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Royal Decree 358/2015 Of 8 May, Amending Royal Decree 217/2008 Of February 15 On The Legal Regime Of Investment Services Companies And Other Entities Providing Investment Services And By Which S ...

Original Language Title: Real Decreto 358/2015, de 8 de mayo, por el que se modifica el Real Decreto 217/2008, de 15 de febrero, sobre el régimen jurídico de las empresas de servicios de inversión y de las demás entidades que prestan servicios de inversión y por el que s...

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TEXT

I

The financial system plays a set of functions that are vital to the smooth functioning of the economy. Firstly, it allows the economic units to be brought into contact with surplus and savings deficits, thus facilitating the financing of business projects. In addition, the financial system gives liquidity to investments that could in principle be illiquid either through the transformation of maturities by financial intermediaries, or through the creation of secondary markets where investors may be able to divest their securities before the expiry date of the securities arrives. Finally, it would be worth highlighting their role in risk management. Thus, a developed financial system allows each investor to find the combination of profitability and risk that best suits their characteristics or preferences.

Although the most important episodes of financial crises have been related to credit institutions, the bankruptcy of other financial institutions has also had significant consequences throughout the financial year. history. Furthermore, as credit institutions and investment firms are often subject to similar risks, a common regulatory framework for prudential matters is justified. For this reason, all European solvency rules, i.e. 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 amending Regulation (EU) No 648/2012 and Directive 2013 /36/EU of the European Parliament and of the Council of 26 June 2013 on access to the business of credit institutions and the prudential supervision of credit institutions credit and investment firms, for which Directive 2002/87/EC is amended and the undertakings are repealed; Directives 2006 /48/EC and 2006 /49/EC, based on the "Global regulatory framework for strengthening banks and banking systems" (Basel III), extends its effects to investment firms.

These rules provide for capital and liquidity requirements as well as internal organisation which, without a doubt, contribute to reducing the likelihood of occurrence of insolvency episodes and which increase the resilience of companies in the investment services to periods of financial stress. However, it is no less certain that, on some occasions, these requirements may lead to disproportionate regulatory burdens depending on the size and nature of the Spanish investment services companies. Therefore, taking into account the fact that most investment firms carry out activities that are very far from being in terms of scale, nature and complexity of those carried out by credit institutions, Directive 2013 /36/EU of 26 June 2013 In 2013, Regulation (EU) No 575/2013 of 26 June 2013 provides for exemptions for investment firms with less complexity.

II

Directive 2013 /36/EU of 26 June 2013 was transposed into national law in two stages. In a first phase, the Royal Decree-Law 14/2013 of 29 November, of urgent measures for the adaptation of the Spanish law to the European Union legislation in the field of supervision and solvency of financial institutions, transposed those more urgent aspects of Directive 2013 /36/EU of 26 June 2013, the non-transposition of which could have hindered the exercise by the Bank of Spain and the National Securities Market Commission of the new powers conferred on it by the Directive as well as its own operability with Regulation (EU) No 575/2013 of 26 June 2013.

Later, Law 10/2014 of 26 June, of the management, supervision and solvency of credit institutions, would be undertaken in full incorporation into the Spanish law of the provisions of Directive 2013 /36/EU of 26 June 2013, whose transposition required legal status. In particular, the provisions on investment services companies were incorporated into Law 24/1988 of 28 July of the Stock Market through the first provision of the first.

This royal decree aims, on the one hand, to complete the transposition of Directive 2013 /36/EU of 26 June 2013, and, on the other, to convert Royal Decree 217/2008 of 15 February into the legal system of companies of investment services and of the other entities providing investment services and partially amending the Regulation of Law 35/2003, of 4 November, of Collective Investment Institutions, approved by the Royal Decree 1309/2005 of 4 November 2005, in the main regulations with regulatory status in the field of management, supervision and solvency of investment firms.

III

This royal decree consists of a single article that introduces a series of modifications to Royal Decree 217/2008, of February 15. Thus, paragraphs 2 and 3 develop the suitability requirements to be met by the members of the Board of Directors, Directors-General and other key positions of the investment firm. These requirements are grouped into three categories: commercial and professional honorability, knowledge and experience and ability to exercise good governance that must be continuously evaluated by the National Securities Market Commission. as for the investment services themselves.

For its part, paragraph 10 introduces a series of articles that carry out the functions of the three committees with which investment service firms must count as provided for in Law 24/1988 of 28 July 1988. Stock Market, Nomination Committee, Remuneration Committee and Risk Committee. Among the tasks of the first of these committees is to set a representation objective for the less-represented sex on the board of directors and to draw up guidelines on how to achieve this objective. This section also develops the obligations of advertising on corporate governance and remuneration policy.

The bulk of the amendments are in paragraph 12 which adds two new titles to Royal Decree 217/2008 of 15 February. The first of these contains the solvency provisions of the investment services companies in addition to those of Regulation (EU) No 575/2013 of 26 June 2013. Under this heading, Chapter I sets out the obligations of investment firms to have strategies and procedures in place to enable them to assess the adequacy of capital held by the nature, scale and complexity of their investment. activity. It also sets out a set of guidelines to be followed by investment firms to manage the different risks they face (credit risk and counterparty risk, liquidity risk, interest rate risk, risk of capital risk, risk of liquidity risk, risk of liquidity risk, etc.). securitisation, operational risk ...).

For its part, Chapter II contains the regime of Common Equity Tier 1 mattresses additional to those established on an ordinary basis in Regulation (EU) No 575/2013 of 26 June 2013. Following the structure of Law 24/1988, of July 28, of the Market of Securities, this chapter refers to the equivalent chapter of Royal Decree 84/2014, of 13 February, for which the Law 10/2014 is developed, of June 26.

The second title added in paragraph 12 sets out the provisions governing the supervisory function of the National Securities Market Commission and is divided into four chapters. Chapter I contains the content of the review and supervisory evaluation of the National Securities Market Commission. This supervision shall pay particular attention to the use of internal methods for the calculation of solvency requirements.

The second chapter contains the subjective scope of the monitor function. In particular, a number of rules are laid down to determine which competent authority to monitor on a consolidated basis when the entity to be supervised is a consolidated group of investment services companies operating in several States. In addition, Chapter III includes the framework of collaboration of the National Securities Market Commission with other competent authorities. The articles on the functioning of colleges of supervisors, the adoption of joint decisions on prudential supervision or the procedure for the declaration of significant branches are highlighted in this

.

Finally, Chapter IV contains a number of advertising obligations of the National Securities Market Commission and investment firm companies. The National Securities Market Commission should publish, among others, the criteria and methodology used to review the procedures applied by investment firms to comply with the solvency rules. For their part, investment firms will have to publish a report entitled "Solvency Information" containing information on those aspects of their activity that will enable other actors to assess the risk of their exposures.

This royal decree has been submitted to the Ministry of Finance and Public Administration and the Advisory Committee of the National Securities Market Commission.

In its virtue, on the proposal of the Minister of Economy and Competitiveness, in agreement with the Council of State and after deliberation of the Council of Ministers at its meeting of May 8, 2015,

DISPONGO:

Single item. Amendment of Royal Decree 217/2008 of 15 February on the legal status of investment firms and other entities providing investment services and amending the Law Regulation in part 35/2003, dated November 4, of the Collective Investment Institutions, approved by Royal Decree 1309/2005 of 4 November 2005.

Royal Decree 217/2008 of 15 February on the legal status of investment firms and other entities providing investment services and amending the Law Regulation in part 35/2003, dated 4 November, of the Collective Investment Institutions, approved by Royal Decree 1309/2005 of 4 November 2005, is amended as follows:

One. Article 5 (1) (e) and (f) are amended as follows:

" e) The placement of financial instruments without a firm commitment.

f) Securing financial instruments or placing financial instruments on the basis of a firm commitment. "

Two. Paragraph 1 (e) is amended, paragraph 2 is deleted and Article 14 (3) shall become paragraph 2 with the following wording:

" e) Contar with an administrative board made up of at least three members. The members of the Management Board, as well as the Directors-General or assimilated and those responsible for internal control functions and other key positions for the daily development of the business of an investment firm, must comply with the requirements of good repute, experience and good governance laid down in Article 67.4 of the Law 24/1988, of 28 July, of the Securities Market. These requirements will also be required for natural persons representing legal persons on boards of directors.

The members of the board of directors, as well as the directors-general or those who are responsible for internal control functions and other key positions in the development, must also meet these requirements. the activity of the dominant company of an investment firm, as well as the administrators of the dominant entities of the financial advisory firms, where those undertakings have not been provided with a administration. When assessing those requirements, account shall be taken of the nature, scale and complexity of the functions performed by these persons in respect of the investment firm.

2. Investment firms must comply at all times with the requirements laid down in paragraph 1 of this Article. However:

(a) The authorisation may only be revoked for lack of suitability of any partner in exceptional circumstances, as provided for in Article 69.11 of Law 24/1988 of 28 July of the Stock Market.

(b) For lack of commercial or professional honorability of directors or directors, the revocation shall only proceed if the persons concerned do not cease their positions within a month of the requirement that the Commission directs them to do so. National of the Securities Market. There shall be no lack of good repute for the mere fact that, in the exercise of his office, a counsellor or director is charged or prosecuted for any of the offences referred to in Article 67.2.f), third paragraph, of Law 24/1988, of July 28, of the Stock Market. "

Three. Articles 14a to 14e are added with the following wording:

" Article 14a. Commercial and professional honorability requirements.

1. The commercial and professional honorability required by article 67.4 (a) of Law 24/1988, of July 28, of the Market of Securities, and in Article 14.1.e) of this royal decree, in those who have been showing a personal conduct, will be present. commercial and professional who do not cast doubt on their ability to perform sound and prudent management of the investment firm.

2. To assess the concurrency of commercial and professional honorability, all available information must be considered, including:

(a) The trajectory of the charge in question in its relationship with the regulatory and supervisory authorities; the reasons why it would have been dismissed or terminated in previous posts or positions; its personal and personal solvency record compliance with their obligations; their professional performance, if they have held liability positions in investment firms that have been subject to an early action or resolution process; or if they have been disabled pursuant to Law 22/2003, of 9 July, Insolvency, until the end of the period of disqualification set in the judgment of qualification of the contest and the broken and uncontested not rehabilitated in proceedings with prior to the entry into force of the said law.

b) The conviction by the commission of crimes or misconduct and the sanction by the commission of administrative violations taking into account:

1. º The intentional or reckless character of the offense, fault, or administrative violation.

2. º If the conviction or penalty is or is not firm.

3. º The severity of the sentence or penalty imposed.

4. The classification of the facts that led to the conviction or punishment, especially if it was a matter of social crimes, against the patrimony and against the socioeconomic order, against the Public Finance and against the Social Security, offences of money laundering or reception or if they are in breach of the rules governing the exercise of banking, insurance or securities markets, or of consumer protection.

5. º If the facts that led to the conviction or sanction were made in its own advantage or to the detriment of the interests of third parties whose administration or business management would have been entrusted, and where appropriate, the relevance of the (a) facts for which the conviction or penalty occurred in relation to the duties assigned to them or are to be assigned to the office in question in the investment firm.

6. The prescription of unlawful acts of a criminal or administrative nature or the possible extinction of criminal liability.

