Financial Crime World

Financial Inclusion and Compliance in Spain: Regulatory Framework Under Scrutiny

Spain’s financial regulatory landscape is a complex web of laws, regulations, and guidelines that govern the activities of financial services firms and their associated persons. This article provides an overview of the key aspects of the Spanish financial regulatory framework, highlighting the main regulatory authorities, laws, and regulations that shape the industry.

The Regulatory Authorities

In Spain, two primary regulatory authorities oversee the financial services sector:

  • Bank of Spain (Banco de España): responsible for supervising less significant credit institutions, payment institutions, e-money institutions, and financial credit establishments.
  • National Securities Market Commission (Comisión Nacional del Mercado de Valores or CNMV): regulates securities markets and oversees investment services firms, including banks’ securities trading activities.

The Regulatory Framework

The Spanish financial regulatory framework is built on the following key laws and regulations:

  • Law 13/1994: grants autonomy to the Bank of España and outlines its supervisory duties.
  • Revised Text of the Securities Market Law (Royal Legislative Decree 4/2015): regulates the main functions and powers of the CNMV.
  • Single Supervisory Mechanism (SSM): allows for a coordinated approach to banking supervision across the eurozone, with the Bank of España working in tandem with the European Central Bank (ECB).

EU Law and its Impact

EU law plays a significant role in shaping Spain’s financial regulatory framework. The transposition of EU Directives and regulations forms the basis of Level 1 legislation, while Level 2 legislation consists of guidelines and recommendations from supervisory authorities. These regulations govern prudential aspects such as:

  • Capital and resources
  • Corporate governance
  • Suitability of shareholders
  • Internal control systems
  • Audits
  • Accounting
  • Reporting to supervisory authorities
  • Transparency

Key Areas of Regulation for Financial Services Providers

Financial services providers must comply with the following key areas of regulation:

  • Authorization: obtaining necessary licenses and approvals
  • Business conduct rules: adhering to guidelines on professional behavior
  • Capital and liquidity requirements: maintaining sufficient capital and liquidity levels
  • Anti-money laundering measures: implementing procedures to prevent money laundering
  • Reporting obligations: submitting regular reports to supervisory authorities
  • Administrative penalties for non-compliance: facing fines and other sanctions for failure to comply with regulations

Additional Requirements

In addition to public authorities, professional associations and designated bodies may also impose additional requirements on financial services firms. These organizations must operate within the framework of legal requirements and are subject to review by supervisory authorities.

Disclaimer

The information provided is accurate as of January 29, 2021, and serves as a guide for understanding the regulatory framework governing financial inclusion and compliance in Spain. It is essential to consult with relevant authorities and experts for up-to-date information and guidance on specific regulations and requirements.