In June, the Spanish Government approved a draft law whose objective is to reform Royal Legislative Decree 4/2015, of 23 October, which approves the revised text of the Securities Market Law (current Securities Market Law). The text of this bill has been submitted to the Spanish Parliament for approval and has been made available to the public this September 2022.
Among the objectives of the reform proposed in the bill (hereinafter the Bill) are the general objectives that we will explain below. In addition to these general objectives, this article refers to different specific situations, such as the regulation of crypto-assets and listed companies for acquisition purposes (SPACs), as their regulation is a regulatory novelty of the utmost topicality.
Adaptation of Spanish regulations to the current reality
The adaptation of current Spanish financial regulations, in particular the current Securities Market Law, which dates back to 2015, to the current economic situation and particularly taking into account the existence of the new technologies that have had an impact on financial systems in recent times: digitalisation, new financing instruments and markets, new forms of listing (such as SPACs, companies listed on the stock exchange without activity and with the sole purpose of raising money to buy a company), and having an even more specific impact on the regulation of the so-called Cryptoassets.
In this sense, the Bill aims to merge several European rules into a single text, with the sole purpose of increasing the protection of companies and individual investors. Thus, if it is approved by the Spanish Parliament, the Bill will constitute the regulatory framework that will replace the current Securities Market Law and will also unify in a single text European directives and regulations that have been developing regulatory matters related to securities markets and investment services in order to provide legal certainty to companies and investors.
Strengthening the position of the Securities Markets with regard to the financing of the Spanish economy
The main objective pursued by the Project in this area is to establish a regulatory framework that will enable companies to benefit from investment services as a means of financing activity and from the capacity for non-bank financing of companies, while at the same time increasing investor protection.
Thus, the Project aims to modernise the Spanish Securities Markets in order to improve and enhance their capacity to finance the economy in a transparent and efficient manner, to strengthen the supervisory regime applicable to investment services firms and to maintain a high level of protection for financial services clients and savers.
Simplification of procedures and elimination of administrative burdens
In order to achieve the above objectives, the Draft revises the procedures set out in the current Securities Market Law and in the regulations currently in force and simplifies some of the procedures currently in place. In addition, it eliminates administrative and management formalities and burdens that are inoperative, with the ultimate aim of facilitating the attraction of investment.
Thus, it simplifies the process of issuing fixed-income securities, proposes the elimination of certain unnecessary reporting obligations in the securities clearing and settlement process, reduces the fees of the National Securities Market Commission (CNMV) and thus achieves convergence of Spanish regulations with those of the European Union.
In short, with regard to the simplification of procedures, the Bill seeks to simplify information requirements and obligations as far as possible, in order to facilitate the channelling of financing, while also safeguarding the protection and interests of investors.
Measures in relation to investor protection, with special reference to Listed Companies for Acquisition Purposes (SPACs) and Crypto-assets.
Regulation of Listed Companies with Acquisition Purposes (SPACs)
Specifically, the Draft Law incorporates a reform of the Capital Companies Act to guarantee the protection of investors in Listed Companies with Acquisition Purposes (SPACs), guaranteeing the conditions under which the repayment of the capital invested by shareholders is carried out.
By way of explanation, a SPAC is a company whose purpose is to raise funds by going public through an Initial Public Offering (IPO), equity stakes are offered in exchange for raising funds.
Thus, the SPAC is listed on a stock market without having initiated or developed any type of business activity, as its sole purpose is to raise money.
The funding that may be acquired after the IPO is used to carry out mergers that allow them to become larger. Thus, the initial shareholders make their investment, without knowing what mergers are going to take place and in any case, often no merger agreement is reached. This uncertainty is the reason for the Draft to regulate the guarantees of the conditions under which the repayment of the capital invested by the shareholders is carried out.
Regulation of crypto-assets
The Draft envisages the incorporation into Spanish law of certain European regulations that have yet to be transposed, in order to address the situations arising from the digitalisation process initiated by the financial sector some years ago.
In this regard, the Draft includes the necessary changes to allow the effective application in Spain of the European regulations on crypto-assets immediately after their approval, should they finally be approved.
To this end, the Draft provides the CNMV with the necessary powers to guarantee investor protection and financial stability in the field of crypto-assets and distributed registration technology.
Thus, any financial instrument that may consist of a cryptoasset, i.e. one that is represented by means of distributed registry technology, would be included in this regulation. In addition, a set of infringements and penalties are included in the regulation that will enable the CNMV to prosecute and penalise breaches of the obligations to which crypto-assets presented as an investment object are subject.
If the Draft is finally approved, the necessary issues for the application of Regulation (EU) 2022/858 of the European Parliament and of the Council of 30 May 2022 on a pilot scheme for market infrastructures based on decentralised registry technology (which incorporates the regulation of the application of the so-called Blockchain to financial services), as well as the Regulation of the European Parliament and of the Council on crypto-asset markets and amending Directive (EU) 2019/1937, will be incorporated into the regulations.
Thus, the aforementioned regulation may be applied in Spain to the systems and infrastructures used in the activity of securities markets and financial services and will allow the use of this technology in transactions with financial assets.
In addition, the Bill includes the conditions and obligations that must be fulfilled in order to create and register crypto-assets subject to Spanish securities market regulations.
In view of the new features included in the Bill, the Commercial and Corporate Law Department of Belzuz Abogados will monitor the process of processing this draft law until its conclusion and we will keep you informed of any new developments that affect it. In any case, if you as an individual investor or your company need advice in relation to the application of the regulations related to the Securities Market or financial services, do not hesitate to contact Belzuz Lawyers to request the necessary legal advice.
Departamento Derecho mercantil y societario | Madrid (España)
Belzuz Abogados SLP
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