7. The existence of extenuating circumstances and subsequent conduct from the commission of the offence or offence.

8. The reiteration of convictions or penalties for offences, offences or offences.

For the purposes of assessing the provisions of this letter, the investment firm shall forward to the National Securities Market Commission a criminal record of the person subject to the valuation. The National Securities Market Commission shall also consult the databases of the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority on administrative and administrative penalties. may establish a committee of independent experts in order to inform the assessment files in which it is convicted of offences or offences.

c) The existence of relevant investigations based on rational indications, both in the criminal and administrative fields, on some of the facts mentioned in the letter. There shall be no lack of good repute for the mere fact that, in the course of his or her duties, a counsellor, director-general or equivalent person, or other employee responsible for internal control or who holds a key position in the the development of the entity's overall activity is the subject of such investigations.

3. If, during the course of his/her activity, he/she is present in the person under assessment, one of the circumstances provided for in the previous paragraph and that is relevant to the assessment of his or her good repute, the investment firm shall communicate to the National Securities Market Commission within the maximum period of 15 working days from its knowledge.

4. Members of the Board of Directors, Directors-General or Assimilated and other employees who are responsible for the internal control functions or hold key positions for the daily development of the business of the business of investment that has knowledge of the fact that they are in one of the circumstances described in paragraph 2, must inform their entity.

Article 14b. Knowledge and experience requirements.

1. They will have the knowledge and experience required under Article 67.4.b of the Law 24/1988 of 28 July, of the Securities Market, and Article 14.1.e) of this royal decree who are trained in the appropriate level and profile, in particular in the areas of investment services, banking and other financial services, and practical experience derived from their previous occupations for sufficient periods of time. This will take into account the knowledge acquired in an academic environment, as well as the experience in the professional development of functions similar to those that will be developed in other entities or companies.

2. In the assessment of practical and professional experience, particular attention must be paid to the nature and complexity of the posts, the powers and powers of decision and responsibilities assumed, as well as the number of persons employed. his position, the technical knowledge reached on the financial sector and the risks to be managed.

In any case, the criteria for knowledge of experience will be applied by assessing the nature, scale and complexity of the activity of each investment firm and the specific roles and responsibilities of the post. assigned to the person evaluated.

3. The Board of Directors shall also have members who, taken as a whole, have sufficient professional experience in the government of investment firms to ensure the effective capacity of the Board of Directors. administration to make decisions independently and autonomously for the benefit of the entity.

Article 14c. Ability to exercise good governance of the investment services company.

To assess the capacity of the members of the board of directors to exercise good governance of the investment firm, as required by article 67.4.c) of the Law 24/1988, of 28 July, of the Market of Securities, and Article 14.1.e) of this royal decree shall be taken into account:

a) The presence of potential conflicts of interest that generate undue influences from third parties derived from:

1. The positions held in the past or present in the same investment firm or in other private or public organizations.

2. A personal, professional or economic relationship with other members of the management board of the investment firm, its parent or its subsidiaries.

3. A personal, professional or economic relationship with the shareholders holding the control of the investment firm, its parent or its subsidiaries.

b) The ability to devote sufficient time to perform the corresponding functions.

If, during the course of your business, you are in a situation where you are in a situation where you may alter your ability to exercise a good government of the investment firm, the investment firm will inform the Commission National of the Securities Market within the maximum period of 15 working days from your knowledge.

Article 14d. Assessment of suitability.

1. The assessment of the requirements of good repute, experience and good governance set out in article 67.4 of Law 24/1988, of July 28, and in article 14.1.e) of this royal decree will be carried out:

(a) By the investment firm itself or, where appropriate, by its promoters, on the occasion of the request to the National Securities Market Commission for the authorisation for the exercise of the business activity of the investment services, where new appointments are to be made, and whenever circumstances arise which advise to re-assess the suitability in application of the procedures provided for in Article 14e.

(b) By the acquirer of a significant share, when the acquisition of such participation results in new appointments, without prejudice to the subsequent valuation performed by the entity.

If the assessment of the suitability of the charges referred to in (a) and (b) above is negative, the investment firm shall refrain from appointing or holding such a person, or in the case of be an event of an over-coming, shall take appropriate measures to remedy the identified deficiencies and, where necessary, provide for temporary suspension or termination.

c) By the National Securities Market Commission in the following cases and deadlines:

1. On the occasion of the authorisation of the establishment of an investment firm, within the time limit laid down in Article 12.

2. On the occasion of the acquisition of a significant participation from which new appointments are made, within the period provided for in Article 69 of the Law 24/1988, of July 28, of the Stock Market.

3. Following the communication of the proposal for new appointments provided for in Article 14e (3), within a period of three months from that notification. In the absence of notification within this period, the assessment shall be deemed to be positive.

4. º When, in the presence of sound evidence, it is necessary to assess whether the suitability is maintained in relation to the members in office.

2. Any non-compliance with the requirements specified in Articles 14a to 14c shall be communicated to the National Securities Market Commission by the investment firm within the maximum period of 15 working days from the time it is established. have knowledge of it.

Article 14 sexies. Selection, control and assessment of eligibility requirements by investment firms.

1. Investment firms and branches of investment firms which are not authorised in a Member State of the European Union must, under conditions proportionate to the nature, scale and complexity of their activities, be provided with appropriate internal units and procedures to carry out the selection and continuous assessment of the members of its board of directors and of its directors-general or assimilated persons, and of those responsible for internal control functions or other key positions in the investment services company.

2. In addition, investment firms will have to identify key positions for the daily development of their business and those responsible for internal control functions, while at the disposal of the National Market Commission. Values an up-to-date relationship of the persons who perform them, the assessment of the suitability made by the investment firm and the documentation supporting it.

3. Investment firms shall communicate to the National Securities and Exchange Commission the proposal for the appointment of new members of the board of directors and of directors-general or those who are assimilated to the securities market. investment services such as, where appropriate, their dominant company. '

Four. Article 15 (1) is amended as follows:

" 1. Investment firms shall have a share capital not less than the following amounts:

(a) Securities companies; EUR 730,000.

b) Securities agencies; EUR 125,000.

(c) Non-authorised securities agencies to hold funds or securities of their clients in deposit; EUR 50,000.

(d) Portfolio management companies must have:

i. An initial capital of EUR 50,000; or

ii. A professional liability insurance, a guarantee or other equivalent guarantee which allows the liability to be made in respect of negligence in the exercise of its professional activity throughout the territory of the European Union, with a cover minimum of 1,000,000 euros per claim for damages, and a total of 1,500,000 euros per year for all claims.

iii. A combination of initial capital and professional civil liability insurance which results in a level of coverage equivalent to that of previous points (i) and (ii).

The initial share capital may only be made up of one or more of the items referred to in Article 26.1.a) to (e) of Regulation (EU) No 575/2013 of 26 June 2013. '

Five. The first subparagraph of Article 16 (3) is amended as follows:

" 3. The National Securities Market Commission shall be responsible for the creation and management of a register of directors and directors-general of the dominant entities, other than credit institutions, investment firms or entities. insurance companies or reinsurers of Spanish investment firms, where the directors, directors and assimilated persons of the companies must be registered. This register shall also include, where appropriate, the administrators of the dominant entities of the financial advisory firms. '

Six. Article 21 (1) (f) and (g) are amended as follows:

" (f) the members of its board of directors or, where appropriate, its administrator or administrators, as well as all its directors-general and assimilated persons, have adequate knowledge and experience for the exercise of their functions.

Administrators, CEOs, and those who develop senior management functions, as well as those representing legal persons, should be recognized as commercial and professional honorability.

g) Natural persons who are constituted as financial advisory firms shall have adequate commercial and professional good repute as well as sufficient knowledge and experience for the exercise of their functions. "

Seven. Article 24 (4) is worded as follows:

" 4. The agents of the investment firm must comply with the requirements laid down in Article 14.1.f) and, where they are legal persons, those provided for in Article 14.1 (d) and (e), all with the necessary adaptations which, in their case, determine the Minister of Economy and Competitiveness for natural and legal persons. Notwithstanding the foregoing, the agents of investment firms which are legal persons may be provided with different modes of organisation of the company, in which case the requirements and obligations laid down in the Articles 14.1.d), e) and f), shall be met by their administrators. "

Eight. A new paragraph 6 is added to Article 27 with the following wording:

" 6. Subsidiaries of Spanish investment firms located in non-EU Member States shall also have systems, strategies, procedures and mechanisms equivalent to those provided for in this Article unless the legislation of the country in which the subsidiary is located prohibited. '

Nine. Article 29 is worded as follows:

" Article 29. Risk management.

1. In accordance with Article 70 (3) (a) of the Law 24/1988 of 28 July 1988 on the Securities Market, institutions providing investment services shall take the following measures:

(a) Establish, implement and maintain risk management procedures and policies to determine the risks arising from their activities, processes and systems and, where appropriate, to establish the level of risk tolerated by the entity.

b) Adopt effective measures, processes and mechanisms to manage risks related to the entity's activities, processes and systems based on their level of risk tolerance.

c) Check:

i. That the company's risk management policies and procedures are appropriate and effective.

ii. The level of compliance by the entity and its competent persons with the measures, processes and mechanisms referred to in point (b) above.

iii. That the measures taken to address any possible shortcomings in policies, procedures, measures, processes and mechanisms are appropriate and effective, indicating those cases where the staff of the undertaking does not comply with such measures, processes and mechanisms, or do not implement management policies and procedures.

2. Where it is proportionate according to the nature, scale and complexity of its business activity and the nature and range of investment services it provides, the investment firm shall, in accordance with Article 70 ter.tres.3 of the Securities Market Act 24/1988 of 28 July 1988 shall create and maintain a risk management unit that operates independently and develops the following functions:

(a) Application of the policy and procedures referred to in paragraph 1.

b) Presentation of a full picture of the full range of risks to which the investment firm is exposed.

c) Determination, quantification and appropriate reporting of all major risks.

(d) Reporting and advising the Management Board on specific risk developments affecting or likely to affect the investment firm.

e) Active participation in the development of the investment services company's risk strategy and in all important risk management decisions.

Regardless of whether or not the risk management body exists, all investment firms must be able to demonstrate that the policies and procedures adopted in accordance with the provisions of the Previous section meets the provisions of the and are effective.

3. The Director of the Risk Management Unit shall be an independent senior management officer, who shall not perform operational functions and who shall specifically assume responsibility for the risk management function and shall not be revoked from his position without the risk management function. prior approval of the board of directors.

In any case, operational functions shall be understood to involve executive or management responsibilities in the lines or business areas of the investment firm.

For the exercise of its functions the director of the risk management unit shall have direct access to the management board.

When the nature, scale and complexity of the investment firm's activities do not justify the specific name of a person, another senior manager of the investment firm may be able to perform such a function. investment services, provided that there is no conflict of interest.

4. In addition, the risk committee of the investment services companies required, in accordance with Article 70b. Three of the Law 24/1988, of July 28, of the Securities Market, to its creation, will perform the following functions:

a) Advise the board of directors on the overall risk, current and future risk propensity of the investment firm and its strategy in this area, and assist it in monitoring the implementation of the strategy.

However, the board of directors shall be responsible for the risks that the investment services undertaking assumes.

b) To monitor that the pricing policy of the assets and liabilities offered to clients takes full account of the business model and risk strategy of the investment services company. Otherwise, the risk committee shall submit to the management board a plan to remedy it.

c) Determine, together with the board of directors, the nature, quantity, format and frequency of the risk information to be received by the committee itself and the board of directors.

d) Collaborate for the establishment of rational remuneration policies and practices. For such purposes, the risk committee shall examine, without prejudice to the functions of the remuneration committee, whether the policy of incentives provided for in the remuneration system takes into account the risk, capital, liquidity and probability. and the opportunity for benefits.

For the proper exercise of these functions, investment firms shall ensure that the risk committee is able to access information on the risk situation of the business services company without difficulty. investment and, if necessary, to the risk management unit and to specialised external advice. "

Ten. New Articles 31a to 31e are added with the following wording:

" Article 31a. Corporate governance and remuneration policy obligations.

