Spain’s Financial Regulation Landscape Evolves: New Laws and Regulations Take Effect

Strengthening Financial Stability and Promoting Sustainability

MADRID - In a bid to enhance asset management, shareholder identification, proxy advisor obligations, and climate change mitigation, Spain has introduced several new laws and regulations aimed at promoting financial stability and sustainable economic growth.

Key Changes in Asset Management

• The definition of asset managers has been expanded to include investment firms that provide portfolio management services to investors. This move ensures that these entities are held to similar standards as traditional asset managers.
• Insurance companies and pension funds must now disclose how their investment strategies align with their liabilities and contribute to medium- to long-term performance.

Shareholder Identification and Proxy Advisor Obligations

• Entities entitled to demand the disclosure of beneficial owners in addition to formal shareholders.
• Proxy advisors are subject to specific obligations, including transparency on voting recommendations and conflict-of-interest disclosures.

Climate Change Mitigation

• Companies must assess the financial consequences of climate-related risks and disclose measures taken to mitigate these impacts.
• The Bank of Spain, CNMV, and DGSFP will produce a joint report on the alignment of the Spanish financial system with climate targets.

Code of Good Practices for Renegotiation of State-Guaranteed Debt

• Aims to provide relief to viable firms and self-employed professionals affected by the pandemic.
• Participating banks must extend loan maturities, consider converting financing into profit-participating loans, or reduce principal amounts while ensuring that these measures are applied in accordance with applicable regulations.

Changes to Corporate Enterprises Act and Securities Market Act

• Revised requirements for directors’ due diligence, listed company director remuneration, and equity-raising processes.
• The law has clarified the regime governing rights issues by Spanish companies whose shares are traded on foreign markets only.

Conclusion

These developments aim to promote financial stability, increase transparency, and support sustainable economic growth in Spain. By strengthening regulations and promoting responsible business practices, Spain is taking a proactive approach to ensuring a stable and sustainable financial system for years to come.