SPAIN Law and Practice Contributed by: Miguel Cases and Claudi Rossell, Cases & Lacambra
2.3 Forwards There is no specific regulation on forwards other than the exceptions mentioned in 2.6 Exemptions, Non- Derivative Products and Spot Transactions . 2.4 Listed v Over-the-Counter The key difference between derivatives that trade on the counter versus OTC is the fact that OTC deriva - tives, although generally documented on the basis of standard models, are bespoke, tailor-made products as opposed to the derivatives traded on futures and options markets, which have fully standardised terms and conditions. Since there is no room left for negotia - tion in relation to these derivatives, they can be listed as negotiable securities. It is worth noting that trading on a trading venue is one of the criteria used to characterise products as derivatives, especially when the contract can – or has been – physically settled, as mentioned in 2.6 Exemp- tions, Non-Derivative Products and Spot Transac- tions . Moreover, the National Securities Market Com - mission (C omisión Nacional del Mercado de Valores (CNMV)) considers some securities (ie, warrants with embedded options) as derivatives. 2.5 Asset Classes According to the 2023 European Securities and Mar - kets Authority (ESMA) Market Report on EU Deriva - tives Markets, based on the data provided by the trade repositories regulated by EMIR, the most com - mon derivative products in the EU are those related to the following: • interest rates (78%); • exchange rates (14%); • equity (5%); • credit (4%); and • commodities (1%). In its 2024 Activity Report, the CNMV summarises the number of transactions and the related notional amounts of derivatives traded on Spanish trading venues. The gross notional amount of derivatives traded on MEFF experienced a sharp decline (5.3%), although this negative trend was smaller than for Spanish equity product-related segments (6%); these comprise the bulk of MEFF’s business, which is mainly
concentrated on the trading of two shares (Santander and Telefónica, accounting for up to 97% of the whole segment). The growth in the number of contracts for different types of futures (particularly dividends) par - tially offset the decline in the volume of stock options contracts (down 14.1%), which were more affected by competition. Likewise, trading in both futures and stock options remained concentrated in a very small number of underlying assets (Iberdrola, Banco San - tander, Telefónica, Repsol and BBVA). The number of derivative transactions contracted in OTFs continued to increase in 2024, although this increase was not accompanied by a higher amount of cash traded. Thus, the number of transactions traded grew by 27.1%, but their cash value fell by 7.2%, mainly due to the decline in cash contracted in currency derivatives (down 25%). There are no limits on asset classes beyond the posi - tion limits for commodity derivatives pursuant to Arti - cle 57 of MiFID III. Notwithstanding the foregoing, the CNMV restricted the distribution of contracts for differ - ence (CFDs) with high leverage ratios, setting limits on the provision of initial margin (higher than one-thirtieth for major currency pairs, one-twentieth for all other currency pairs, gold and relevant stock benchmarks, one-tenth for commodities and non-relevant stock benchmarks, one-half for crypto-assets and one-fifth for all other underlying assets) and banning the offer - ing of binary options among retail investors from 2017 onwards, in line with previous ESMA decisions. Such restrictions also affect the publicity related to these products (the distributor must warn potential clients of the actual risks and their likely lack of suitability) and entail other protective measures: • a margin close-out rule on a per account basis (at 50% of the minimum required margin); • negative balance protection on a per account basis as an overall guaranteed limit on retail client losses; and • a restriction on the incentives offered to trade CFDs. On 11 July 2023, the CNMV issued addi - tional restrictions on CFD publicity and promotion practices, specifically banning several market - ing techniques and broadening the scope of the protective measures to encompass all products
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