1. For the purposes of Article 70 ter.s.5 of Law No 24/1998 of 28 July 1998, as regards its reference to Article 34 of Law 10/2014, of 26 June, the term 'discretionary pension benefits' shall be understood as the payment of the amount of the pension. (a) Discretionary powers granted by an investment firm on an individual basis to its staff under a separate pension scheme or instrument which provides for retirement benefits and which can be assimilated to variable remuneration. In no case shall it include benefits granted to an employee in accordance with the company's pension system.

2. For the purposes of the referral provided for in Article 70 ter.s.5 of Law 24/1998 of 28 July, in respect of Article 34.1 (p) of Law 10/2014, of 26 June, the National Securities Market Commission may:

(a) Impose restrictions on investment services companies for the use of the instruments mentioned in that article of Law 24/1988, of July 28, of the Securities Market.

b) Set the criteria necessary to allow variable remuneration to be contracted according to the negative financial results of investment firms.

c) Require investment firms and their groups to limit variable remuneration as a percentage of total revenue when this is not compatible with the maintenance of a sound capital base.

3. In relation to investment firms which have received financial support under the terms of Article 35 of Law 10/2014 of 26 June 2014, as referred to in Article 70 ter.dos.7 of Law 24/1998 of 28 July 1998, and without (a) to the detriment of the other applicable rules, it is for the National Securities Market Commission to expressly authorize the amount, accrual and credit of any variable remuneration to the directors and directors, and may also establish, if comes, limits to your total remuneration.

4. Without prejudice to the foregoing, the National Securities Market Commission will comply with the provisions of Article 70 ter.two of Law 24/1988 of 28 July, laying down criteria on the concepts and policies of remuneration contained in the Articles 32 to 35 of Law 10/2014 of 26 June, and in particular, may lay down specific criteria for determining the relationship between fixed and variable components of total remuneration.

5. In accordance with Article 70 ter.4 of Law 24/1988 of 28 July 1988 on the Securities Market, the National Securities Market Commission may have the obligation to constitute the committees provided for in Articles 70b. One and 70 ter.dos.6 of that law, provided that:

(a) in the case of subsidiaries of subsidiary investment services which have been exempted from the application of prudential requirements on an individual basis, pursuant to Articles 7 or 10 of Regulation (EU) No 575/2013; June 2013.

(b) Parent investment firms shall constitute such committees in accordance with Articles 31c and 3d and take up their duties for the subsidiaries.

Article 31 ter. Corporate governance and remuneration policy advertising obligations.

1. An investment firm shall have a website in which it shall provide comprehensive, clear, comprehensible and comparable information on corporate governance information provided for in Articles 70b to 70b. Three of the Law 24/1988, of July 28, of the Securities Market, and the way they meet their corporate governance and remuneration obligations.

2. The management board shall be responsible for maintaining the updated information on the entity's website.

3. Information on the total remuneration payable in each financial year by the members of the board of directors shall reflect the total amount of the remuneration due and an individual breakdown by remuneration reference to the amount of fixed components and allowances, as well as to the variable remuneration concepts.

This information shall contain any accrued remuneration concept, whatever its nature or the entity of the group that satisfies it.

4. The provisions of the preceding paragraph shall include, where appropriate, the remuneration payable by the members of the board of directors for their membership of councils in other companies of the group or participants in which it acts on behalf of the group.

5. However, this Article shall not apply to investment firms which fulfil the following requirements:

(a) Not to be authorized to provide the ancillary service referred to in Article 63.2.a) of Law 24/1988 of 28 July of the Stock Market.

(b) To provide 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 Stock Market.

c) Not be authorized to deposit money or securities of your clients and, for this reason, may never be in a debtor situation with respect to such clients.

6. The National Securities Market Commission will specify the terms in which the web page and the information regarding corporate governance and remuneration policy need to be set up that the investment services companies, based on its nature, scale and complexity, must be included in it, in accordance with the provisions of Law 24/1988 of 28 July of the Stock Market and in this chapter.

Article 31c. Committee on appointments.

1. The nomination committee, provided for in Article 70b. One of the Law 24/1988, of 28 July, of the Securities Market, will perform at least the following functions:

a) Identify and recommend, with a view to their approval by the board of directors or the general meeting, candidates to provide the vacant positions of the board of directors.

b) Assess the balance of knowledge, capacity, diversity and experience of the board of directors and elaborate a description of the functions and skills required for a particular appointment, assessing the commitment of Planned time for the performance of the position.

c) Evaluate periodically, and at least once a year, the structure, size, composition and performance of the board of directors, making recommendations to it, with respect to possible changes.

(d) Evaluate regularly, and at least once a year, the suitability of the various members of the board of directors and of the board as a whole, and report to the management board accordingly.

e) Regularly review the policy of the board of directors on the selection and appointment of senior management members and make recommendations to them.

(f) Establish, in accordance with Article 70 ter.uno.2 of Law 24/1988, of 28 July, of the Securities Market, an objective of representation for the least represented sex on the board of directors and to draw up guidelines on how to increase the number of people of the least represented sex with a view to achieving this objective. The objective, guidelines and implementation of these guidelines shall be published together with the information provided for in Article 435.2.c) of Regulation (EU) No 575/2013 of 26 June 2013 and shall be transmitted by the National Market Commission Securities to the European Banking Authority.

The National Securities Market Commission will also use this information to conduct comparisons of practices in favor of diversity.

2. In the performance of its tasks, the appointment committee shall take into account, as far as possible and on an ongoing basis, the need to ensure that the decision-making of the board of directors is not dominated by an individual or an individual. reduced group of individuals in such a way that the interests of the entity as a whole are harmed.

3. The nomination committee may use the resources it deems appropriate for the development of its functions, including external advice, and receive appropriate funds for this.

Article 31 quinquies. Remuneration Committee.

1. The remuneration committee provided for in Article 70 (2) of the Law 24/1988 of 28 July 1988 on the Stock Market will be responsible for the preparation of decisions relating to remuneration, including those which have an impact on the the risk management and risk management of the investment firm concerned, to be adopted by the Management Board.

In particular, the remuneration committee shall inform the general remuneration policy of the members of the board of directors, directors-general or similar directors, as well as individual and other remuneration. contractual terms and conditions for members of the board of directors who perform executive functions, and shall ensure compliance.

2. In cases where the specific rules of an institution provide for the representation of staff on the board of directors, the remuneration committee shall include one or more staff representatives.

3. When preparing the decisions, the remuneration committee shall take into account the long-term interests of the shareholders, investors and other stakeholders in the investment firm as well as the public interest.

Article 31 sexies. Monitoring of remuneration policies.

The National Securities Market Commission will collect and transmit to the European Banking Authority the following information:

(a) The published by the institutions in accordance with Article 450.1.g. (h) and (i) of Regulation (EU) No 575/2013 of 26 June 2013. This information will be used by the National Securities Market Commission to compare trends and practices in remuneration.

(b) The number of natural persons in each entity receiving remuneration of EUR 1 million or more per year, including their responsibilities in the position it occupies, the scope of business involved and the main components of the salary, the incentives, the long-term premiums and the contribution to the pension. "

Once. Article 43 (1) is amended as follows:

" 1. Institutions providing investment services shall ensure that their external auditors refer to the National Securities Market Commission an annual report on the adequacy of the measures taken by the National Securities Market Commission to comply with the provisions of this Regulation. Article 70 ter.2.f) and 70 ter.3.c) of Law 24/1988 of 28 July of the Stock Market and in this section. In the case of credit institutions, the Bank of Spain shall receive a copy of that report. "

Twelve. Two new titles are added with the following wording:

" TITLE VI

Solvency of investment services companies

CHAPTER I

Capital risk and self-assessment systems, procedures and mechanisms

Article 87. Scope of application.

1. This Title shall apply to investment firms, to the consolidable groups of investment firms, to the financial holding companies and to the mixed financial holding companies in the terms envisaged. In Law 24/1988, of July 28, of the Stock Market.

2. By way of derogation from the above paragraph, Articles 89, 92, 95, 98 and 101 of this Title shall not apply to investment firms which fulfil the following requirements:

(a) Not to be authorized to provide the ancillary service referred to in Article 63.2.a) of Law 24/1988 of 28 July of the Stock Market.

(b) To provide 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 Stock Market.

c) Not be authorized to deposit money or securities of your clients and, for this reason, may never be in a debtor situation with respect to such clients.

3. In addition, to the investment firms defined in the previous paragraph which provide only the investment services or activities listed in Article 63.1.a) and (g) of the Law 24/1988 of 28 July of the Securities Market, Articles 90, 91, 93, 94, 99 and 100 of this Title shall not apply to them either.

Article 88. Responsibility of the management board for risk taking.

1. For the proper exercise of the responsibilities of the Management Board on Risk Management provided for in Article 70b. Its.2 of the Law 24/1988, of July 28, of the Securities Market, investment services companies:

a) They shall establish channels of information to the Management Board covering all major risks and risk management policies and their modifications.

(b) Ensure that the management board is able to access information on the risk situation of the institution without difficulty and, if necessary, to the risk management and external advisory function specialized.

2. The management board shall determine, together with the risk committee, the nature, quantity, format and frequency of the risk information to be received by the committee and the board of directors.

Article 89. Implementation of the internal capital self-assessment process.

1. The capital self-assessment process provided for in Article 70.2 of Law 24/1988 of 28 July of the Securities Market will be carried out:

(a) On a consolidated basis, in accordance with the scope and the prudential consolidation methods provided for in Part One, Title II, Chapter 2, Sections 2 and 3 of Regulation (EU) No 575/2013 of 26 June 2013, by:

1. Parent investment services companies.

2. The investment services companies controlled by financial holding companies and mixed financial holding companies. However, where a financial holding company or a parent mixed financial holding company controls more than one investment firm or credit institution, the capital self-assessment process shall be carried out in the same way as only by the investment firm or credit institution on which the supervision on a consolidated basis is applied in accordance with Article 107.

(b) On an individual basis by investment service companies that meet any of the following conditions:

1. No subsidiaries or parent companies.

2. No are included in the consolidation in accordance with Article 19 of Regulation (EU) No 575/2013 of 26 June 2013.

3. Hayan was excepted by the National Securities Market Commission for the application of own resources requirements on a consolidated basis in accordance with Article 15 of Regulation (EU) No 575/2013 of 26 December 2013. June 2013.

2. The strategies and procedures referred to in Article 70.2 of Law 24/1988 of 28 July of the Securities Market will be summarized in an annual report of self-assessment of the internal capital to be sent to the National Market Commission. Securities by 30 April of each financial year, or within a shorter period of time when established by the National Securities Market Commission.

For the purposes of this report, investment firms must take into account the criteria that the National Securities Market Commission publishes for these purposes.

Article 90. Credit risk and counterparty risk.

In terms of credit risk and counterparty risk, investment firms, in proportion to the nature, scale and complexity of their activities, shall:

a) Basis the granting of credits on solid and well-defined criteria.

b) Establish a clear procedure for the approval, modification, renewal and refinancing of credits.

(c) Dispose of internal methodologies that enable them to assess the credit risk of exposures to individual debtors, securities or securitisation positions, as well as the credit risk of the portfolio as a whole.

Internal methodologies will not be solely or mechanically supported in external credit ratings. The fact that the own resources requirements are based on the rating of an external credit rating agency or the non-existence of a rating of the exposure will not prevent investment firms from having a credit rating on their own has other relevant information to assess its internal capital allocation.

d) Use effective methods to permanently manage and monitor the various portfolios and exposures at credit risk.

e) Identify and manage doubtful credits, and perform appropriate value adjustments and provisions.

f) Diversify credit portfolios in an appropriate manner according to the target markets and the overall credit strategy of the investment firm.

