Non-harmonised CIS: requirements for trading in Spain

This blog post explains the requirements for trading in Spain for non-harmonised CIS. In Spain, collective investment schemes (‘CIS’) are governed by Law 35/2003 on Collective Investment Schemes (Ley 35/2003, de 4 de noviembre, de Instituciones de Inversión Colectiva), as amended by Law 31/2011 (Ley 31/2011).

Foreign collective investment schemes seeking to deal in shares and units in Spain which are not subject to Directive 2009/65/EC (hereinafter the ‘Directive’) of the European Parliament and of the Council on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (the so-called ‘non-UCITS CIS’ or ‘non-harmonised CIS’) must comply with specific accreditation, registration and document submission requirements, as set out in section 15 quinquies of Law 35/2003, as amended by amendment 18 (‘Dieciocho‘) under Law 31/2011.

What follows is a translation into English of the legal provisions setting out these requirements.

‘The trading in Spain of the shares and units of non-harmonised CIS (hereinafter “CIS”) will require prior accreditation from the CNMV of compliance with the following:

a) That Spanish regulations regulate the same category of CIS to which the foreign institution belongs and that the CIS is subject to specific regulations in its State of origin for the protection of the interests of shareholders or unit-holders similar to Spanish regulations in this area.

b) Favourable report from the authority of the home State entrusted with the control and inspection of the CIS with regard to the development of its activities.

Once these points have been accredited, the CIS must satisfy the following requirements:

1. Provision and registration with the CNMV of the documents certifying that the CIS and the shares, units or securities representing its capital or assets are subject to the legal regime applicable to it (in accordance with the legislation of origin).

2. Registration with the CNMV and submission of the CIS’s financial statements and the corresponding audit report, prepared in accordance with the legislation applicable to the CIS in question.

3. Submission, approval and registration with the CNMV of a prospectus and a KIID, as well as their publication.

All the documents referred to in this section must be accompanied by a sworn translation into Spanish.

In order for the CIS to be able to trade its shares or units in Spain, it must be expressly authorised for this purpose by the CNMV – Comisión Nacional del Mercado de Valores – (National Securities Market Commission) and be entered into its registers.

Authorisation may be refused on prudential grounds, on the grounds of failure to provide equivalent treatment to Spanish CIS in their country of origin, failure to ensure compliance with the rules on the organisation and discipline of the Spanish securities markets, failure to ensure adequate protection for investors resident in Spain, or the existence of distortions in the conditions of competition between these CIS and CIS authorised in Spain’.

I am a UK-based sworn English-Spanish translator appointed by the Spanish Ministry of Foreign Affairs in 2003. Contact me for a quote here.

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SOURCES

Ley 35/2003, de 4 de noviembre, de Instituciones de Inversión Colectiva, https://www.boe.es/buscar/act.php?id=BOE-A-2003-20331

Ley 31/2011, de 4 de octubre, por la que se modifica la Ley 35/2003, de 4 de noviembre, de Instituciones de Inversión Colectiva, https://www.boe.es/buscar/doc.php?id=BOE-A-2011-15621

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