SPAIN Law and Practice Contributed by: Miguel Cases and Claudi Rossell, Cases & Lacambra
In addition to the above-mentioned exception, the fol - lowing criteria are laid out to prevent the characterisa - tion of other types of transactions as derivatives. • Wholesale energy forwards (power, gas, oil and coal) are not deemed derivatives when they are – or may be – physically settled and are used for commercial purposes. However, the following agreements are deemed derivatives even when settled physically: (i) agreements traded on a trad - ing venue (except physically settled wholesale energy products traded on an OTF) and (ii) physi - cally settled agreements not used for commercial purposes that have characteristics akin to other derivative instruments (ie, derivatives traded on a trading venue). • Commodity spot transactions are not deemed derivatives provided that they fit the definition of a spot transaction. These transactions are defined in Article 7 of Regulation (EU) 2017/565 as agree - ments for the sale of a commodity, asset or right, under the terms of which delivery is scheduled to be made within the longer of the following peri - ods: (i) two trading days or (ii) the period generally accepted in the market for that commodity, asset or right as the standard delivery period. • FX spot transactions are not deemed derivatives provided that they fit the definition of an FX spot transaction. These transactions are defined in Article 10 of Regulation (EU) 2017/565 as agree - ments for the exchange of one currency against another currency, under the terms of which delivery is scheduled to be made within: (a) two trading days in respect of any pair of major currencies (US dollar, euro, Japanese yen, pounds sterling, Australian dollar, Swiss franc, Canadian dollar, Hong Kong dollar, Swedish krona, New Zealand dollar, Singapore dol - lar, Norwegian krone, Mexican peso, Croatian kuna, Bulgarian lev, Czech koruna, Danish krone, Hungarian forint, Polish zloty and Roma - nian leu); (b) the longer of two trading days or the period generally accepted in the market for a given currency pair as the standard delivery period for that pair of currencies, where at least one currency is not a major currency; or (c) the period generally accepted in the market for
the settlement of a given transferable security or unit in a collective investment undertaking as the standard delivery period – where the contract for the exchange of those currencies is used mainly for the sale or purchase of a transferable security or a unit in a collective investment undertaking – or five trading days, whichever is shorter. • Since there are other products that can be deemed derivatives due to being settled in cash – or that may be settled in cash at the request of one of the parties other than by reason of default or other termination event, or due to having the character - istics of other derivative products – Section 3.10 of Annex I of MiFID III, and Articles 6 and 8, include a long list of potential underlying assets. CNMV is the regulator of reference for derivatives and derivatives transactions as defined in the SMA. How - ever, other regulators may also oversee certain types of derivatives transactions. For instance, the Bank of Spain ( Banco de España (BdE)) is the primary regu - lator for a broad range of banking issues related to derivatives, such as lending practices, accounting and solvency, inter alia. Additionally, other sector-specific regulators may be involved, such as those oversee - ing energy, insurance or other industry-specific areas. 3.1.2 Clearing EMIR, as amended from time to time, and its imple - menting legislation are the high-level regulations on derivatives clearing. Since all these rules are deemed regulations pursuant to the Treaty on the Functioning of the EU, they are mandatory over the whole terri - tory of the EU, including Spain, in accordance with its own terms. Derivatives clearing is mandatory for those OTC agreements that are deemed liquid and sufficiently standard according to the regulatory technical stand - ards (RTS) laid down by ESMA and adopted by the European Commission. Pursuant to Articles 4 and 5.2 of EMIR, such regulations will list the agreements sub - 3. Regulation of Derivatives 3.1 National 3.1.1 National Regulators
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