Article 91. Residual risk.

Investment services companies, in proportion to the nature, scale and complexity of their activities, should have written policies and procedures, among other means, to manage the possibility of the credit risk mitigation techniques referred to in Article 108 of Regulation (EU) No 575/2013 of 26 June 2013 are less effective than expected.

Article 92. Risk of concentration.

Investment services companies must have written policies and procedures, among other means, to control the risk of concentration derived from:

(a) Exhibitions vis-à-vis each of the counterparties, including central counterparties, related counterparty groups and counterparties of the same economic sector, of the same geographical region or of the the same activity or commodity in terms as determined by the National Securities Market Commission.

(b) The application of credit risk mitigation techniques, including risks related to large indirect credit exposures, such as an issuer of collateral.

Article 93. Risk of securitisation.

1. Risks arising from securitisation transactions in which the investment firm acts as an investor, originator or sponsor, including reputational risk, shall be valued and controlled by means of policies and procedures appropriate to ensure, in particular, that the economic content of the operation is fully reflected in the risk assessment and management decisions.

2. Investment services companies originating from renewable securitisation transactions that include early amortisation clauses will have liquidity plans in place to deal with the implications arising from both depreciation and amortisation. expiration as of the anticipated.

Article 94. Market risk.

1. Investment firms shall apply policies and procedures for the determination, valuation and management of all significant sources of market risks and for the effects of such risks that are significant.

For such purposes, the level of domestic capital of investment firms shall be appropriate to cover significant market risks that are not subject to a requirement for own resources. In particular, investment firms shall have adequate internal capital in the following cases:

(a) To cover the risk of loss of base resulting from the difference between the evolution of the value of a futures contract or another product and the value of the shares that make up it when, when calculating the requirements of own funds at risk of position in accordance with Chapter 2 of Title IV of Title IV of Regulation (EU) No 575/2013 of 26 June 2013 have offset their positions in one or more of the shares constituting the stock index with one or more positions in the futures contract or other product based on the stock index.

(b) Where they hold opposing positions in futures contracts based on stock indices whose maturity or composition is not identical.

(c) To cover the risk of loss that exists between the time of the initial commitment and the following working day, when applying the net position reduction scheme provided for in Article 345 of Regulation (EU) No 575/2013, dated 26 June 2013.

2. Also, when the entity's short positions sell before long positions, the National Securities Market Commission will require entities to take action against the risk of liquidity insufficiency.

Article 95. Risk of interest rates arising from activities outside the trading book.

Investment services companies shall apply systems to determine, assess and manage the risk arising from possible changes in interest rates that have an impact on activities outside the trading book.

Article 96. Operational risk.

1. Investment firms shall apply policies and procedures to assess and manage exposure to operational risk, including, where appropriate, the risk of a model, which covers the risk of infrequent loss-generating events. very high.

To this end, the risk of a model risk is the risk of potential loss in which an entity could incur as a result of decisions based primarily on the results of internal models, due to errors in the conception, application or use of such models.

Investment service companies shall specify what constitutes an operational risk for the purposes of those policies and procedures.

2. Investment firms shall establish emergency and business continuity plans that enable them to maintain their business and to limit losses in the event of serious disruptions to the business.

Article 97. Liquidity risk.

1. Investment firms shall have strategies, policies, procedures and systems for the management of liquidity risk commensurate with the nature, scale and complexity of their activities. To this end, the National Securities Market Commission will require investment firms to:

a) Develop methods for tracking funding positions.

b) Identify the available load-free assets in emergency situations, taking into account potential legal constraints on possible liquidity transfers.

c) Study the impact of different scenarios on their liquidity profiles.

2. Investment firms, taking into account the nature, size and complexity of their activities, should maintain liquidity risk profiles consistent with those necessary for the smooth functioning and soundness of the system. The National Securities Market Commission will monitor the evolution of such profiles held by investment services companies, taking into account elements such as product design and volumes, risk management, policies of funding and the funding concentrations. In particular, the National Securities Market Commission will require entities to:

(a) Contar with liquidity risk mitigation tools such as liquidity buffers or an adequate diversification of funding sources that enable financial stress situations to be addressed.

b) Develop emergency plans to address scenarios under point (c) of the previous paragraph and plans to address potential liquidity shortfalls. The latter must be put to the test by the investment firm at least once a year.

3. Where the National Securities Market Commission considers that an investment firm has lower than adequate levels of liquidity in accordance with the criteria set out in this Article and in its implementing rules may adopt, inter alia, any of the measures referred to in Article 87 octies.2 of Law 24/1988 of 28 July 1988 on the Stock Market.

These measures shall apply without prejudice to the penalties corresponding to the provisions of Title VIII, Chapter II of Law 24/1988 of 28 July of the Stock Market and shall be related to the position of the of the institution's liquidity and the stable financing requirements laid down in the solvency rules.

4. Furthermore, where the evolution of the liquidity risk profiles of an investment firm could lead to instability in another investment firm or to systemic instability, the National Market Commission of the European Union Securities shall inform the European Banking Authority of the measures taken to address this situation.

Article 98. Risk of excessive leverage.

1. Investment firms shall establish policies and procedures for the identification, management and control of the risk of excessive leverage.

2. The risk indicators for excessive leverage shall include the leverage ratio determined in accordance with Article 429 of Regulation (EU) No 575/2013 of 26 June 2013 and the gaps between assets and liabilities.

3. Investment firms shall address the risk of excessive leverage on a preventive basis, taking due account of potential increases in the risk of such risk caused by reductions in the company's own resources. investment services resulting from expected or actual losses, in accordance with the applicable accounting rules. For these purposes, investment firms must be able to deal with different situations of difficulty with regard to the risk of excessive leverage.

Article 99. Exposures to the public sector.

1. Pursuant to Article 115.2 of Regulation (EU) No 575/2013 of 26 June 2013, exposures to Autonomous Communities and Spanish Local Entities shall be treated as exposures to the same treatment as the exposures to the General Administration of the State.

2. In accordance with Article 116.4 of Regulation (EU) No 575/2013 of 26 June 2013, where, in exceptional circumstances and, in the opinion of the National Securities Market Commission, there is no difference in risk due to the the existence of adequate guarantees, the following exposures may be assigned the same weight as exposures to the Administration of which they are dependent:

(a) Exhibitions in front of Autonomous Bodies and Business Entities governed by Title III of Law 6/1997 of 14 April of the organization and operation of the General Administration of the State.

(b) Exhibitions vis-à-vis other public law agencies or entities linked to or dependent on the General Administration of the State.

c) Exhibitions in front of managing entities, Common Services and Social Security Mutual Services.

d) Exhibitions in front of the Official Credit Institute.

e) Exhibitions in front of Autonomous Communities and Public Entes that are dependent on the Autonomous Communities, provided that, in accordance with applicable laws, they have a similar nature to that provided for the dependents of the Administration of the State.

(f) Exhibitions in front of Public Bodies or Bodies of a administrative nature that are dependent on Spanish Local Entities, provided that they are not for profit and develop their own administrative activities entities.

g) Exhibitions in relation to consortia integrated by Autonomous Communities or Spanish Local Entities, or by these and other Public Administrations, in so far as, by their composition, those Public Administrations support most of the consortium's economic responsibilities.

Article 100. Adoption of measures to return to compliance with the solvency rules.

1. Where an investment firm or a consolidated group of investment services companies presents a deficit of own resources that are available on the basis of those required by Regulation (EU) No 575/2013 of 26 June 2013, Law 24/1988 of 28 July 1988 of the Securities Market, and by this royal decree, the investment firm or the investment firm of the consolidated group, as the case may be, will inform the company immediately of this. National Securities and Exchange Commission (NComisión Nacional del Mercado de Valores) and will present within one month a program in which the plans to return to compliance, unless the situation has been corrected in that period. The programme shall contain at least the aspects relating to the identification of the determining causes of the own resources deficit, the plan to return to compliance which may include the limitation of the development of activities involving high risks, divestiture of individual assets, or measures for raising the level of own resources and foreseeable deadlines for returning to compliance.

In the event that the defaulting investment firm belongs to a consolidable group of investment service companies, the programme must be endorsed by the investment firm's obligation.

This program must be approved by the National Securities Market Commission, which may include any modifications or additional measures it deems necessary to ensure the return to the minimum resource levels. own requirements. The submitted programme shall be deemed to have been approved if the National Securities Market Commission has not produced an express resolution within three months of its submission.

The provisions of this paragraph shall not apply if the own resources deficit is lower than the combined requirement of capital buffers, in which case the provisions of Article 75 of Royal Decree 84/2015 shall apply. February 13. To this end, the allusions made to the Banco de España in that article shall be construed as being made to the National Securities Market Commission.

2. The same performance as provided for in the previous paragraph shall be followed where the limits to the major risks set out in Part 4 of Regulation (EU) No 575/2013 of 26 June 2013 are exceeded, including where due to a Reduction in the amount of own resources available.

3. When the National Securities Market Commission, in accordance with the provisions of Article 87 of the Law 24/1988, of 28 July, of the Securities Market, requires an investment firm or a group to maintain resources. (a) additional to those required on a minimum basis, and such a requirement is that the own resources of the investment firm are insufficient, the investment firm or the investment firm The group must, as the case may be, submit within one month a programme setting out the plans for comply with the additional requirement, unless the situation has been corrected in that period. In the event that the defaulting investment firm belongs to a consolidable group of investment service undertakings, the programme shall be endorsed by the investment firm of the investment firm.

This program must be approved by the National Securities Market Commission, which may include any modifications or additional measures it deems necessary. The programme shall include the planned date of compliance with the additional requirement, which shall be the reference for the beginning of the calculation of the time limit laid down in Article 99.1 of the Law 24/1988 of 28 July 1988 on the Securities Market. The submitted programme shall be deemed to have been approved if no express resolution has been produced within three months of its submission to the National Securities Market Commission.

4. When the National Securities Market Commission, in accordance with the provisions of Article 87 of the Law 24/1988, of 28 July, of the Securities Market, requires an investment firm or a group to strengthen the procedures, mechanisms and strategies adopted, may require the submission of a programme setting out the measures necessary to address the shortcomings identified and the time-limits for its implementation. Such a programme shall be approved by the National Securities Market Commission, which may include any amendments or additional measures it deems necessary.

5. Where several of the assumptions made in the previous paragraphs are simultaneously given, the programme submitted may be as a whole.

CHAPTER II

Capital Mattresses

Article 101. Determination and calculation of capital buffers.

1. It shall be determined in accordance with the provisions of Title II, Chapter II of Royal Decree 84/2015 of 13 February 2015, for the development of Law 10/2014 of 26 June 2014 on the management, supervision and solvency of credit institutions, combined capital buffers, understood as the total of the Common Equity Tier 1 capital required to comply with the obligation to have a capital conservation buffer, and, if applicable, the following capital buffers to which it is refers to Article 70d of the Law 24/1988, of 28 July, of the Stock Market:

a) Anti-cyclical capital buffers specific to each entity.

b) Mattresses for Global Systemic Importance Entities (EISM).

c) Mattresses for other systemically important entities (OEIS).

d) Mattresses against systemic risks.

However, the provisions of this Chapter in relation to the European Central Bank shall not apply.

2. The scheme for the application of anti-cyclical mattresses and systemic risks fixed by other countries shall be that laid down in accordance with Articles 60 and 72 of Royal Decree 84/2015 of 13 February 2015.

