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The government is completing the preparation of a Finance Act, the pre-project for which envisages an in-depth reform of the legal regime governing the Spanish financial sector. One of the basic aims sought by the government with this Act, as deduced from sections of the pre-project, is to provide a solid base for the mechanisms that guarantee true protection to the investor. For this purpose, the pre-project attempts to promote the transparency of the markets and the control of insider information.

The pre-project introduces significant changes to Act 24/1988 of July 28 on the Securities Market, particularly in the statute governing the treatment of insider information, the publication of relevant events, the efficiency of what are known as Chinese walls and the transparency of transactions among associated parties.

Therefore, the definition of insider information is extended and will now include "financial instruments other than negotiable securities themselves", the pre-project referring to private issues of stock options and warrants.

The pre-project also regulates in greater detail the publication of relevant events concerning listed securities or financial instruments. For this purpose, the obligation is imposed on issuers to remit to the Spanish securities market regulator, Comisión Nacional del Mercado de Valores (CNMV), notice on any relevant event before it is made public to analysts, investors or the media. In addition, where there are changes in expectations on the results or the turnover included in a registered relevant event, issuers must report this fact to the CNMV as soon as it is becomes known or is forecast.

The pre-project also lays down the regulations for measures to control insider information such as Chinese walls, which have to be put in place by all entities operating on the securities markets.

Fernando Vives

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