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Uría & Menéndez Madrid

As a new development of the principle of free issuing established by article 25 of Law 24/1988, of July 28, regarding the Securities Market, the Treasury, through the Ministerial Order of May 28, 1999, has recently modified the administrative regimen applicable to those issues of securities which were forbidden or subject to prior administrative authorization.

The new Order has removed the prohibition established by the Ministerial Order of November 14 1989, so that since July 1999, those issues of securities of which the principal or interest is subject to review according to the evolution of a given price index, the price of a good or a service, or any other index related to those previously mentioned, are only subject to a prior administrative authorization to be granted within 15 days of the time it is requested by the issuer. The authorization is not necessary if the interest rate is determinable in accordance with the evolution of another interest rate or if the return of these securities is determined by the evolution followed by stock price indices or any other secondary market index.

No other issue is prohibited or subjected to a prior administrative authorization, since the Order also removes the requirement of the prior administrative authorization for the issue of securities with a maturity date of more than 18 months and no explicit return, mixed return or explicit return of which periodical accrual is more than one year.

Luis de Carlos / Daniel Abad

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