3. The joint application of capital buffers for EISM, for OEIS and for systemic risks shall be subject to the limits set in accordance with Article 65 of Royal Decree 84/2015 of 13 February 2015.

4. The National Securities Market Commission shall carry out the communications of the capital buffers as set out in Title II, Chapter II of Royal Decree 84/2015 of 13 February.

5. In the event of non-compliance with the combined capital mattress requirement referred to in Article 70d of Law 24/1988 of 28 July 1988 on the Stock Market, the provisions of Articles 73 to 75 of the Royal Decree shall apply. 84/2015, February 13.

6. For the purposes of this Article, the references made to the Banco de España in Title II, Chapter II of Royal Decree 84/2015 of 13 February 2015, with the exception of Articles 60 and 61, shall be construed as being made to the National Market Commission Values. References to credit institutions shall also be construed as being made to investment firms.

TITLE VII

Monitoring

CHAPTER I

Target scope of the monitor function

Article 102. Content of supervisory review and evaluation.

1. In accordance with Article 87 (1) (1) of Law 24/1988 of 28 July 1988 on the Securities Market, and taking into account the technical criteria referred to in Article 103, the National Securities Market Commission shall review the systems, strategies, procedures and mechanisms applied by investment firms in order to comply with the provisions of Regulation (EU) No 575/2013 of 26 June 2013 and the solvency rules contained in Law 24/1988, July 28, on the Securities Market, and in this royal decree, and will evaluate:

(a) The risks to which investment services companies and their consolidable groups are or could be exposed.

(b) The risks that an investment firm poses to the financial system, taking into account the determination and measurement of systemic risk in accordance with Article 23 of Regulation (EU) No 1093/2010, The European Parliament and the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716 /2009/EC and repealing Commission Decision 2009 /78/EC or the European Banking Authority recommendations of the European Systemic Risk Board, as appropriate.

(c) The risks that have become apparent in the stress tests, taking into account the nature, size and complexity of the activities of the investment firm.

As of this review and evaluation, the National Securities Market Commission will determine whether the systems, strategies, procedures, and mechanisms employed by the institutions and the equity and liquidity held by they ensure sound management and coverage of their risks.

2. The National Securities Market Commission shall establish the frequency and intensity of the review and evaluation referred to in paragraph 1, taking into account the magnitude, systemic importance, nature, size and complexity of the activities of the Securities Market. the investment firm in question, as well as the principle of proportionality. The review and evaluation shall be updated at least on an annual basis in the case of investment firm undertakings to which the supervisory examination programme provided for in Article 84a of Law 24/1988 of 28 July 1988 applies. Stock Market.

3. To investment firms other than the National Securities Market Commission, which are subject to the application of own resources requirements on a consolidated basis as provided for in Article 15 of Regulation (EU) No 139/2014. 575/2013, of 26 June 2013, shall apply to them paragraph 1 of this Article on an individual basis.

4. To investment firms which, in the opinion of the National Securities Market Commission, have similar risk profiles for, inter alia, the affinity of their business models, the geographical location of their exposures or the nature and extent of the risks to which they are exposed or which they could present for the financial system, the National Securities Market Commission may decide to apply a supervisory review and evaluation process to them. similar or identical.

The decision taken pursuant to the preceding paragraph shall be notified by the National Securities Market Commission to the European Banking Authority.

5. The National Securities Market Commission shall inform the European Banking Authority of the functioning of its supervisory review and evaluation process, as well as of the methodology used to make use of the supervisory powers provided for in the Title VIII, Chapter I of Law 24/1988 of 28 July 1988 on the Stock Market provided that the review process shows that an investment firm could pose a systemic risk in accordance with Article 23 of the Regulation (EU) No 1093/2010 of 24 November 2010.

Article 103. Criteria applicable to supervisory review and evaluation.

1. In addition to the credit risk, market risk and operational risk, the review and evaluation carried out by the National Securities Market Commission in accordance with the previous Article shall include at least all aspects of the following:

(a) The results of the stress tests carried out in accordance with Article 177 of Regulation (EU) No 575/2013 of 26 June 2013 by investment firms using the method based on internal ratings.

(b) Exposure to the risk of concentration and its management by institutions, including compliance with the requirements set out in Part 4 of Regulation (EU) No 575/2013 of 26 June 2013 and in the Article 92 of this royal decree.

(c) The soundness, appropriateness and form of application of policies and procedures established by investment firms for the management of the residual risk associated with the use of recognised reduction techniques the credit risk.

d) The adequacy of own resources held by an investment firm with respect to assets that it has securitised.

e) Exposure to liquidity risk and its measurement and management by investment services companies.

f) The impact of the diversification effects and the way in which these effects are taken into account in the risk assessment system.

g) The results of the stress tests carried out by investment firms using internal methods to calculate the own resources requirements for market risk in accordance with the Part Three, Title IV, Chapter 5 of Regulation (EU) No 575/2013 of 26 June 2013.

h) The geographical location of the exposures of the investment services companies.

i) The business model of the investment services company.

j) The assessment of systemic risk.

k) The exposure of investment services companies to the interest rate risk arising from activities outside the trading book.

l) The exposure of investment services firms to the risk of excessive leverage, as reflected by the excessive leverage indicators. When determining the adequacy of the leverage ratio of investment services companies and of the systems, strategies, procedures and mechanisms employed by investment services companies to manage the risk of leverage excessive, the National Securities Market Commission shall take into account the business model of such investment firms.

m) Corporate governance systems of investment services companies, their culture and corporate values and the ability of board members to perform their duties. In carrying out this review and evaluation, the National Securities Market Commission shall have access, at least, to the agendas and supporting documentation of the meetings of the Management Board and its committees, as well as the results. the internal or external evaluation of the performance of the Management Board.

2. For the purposes of paragraph 1 (e), the National Securities Market Commission shall periodically carry out a comprehensive assessment of the overall management of the liquidity risk by investment firms and shall promote development. of sound internal methodologies.

In conducting these examinations, the National Securities Market Commission will take into consideration the role played by investment services firms in the financial markets and the possible impact of their decisions on the market. stability of the financial system of the other Member States of the European Union concerned.

3. The National Securities Market Commission shall monitor whether an investment firm has provided implicit support to a securitisation.

In the event that an investment firm has provided implicit support on more than one occasion to a securitisation, thereby preventing a significant transfer of the risk, the National Commission of the The Securities Market will take appropriate action on the basis of higher expectations that it will provide support for securitisation in the future.

Article 104. Internal methods for calculating own resource requirements.

1. The National Securities Market Commission shall monitor, taking into account the nature, scale and complexity of the activities of the investment firm, that it is not exclusively or mechanically dependent on the ratings external credit institutions when assessing the solvency of an entity or a financial instrument.

2. Without prejudice to the fulfilment of the criteria laid down for the trading book in Part Three, Title I, Chapter 3 of Regulation (EU) No 575/2013 of 26 June 2013, the National Securities Market Commission shall promote the companies that are important for their size, internal organisation and nature, the size and complexity of their activities develop their capacity for internal credit risk assessment and use the method based on internal ratings to calculate your own resources requirements for credit risk where their exposures are significant in absolute terms and where they have at the same time a large number of significant counterparties.

3. Without prejudice to the fulfilment of the criteria for the use of internal methods for the calculation of the own resources requirements set out in Part Three, Title IV, Chapter 5 of Regulation (EU) No 575/2013 of 26 June 2013, The National Securities Market Commission will promote investment service companies, taking into account their size, internal organization and the nature, size and complexity of their activities, develop assessment capabilities internal risk and to a greater extent to use internal methods for the calculation of its own resources requirements specific to the debt instruments of the trading book, as well as internal methods for the calculation of the own resources requirements for default and migration risk, where their exposures to the specific risk are significant in absolute terms and where they have a large number of significant positions in debt instruments of different issuers.

4. In order to promote the use of internal methods, the National Securities Market Commission may, among other measures, publish technical guidelines on the elaboration and implementation of these methods for the calculation of resource requirements. own.

Article 105. Establishment of internal methods monitoring references for the calculation of own resource requirements.

1. Investment firms which are allowed to use internal methods for the calculation of risk-weighted exposure amounts or own resources requirements, with the exception of operational risk, shall communicate to the Commission National of the Securities Market the results of the application of its internal methods to its exposures or positions included in the reference portfolios drawn up by the European Banking Authority in accordance with Article 78.8.b) of the Directive 2013 /36/EU of 26 June 2013.

2. The investment firms referred to in the preceding paragraph shall submit the results of their calculations to the National Securities Market Commission and the European Banking Authority, accompanied by an explanation of the methods employees to produce such results, at least once a year.

In the presentation of these results, institutions shall use the template prepared by the European Banking Authority for these communications.

3. By way of derogation from the above paragraph, the National Securities Market Commission may, after consultation with the European Banking Authority, draw up specific portfolios to assess the internal methods used by the European Banking Authority. investment services. In such cases, the investment firm shall report these separate results from the results of the calculations for the portfolios of the European Banking Authority.

4. The National Securities Market Commission shall, on the basis of the information submitted by investment firm undertakings in accordance with paragraphs 2 and 3, monitor the variety of results in risk-weighted exposure amounts or risk exposures. own resources requirements, as appropriate, with the exception of operational risk, corresponding to the exposures or transactions in the reference portfolios resulting from the application of the internal methods of those service undertakings investment. At least once a year, the National Securities Market Commission shall carry out an assessment of the quality of the above models with special attention to the methods that:

a) Arrowen significant differences in the requirements of own resources for the same exposure.

b) Reflect particularly high or reduced diversity.

c) Significantly and systematically underestimate your own resource requirements.

5. When some investment firm diverges significantly from the majority of firms in similar investment services or where, because of its low homogeneity, the methods lead to very divergent results, the National Commission The Securities Market will investigate the reasons for this.

If it can be clearly established that the model of an investment firm leads to the underestimation of own resources requirements that is not attributable to differences in the underlying risks of the exposures or positions, the National Securities Market Commission shall take corrective action.

6. Corrective measures taken in accordance with the above paragraph shall not:

a) Driving normalization or preferred methodologies.

b) Create inappropriate incentives.

c) Give place to gregarious behavior.

Article 106. Permanent review of the authorization to use internal methods.

1. The National Securities Market Commission shall regularly review, and at least every three years, the observance by investment firms of the requirements for models which are used for the calculation of the own resources requirements require prior authorisation in accordance with Part Three of Regulation (EU) No 575/2013 of 26 June 2013.

In the event of significant deficiencies in the capacity of an investment firm's internal model to reflect the risks, the National Securities Market Commission may require that the deficiencies or measures to mitigate its consequences, such as the imposition of higher multiplication coefficients, increases in the requirements of own resources or other measures deemed appropriate and effective.

2. If, in the case of an internal model concerning the market risk, a high number of excess losses with respect to the risk value calculated by the institution's model, in accordance with Article 366 of Regulation (EU) No 575/2013, of 26 June 2013, indicates that the model is not or has ceased to be sufficiently precise, the National Securities Market Commission may revoke the authorization to use it or impose measures to be perfected without delay.

3. If an investment firm has been authorised to apply a method of calculation of the own resources requirements required by the prior authorisation of the National Securities Market Commission in accordance with the Third of Regulation (EU) No 575/2013 of 26 June 2013, and no longer meets the conditions required to apply it, the investment firm must demonstrate that the consequences of the non-compliance are irrelevant in accordance with the Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on the comply with those requirements in a timely manner and set a time limit for carrying out such requirements.

