Reform of the Spanish Securities Market Law to match EU rules

Automatic summary, not yet reviewed

1. The law expands the scope of the Securities Market Law to include new financial instruments, such as forward contracts, options, futures and financial swaps, not just traditional negotiable securities.
2. The Advisory Committee of the National Securities Market Commission is updated: representatives of all official secondary markets join it, and its duties are adjusted to the new rules.
3. Requirements for issuing securities similar to others already traded are relaxed, to avoid unnecessary costs when enough information already exists or the investors are professionals.
4. Official secondary markets are regulated, a distinction is made between regulated and non-regulated markets, and powers are shared between the State and the Autonomous Communities depending on each market's scope.
5. The figure of investment services companies is created, with rules on authorization, operation, significant shareholdings, cross-border activity, and the possibility of suspending or revoking their authorization.
6. The Investor Guarantee Fund is created. It compensates investors when an investment services company becomes insolvent and cannot return their money or securities.
7. The supervision, inspection and sanctioning regime of the National Securities Market Commission is updated to match the new figures and entities the law regulates.
8. Rules for public limited companies are changed to make business financing easier: preferred, non-voting and redeemable shares are regulated, and the pre-emptive subscription period for listed companies is shortened to fifteen days.

Who it affects

• Individual investors: They get an Investor Guarantee Fund that compensates them if their firm becomes insolvent.
• Investment services companies (securities firms, brokerage agencies, portfolio managers): They must meet new authorization, reporting and solvency requirements, and can operate across the European Union with a single authorization.
• Credit institutions: They are placed on equal footing with investment services companies to operate in securities markets, with access to stock exchanges from January 1, 2000.
• Public limited companies, listed or not: They get new financing tools through preferred, non-voting and redeemable shares, and faster procedures to increase capital.
• Autonomous Communities: They gain powers over securities markets and stock exchanges located in their territory.

Words worth knowing

Mercado secundario oficial (official secondary market)

An authorized market where already issued securities are bought and sold, such as the stock exchanges or the Public Debt Market.

Pasaporte comunitario (EU passport)

A system allowing a firm authorized in one European Union country to operate in the others without a new authorization.

Participación significativa (significant shareholding)

Holding at least 5 percent of a company's capital or voting rights, or having a notable influence on it.

Suscripción preferente (pre-emptive subscription right)

The right of existing shareholders to buy new shares before anyone else when the company increases its capital.

Acciones rescatables (redeemable shares)

Shares that the issuing company or their holders can redeem, that is, retire, under the conditions set when they were issued.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries