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Compliance Procedures for Banks in Spain: A Comprehensive Guide
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The banking sector in Spain is subject to a complex web of regulations aimed at ensuring the stability and integrity of the financial system. In this article, we will delve into the compliance procedures that banks operating in Spain must adhere to.
Regulatory Framework
The Bank of Spain, in collaboration with the European Central Bank (ECB), plays a crucial role in supervising and regulating the banking sector. The main legislation governing banking activities in Spain includes:
- Law 13/1994 on the autonomy of the Bank of Spain
- Royal Legislative Decree 4/2015, which approves the revised text of the Securities Market Law
Authorisation
To provide regulated services, banks must obtain authorisation from the corresponding supervisory authority. In the case of EU entities, a “passporting” procedure is required to enable cross-border provision of services or establishment in Spain without additional authorization.
Key Points:
- Obtain authorisation from the Bank of Spain for regulated services
- “Passporting” procedure for EU entities
Business Conduct Rules
Banks are subject to business conduct rules throughout their operations, focusing on how services should be provided, including client information requirements.
Key Points:
- Client information requirements
- Services provision guidelines
Capital and Liquidity
Most banks must comply with capital and own resources requirements. Credit institutions also maintain liquidity ratios to ensure stability.
Key Points:
- Capital and own resources requirements
- Liquidity ratios for credit institutions
Anti-Money Laundering
All banks are required to implement anti-money laundering measures, having dedicated internal control bodies, and report certain transactions to the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences (Sepblac).
Key Points:
- Implement anti-money laundering measures
- Report transactions to Sepblac
Reporting Requirements
Banks must comply with regulatory reporting requirements, varying in intensity depending on the entity, service provided, and clients targeted.
Key Points:
- Regulatory reporting requirements
- Varying intensity based on entity and services
Infringements and Penalties
Administrative penalties are imposed by competent financial supervisory authorities for breaches of financial regulations.
Key Points:
- Administrative penalties for financial regulation breaches
- Competent financial supervisory authority enforcement
Additional Requirements
State and regional consumer authorities issue guidelines on consumer protection, which may be relevant to banking services. Professional associations do not have regulatory authority, but entities participating in markets, like central securities depositaries or clearing central counterparties, must draft internal regulations in accordance with legal requirements and under supervisory review.
Key Points:
- Consumer protection guidelines from state and regional authorities
- Internal regulations for market participants
Conclusion
Compliance procedures for banks operating in Spain involve a multifaceted approach, including authorisation, business conduct rules, capital and liquidity requirements, anti-money laundering measures, reporting obligations, infringement penalties, and additional state and regional guidelines. By understanding these requirements, financial institutions can ensure they operate within the law and maintain stability and integrity in the Spanish banking sector.
Date: 29 January 2021