The investment firm will perfect such a plan if it is unlikely to result in full compliance with the requirements or if the deadline is inadequate. If the investment firm is unlikely to be able to meet the requirements again at an appropriate time and does not satisfactorily demonstrate that the consequences of the non-compliance are irrelevant, the authorisation to use the it shall be revoked or limited to areas where there is no non-compliance or those where a compliance situation can be achieved within an appropriate time limit.

4. The National Securities Market Commission shall take into account the analysis of the internal methods and benchmarks prepared by the European Banking Authority when reviewing the authorisations granted to the service companies of the European Securities Market. investment to use those models.

CHAPTER II

Subjective scope of the monitor function

Article 107. Monitoring of consolidable groups.

1. The National Securities Market Commission shall be responsible for supervision on a consolidated basis of:

(a) The consolidated groups of investment services companies in which the parent is an investment firm authorised in Spain.

(b) the consolidable groups in which the parent is a financial holding company or a mixed financial holding company whose subsidiaries are investment firms or credit institutions authorised in Spain; provided that the investment firm has a higher balance sheet than that of the credit institutions.

(c) The consolidable groups in which the parent is a financial holding company or a mixed financial holding company of a Spanish portfolio holding as subsidiaries undertakings of investment services or authorised credit institutions in Spain and in other Member States of the European Union. In addition, the balance sheet of investment firms authorised in Spain shall be higher than that of the credit institutions authorised in Spain.

(d) Consolidable groups which have as their parent more than one financial holding company or mixed financial holding company with registered office in Spain and in another Member State of the European Union whose subsidiaries are (a) undertakings of investment services or credit institutions authorised in each of the Member States of the European Union in which the financial holding companies or mixed financial holding companies are based, provided that the investment firm authorised in Spain has the highest balance sheet.

(e) Consolidated groups consisting of investment services firms or credit institutions authorised in other Member States of the European Union whose parent is a financial holding company or a company mixed financial portfolio with registered office in a Member State other than those where the investment firm and subsidiary credit institutions have been authorised, provided that the investment firm authorised in Spain has the highest balance sheet.

(f) Groups determined as consolidables pursuant to Article 18.6 of Regulation (EU) No 575/2013 of 26 June 2013 on the terms established by the National Securities Market Commission.

2. By way of derogation from points (c), (d) and (e) of the previous paragraph, the National Securities Market Commission, in agreement with the Bank of Spain or with the authorities of other Member States of the European Union responsible for the (a) on an individual basis of the investment services undertakings or credit institutions of a group, the latter may waive the application of the criteria referred to in those letters if the relative importance of the group's activities in any of the other Member States in which it operates advises that consolidated base supervision be exercised by a competent authority other than the National Securities Market Commission.

In the cases referred to in the preceding paragraph, the National Securities Market Commission shall provide, as appropriate, the financial holding company, the mixed financial holding company or the service undertaking of the Spanish investment with the highest balance sheet of the group, the possibility of expressing its point of view in this respect.

The National Securities Market Commission shall notify the European Commission and the European Banking Authority of any agreement adopted pursuant to this paragraph.

Article 108. Inclusion of holding companies in consolidated supervision.

1. Financial holding companies and mixed financial holding companies shall be included in consolidated supervision.

2. Where the subsidiaries of the financial holding company or the mixed financial holding company are not included in the supervision on a consolidated basis by virtue of any of the assumptions provided for in the Article 19 of Regulation (EU) No 575/2013 of 26 June 2013, the National Securities Market Commission shall ask the parent undertaking for information which may facilitate the exercise of the supervision of that subsidiary.

3. The National Securities Market Commission, where it is the consolidating supervisor, may request the information referred to in Article 109 from the subsidiaries of an investment firm, a financial holding company or a financial holding company. mixed financial holding company that are not included in the area of supervision on a consolidated basis. In this case, the transmission and verification procedures provided for in that Article shall apply.

4. The National Securities Market Commission, as a consolidating supervisor, shall establish a list of the financial holding companies and the mixed financial holding companies referred to in Article 11 of Regulation (EU) No 139/2014. 575/2013, dated 26 June 2013. This list shall be forwarded by the National Securities Market Commission to the other competent authorities of other Member States, to the European Banking Authority and to the European Commission.

Article 109. Requests for information and checks on the activity of mixed portfolio companies.

1. Where the parent undertaking of one or more Spanish investment firms is a mixed holding company, the National Securities Market Commission shall require the mixed holding company and its subsidiaries to address directly to those or through subsidiaries which are investment firm undertakings, the communication of any relevant information to exercise supervision over such subsidiaries.

2. The National Securities Market Commission may carry out or entrust to auditors the on-the-spot verification of the information provided by the mixed companies and their subsidiaries. Where the mixed holding company or one of its subsidiaries is an insurance undertaking, the procedure laid down in Article 87 of the Law 24/1988 of 28 July 1988 on the Stock Market may also be used.

If the audit is carried out by auditors, the independence regime to which the auditors in Chapter III of the text are subject shall be subject to the provisions of this Regulation. recast of the Audit of Accounts Law, approved by the Royal Legislative Decree 1/2011, of July 1.

Where the mixed holding company or one of its subsidiaries is located in another Member State of the European Union, the on-the-spot verification of the information shall be carried out in accordance with the procedure laid down in Article 115.

CHAPTER III

Collaboration between monitoring authorities

Article 110. Collaboration of the National Securities Market Commission with other authorities in the framework of supervision on a consolidated basis.

1. In accordance with the provisions of Article 91.6 of Law 24/1988 of July 28 of the Securities Market, in the exercise of collaboration with supervisory authorities of other countries, the National Securities Market Commission will facilitate all of the securities markets. relevant information as requested by those authorities and, in any case, on its own initiative, that information which may have a significant impact on the assessment of the financial soundness of an investment firm or an entity financial of another State.

In particular, the information referred to in the first paragraph shall include:

(a) The legal structure and governance structure of a consolidable group of investment services companies.

b) Procedures for collecting information from entities in a group and checking them.

(c) Adverse developments in investment firms or other undertakings in a group that may seriously affect credit institutions.

(d) Sanctions for serious or very serious infringements and exceptional measures taken by the National Securities Market Commission, including the imposition of a specific own resources requirement under Article 87 Article 2 (a) of the Law 24/1988 of 28 July 1988 on the Securities Market and the imposition of any limitation on the use of the advanced measurement method for the calculation of own resources requirements under Article 312.2 of the Regulation (EU) No 575/2013 of 26 June 2013.

2. The planning and coordination, in collaboration with the competent authorities involved and with the central banks, of the supervisory activities in situations of urgency or in anticipation of them in accordance with the provisions of Article 91.6.c The Law 24/1988, of July 28, of the Stock Market, will include the preparation of joint evaluations, the implementation of emergency plans and the communication to the public.

3. The National Securities Market Commission shall provide the European Banking Authority with all the information it needs to carry out the tasks entrusted to it in Directive 2013 /36/EU of 26 June 2013 on Regulation (EU) No 575/2013, of 26 June 2013 and Regulation (EU) No 1093/2010 of 24 November 2010 pursuant to Article 35 of the latter Regulation.

4. The National Securities Market Commission may report and request assistance from the European Banking Authority when the competent authorities of other Member States of the European Union involved in the supervision of business services Consolidated group investment:

a) Do not communicate essential information.

(b) Denied a request for cooperation and, in particular, for the exchange of relevant information, or do not take action within a reasonable time.

c) Do not properly perform the tasks that correspond to them as a consolidated based monitor.

Article 111. Collaboration of the National Securities Market Commission with authorities from other countries in the framework of branch supervision.

1. In order to monitor the activity of Spanish investment firms operating through a branch in other Member States of the European Union, the National Securities Market Commission will collaborate closely with the competent authorities of the relevant Member States.

In the framework of this collaboration, the National Securities Market Commission will communicate all relevant information relating to the management, management and ownership of these investment services companies that can facilitate their supervision and examination of the conditions of its authorisation, as well as any other information likely to facilitate the supervision of such entities, in particular in terms of liquidity, solvency, deposit guarantee, limitation of large risks, other factors that may influence the systemic risk posed by the company investment, administrative and accounting services and internal control mechanisms.

The communication of information referred to in the preceding paragraph shall be conditional, in the case of non-EU Member States, on the submission of foreign supervisory authorities to secrecy obligations. at least equivalent to those laid down in Article 90 of the Law 24/1988 of 28 July 1988 on the Securities Market.

2. With regard to liquidity, the National Securities Market Commission shall immediately communicate to the competent authorities of the Member States of the European Union where branches of Spanish investment services companies operate:

(a) Any information or verification related to liquidity supervision in accordance with Part Six of Regulation (EU) No 575/2013 of 26 June 2013 and Title VIII of Chapter I of the Act (a) to the extent that such information or findings are relevant for the purposes of the protection of the securities market, of the activities carried out by the investment firm through the branches, of 28 July 1988, depositors or investors of the host Member State.

(b) Any liquidity crisis that occurs or is reasonably expected to occur. This information shall also contain the prudential supervision measures applied in this respect and the details of the recovery plan and any prudential supervision measures taken in that context.

3. The National Securities Market Commission, as the competent authority of the host Member State of a branch of an investment firm of another Member State of the European Union, may request the authorities to competent authorities of the home Member State to communicate and explain the manner in which the information and findings transmitted by the Member State have been taken into account.

If, after these explanations, the National Securities Market Commission considers that the authorities of the State of origin have not taken adequate measures, it may adopt measures to protect the interests of depositors and investors and the stability of the financial system, after informing the competent authorities of the State of origin and, in the case of authorities of a Member State of the European Union, also the European Banking Authority.

4. When the National Securities Market Commission is the supervisor of a Spanish investment firm with branches in another Member State of the European Union and disagrees with the measures to be taken by the authorities competent in the Member State in which the branch is situated, may use the European Banking Authority and ask for assistance in accordance with Article 19 of Regulation (EU) No 1093/2010 of 24 November 2010.

Article 112. Operation of colleges of supervisors.

1. The National Securities Market Commission, when it is appropriate to establish a college of supervisors in accordance with the provisions of Article 91 septies of Law 24/1988 of 28 July of the Stock Market:

a) Chair the meetings of the college and decide on the competent authorities involved in the meetings and activities of the college of supervisors.

(b) It shall keep all members of the college fully informed of the organisation of meetings, agreed decisions and measures taken.

(c) It shall inform the European Banking Authority, subject to the confidentiality requirements laid down in Article 90 of the Law 24/1988 of 28 July of the Securities Market, of the activities of the European Banking Authority. supervisors, especially those developed in emergency situations, and shall communicate to that authority any information that is of particular interest for the purpose of the convergence of supervisory activity.

In any event, the decisions of the National Securities Market Commission shall take into account the relevance of the supervisory activity to be planned or coordinated, including the obligations of cooperation with Member States in which significant branches are established as well as the impact of decisions on the stability of the financial system of the other Member States of the European Union.

2. By way of derogation from the above paragraph, colleges of supervisors may participate:

(a) The European Banking Authority as it considers appropriate in order to promote and control the efficient, effective and consistent functioning of those colleges in accordance with Article 21 of Regulation (EU) No 1093/2010 of 24 June 2010. November 2010.

(b) The competent authorities responsible for the supervision of subsidiaries of a parent investment firm of the European Union or of a financial holding company or mixed financial holding company the European Union.

(c) The competent authorities of the Member State in which significant branches are established.

d) Central banks.

e) Competent authorities of third countries subject to confidentiality requirements which are equivalent, in the opinion of all competent authorities, to those provided for in Article 90 of the Law 24/1988, 28 of July, on the Securities Market.

