- SMEs that see their funding depleted will receive a three-month notice and access reports on their situation
- The accredited investor will have no limit to crowdfunding and the retailer may invest up to 3,000 euros per project.
- A capitalization ceiling of 500 million euros is established to operate in the Alternative Stock Market
The Council of Ministers has approved the Draft Law (PL) to Promote Business Financing, the objective of which is to improve the financing channels of companies, especially SMEs. It is about making access to credit more flexible, both bank and that which circulates through alternative routes, and channeling savings towards investment through more agile instruments. Among the new features, the obligation to carry out a three-month notice to SMEs that are affected by a reduction or cancellation of financing and the possibility of obtaining a detailed report on their financial position stand out. Non-bank instruments such as the so-called “crowdfunding” are also regulated and the regulation of other existing ones, such as the Alternative Stock Market (MAB), is improved.
The regulation will establish the obligation on the part of credit institutions to offer advance notice of at least three months to SMEs whose financing is to be canceled or significantly reduced (35% or more). The objective is to provide these companies with the necessary adjustments to redirect their sources of financing quickly. Along with the advance notice, SMEs are given the right to obtain from the entity information about their financial position, payment history, statement, credit rating, etc., and their credit rating in accordance with the specific methodology for SMEs that the Bank will develop. from Spain (“SME rating”). This request must be attended within 10 business days and free of charge. In addition, they may request this data at any other time and unconditionally, a request that must be addressed within 15 days and at a reduced cost.
The PL approved by the Government also establishes, and for the first time in Spain, a legal regime for internet platforms that promote participatory financing through loans or the issuance of shares, obligations or participations with limited liability. This provides an adequate framework for the so-called “crowdfunding” with the objective of guaranteeing in a balanced way the correct protection of investors and at the same time promoting this new tool for direct financing of business projects in their initial phases.
This regulation exclusively regulates participatory financing operations that seek a monetary return derived from business or consumer financing, unlike other types of crowdfunding, such as those related to patronage or buying and selling. Supervision will be carried out by the CNMV with the involvement of the Bank of Spain when the activity consists of the intermediation of loans. Transparency is another of the requirements of the new regulation by guaranteeing that all investors have access to sufficient information on aspects such as the platform itself, the developer and the characteristics of the vehicle used to capture the financing, as well as on all the risks involved investment in these types of projects.
It distinguishes between accredited investors and non-accredited investors. The first are institutional, companies that exceed certain asset levels (1 million euros), turnover (2 million) or own resources (300,000 euros) and all natural or legal persons whose income levels exceed 50,000 euros per year or have assets of more than 100,000 euros and expressly request this treatment. Accredited investors will be able to invest without limit while non-accredited investors (all others), due to their retail nature, will have annual investment limits (3,000 euros per project and 10,000 euros in the set of platforms) and must require the handwritten signature of which they declare, before acquiring any payment commitment, having been warned of the risks of this type of investment.
Another novelty included in the Business Financing Promotion PL is the one related to the Alternative Stock Market (MAB). With the aim of promoting it, the transit from the MAB to the Stock Market of those companies whose development and growth requires listing on this official market is made more flexible. Thus, the requirement of the intermediate management declaration (mid-semester) is eliminated for a transitional period of two years; and companies are allowed not to submit the second semi-annual report, which is not required by EU regulations. In addition, a capitalization threshold of 500 million euros is established, from which the companies whose shares are listed on the MAB must request admission to trading on a regulated market, so that they will be automatically bound by corporate governance rules and other transparency requirements specific to this market.
In terms of supervision of multilateral trading systems, the responsibility of the directors of multilateral trading systems is extended, which in the case of the MAB is Bolsas y Mercados (BME). To this end, the obligation to notify the CNMV of any legal breach that may arise from the information of the issuers to which they have access, and not only in terms of market abuse, is extended. Lastly, the monitoring work carried out by the CNMV on these alternative markets is increased. For this, the governing entity would be required to report to the CNMV on a quarterly basis the specific actions it is carrying out to supervise the proper functioning of the market. On the basis of this periodic communication, the CNMV may request more information from the rector or even the development of other specific supervisory functions.
In other areas, the PL reinforces the supervisory capacity of the National Securities Market Commission (CNMV). They are given greater powers of supervision, inspection and sanction, given the increase in activity in the financial markets. The CNMV may prepare technical guides for the application of the regulations and will be the competent authority in the authorization and revocation of the entities that operate in the stock market, as well as for the application of sanctions. The so-called "mistery-shopping" is also regulated as a mechanism for collaboration with the CNMV's inspection functions and the publication of the opening of disciplinary proceedings in a motivated way, when it generates a clear positive effect on the protection of investors or the functioning of markets.
Another aspect contemplated in the standard is the regulation of credit financial establishments (EFC), entities that play a relevant role in consumer financing in Spain. The EFCs were no longer considered credit institutions with the entry into force of European and national solvency regulations, so it was necessary to provide them with a specific legal framework. The norm approved today by the Government extends to EFC the scales of supervision and solvency applicable to banks, which means keeping these entities within the perimeter of financial control and inspection.
An improvement in the bond issuance regime is also addressed to adapt it to the current functioning of the capital market and to facilitate the access of Spanish companies to the debt markets. Lastly, the regulation reforms the legal regime for securitizations with the aim of simplifying and making them more transparent, endowing them with adequate quality and reducing dependence on rating agencies with regard to securities issued by securitization funds.
