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Disclosure Requirements - Spain

12.08.2024

Disclosure Category 1

With regard to securities registered with the Spanish Central Securities Depository (CSD), the CSD is obligated to, under section 114 and 115 of the Securities Market Act and approved by the Royal Decree (RD) 4/2015, to organise and ensure collection of the described information, including registered holders and transactions information.

With regard to Spanish Treasury Bills (T-bills), implicit return on public debt securities (stripped securities) and corporate debt securities (zero-coupon bonds with a maturity under 12 months) subject to RD 1145/2011, Clearstream Banking (jointly referring here to Clearstream Banking A.G. and Clearstream Banking S.A.) is due to report to the Tax Authorities the identity of the Spanish resident beneficial owners.

Consent

Clients entering into transactions in Spanish securities through their account with Clearstream Banking, as well as clients holding T-bills on behalf of ultimate Spanish resident beneficial owner consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, the Bank of Spain) as their attorney-in-fact, under power of attorney to collect from Clearstream Banking such information as is required to be disclosed.

Clients who do not want to grant such authority and information to Clearstream Banking should refrain from holding and activity in such securities and would bear the consequences if they do not provide the final beneficial owner details upon Clearstream Banking's request.

Disclosure requirements

In accordance with the CSD Regulation, and Article 38, Clearstream Banking must report to the Spanish CSD with ownership and transaction information, that includes the ownership associated with the settlement instructions, actions and book entries that result in variations of the clients’ account with Clearstream Banking.

In addition, for any corporate events resulting in the Spanish market in a purchase, sale or subscription on debt instruments, whether voluntary or mandatory, those purchases, sales or subscriptions are subject to registration requirements under the name of the seller or buyer (that is, the Clearstream Banking AG client). The disclosure of the identity of the Clearstream Banking AG clients is therefore required and Clearstream Banking AG will disclose this information to the depository for these events.

Clients not willing to disclose the above-mentioned information or give this consent in accordance with the Spanish legal requirements cannot hold such securities in their account with Clearstream Banking AG.

Background and legal basis

The basis for the disclosure obligation of all beneficial owners that are Spanish residents for T-bills and for implicit return on public and corporate debt securities is ruled by RD 1145/2011¹.

RD 1145/2011 establishes annual reporting obligations to be provided to the Spanish Tax Authorities in relation to Spanish resident beneficial owners holding securities issued by the Spanish Treasury and by Autonomous Communities, the Bank of Spain being paying agent for both securities:

Public debt securities and corporate bonds subject to RD 1145/2011;
Stripped public debts and Zero coupon (maturity <= 12 months)¹;
T-bills.

In order to comply with the above annual reporting obligations, clients holding T-bills or implicit return on public and corporate debt securities must provide a list of Spanish beneficial owners with the information and format specified, as described in the Market Taxation Guide - Spain.

The obligation to disclose falls on Clearstream Banking, in whose names the securities are registered in the Spanish market, and is to be cascaded down to the final beneficial owners.

The obligation to report information on the ownership of the transactions in which the members of official secondary markets and multilateral trading facilities intervene, is ruled by the Iberclear Regulations ("Regulation of Sociedad de Sistemas") and Article 38 in particular, in alignment with the Securities Market Act and provision of Article 101, 114 and 115, as well as EU Regulation No. 909/2014, of 23 July 2014.

However, there are no holding restrictions on stripped securities or zero-coupon securities with maturity below or equal to 12 months for beneficial owners that are Spanish non-resident or Spanish resident corporate income taxpayers, for which the above disclosure requirements apply.

The obligation to disclose significant holdings is ruled by Royal Decree 1362/2007 of 19 October 2007, implementing the Market Act 24/1988 of 28 July, and by Law 5/2009 of 19 June 2009, which amended the Market Act 24/1988 of 28 July 1988, of financial markets, Law 26/1988, of 29 July 1988, regarding discipline and interventions of credit institutions and the rewritten text of the Law of supervision of private insurance, approved by Legislative Royal Decree 6/2004 of 29 October 2004.