3. The National Securities Market Commission may refer to the European Banking Authority pursuant to Article 19 of Regulation (EU) No 1093/2010 of 24 November 2010 any disagreement with other competent authorities which integrate the college and request your assistance.

Article 113. Exchange of information on supervision on a consolidated basis.

1. Where the parent undertaking and the investment firm or undertakings which are its subsidiaries are located in different Member States of the European Union, the National Securities Market Commission shall communicate to the competent authorities of the each of those Member States each of the relevant information to facilitate the exercise of supervision on a consolidated basis.

2. Where the supervision of parent undertakings not located in Spain pursuant to Article 107 is to be carried out by the National Securities Market Commission, the latter may request the competent authorities of the Member State in which it is located. the parent undertaking to ask the parent undertaking for information relevant to the exercise of supervision on a consolidated basis and to transmit this information to the National Securities Market Commission.

Article 114. On-site checks of branch activity.

1. To exercise the supervision of branches of Spanish investment services companies in other Member States of the European Union, the National Securities Market Commission, after consulting the competent authorities of the Member State of reception, may carry out on-the-spot checks on the information referred to in Article 111. Such verification may also be carried out through the competent authorities of the Member State in which the branch operates or through auditors or experts.

Where the audit is carried out by auditors, the independence regime to which the auditors are subject in accordance with Chapter III of the recast text of the Regulation shall be subject to the provisions of this Regulation. The Audit of Accounts Act, approved by Royal Legislative Decree 1/2011 of 1 July, or, if the auditors are established in other Member States of the European Union, shall be subject to the provisions of the of independence comparable to Spanish.

2. To exercise supervision of branches in Spain of investment firms authorised in other Member States of the European Union, the competent authorities of those Member States, after consulting the National Commission of the European Union, The market in securities may carry out on-the-spot checks on the information referred to in Article 111. These checks shall in any event be without prejudice to the applicable Spanish legislation.

Article 115. Verification of information relating to entities in other Member States of the European Union.

1. In the framework of the application of the solvency rules contained in Regulation (EU) No 575/2013 of 26 June 2013, the National Securities Market Commission may request the competent authorities of other Member States to take the verification of information on the following entities established in its territory:

a) Investment services companies.

b) Credit institutions.

c) Financial holding companies.

d) Mixed financial holding companies.

e) Financial entities.

f) Auxiliary service companies.

g) Mixed portfolio companies.

(h) Subsidiaries, located in another Member State of the European Union, of:

1. Financial holding companies, mixed financial holding companies or mixed holding companies, which are insurance undertakings or other investment firms not referred to in Article 4.1.2 of the Financial Regulation. Regulation (EU) No 575/2013 of 26 June 2013 subject to an authorisation scheme.

2. º credit institutions, investment firms, financial holding companies or mixed financial holding companies, which are not included in the scope of supervision on a consolidated basis.

2. Where the National Securities Market Commission receives a request similar to paragraph 1 from the competent authorities of other Member States of the European Union, it shall, within the framework of its competence, give it a course of action. of the following methods:

a) By self-testing the check.

b) Allowing the competent authorities who have submitted the application to proceed to it.

c) Allowing an auditor or expert to proceed to it.

In addition, the National Securities Market Commission will allow the requesting competent authority to participate in the verification, if it so wishes, when it does not do so by itself.

If the audit is carried out by auditors, the independence regime to which the auditors in Chapter III of the text are subject shall be subject to the provisions of this Regulation. recast of the Audit of Accounts Law, approved by the Royal Legislative Decree 1/2011, of July 1.

Article 116. Joint decision.

1. In the context of the collaboration established in Article 91 (e) of Law 24/1988 of 28 July 1988, of the Securities Market, the National Securities Market Commission, where it is the consolidating supervisor of a group or the competent authority responsible for the supervision of the subsidiaries of a parent investment firm of the European Union, a financial holding company or a mixed financial holding company in the European Union in Spain, shall endeavour to all its means, reach a consensual decision with the other supervisory authorities of the Union European on:

(a) The application of the provisions of Articles 70.2 and 87a of Law 24/1988 of 28 July of the Stock Market to determine the adequacy of the consolidated level of own resources held by the group in relation to its own resources. financial situation and risk profile and the level of own resources necessary for the application of Article 87 of that law to each of the investment services undertakings of the group and on a consolidated basis.

(b) Measures to address any significant issues and important findings related to the supervision of liquidity.

2.

joint decision referred to in paragraph 1 shall be taken:

(a) For the purposes of paragraph 1.a), within four months of the presentation by the consolidating supervisor, to the other relevant competent authorities, of a report including the risk assessment of the group, in accordance with Articles 70.2, 87 bis.1 and 87 octies.2.a) of Law 24/1988 of 28 July of the Stock Market.

(b) For the purposes of paragraph 1 (b), within one month of the presentation by the consolidating supervisor, to the other relevant competent authorities, of a report including the assessment of the risk profile of the liquidity of the group, in accordance with Articles 97 of this royal decree and 70.2 of the Law 24/1988, of July 28, of the Stock Market.

3. The joint decision shall be set out in a document containing the fully reasoned decision and the National Securities Market Commission, where the consolidating supervisor is on a consolidated basis, forward to the parent investment firm of the European Union.

In case of disagreement, on its own initiative or at the request of any of the other competent authorities concerned, the National Securities Market Commission, before taking the decision referred to in the following paragraph, shall consult the European Banking Authority. The result of the query will not bind you.

4. In the absence of the said joint decision between the competent authorities within the time limits referred to in paragraph 2, the National Securities Market Commission shall, when exercising its supervision on a consolidated basis, take a decision on the application of Articles 70.2, 87a and 87 octies.2.a) of Law 24/1988 of 28 July 1988 of the Securities Market and of Article 97 of this royal decree on a consolidated basis after taking due account of the risk assessment of the subsidiaries made by the relevant competent authorities and, where appropriate, the result of the consultation of the European Banking Authority, explaining any significant variation in the opinion received from the European Banking Authority.

If at the end of the time limits referred to in paragraph 2 some of the competent authorities concerned have referred the matter to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 1093/2010, On 24 November 2010, the National Securities Market Commission shall defer its resolution and shall await the decision which the European Banking Authority may adopt in accordance with Article 19.3 of that Regulation. It shall subsequently decide in accordance with the decision of the European Banking Authority. The time limits referred to in paragraph 2 shall be considered as periods of conciliation within the meaning of Article 19 of that Regulation.

The matter shall not be referred to the European Banking Authority after the end of the four-month period or the one-month period, as appropriate, or after a joint decision has been taken.

5. Similarly, in the absence of the said joint decision, the National Securities Market Commission, as responsible for the supervision of the subsidiaries of a parent investment firm of the European Union or a financial company A joint venture or a mixed financial holding company in the European Union will take a decision on the application of Articles 70.2, 87a and 87 octies.2.a) of Law 24/1988 of 28 July of the Stock Market and of Article 97 of the royal decree, on an individual basis, after taking due account of the observations and the reservations expressed by the consolidating supervisor and, where appropriate, the outcome of the consultation with the European Banking Authority, explaining any significant variation in the opinion received from the European Banking Authority.

If at the end of the four-month period or one month, as appropriate, one of the competent authorities concerned has referred the matter to the European Banking Authority in accordance with Article 19 of Regulation (EU) No 139/2014. 1093/2010 of 24 November 2010 the National Securities Market Commission shall defer its decision and shall await the decision which the European Banking Authority may take in accordance with Article 19.3 of that Regulation. It shall subsequently decide in accordance with the decision of the European Banking Authority. The time limits referred to in paragraph 2 shall be considered as periods of conciliation within the meaning of Article 19 of that Regulation.

The matter shall not be referred to the European Banking Authority after the end of the four-month period or the one-month period, as appropriate, or after a joint decision has been taken.

6. The decisions referred to in the preceding two paragraphs shall be laid down in a document containing the fully reasoned decisions and shall take account of the risk assessment, the observations and the reservations expressed by the other parties. competent authorities throughout the periods referred to in paragraph 2.

The National Securities Market Commission, when it exercises a consolidating supervisor, shall forward the document to all the competent authorities concerned and to the parent investment firm of the European Union or Subsidiary concerned.

7. The joint decisions referred to in paragraph 1 and the decisions of supervisors on a consolidated basis from other Member States of the European Union, affecting companies of Spanish investment services subsidiaries of the consolidated groups Such decisions shall have the same legal effect as the decisions taken by the National Securities Market Commission.

8. The joint decision referred to in paragraph 1 and the decisions taken in the absence of a joint decision in accordance with paragraphs 4 and 5 shall be updated each year or, in exceptional circumstances, when a competent authority (a) responsible for the supervision of subsidiaries of an investment firm or a parent credit institution of the European Union or a financial holding company or a mixed financial holding company in the European Union, to the on a consolidated basis a fully reasoned written request to update the Decision on the application of Article 87 (2) (a) of the Law 24/1988 of 28 July 1988 on the Securities Market. In the second case, the consolidating supervisor and the competent authority that submitted the application may be responsible for the update on a bilateral basis.

Article 117. Branch statement procedure as significant and reporting obligations of the National Securities Market Commission in this respect.

1. For branches of Spanish investment services companies other than those referred to in Article 95 of Regulation (EU) No 575/2013 of 26 June 2013 established in another Member State of the European Union, the Commission National Stock Market:

(a) Promote the process of adoption of a joint decision on its designation as significant within the maximum period of 2 months from the receipt of the application referred to in Article 9d of the Law 24/1988 of 28 July, on the Securities Market. In the event of no joint decision being taken, the National Securities Market Commission shall recognise and implement the decision taken in this respect by the competent authority of the host Member State.

(b) It shall communicate to the competent authorities of the Member State of the European Union where a significant branch of a Spanish investment firm is established the information referred to in Article 91 (a) of the Law 24/1988 of 28 July 1988 on the Securities Market and requests for additional own resources in accordance with Article 87 (2) (a) and shall carry out the tasks referred to in Article 91.6.c) of that Law in collaboration with the competent authorities of the Member State in which the branch operates.

The National Securities Market Commission shall also communicate to the Spanish investment firm the decision taken in this respect by the competent authority of the host Member State.

2. With regard to branches in Spain of investment firms from other Member States of the European Union, the National Securities Market Commission may request the competent supervisory authorities to initiate proceedings. appropriate to recognise the significant nature of such a branch and, where appropriate, to resolve on such an extreme. To this end, if, within two months of the receipt of the request made by the National Securities Market Commission, a joint decision is not reached with the supervisor of the home Member State, the National Market Commission It will have an additional period of two months to make its own decision. In taking its decision, the National Securities Market Commission shall take into account the views and reservations expressed by the supervisor on a consolidated basis or by the competent authorities of the host Member State.

3. In the actions referred to in paragraphs 1 (a) and 2 above, the National Securities Market Commission shall:

(a) Take into account the views and reservations that have been expressed, where appropriate, by the competent authorities of the Member States concerned.

b) Consider items such as the market share of the branch in terms of managed financial instruments; the likely impact of the suspension or cessation of the operations of the investment firm in the liquidity of the market and in payment systems, and of clearing and settlement; or the size and importance of the branch by number of customers.

Such decisions shall be translated into a document containing the decision and its statement of reasons and shall be notified to the other competent authorities and to the investment firm itself.

4. The National Securities Market Commission shall communicate to the competent authorities of the host Member States where significant branches of Spanish investment services companies are established:

(a) The results of the risk assessments of investment firms with branches of this type that have been carried out in accordance with Article 87a of the Law 24/1988 of 28 July 1988 on the market in Values.

