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Spain exhibits a high level of implementation of the International Organisation of Securities Commissions (IOSCO) principles. The legal framework is robust and provides the Comisión Nacional de Valores (CNMV) with broad supervisory, investigative and enforcement powers. Arrangements for off-site monitoring of regulated entities are robust. Thematic reviews in selected areas have complemented such monitoring, allowing the CNMV to take a “full industry” perspective on key issues. The CNMV has also developed robust arrangements for market surveillance.
Some areas of supervision and enforcement require strengthening. In particular, the CNMV should make more use of on-site inspections for all types of investment service providers, but in particular in connection with credit institutions given their dominant role in the securities markets, and the inherent conflicts of interest that arise from their dual role as issuers and distributors of products. This could be done via spot checks on particular issues, and does not imply the need for full scale inspections. In tandem, the CNMV should continue to use more proactively its sanctioning powers in connection with breaches by regulated entities, in addition to other enforcement mechanisms such as remedial agreements. Successful criminal prosecution of market abuse is a challenge, but positive steps have been taken as the CNMV has become more active in the referral of cases to the criminal authorities.
Certain aspects of the current governance structure of the CNMV raise concerns vis-à-vis independence, although the assessors saw no evidence of interference with day-to-day operations. The participation of a representative of the Ministro de Economía y Competitividad (MEC) in the board of the CNMV; the fact that certain key decisions (authorisations and the imposition of sanctions for the most serious breaches) are still a responsibility of the MEC; and the requirement of governmental approval to hire additional personnel are threats to CNMV independence. In practice the collegial nature of the board and the “regulated” nature of the authorisation and sanctioning processes—which require a recommendation from the CNMV have acted as mitigating factors.