Last March 17, the new Law reforming the Securities Market Law (Law 6/2023) was published in the Official State Gazette (BOE). This Law is based on the Report on the proposal for a Regulation of the European Parliament and of the Council on crypto-assets markets. It thus regulates one of the areas of greatest growth and innovation in the financial and technological sector in recent years.
It is essential to highlight that proper regulation of cryptoassets and blockchain technology is essential to promote economic growth and sustainable innovation in the financial and technology sector, Spain is taking an important step forward
The following numerals highlight the measures of greatest impact through the enactment of the present law:
- The entity in charge of the TRD (Distributed Registry Technology) is responsible for the administration and registration of securities, and all transactions must be made through the distributed registry. Law 6/2023 allows the representation of stocks, bonds, mutual fund units and shares of collective investment companies through TRD systems. In addition, certificates issued by the entity in charge of the TRD are recognized as enforceable instruments.
- The present law names the CNMV as the entity “competent for the supervision of the issuance, offer and admission to trading of certain crypto assets that are not financial instruments.”[1]From now on, the CNMV has the power to regulate and sanction based on the infringements established by the EU in the interest of investor protection.
- Law 6/2023 regulates what refers to “negotiable securities”; understanding as such any right of patrimonial content, whatever its denomination” as a consequence any amount transferred by means of distributed registry technology (TRD) is subject to the regulation of the present law.
- The advertising of crypto-assets must be considered lawful in accordance with the general rules on advertising. The offer of crypto-assets or other assets and instruments presented as investment objects must be approved by the CNMV. The advertising regulation determines that only legal persons established in the Union, natural persons resident in the Union or other entities established or headquartered in the Union and subject to the rights and obligations of the Union, or decentralized autonomous organizations are eligible to be offerors of cryptoassets in the EU. If it does not fall into any of these categories, the CNMV is competent to sanction any offer made since the enactment of this law.
- The first numeral of Article 32 of the EU report amending Directive (EU) 2019/1937 provides that, “Issuers of asset-backed tokens shall establish and maintain at all times an asset reserve to cover holders’ claims in respect of outstanding asset-backed tokens. “2 This means that by enacting the present law, those issuers of crypto-assets must reserve an aggregate nominal value equal to or greater than the sum of the outstanding claims of each of the holders of the crypto-assets, in this way the EU seeks to mitigate the probability of insolvency on the part of the issuers.
- Also, Article 307 of the present law provides that according to the EU report (Article 67) crypto asset service providers authorized to provide the service of custody and administration of crypto assets on behalf of third parties must keep a record of open positions of each client and establish a custody policy to ensure the security of crypto assets and the rights related to them. They must also facilitate the exercise of rights associated with cryptoassets and record any changes in the client’s position register.
- Electronic money tokens are those cryptoassets that are attached to a legal tender (FIAT) currency, the holders of these tokens have the right to claim in favor of the issuer at any time the full amount of their equivalent in the legal tender currency. However, issuers may agree to a maximum of two working days for payment in cash or by transfer. Failure to comply with these regulations entitles the CNMV to sanction the issuer.
Law 6/2023 on investment services securities markets in Spain represents an important step forward in the regulation of cryptoassets and blockchain technology in the country. The key measures identified in this list aim to ensure investor protection and encourage innovation in the sector, while establishing a clear and effective regulatory framework.
Spain is taking an important step forward in this regard, while awaiting the implementation of MiCA it is essential to promote economic growth and sustainable innovation in the financial and technology sector.
[1] Draft Law on Securities Markets and Investment Services 621/000081 Spain.
Report on the proposal for a regulation of the European Parliament and of the Council on crypto-asset markets and amending Directive (EU) 2019/1937: A9-0052/2022: European Parliament (2022) REPORT on the proposal for a regulation of the European Parliament and of the Council on crypto-asset markets and amending Directive (EU) 2019/1937 : A9-0052/2022 : European Parliament. Available at: https://www.europarl.europa.eu/doceo/document/A-9-2022-0052_ES.html (Accessed: March 24, 2023).
