The Council of Ministers today approved the Royal Decree establishing the Legal Regime of Asset Management Companies, within the framework of agreements with European institutions for the recapitalization of the Spanish banking system through the financial assistance program. The decision will allow the Asset Management Company (Sareb) to be launched on December 1, one of the conditions established in the Memorandum of Understanding signed on July 23.
Sareb will group the damaged assets of the entities undergoing restructuring and resolution for their management and subsequent orderly sale. The Royal Decree approved today addresses the methods for determining the categories of transferable assets, the valuation criteria for those assets and the legal structure of asset management companies. Likewise, the corporate governance obligations and the supervisory bodies and their powers are detailed.
Sareb is constituted as a public limited company whose object is the transfer of assets necessary to carry out the current process of restructuring and consolidation of the banking sector. A very broad set of entities may be shareholders. Regarding its organizational structure, a special effort has been made to reinforce good corporate governance practices. Sareb has a minimum requirement of at least one third of the total number of independent directors and the obligation to set up a series of specialized committees (audit, remuneration and appointments).
Transparency and professionalism are two of the fundamental characteristics of Sareb. The members of the board of directors must demonstrate professionalism, good repute and experience. The company must also prepare a semi-annual report on the activity and present an annual Compliance report, prepared by an independent expert, in order to collect an external and impartial analysis of management.
The supervision and inspection will be carried out by the Bank of Spain, which will be reinforced by a Monitoring Commission to guarantee adequate compliance with the public interest objectives for which Sareb is designed. Representatives of the Ministry of Economy and Competitiveness, Finance and Public Administrations, Bank of Spain and the National Securities Market Commission (CNMV) are integrated in this commission. Permanent observers such as the European Central Bank (ECB) may join.
Once commissioned, Sareb will be able to transfer part of its assets to special funds, in order to facilitate the divestment process. These are called Bank Asset Funds (FAB), they will be aimed at professional investors and their regulation is inspired, from the maximum flexibility, in that of securitization funds and collective investment institutions. The CNMV will create a specific registry for these vehicles and will supervise compliance with the regulations related to them.
The Royal Decree also regulates the type of assets to be transferred by credit institutions in the process of restructuring or resolution ordered to Sareb. The maximum size of the set of assets is set at 90,000 million euros, although it is estimated that the figure will be around 62,000 million euros. It includes all the promoter credit from 250,000 euros, real estate foreclosed assets above 100,000 euros and holdings in real estate companies.
With the Royal Decree approved today and the set of regulations and provisions put in place by the Government, a decisive step is taken in the process of consolidating the financial sector. This decree is added to the Restructuring and Resolution of Credit Institutions, which reinforces the mechanisms for resolution and control of banking crises and is completed with the design of the Sareb structure, which sets the operations of the company aimed at absorbing assets real estate agencies with aid.