(b) Decisions taken pursuant to Article 87 octies.2 of Law 24/1988 of 28 July 1988 on the Securities Market to the extent that such assessments and decisions are relevant to those branches.

The National Securities Market Commission shall also consult the competent authorities of the host Member States on the operational measures carried out by the investment firm to ensure that the the liquidity recovery plans can be applied immediately where this is relevant for the liquidity risks in the currency of the host Member State.

5. The National Securities Market Commission may use the European Banking Authority and request assistance in accordance with Article 19 of Regulation (EU) No 1093/2010 of 24 November 2010 when:

(a) The competent authorities of the home Member State of a significant branch operating in Spain have not consulted the National Securities Market Commission in establishing the recovery plan for the liquidity.

(b) When the National Securities Market Commission holds that the liquidity recovery plans imposed by the competent authorities of the home Member State of a significant branch operating in Spain do not are suitable.

CHAPTER IV

Reporting and publishing obligations

Article 118. Disclosure obligations of the National Securities Market Commission.

1. The National Securities Market Commission should publish on its website:

(a) The texts of the laws and regulations, as well as the general guidelines adopted in the field of solvency rules.

(b) The way in which the options and powers afforded by European Union law have been exercised.

(c) The criteria and methodology followed by the National Securities Market Commission itself to review the agreements, strategies, procedures and mechanisms applied by investment firms and their groups at last to comply with Regulation (EU) No 575/2013 of 26 June 2013 and the solvency rules contained in the Securities Market Act of 28 July 1988 and to assess the risks to which they are or could be exposed.

(d) The general criteria and methods adopted to verify compliance with the provisions of Articles 405 to 409 of Regulation (EU) No 575/2013 of 26 June 2013.

e) A brief description of the outcome of the supervisory review and the description of the measures imposed in cases of non-compliance with the provisions of Articles 405 to 409 of Regulation (EU) No 575/2013 of 26 June 2013.

(f) The others provided for in Article 87 septies of Law 24/1988 of 28 July of the Stock Market.

2. Also, when the National Securities Market Commission, pursuant to Article 7.3 of Regulation (EU) No 575/2013 of 26 June 2013, decides to exempt an investment firm from compliance with Article 6.1 of that Regulation. rules, you must publish the following information:

(a) The criteria applied to determine that there are no significant, current or planned impediments of a practical or legal nature for the immediate transfer of own resources or the repayment of liabilities.

(b) The number of parent investment firms benefiting from this exemption and, among them, the number of investment service companies that have subsidiaries located in a non-Union country European.

c) On an aggregate basis for Spain:

1. º The total consolidated amount of own resources of the parent investment firm in Spain to which this exemption is applied which is held by subsidiaries located in non-EU Member States.

2. The percentage of the consolidated total of own resources of parent investment firms in Spain to which this exemption is applied, represented by own resources held by subsidiaries located in non-Member States. Member of the European Union.

3. The percentage of the consolidated total of own resources required under Article 92 of Regulation (EU) No 575/2013 of 26 June 2013 on parent investment firms in Spain to which it applies this exemption, represented by own resources held by subsidiaries located in non-EU Member States.

3. Where the National Securities Market Commission, in accordance with Article 9.1 of Regulation (EU) No 575/2013 of 26 June 2013, authorises an investment firm to incorporate in its calculation of the requirement referred to in the Article 6.1 of the said Regulation, to those of its subsidiaries which comply with the conditions laid down in Article 7.1.c) and (d) of that Regulation and whose significant exposures or liabilities are in respect of such service undertakings parent investment, you must publish the following information:

(a) The criteria that apply to determine that there are no significant, current or planned impediments of a practical or legal nature for the immediate transfer of own resources or the repayment of liabilities.

(b) The number of parent investment firms to which this authorisation has been granted and, among them, the number of such parent investment firms which have subsidiaries located in non-Member States. Member of the European Union.

c) On an aggregate basis for Spain:

1. The total amount of own resources of the parent investment firms to which this authorisation has been granted which is held by subsidiaries located in non-EU Member States.

2. The percentage of the total own resources of the parent investment firms to which this authorisation was granted represented by own resources held by subsidiaries located in non-member states of the European Union.

3. The percentage of the total own resources required under Article 92 of Regulation (EU) No 575/2013 of 26 June 2013 on the parent investment firms to which it has been granted authorisation represented by own resources held by subsidiaries located in non-EU Member States.

Article 119. Information on the solvency of investment firms.

1. In accordance with Article 70a of the Law 24/1988, of 28 July, of the Securities Market, the consolidable groups of investment services companies and investment firms not integrated into one of these consolidable groups publish on their website duly integrated into a single document known as "Solvency Information", specific information on the financial situation and activity data on which the market and other interested parties may have interest in order to assess the risks they face, their market strategy, their control the risks, their internal organisation and their situation in order to comply with the minimum own resources requirements laid down in Regulation (EU) No 575/2013 of 26 June 2013 and in Law 24/1988 of 28 July 2013 on the market in Values.

2. The same disclosure obligations shall be payable on an individual basis to Spanish or foreign investment firms incorporated in another Member State of the European Union, subsidiaries of investment firms In cases where the National Securities Market Commission considers it to be in the interest of its activity or relative importance within the group. In the event that the obligation affects foreign subsidiaries, the National Securities Market Commission will forward the corresponding resolution to the dominant Spanish investment firm, which will be required to adopt the measures. necessary to give you effective compliance.

3. Investment firms may omit the non-significant information and, with the appropriate warning, the data they consider to be reserved or confidential. They may also determine the means, place and method of disclosure of the document.

4. The publication of the "Solvency Information" document shall be carried out at least annually and at the earliest opportunity. In any event the publication may not take place after the date of approval of the annual accounts of the investment firm.

However, investment firms will assess the need to publish some or all of the information more frequently in view of the nature and characteristics of their activities.

In addition, the National Securities Market Commission may determine the information to which investment firms must pay particular attention when assessing whether a frequency of publication greater than the year for such data.

5. Notwithstanding the above, investment service undertakings which fulfil the following requirements are excluded from the scope of this Article:

(a) Not to be authorized to provide the ancillary service referred to in Article 63.2.a) of Law 24/1988 of 28 July of the Stock Market.

(b) To provide 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 Stock Market.

(c) Not be authorized to deposit money or securities of your clients and, for this reason, may never be in a debtor position with respect to such clients. "

Thirteen. The single additional provision becomes the additional provision first and a new additional provision is added with the following wording:

" Additional Disposition Second. Communication of sanctions to the European Banking Authority.

The National Securities Market Commission shall inform the European Banking Authority of the penalties imposed on investment firms as well as of the remedies against them and their results.

However, the above will not be necessary to report on penalties imposed on investment firms that meet the following requirements:

(a) Not to be authorized to provide the ancillary service referred to in Article 63.2.a) of Law 24/1988 of 28 July of the Stock Market.

(b) To provide 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 Stock Market.

(c) Not be authorized to deposit money or securities of your clients and, for this reason, may never be in a debtor position with respect to such clients. "

Fourteen. The second final disposition is modified as follows:

" Final Disposition Second. Regulatory enablement.

The Minister of Economy and Competitiveness and, with his express rating, the National Securities Market Commission, will be able to dictate the precise provisions for the proper execution of this royal decree.

The National Securities Market Commission may issue the necessary provisions to develop, specify and specify the information that official secondary markets are required to disclose on the stock market. (a) to be admitted to trading on them, both in relation to the buying and selling positions existing at any time, and in relation to the transactions already concluded, in accordance with Article 43 of the Law 24/1988 of 28 July 1988, Securities Market, Securities Market, and in accordance with the requirements in this respect set out in Community legislation. "

Single additional disposition. Prior approval of the Additional Tier 1 and Tier 2 instruments.

The computation of the additional Tier 1 capital and Tier 2 capital instruments of investment services companies as such will be conditional upon their prior approval by the National Securities Market Commission. in accordance with the criteria laid down in Regulation (EU) No 575/2013 of 26 June 2013.

Single repeal provision. Regulatory repeal.

All provisions of the same or lower rank that are opposed to this royal decree are repealed, and in particular the provisions relating to investment services companies of Royal Decree 216/2008 of 15 February 2008. own resources of financial institutions.

Final disposition first. Competence title.

1. This royal decree is dictated by the provisions of the rules 6. ª, 11. and 13. of article 149.1 of the Spanish Constitution, which attribute to the State the jurisdiction over commercial law, bases of the ordination of credit, banking and insurance and coordination of the overall planning of economic activity, respectively.

2. The provisions of the foregoing paragraphs are without prejudice to the powers conferred on the Autonomous Communities by the Autonomous Communities on the supervision of investment firms and within the framework laid down by Union law. European.

Final disposition second. Incorporation of European Union law.

By this royal decree, Directive 2013 /36/EU of the European Parliament and of the Council of 26 June 2013 on access to the business of credit institutions and supervision is incorporated into Spanish law. prudential rules for credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006 /48/EC and 2006 /49/EC.

Final disposition third. Powers of development.

1. Without prejudice to the provisions of this Royal Decree and Law 24/1988 of 28 July of the Securities Market, the National Securities Market Commission may:

(a) Make use, in accordance with its field of competence, of the options attributed to the national competent authorities in 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 and Directive 2013 /36/EU of the European Parliament and of the Council of 26 June 2013 on the access to the activity of credit institutions and to the prudential supervision of credit institutions and credit institutions; investment firms, amending Directive 2002/87/EC and repealing Directives 2006 /48/EC and 2006 /49/EC.

(b) Make use, in accordance with its field of competence, of the options attributed to the Member States in Articles 412.5, 413.3 and 493.3 of Regulation (EU) No 575/2013 of 26 June 2013.

c) To urge investment firms and their groups to conduct reviews by independent experts on those aspects that they consider relevant to the effects of the obligations of the entities or groups established in the solvency rules and, in particular as regards the consistency and quality of the data of the internal methods provided for in the solvency regulation.

d) Determine the types of financial institutions to be included in the consolidable group of investment services companies.

e) Receive the communications of the other bodies responsible for the individual supervision or on a consolidated basis of the entities belonging to a consolidated group in which different entities of the companies are integrated of investment services when the National Securities Market Commission is responsible for the supervision of the said group. Such communications shall be carried out whenever necessary and at least twice a year. Its content shall be that relating to the minimum own resources requirements which, in accordance with its specific rules, are to be payable individually or on a consolidated basis to investment firms subject to their supervision, the deficits which present in relation to such minimum requirements, and the measures taken for their correction.

(f) Dictate, in accordance with its field of competence, the precise provisions for the proper execution of this royal decree.

2. Any rule that is dictated in the development of what is foreseen in this royal decree and may directly affect financial institutions subject to the supervision of the Banco de España or the Directorate General of Insurance and Pension Funds will be given prior report of these bodies.

Final disposition fourth. Entry into force.

1. This royal decree shall enter into force on the day following that of its publication in the "Official Gazette of the State".

2. By way of derogation from the above paragraph, investment firms shall have a period of time of:

a) Three months from the entry into force of this royal decree for the replacement of directors, directors general or assimilated and other employees who do not possess the suitability requirements arising from the application of this real decree.

b) Three months from the date on which the National Securities Market Commission publishes the necessary developments to the effect, to provide on its website the information provided for in Article 31b of the Royal Decree 217/2008, of 15 February, on the legal status of investment firms and other entities providing investment services and amending in part the Regulation of Law 35/2003 of 4 November 2001 on the Institutions of Collective Investment, approved by Royal Decree 1309/2005 of 4 November.

Given in Madrid, on May 8, 2015.

FELIPE R.

The Minister of Economy and Competitiveness,

LUIS DE GUINDOS JURADO