APPLICATION OF UNION LEGISLATION

Law 15/2011 of 16 June 2011 (BOE of 17 June 2011) amending certain financial legislation
applies to the Spanish legal system Regulation 1060/2009 of the European Parliament
and of the Council of 16 September 2009 on credit rating agencies.
The main purpose of the Law is to establish the obligation for certain financial institutions29
to use the ratings issued by credit rating agencies. Also, the legislation on credit rating
agencies is adjusted as necessary for the respective national supervisors to cooperate
with the ESMA.
The main amendments made by the Law are as follows:
From the standpoint of solvency, the use by credit institutions or investment firms of
external credit ratings shall require that these have been issued or endorsed by an
ESMA established in the European Union and registered according to Regulation
1060/2009. Ratings of institutions established or financial instruments issued outside
the European Union must have been issued by a credit rating entity established in a
non-Member State that has received an equivalent certification in accordance with
Regulation 1060/2009.
The credit rating agency must have been recognised by the Banco de España or, where
applicable, by the CNMV, in accordance with the criteria established for this purpose and,
in turn, considering the objectivity, independence, transparency and ongoing review of the
methodology applied, as well as the market credibility and acceptance of the credit ratings
issued by that credit rating agency.
The CNMV supervision, inspection and sanctioning regime established in Securities Market
Law 24/1988 of 28 July 1988 shall apply to: 1) the credit rating agencies established in
Spain and registered in accordance with Regulation 1060/2009, persons involved in credit
rating activities, rated entities and related third parties, third parties to whom the credit
rating agencies have outsourced certain functions or activities, and other persons otherwise
related or connected to credit rating agencies or credit rating activities, and 2) the
credit rating agencies registered by a competent authority of the European Union, and the
credit rating agencies registered by a competent authority of a third country that have received
certification based on equivalence under said Regulation, and which in both cases
operate in Spain.
The CNMV shall exercise its authority and apply the infringement and sanctioning regime
pursuant to Law 24/1988 in accordance with European Union legislation on credit
rating agencies. It shall have the necessary supervision and inspection powers to
perform the functions assigned by delegation or under cooperation arrangements with
other competent authorities, in accordance with the provisions of Regulation
1060/2009.
The CNMV shall cooperate with and assist other competent authorities of the European
Union to carry out the functions set out in Regulation 1060/2009. In particular it may request
the cooperation of other competent authorities of the European Union in a supervisory
activity, for an on-the-sport verification or an investigation of, inter alia, matters relating
to credit rating agencies.
Lastly, the CNMV shall maintain, in addition to the official registers set out in Law 24/1988,
which shall be freely available to the public, a register of credit rating agencies established
in Spain.
The Law came into force on 18 June 2011.

Amendment of rules (foreign collective investment institutions)

Amendment of rules on reporting by foreign collective investment institutions registered with the CNMV

CNMV Circular 2/2011 of 9 July 2011 (BOE of 26 July 2011) on reporting by foreign collective
investment institutions registered with the CNMV repeals and replaces CNMV Circular
2/2006 of 27 June 2006.30 The Circular writes into the Spanish legal system the latest
precepts of Union legislation31 which came into force on 1 July 2011.
Under the new notification procedure, collective investment institutions (CIIs) have to submit
the relevant documentation to the competent authority of the home Member State.
That documentation shall include the notification letter, which contains the identity of the
entity empowered to represent the CII before the CNMV and the information on the provisions
for marketing the CII in the host Member State. In this respect, the Circular spells out
the specific information which the foreign CII must include in the notification letter, for
which purpose it sets out a standard format of the marketing report.32
Certain information on the foreign CII must be kept up to date electronically.
The requirements regarding the CII documentation to be sent to the CNMV are changed, the
information required to be disclosed to investors is adjusted somewhat, the requirement to register
compartments in the CNMV register is eliminated, and the content of the communication to
be made to the CNMV pursuant to Article 52 of the Personal Income Tax Regulations is broadened
to include information on compartments and/or classes to be reported for tax purposes.
Lastly, non-harmonised CIIs are no longer required to send information electronically.
The Circular came into force on 1 July 2011.

Amendment of the law on credit institutions

Amendment of the law on credit institutions’ own funds and on credit institution deposit guarantee funds.

Law 6/2011 of 11 April 2011 (BOE of 12 April 2011) amended Law 13/1985 of 25 May 19851 on investment ratios, own funds and reporting requirements for financial intermediaries, Law 24/1988 of 28 July 19882 on the securities market and Legislative Royal Decree 1298/1986 of 28 June 19863 on the adaptation of current credit institution law to EU legislation.
The purpose of the Law is to commence transposition of Directive 2009/111/EC of the European Parliament and of the Council of 16 September 2009 amending Directives 2006/48/ EC, 2006/49/EC and 2007/64/EC as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management.

More recently, Royal Decree 771/2011 of 3 June 2011 (BOE of 4 June 2011) amended Royal Decree 216/2008 of 15 February 20084 on financial institutions’ own funds and Royal Decree 2606/1996 of 20 December 19965 on credit institution deposit guarantee funds. This Royal Decree implements Law 2/2011 of 4 March 2011 on sustainable economy and Law 6/2011 of 11 April 2011. It also makes headway in the transposition of Directive 2009/111/EC and of Dire ctive 2010 /76/E U o f the European Parliament and of the Council of 24 November 20106 amending Directives 2006/48/EC and 2006/49/EC as regards capital
requirements for the trading book and for resecuritisations and the supervisory review of remuneration policies.
It also takes the opportunity to introduce a new legal regime governing additional contributions to credit institution deposit guarantee funds based on the remuneration of the deposits, in line with the provisions being adopted in this connection in the EU.
More information:  Management