The EU Directive (EU) 2017/828 modifying Directive 2007/36 on specific shareholder's rights (“SRDII”) has been transposed into Spanish Regulation by means of Law 5/2021 dated 12 April 2021 (“Law 5/2021”).

Sanctions

Non-disclosed Spanish resident holders of T-bills or of implicit return on public and corporate debt securities may be subject to the penalties prescribed by Spanish Tax Law (Ley General Tributaria).

Clients holding T-bills or implicit return on public and corporate debt securities at maturity are deemed to accept any penalties imposed, directly by the Spanish authorities or via Clearstream Banking, for failure to comply with the above disclosure requirements.

Obligation to report threshold crossings

There is an obligation to report to the issuer and to the Comisión Nacional del Mercado de Valores (CNMV), as follows:

For voting rights on listed companies in an official secondary market or in another EU regulated market, the threshold to be reported is 3%.
For voting rights on listed companies and financial instruments, acquisitions crossing 3%, 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 60%, 70%, 75%, 80% and 90% thresholds must be reported.
For countries that are considered by the Spanish fiscal authorities to be tax havens, this threshold is set at 1% and multiples thereof (2%, 3% etc.).
For registered capital or voting rights in credit institutions, insurance companies and investment service entities the reporting requirements are as follows, acquisitions of a qualifying holding of at least 5% of the capital or voting rights must be notified to the relevant supervisory body for information purposes.
Also, the thresholds in increase or decrease in significant holdings of 10%, 20%, 30%, or 50% and acquisitions gaining control of the institution must be reported to the relevant supervisory body before acquisition in order for the Regulator to evaluate it.

The obligation to report significant holdings as defined above falls as follows:

Entities that render custody and administration services and can exercise voting rights in respect of their holdings in a discretionary manner must report significant holdings to the CNMV;
Beneficial Owners must report significant holdings to the issuer and to the CNMV.

The CNMV must be notified directly whenever a threshold is exceeded. A form for reporting this information is available on the CNMV website, under Legislación, Jurisprudencia y otras normas / Modelos normalizados / Sociedades emisoras).

The form is designed to be completed online and then printed and mailed to:

CNMV
Paseo de la Castellana, 19
28046 Madrid
Spain

Financial intermediaries that provide custody and administration services are specifically excluded from reporting significant holdings as long as voting right are exercised only on instruction from their clients.

The CNMV can request such information as it deems necessary from any individual or legal entity to the extent that they are subject to the Securities Market Act 24/1988. In practice, this means that the CNMV has the authority to raise an enquiry.

Until October 2007, Clearstream Banking had an obligation to disclose details of client holdings to the CNMV systematically and on a regular basis. This obligation ceased with the enactment of Royal Decree 1362/2007 on 19 October 2007.

According to Law 5/2009 of 29 June 2009, disclosure must be made to the appropriate supervisory entity as follows:

Credit institutions: to the Bank of Spain and the Credit Institution;
Investment companies: to the CNMV and the Investment Company;
Insurance Companies: to the Dirección Nacional de Seguros y Fondos de Pensiones and the Insurance Company.

Shareholder identification as set out in the SRD II Law

The SRD II Law provides for the right for issuers to identify their shareholders.

Issuers can request intermediaries at each level of a custody chain to promptly provide relevant information to facilitate such identification.

In accordance with SDR II Law as amended, an intermediary (in this case Clearstream Banking) shall, upon receipt of the shareholder identification request, transmit to the next intermediaries in the custody chain (that is, Clearstream Banking clients with holdings in the requested securities). A response to the shareholder identification disclosure request shall be sent by every intermediary in the custody chain directly to the recipient's address defined in the request and without delay. Clearstream Banking will generate the response as required, with information regarding shareholder's identity, limited to Clearstream Banking books only.

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1. Zero-coupon bonds with a maturity above 12 months are not eligible in Clearstream Banking. Also, clients are not allowed to hold Spanish stripped securities (regardless of maturity) or zero-coupon bonds with maturity below or equal to 12 months on behalf of that are Spanish resident individual taxpayers.