{"id":12636,"date":"2018-11-16T12:49:24","date_gmt":"2018-11-16T12:49:24","guid":{"rendered":"http:\/\/progresomicrofinanzas.org\/?p=12636\/"},"modified":"2018-11-16T12:51:37","modified_gmt":"2018-11-16T12:51:37","slug":"12636","status":"publish","type":"post","link":"https:\/\/www.fundacionmicrofinanzasbbva.org\/revistaprogreso\/en\/12636\/","title":{"rendered":"Diligence, transparency and vetting in the new consolidated text of the Securities Market Act"},"content":{"rendered":"
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The draft of the Consolidated Text of the Securities Market Law, pursuant to Royal Decree 14\/2018 passed in September, has been published recently. This transposes into Spain’s body of law the provisions of EU Directive 2014\/65\/ (MiFID II) and its Delegated EU Directive 2017\/593, which had been awaiting adaptation.<\/span><\/p>\n

The Bill contains several provisions regulating the system for authorizing and supervising service companies and investment activities and those granting new supervisory powers to the National Securities Market Commission (CNMV); it also makes significant additions to the rules of conduct that these companies must follow to guarantee investor protection. Even though many of them were covered in the previous EU Directive 2004\/39 (MiFID I), these requirements represent reinforced duties of customer reporting and of monitoring transactions that trigger conflicts of interest.<\/span><\/p>\n

Some of the most important features are highlighted below:<\/span><\/p>\n

General organization, conduct and information duties<\/b><\/p>\n

The regulation lays down general minimum requirements for internal organization and operating, and some general duties that companies must adhere to in the best interests of their clients and other stakeholders, having the duty of acting honestly, impartially and professionally.<\/span><\/p>\n

Specifically, companies are obliged to adopt such measures as might be necessary to prevent, detect and manage potential conflicts of interest between their clients and the company or group itself.<\/span><\/p>\n

It stipulates that they must keep their clients informed at all times in an appropriate, impartial, clear and trustworthy manner, and identify, where applicable, information that is of an advertising nature. They should also provide clients with a report on the service provided, in a durable format. This report should cover the regular reporting that has been carried out, explaining the type and complexity of the financial instruments in question and the nature of the service, and noting the cost of the transactions and services performed against the client’s account.<\/span><\/p>\n

Furthermore, companies must ensure at all times that they have all the information on their clients that they need and must assess the suitability and need of the investment services or portfolio management they offer, so that they are commensurate with clients’ risk tolerance and capacity to withstand losses.<\/span><\/p>\n

The board of directors<\/b><\/p>\n

Consistent with the regulatory developments of the last few years, the Bill reinforces the relevance of the board of directors, conferring on it the duty of defining, approving and supervising the following matters:<\/span><\/p>\n