- SMEs that see their funding reduced will receive a three-month notice and will access reports on their situation
- The accredited investor will have no limit for crowdfunding and the retailer can 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) for the Promotion of Business Financing, which aims to improve the financing channels of companies, especially SMEs. It is about making access to credit more flexible, both bank and that circulating in alternative ways and channeling savings towards investment through more agile instruments. Among the novelties, 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 stands out. Non-bank instruments such as the so-called “crowdfunding” are also regulated and the regulation of existing ones, such as the Alternative Stock Market (MAB), is improved.
The norm will establish the obligation on the part of the credit institutions to offer notices of at least three months to the SMEs whose financing is going to be canceled or remarkably reduced (35% or more). The objective is to provide these companies with the necessary adjustments to reorient their sources of financing quickly. Together with the notice, SMEs are granted the right to obtain information about their financial position, payment history, extract, credit rating, etc., and their credit rating from the entity in accordance with the specific methodology for SMEs that the Bank will develop from Spain (“SME rating”). This request must be answered within 10 business days and free of charge. In addition, they may request this information 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 limited liability shares, obligations or participations. An adequate framework for the so-called “crowdfunding” is thus provided with the objective of ensuring in a balanced manner the correct protection of investors and at the same time promoting this new tool for direct financing of business projects in their initial stages.
This rule exclusively regulates participatory financing operations that seek monetary performance derived from business or consumer financing, unlike other types of crowdfunding such as those related to patronage or sale. The supervision will be carried out by the CNMV with the involvement of the Bank of Spain when the activity consists in the intermediation of loans. Transparency is another requirement 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 all the risks involved. the investment in this type of projects.
Distinguish between accredited investors and non-accredited investors. The first are institutional, companies that exceed certain levels of assets (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 an equity exceeding 100,000 euros and expressly request this treatment. Accredited investors may 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 by which they state, before acquiring any payment commitment, have been warned of the risks of this type of investment.
Another novelty included in the PL for the Promotion of Business Financing is that relating to the Alternative Stock Market (MAB). With the objective of promoting it, the transit from the MAB to the Stock Exchange of those companies whose development and growth requires a quotation in 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 not allowed 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 companies whose shares are listed on the MAB must apply for admission to trading in a regulated market, so that they will be automatically bound by corporate governance rules and other transparency requirements of this market.
Regarding the supervision of the multilateral trading systems, the responsibility of the directors of the multilateral trading systems is extended, which in the case of the MAB is Bags and Markets (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 is extended, and not only in terms of market abuse. Finally, the monitoring work carried out by the CNMV on these alternative markets is increased. To that end, the governing body would be required to report to the CNMV on a quarterly basis the specific actions it is taking to supervise the proper functioning of the market. Based on this periodic communication, the CNMV may require more information from the rector or even the development of other specific supervisory functions.
In other areas, the PL strengthens the supervisory capacity of the National Securities Market Commission (CNMV). It is granted greater powers of supervision, inspection and sanction, given the increase in activity in the financial markets. The CNMV may develop technical guidelines 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 inspection functions of the CNMV and the publication of the initiation of disciplinary proceedings in a motivated manner, when a clear positive effect is generated on the protection of investors or operation of the markets.
Another aspect contemplated in the standard is the regulation of financial credit establishments (EFC), entities that play a relevant role for the financing of consumption in Spain. The EFCs 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 rule approved today by the Government extends to the EFC the supervisory and solvency scales applicable to banks, which means keeping these entities in the perimeter of financial control and inspection.
An improvement in the regime of issuance of obligations is also addressed to adapt it to the current operation of the capital market and to facilitate the access of Spanish companies to debt markets. The norm finally reforms the legal regime of securitizations with the objective of simplifying them and making them more transparent, providing them with adequate quality and reducing the dependence of the rating agencies with regard to securities issued by securitization funds.
