The Council of Ministers has approved a Preliminary Draft Law (APL) for the Promotion of Business Financing whose objective is to make financing more accessible and flexible to SMEs and, in particular, to lay the foundations for strengthening sources of direct financing. An APL of Venture Capital Entities has also been approved, which aims to promote this formula with the same purpose of improving the financing of SMEs, as well as incorporating European Union Law regarding the so-called alternative investment funds. The Cabinet has also analyzed a report on corporate debt refinancing and restructuring for subsequent approval.

The main novelties in the APL on the Promotion of Business Financing are the establishment of a notice and information system by credit institutions for those SMEs whose financing is restricted; the improvement of the functioning of the Reciprocal Guarantee Societies (SGR) and the Spanish Company of Re-guarantee (CERSA); the design of a specific regime for credit financial establishments; an adaptation of the securitization regulation; improving the Spanish bond issuance regime; the enhancement of the Alternative Stock Market (MAB); and a proposal for regulation of the so-called crowdfunding.

In more detail, the APL regulates the following aspects:

Advance notice system by credit institutions. Credit institutions are obliged to offer advance notice of at least three months and specific information on the credit situation of those SMEs whose financing is to be canceled or significantly reduced.

Improvement of the operation of the Mutual Guarantee Societies (SGR). It is established that the CERSA (Spanish Refinancing Company) reaval is activated before the creditor in case of default by the SGR after the first request. Additionally, in order to strengthen the management, professionalism and good governance of the SGR, the requirements of honorability, knowledge and experience of credit institutions will be extended to their managers.

Specific legal regime for credit financial establishments. These entities will be provided with the most effective legal framework to maintain and enhance their activity. They will be fully oriented towards business and consumer financing through alternative channels to those strictly banking.

Improving the regulation of securitizations in Spain. The adoption of reforms with a dual objective is proposed. On the one hand, it is a matter of making the legal regime for securitizations more flexible in order to adapt this instrument to the current demands of the financial market, in line with the most advanced countries in the matter. The aim is also to provide maximum legal certainty and provide legal backing to the usual operations in the field of securitizations.

Promote the operation of the Alternative Stock Market (MAB). The aim is to facilitate the transit of companies from the Stock Market to this alternative trading system. To do so, the requirement to file a takeover bid will be replaced by another less expensive mechanism, which guarantees adequate protection for minority investors. 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.

Improvement of the bond issuance regime. Different measures are introduced in commercial regulation, aimed at facilitating direct access by Spanish companies to the debt markets by removing limits on the issuance of bonds.

Crowdfunding regulation. In line with the consultations made in other countries around us, a preliminary regulation proposal is included in the APL, which sets the conditions for the operation of this new system, based on electronic platforms that directly contact investors and projects. The objective is to promote a new direct financing tool for business projects in their initial stages of development, while protecting investors. For this, the obligations of these platforms are established, guaranteeing that they are transparent and that investors have sufficient information. Limits are set per investor both per project (€ 3,000) and per platform (€ 6,000 per year).

The APL of Venture Capital Entities (ECR) introduces improvements that will allow the further development of this business financing channel. In particular, through the creation of the ECR-Pyme, financing is promoted through capital and debt instruments of companies in their early stages of development and expansion. These types of entities will invest at least 70% of their assets in SMEs, in addition to participating in management and providing advice. They will benefit from a more flexible financial regime than that of traditional venture capital entities as they will be able to make greater use of debt financial instruments.

In line with the transposition of the alternative investment managers directive Another series of reforms are addressed:

  • Introduction of new requirements to management companies regarding their structure and organization to guarantee control of risks, liquidity and conflicts of interest, and specifically to comply with a remuneration policy that prevents excessive risk taking.
  • Streamlining and reducing administrative burdens in the risk capital entities regime, which will no longer be subject to an authorization regime but rather to simple registration before the National Securities Market Commission (CNMV).
  • Adjustment of the minimum own resources requirements of the management companies, which are aligned with those of the board and the rest of the European partners.
  • Adaptation of the marketing and cross-border management system for funds managed by European and foreign management companies.



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