2014 of 26 June of the management, supervision and solvency of credit institutions is amended as follows:

One. Article 70 is worded as follows:

" Article 70. Causes of administrator intervention and substitution.

1. The intervention of a credit institution or the temporary replacement of its administrative body or of one or more of its members shall proceed in the following cases:

(a) In accordance with the provisions of Law 11/2015 of 18 June 2015 on the resolution of credit institutions and investment firms.

(b) Where there are reasonable indications that the credit institution is in a situation other than those provided for in the scope of Law 11/2015 of 18 June, but of exceptional gravity and that it may put in place danger of its stability, liquidity or solvency.

(c) Where a significant holding is acquired in a credit institution without respect to the scheme provided for in this Act or where there are substantiated and substantiated reasons for considering that the influence exercised by the persons that the holding may result to the detriment of the sound and prudent management of the holding, which would seriously damage its financial situation.

2. The intervention or replacement measures referred to in this Article may be taken during the processing of a criminal case or regardless of the exercise of the power of sanction. "

Two. Article 73 is worded as follows:

" Article 73. Content of the intervention and replacement agreement.

1. The agreement shall designate the person (s) to exercise the functions of intervention or to act as interim administrators, and shall indicate whether such persons should act jointly, jointly or severally. Designated persons shall have the capacity, professional qualification and knowledge appropriate to perform these functions, as well as not being in conflict of interest.

The agreement shall also determine whether such intervention will involve the replacement of its administrative body or of one or more of its members and if the interim administrator may exercise its functions in collaboration with the administration organ.

2. Such an agreement, of an executive nature from the moment it is given, will be immediately published in the "Official Gazette of the State" and registration in the corresponding public registers. The publication in the "Official State Gazette" will determine the effectiveness of the agreement against third parties.

3. Where this is necessary for the implementation of the intervention or replacement agreement of the administrators, direct compulsion may be made to take possession of the offices, books and documents concerned or for the examination of the the latter, without prejudice to the provisions of Article 96.3 of Law No 30/1992, of 26 November.

4. The Banco de España may amend, in a reasoned manner and in accordance with the procedure laid down in this Chapter, the measure of intervention or substitution where circumstances so require. "

Final disposition thirteenth. Amendment of Law 22/2014 of 12 November 2014 on the regulation of risk capital institutions, other closed-rate collective investment entities and the management companies of collective investment entities of a closed type, and by which Law 35/2003, dated November 4, is amended by Collective Investment Institutions.

Article 81 (1) and (2) are amended, which are worded as follows:

" Article 81. Conditions for the cross-border management of ECR and EICC by management companies authorised in Spain in accordance with Directive 2011 /61/EU of the European Parliament and of the Council of 8 June 2011 and for the provision of services in others Member States.

1. SGEICs authorised in Spain in accordance with Directive 2011 /61/EU of the European Parliament and of the Council of 8 June 2011 may manage ECR and EICC established in another Member State, either directly or through the establishment of a branch, provided that the SGEIC is authorised to manage such investment entities. In addition, the services referred to in Article 42.4 for which it has been authorised may be provided in another Member State.

2. Any manager who intends to manage an ECR or EICC established in another Member State for the first time shall communicate to the National Securities Market Commission the following information:

a) The Member State in which the ECR or EICC is proposed to be managed,

(b) if the management is to be carried out directly or through the establishment of a branch, or if the services referred to in Article 42.4 for which it has been authorised are to be provided, and

(c) an activity programme indicating, in particular, the services to be proposed and identified by the ECR or EICC that it intends to manage. "

Final disposition fourteenth. Competitive titles.

This Law is dictated by the provisions of Article 149.1.6., 11. and 13. of the Spanish Constitution, which attribute to the State jurisdiction over commercial and procedural law, bases of the ordination of credit, banking and insurance, and bases and coordination of the overall economic activity planning, respectively.

The final provisions first to thirteenth are dictated under the jurisdiction of the jurisdiction expressed in the rules that are the subject of modification by these provisions.

Final disposition fifteenth. Incorporation of European Union law.

By this Law, Directive 2014 /49/EU of the European Parliament and of the Council of 16 April 2014, Directive 2014 /59/EU of the European Parliament and of the Council of 15 May 2014 and of the European Parliament and of the Council of 16 April 2014 on Directive 2013 /50/EU of the European Parliament and of the Council of 22 October 2013.

Final disposition sixteenth. Faculty of development.

The Government may dictate the regulatory standards necessary for the development of the provisions of this Law.

Final disposition seventeenth. Entry into force.

1. This Law shall enter into force on the day following that of its publication in the "Official State Gazette".

2. Without prejudice to the above paragraph:

(a) The rules on internal recapitalisation contained in Chapter VI shall enter into force on 1 January 2016.

(b) The provisions of the new Article 12.1 introduced by the final provision tenth in Royal Decree-Law 16/2011 of 14 October shall not enter into force until 3 July 2017.

Therefore,

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

Madrid, 18 June 2015.

FELIPE R.

The President of the Government,

MARIANO RAJOY BREY