SPAIN Law and Practice Contributed by: Miguel Cases and Claudi Rossell, Cases & Lacambra
3.1.7 Commercial End Users The CNMV enacted specific regulations to enhance the protection of end users in respect of the distribu - tion of derivatives, as follows. • Circular 1/2018, of 12 March 2018, on warnings related to the distribution of financial products (as amended by Circular 2/2025, of 26 March 2025): This regulation is applicable to, when addressed to retail investors, eligible minimum requirement for own funds and eligible liabilities (MREL) financial products, credit-linked and structured indexed products with potential losses equal to or higher than 10% of the gross investment, CFDs, binary options and other complex OTC structured prod - ucts. These products must satisfy a prior risk warn - ing to be expressly accepted by the clients, with a handwritten signature being required (or a recorded message for telephone closing or a “permanent message” in respect of products closed on an electronic platform). In the event that the product was eligible for MREL calculations, an additional warning is to be made in connection with the bail-in risk. In the event that the gap between the market price of the product and the client’s pricing exceeds some specific thresholds, an additional warning is required. • Circular 2/2020, of 28 October 2020, on the pub - licity of products and investment services: This regulation is applicable to all types of publicity on derivatives products aimed at commercial end users, regardless of their classification as retail or professional investors. Its main features are as fol - lows: (a) the issuance of general rules on publicity; (b) the obligation to create inner procedures to enforce the principles of this Circular, with the board of directors ultimately being responsible; (c) a general duty to record all publicity activities for a minimum of five years; and (d) the powers granted to the CNMV to cease or adjust on-going advertising campaigns. • CNMV Resolutions on intervention measures for highly leveraged financial instruments, dated 27 June 2019 and 11 July 2023: To clarify the scope and structure of these Resolutions, the CNMV issued – and regularly updates – a list of FAQs, of which the most recent version is available on the
CNMV’s website . Publicity and promotional activi - ties, as well as the management of margins, are the main issues dealt with by these Resolutions. 3.2 Local There are no local regulators in the securities market. However, territorial consumer agencies are involved in claims related to the distribution of financial instru - ments relatively frequently, although their activities are exclusively based on the Spanish General Consumers Protection Act. 3.3 Self-Regulatory Organisations, Independent Authorities, and Exchanges Although they are not self-regulatory entities, the Spanish Banking Association ( Asociación Española de Banca (AEB)) and the Spanish Confederation of Saving Banks ( Confederación Española de Cajas de Ahorro (CECA)) have co-operated to draft framework agreements under Spanish Law since 1997 (CMOF). To date, four versions of the CMOF have been made public, all of which are easily available on AEB’s web- site . At present, both entities are associations. There are no other similar initiatives in Spain. 4.1.1 Industry Standards and Master Agreements As mentioned above, the CMOF is the standard docu - mentation for OTC derivatives in Spain. This contrac - tual standard is adapted to Spanish Law and drafted in Spanish, albeit that the parties are free to choose the governing law and the disputes resolution mecha - nism. In this vein, the CMOF has alternative claus - es to assist the parties in choosing the competent jurisdiction or tribunals, or alternatively in submitting the contract to arbitration. It is worth noting that the choice-of-court, arbitration and governing law clauses were amended in the 2020 version to ensure that such elections embraced all transactions covered by the CMOF, and that all relevant causes of action fell with - in their scope regardless of their characterisation as contractual or tort claims. The use of CMOF models is quite common in Spain, mostly because the vast majority of end users’ transactions are not interna - tional and hedged positions are based on agreements 4. Documentation Issues 4.1 Trading Documentation
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