Special oversight for groups mixing banking, securities and insurance

Automatic summary, not yet reviewed

1. The law creates an additional supervision regime for financial conglomerates, meaning groups that combine banking, securities and insurance entities. It defines when a group counts as a financial conglomerate using balance sheet and solvency thresholds.
2. Entities in a conglomerate must hold sufficient own funds at the conglomerate level, apply capital adequacy policies, respect limits on risk concentration and intra-group transactions, and have risk management and internal control systems.
3. A single coordinator is designated to lead the supervision of each conglomerate, and the competent authorities must cooperate, exchange information and consult each other before adopting relevant measures.
4. If the obligations are not met or the conglomerate's solvency may be compromised, the same limits set for consolidated groups of financial entities apply, plus the sanctions in the sector rules.
5. For groups based outside the European Union, authorities check whether they receive equivalent supervision in their home country; if not, the Spanish regime applies, and a mixed financial holding company in the EU may be required.
6. The law amends the rules on credit institutions, securities markets and insurance to adapt them: it strengthens consolidation, internal control and sanctionable offenses, and repeals Chapters IV and V of Law 13/1992.

Who it affects

• Credit institutions, investment services firms and insurance and reinsurance companies in financial conglomerates: They face additional group-level solvency, reporting and control requirements.
• Managers of collective investment undertakings and pension fund managers: They are also regulated entities subject to this additional supervision.
• Mixed financial holding companies: Their directors must be reputable and experienced, and the company may act as the obliged entity toward the coordinator.
• Bank of Spain, the National Securities Market Commission and the Directorate General for Insurance and Pension Funds: They supervise, designate the coordinator and can sanction non-compliance.
• Groups whose parent company is outside the European Union: Spanish law applies only if they lack equivalent supervision at home.

Words worth knowing

Conglomerado financiero (financial conglomerate)

A group combining at least one insurance sector entity with banking or investment services, where both sectors are significant.

Entidad regulada (regulated entity)

A company authorized to operate in banking, securities, insurance, investment funds or pension funds.

Sociedad financiera mixta de cartera (mixed financial holding company)

A parent company that is not itself a regulated entity but, with its subsidiaries, forms a financial conglomerate.

Operaciones intragrupo (intra-group transactions)

Transactions between companies of the same group, such as loans between them.

Coordinador (coordinator)

The authority in charge of leading and coordinating the supervision of a financial conglomerate.

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