The Congress of Deputies unanimously approved the Securities Markets and Investment Services Law, which improves the regulation of capital markets and increases their competitiveness.

The new Law improves the regulation of securities markets, modernizing their functioning and increasing their competitiveness in order to increase their ability to finance the economy in a transparent and efficient manner, strengthening the supervisory regime applicable to investment services companies and strengthening the level of protection for savers and financial services customers.

The new standard replaces the previous revised text from 2015 and adapts the financial legal framework to new technological and economic realities, such as digitalisation, new financing instruments and markets for SMEs (such as the BME Growth market) and new forms of listing. At the same time, it incorporates in a single text the guidelines and community measures necessary to apply the recently approved European regulations.

The parliamentary procedure improved some aspects related to investor protection, combining advances in the digitalization of stock markets by allowing the tokenization of securities, with the reinforcement of mechanisms to guarantee the adequate use of ledger technologies distributed by specialized entities.

Measures to improve the ability of exchanges to finance Spanish companies

The Law includes measures to improve the regulation of securities markets, with the aim of improving the non-bank financing capacity of companies and increasing investor protection.

With this objective, some procedures are simplified and redundant administrative burdens are eliminated to facilitate the attraction of investments.

To this end, the process of issuing fixed income securities is simplified, the CNMV fees that issuers of fixed income must pay are reduced and the elimination of some redundant information obligations in the securities clearing and settlement process is proposed. . In this way, national regulations are aligned with EU regulations and those of neighboring countries.

Improvements are also established within the scope of the BME Growth market, by providing for the application to the expanding SME segment of the public offers for the acquisition of shares (OPAS), which will allow shareholders to receive proportionally the control premium in the event of a offer to takeover listed SMEs, which will improve non-bank financing for these companies.

Likewise, the scope is extended to include companies whose debt issues in a financial year are less than 50 million euros, increasing the possibilities of listing in this market and thus improving the financing of companies.

In addition, the changes recently approved in the MIFID II Directive are urgently incorporated into Spanish regulations, with the aim that investment services favor the recapitalization of European companies and facilitate investments in the real economy.

To this end, the reform adjusts information requirements and obligations that, in the current context, may be redundant, to facilitate the channeling of savings into financing, also safeguarding the protection and interests of investors.

Measures to improve investor protection

The norm modernizes the regulation and advances in the incorporation of European norms to face the challenges arising from the digitization process. In this area, the necessary provisions are established to apply the European Regulation on crypto markets in Spain immediately after its entry into force, providing the CNMV with the necessary powers to guarantee investor protection and financial stability in this area.

Thus, the infractions and sanctions that will allow the CNMV to act against non-compliance with the said regulation when it comes into force are incorporated. In this way, the CNMV may sanction non-compliance with the obligations and requirements of crypto-assets that are not financial instruments and that present themselves as objects of investment.

In addition, any crypto asset that is a financial instrument is included in the scope of application of the standard, that is, financial instruments represented by distributed ledger technologies.

The bill includes the conditions and obligations that must be met to constitute and register crypto assets subject to stock market regulation. These provisions will also allow the application of the Regulation of the pilot regime for the use of distributed ledger technology (blockchain) in exchange infrastructures, in order to be able to use this technology for operations with tokenized shares and bonds for five years and without exceeding a certain volume of activity.

Secondly, a reform of the Capital Companies Law is incorporated to guarantee the protection of investors in listed companies with the purpose of acquisition (the so-called SPAC), guaranteeing the conditions under which the capital is reimbursed. shareholders.

These vehicles aim to encourage the IPO of companies, contributing to the diversification of financing sources, mainly for growing companies or in an initial stage of development, and also reducing dependence on bank credit.

Thirdly, the incorporation of Directive 2019/2034 on the prudential regime for investment services companies (ESI) improves the functioning of these companies and incorporates specific solvency obligations for these entities.

The regulation establishes a prudential supervision regime for these companies, adapting it to the particularities of their business model and taking into account the principle of proportionality.

Additionally, the CNMV is empowered to establish the applicable regime depending on the dimension, nature, scale and complexity of the ESI’s activities. A more flexible regime is also contemplated for microenterprises that do not involve systemic risk, while maintaining investor protection.

In order to recognize the particularities of providing the advisory service and guarantee its continuity with full guarantees for investors, a system of national financial advisory firms is instituted. These companies will be able to maintain the same requirements as the present one, although they will be obliged to adhere to the Investor Guarantee Fund, with a proportional contribution system adapted to their level of risk (less than in the provision of other services), which will be specified in regulations for the development of the law.