The Government approved in the Council of Ministers on Monday the draft reform of the law on securities markets and investment services. which will be submitted to the Spanish Parliament with the aim of boosting business financing and strengthening investor protection, particularly in the field of crypto-assets.
As explained by the Ministry of Economy and Digital Transformation, the regulation aims to modernize securities markets with the aim of improve and strengthen their capacity to finance the economy in a transparent and efficient manner.strengthen the supervisory regime applicable to investment firms and maintain a high level of protection for customers and savers in financial services.
This new regulation constitutes a framework law which replaces the current regulation of 2015 and merges in a single text the European directives and regulations which have developed this area in order to offer legal certainty to companies and investors.
With that, the financial legal framework is adapted to the new technological and economic realities. and, in particular, digitalisation, EU directives, new SME finance instruments and markets (such as the BME Growth Market) and new forms of listing (such as SPACs, companies going public without activity and for the sole purpose of raising funds to buy a business).
The bill includes measures to improve the regulation of securities markets, with the aim of. improve the non-bank financing capacity of enterprises.and strengthen investor protection. To this end, the draft law simplifies certain procedures and removes redundant administrative burdens in order to facilitate investment attraction.
To this end, the process for issuing fixed income securities is simplified, CNMV fees are reduced. The CNMV reduced the CNMV fees payable by issuers of fixed income securities and proposed the elimination of certain redundant reporting requirements in the securities clearing and settlement process. In this way, national regulations are brought into line with EU regulations and those of neighboring countries.
It also establishes improvements in the area of the BME Growth marketby applying the takeover bid regime to the growing SME segment, which will allow shareholders to receive a proportional control premium in the event of a takeover bid on the listed SME, thus improving the non-bank financing of these companies.
Also, the definition of SMEs is broadened to include companies whose debt issue during a financial year is less than 50 million euros, which increases the possibilities of being listed on this market and therefore improves the financing of companies.
In addition, changes approved in the MiFID II directivewith the objective that investment services support the recapitalization of European companies and facilitate investment in the real economy.
To this end, the reform adjusts the information requirements and obligations which, in the current context, may be redundant, in order to facilitate the channeling of savings towards financing, while preserving the protection and interests of investors.
First of all, the regulation modernizes the regulations and advances in the incorporation of European regulations to face the challenges derived from the digitalization process. In this area, it establishes the the provisions necessary to apply European regulations on crypto-assets in Spain. immediately after its approval, giving the CNMV the necessary powers to guarantee investor protection and financial stability in this area.
Thus, the scope of the regulation includes any financial instrument which is a crypto-asset, i.e. which is represented by means of distributed recording technology. In addition, it includes offenses and penalties that will allow the CNMV to act in the event of non-compliance. when the European regulation comes into force. Thus, the CNMV will be able to sanction breaches of the obligations and requirements of crypto-assets which are not financial instruments and which are presented as investment objects.
Similarly, the implementing provisions of the pilot system policy for the use of distributed ledger technology (blockchain) in securities market infrastructures, which will make it possible to use this technology to trading in tokenized stocks and bonds for five years and not exceeding a certain volume of activity. The draft law includes conditions and obligations that must be met in order to incorporate and register crypto-assets subject to securities market regulation.
Second, the bill incorporates a reform of the law on capital companies. to ensure the protection of investors in listed companies with the objective of taking control (the aforementioned SPACs) by guaranteeing the conditions under which the reimbursement of the capital invested by the shareholders takes place.
These vehicles are intended to promote the listing of companies on the stock exchange, to contribute to the diversifying funding sources.particularly for growing or early-stage companies, and also to reduce their dependence on bank credit.
Third, the transposition of Directive 2019/2034 on the prudential regime for investment firms (ESI) improves the operation of these firms and includes specific solvency obligations for these entities.
The regulation establishes a specific prudential supervision regime for these companies, adapting it to the particularities of their economic model and taking into account the principle of proportionality.
Furthermore, it The CNMV has the following powers to establish the applicable regime according to the size, nature, scale and complexity of the activities of the ISE. A more flexible regime is also envisaged for very small companies that do not pose systemic risk, while maintaining investor protection.
It is also adjusting the limitation of positions in certain derivative products and the related hedging exemption regime in order to stimulate growth markets.
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The government approves the draft reform of the law on securities markets – Chatborgne
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