Bill to fully repay small investors who bought preferentes

Automatic summary, not yet reviewed

1. The bill would allow small savers who bought preferentes or other hybrid instruments to recover everything they invested, with no losses, and would exempt them from the loss-management measures under Law 9/2012.
2. A saver would generally be anyone who is a retail client, meaning anyone who is not an investment professional. The text also lists specific cases, such as people who had no other significant investment products, wanted to keep their savings available, or resemble cases accepted in arbitration or favorable court rulings.
3. The exemption would also apply to savers without financial experience who prove they did not receive adequate information about the product they bought. Credit institutions would have to hire an independent third party to review every contract and identify savers.
4. Management actions on these instruments would be suspended until it is determined who qualifies as a saver, and those who already exchanged their preferentes or had them converted into shares could recover their money, even if the FROBFROB Fondo de Reestructuración Ordenada Bancaria, the public fund that managed the restructuring of Spanish banks. had already made decisions. In addition, savers holding preferentes and a mortgage on their first home with the same bank who cannot pay the installments could not have the mortgage foreclosed until the nominal amount is returned or they regain the ability to pay.

Who it affects

• Small savers without financial training who bought preferentes or subordinated debt.: They would recover everything they invested, with no losses.
• Those who already exchanged their preferentes or had them converted into shares and suffered losses.: They could recover the amounts invested if their status as savers is confirmed.
• Savers holding preferentes or subordinated debt and a first-home mortgage with the same bank who cannot pay the installments.: The mortgage could not be foreclosed until the nominal amount is returned or they regain the ability to pay.
• Credit institutions.: They would have to hire an independent third party to review all contracts and identify savers.

Words worth knowing

Participaciones preferentes

A Spanish financial product that is neither a share nor a deposit; buyers can lose their money if the bank runs into trouble.

Instrumentos híbridos de capital o deuda subordinada

Hybrid capital or subordinated debt instruments: financial products mixing features of shares and loans, last in line to be paid if the bank fails.

Acciones de gestión

Management actions: measures to spread a bank's losses among holders of these products, such as exchanging them for shares or reducing their value.

Cliente minorista

Retail client: a customer who is not an investment professional and is not assumed to have financial experience or knowledge.

FROB

Fondo de Reestructuración Ordenada Bancaria, the public fund that managed the restructuring of Spanish banks.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries