{"id":3052,"date":"2015-12-14T09:51:56","date_gmt":"2015-12-14T09:51:56","guid":{"rendered":"http:\/\/progresomicrofinanzas.org\/?p=3052"},"modified":"2017-12-19T11:38:43","modified_gmt":"2017-12-19T11:38:43","slug":"update-of-the-legal-regulations-for-financial-credit-establishments","status":"publish","type":"post","link":"https:\/\/www.fundacionmicrofinanzasbbva.org\/revistaprogreso\/en\/update-of-the-legal-regulations-for-financial-credit-establishments\/","title":{"rendered":"Updating legal framework for credit establishments"},"content":{"rendered":"
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This bill repeals Royal Decree 692\/1996 and establishes the implementing clauses for Title II of Law 5\/2015 for promoting business finance<\/a>, regarding the legal regime for financial credit establishments (FCE). A financial credit establishment is similar to the old credit entities with limited operating scope (known as ECAOL in Spanish) and forms part of the strategy of encouraging the growth a more robust system to enable Spanish companies to raise funding.<\/p>\n

The bill establishes conditions of access to this business, solvency requirements for FCEs and rules on their supervision and oversight. It also dedicates a chapter to their corporate governance.<\/p>\n

Conditions of access to the business<\/strong><\/p>\n

The FCEs are limited liability companies requiring authorisation from the Ministry of the Economy & Competitiveness, based on a report from the Bank of Spain and the Executive AML Service. They must be filed at the Companies Registry and in the Bank of Spain’s Special Registry of financial credit establishments.\u00a0 They are licenced to grant credit and carry out other ancillary activities. They may also provide payment services and issue electronic money, when they have the necessary permits to do so. They are expressly forbidden to raise customer funds in the form of deposits, loans, assignments of financial assets or other similar activities.<\/p>\n

They must have a minimum share capital of \u20ac5m, their limited corporate purpose must be defined in their bylaws and they must have their corporate domicile in Spain.<\/p>\n

Solvency requirements and supervision<\/strong><\/p>\n

The bill refers to the solvency requirements, the rules on supervision and corporate governance established in Law 10\/2014 on the regulation, supervision and solvency of financial entities<\/a>, RD 84\/2015<\/a>, and the EU Regulation 575\/2013<\/a>.\u00a0 \u00a0They must also have a sufficient buffer of high-quality liquid assets to cope with a period of serious financial instability. The size of such buffer will be determined by the Bank of Spain.<\/p>\n

They are subject to the supervision and oversight of the Bank of Spain.<\/p>\n

Corporate governance <\/strong><\/p>\n

The bill establishes the principles of corporate governance that the financial credit establishments must follow, in order to obtain and keep their permit to engage in this business. Thus, they must have:<\/p>\n