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On October 1 1998, the Spanish parliament passed a law amending the Securities' Market Law and modifying various other aspects of Spanish securities market-related laws. Among the main features of this new law are the following:

  • a new and detailed regulation on investment services companies (ISCs). The new law defines the activities an ISC may perform and regulates the incorporation, existence and cross-border activities of ISCs, thus introducing the concept of a passport for the rendering of investment services throughout the EU;
  • as a consequence, foreign ISCs complying with the requirements to operate in Spain may be allowed to become members of the Spanish stock exchanges. Credit entities will also be allowed to become members of stock exchanges as from January 1 2000;
  • in addition, the new law establishes an Investment Guarantee Fund to protect investors in cases of insolvency or bankruptcy of ISCs;
  • there are amendments to the Law on Collective Investment Schemes.

In particular, a new regulation is implemented for schemes whose investments are mainly in shares or units of other collective investment schemes; and

  • there are amendments to the Spanish Companies' Law.In particular the following:
  • a new regime for preference shares and non-voting shares;
  • listed companies are now allowed to issue redeemable shares up to a maximum of 25% of their share capital;
  • there is a new regime for the exclusion of pre-emptive rights for issues of new shares and convertible bonds by listed companies; and
  • the minimum period to exercise pre-emptive rights in listed companies will be reduced from one month to 15 days.

Luis de Carlos and Carlos Paredes

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