The president of the National Securities Market Commission (CNMV), Rodrigo Buenaventura, announced this Wednesday that the agency is analyzing, together with Bolsas y Mercados Españoles (BME), possible limitations that may exist for Spanish companies that want to be listed in the United States Member States while also remaining in the Spanish market, namely through the method of listinggiven Ferrovial’s intention to be listed on the primary market in the Netherlands and on the secondary market in Spain and subsequently be listed in the United States.

The president of the CNMV explained that numerous Spanish and European companies were quoted in the United States through ADRs, certificates issued by a bank for a part, normally small, of the company’s share capital, so that what is quoted there is a fraction of the capital which is listed in Spain and that fraction is determined by the demand of North American investors for that value.

“The vast majority of everyone who owns securities listed on the New York Stock Exchange does so using this ADR method. Some indices, such as Nasdaq, admit ADRs in their composition. Others don’t”, he said. There is another possibility that uses a smaller number of companies and that is the listing through listing on the US Stock Exchange while maintaining its ordinary listing on a European Stock Exchange.

alternative method

“This method allows the share of capital listed in the US to be shares, not share certificates,” explained Buenaventura. He listing has “some advantages, but also different costs and obligations” compared to ADRs, and also requires a certain more or less sophisticated registration connection through financial entities that make transferred agent between the European registry and the US registry. “Both at the BME and at the CNMV we are analyzing whether there may be limitations on the use of the listing from Spain to the US in two aspects: the way in which values ​​are represented and the indirect registration mechanisms between the infrastructures of each country”, he explained.

As for the form of representation, he highlighted that Spanish issuers have operated in a “completely dematerialized” system since 1992, which means that securities “are born” in an exclusively digital environment, while other markets maintain physical ownership in paper and then transform it in digital notes. “We are analyzing whether there is any difficulty in this area”, he added. As for the indirect registration mechanisms, he recognized the possibility of connecting the Spanish and American systems more directly than the ADRs suppose today requires “certain adjustments”, although they should not be legislative. , to define the mechanisms for transferring securities that can be traded in the United States.

In any case, Buenaventura stated that so far the CNMV had not received any expressions of interest or queries from Spanish issuers on the possibility of a listing on the American stock exchange of a company listed in Spain without ceasing to have its securities registered in Spain. “This case is new and unprecedented. And that the recent modification of the Securities Market Law […] It would have been a fantastic opportunity to calmly analyze this issue”, conveyed the president of the CNMV in a forum organized by Invertia.

However, it has been open to analyzing specific changes to improve connectivity between the two markets if this issue is relevant to more issuers, although it has defended that this should be done by analyzing its real demand and with the “necessary” legal rigor .also establishing a dialogue with North American counterparts. “It’s not a problem that can be solved in a few days.”

Buenaventura highlighted the CNMV’s role in protecting shareholders and investors in merger operations, ensuring that the necessary information is provided in a transparent manner about the operation. However, he has argued that European capital markets are “highly integrated” and have “high” international openness. “At the CNMV we do not aim at nationality, nor the passport, nor the place where they have their registered office or fiscal issuers, only that they comply with the norms”, it was signed before recalling that in Spain there are 11 foreign quoted companies that also quote in the country. Likewise, he dismissed the existence of fragmentation in terms of information requirements. “It is a mistake to think that companies choose their listing location based on these parameters, because they are identical across Europe. I would prefer all Spanish companies to be listed in Spain, but that doesn’t just depend on regulation and market rules,” he said.

United States Ambassador

For her part, the US Ambassador to Spain, Julissa Reynoso, stated that Spanish companies interested in listing in the US market do not need to change their headquarters to do so, as evidenced by the number of Spanish companies already listed there and They maintain their headquarters in Spain. This was stated by Reynoso in the discussion following his talk at Foro América, organized by Europa Press and Estudio de Comunicación.

“Private companies need to decide where they are listed. As a good New Yorker, I have to say that we have the best listing site in the world, and it’s the elite place for the most important global companies to list. But there are a lot of Spanish companies that are in Spain that are listed on the New York Stock Exchange and they didn’t have to move for that. One thing has nothing to do with the other, ”he said.

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