Guide for the authorisation of broker-dealers, securities ... · Guide for the authorisation of...

Guide for the authorisation of broker-dealers, securities brokers and portfolio management companies [BD (S.V), SB (A.V.) AND PMC (S.G.C.)]

Introduction

The purpose of this Guide is to facilitate and simplify the processing of the authorisation of the following types of Investment Firms (IFs): Broker-dealer (BD), Securities Broker (SB) and Portfolio Management Com-pany (PMC).

It consists of the following sections, which contain the requirements provided in the legislation applicable to the establishment of an IF, both newly-created and arising from a corporate transaction:

1. Authorisation2. Articles of Association3. Management body and Governance4. Shareholding and group structure5. Programme of operations, business plan and financial requirements6. Organisational structure7. Rules of Conduct and relations with clients8. Annexes

For each of them information and documents are requested which the application for authorisation of a BD, SB or PMC must at least contain. In addition, applicants who promote the project may provide data, reports or background information when they are relevant for its assessment.

The CNMV (National Securities Market Commission) may request any additional or explanatory information that is necessary, in accordance with the provisions of article 16.1. of Royal Decree 217/2008, of 15 February, on the legal rules governing investment firms and all other institutions that provide investment services (hereinafter, RD 217/2008).

Legal Framework

The administrative rules to which IFs are subject in order to be entitled to engage in this activity is regulated in RD 217/2008, which gives effect to Title V of the consolidated text of the Securities Market Act, approved by Royal Decree 4/2015, of 23 October (hereinafter SMA), and implementing rules.

In addition, since institutions established under the form of a corporate enterprise are involved, the provisions of Royal Legislative Decree 1/2010, of 2 July, approving the consolidated text of the Corporate Enterprises Act

will apply, on a subsidiary basis, and, if they arise from a corporate transac-tion (change of corporate form, merger, division…), the provisions of Act 3/2009, of 3 April, on structural modifications of companies.

The minimum share capital and own funds requirements are determi-ned in articles 152.1. d) of the SMA, 14.1. d) and 15.1. of RD 217/2008; as regards the calculation of the own funds requirements at individual and consolidated level, IFs are subject, due to the reference in articles 190, 196 and 258 of the SMA, to Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (hereinafter Regulation (EU) no. 575/2013), to a series of Dele-gated Regulations supplementing the aforementioned Regulation (among which should be noted Commission Delegated Regulation (EU) 2014/241 and Commission Delegated Regulation (EU) 2015/488), to the provisions of Title VI of the RD 217/2007, and to CNMV Circular 2/2014, and, in relation to accounting rules, to CNMV Circulars 7/2008 and 3/2014.

In addition, certain IFs are subject to the legislation relating to the reco-very and resolution of credit institutions and investment firms, regulated by Act 11/2015, of 18 June, by Royal Decree 1012/2015, of 6 November, giving effect to the aforementioned Act and by other implementing legis-lative provisions.

The minimum requirements which must be observed by the general po-licies on control and monitoring of risks which must be designed by IFs in order to engage in the activity are provided in article 194 of the SMA, Title VI of the RD 217/2008 and in CNMV Circular 1/2014.

As regards the rules of conduct and relations with clients, Title VII of the SMA and the rules giving effect to it establish the rules of conduct of those involved in the securities markets and those which must govern relations with clients. Order ECO/734/2004 provides that a customer service depart-ment or service and a Client Protection Regulation must exist.

In addition, in order to carry on its activity, and in any event prior to registration in the CNMV registry, IFs must join the Investment Guarantee Fund regulated in RD 948/2001.

Finally, the final paragraph of article 14 1 f) of RD 217/2008 provides that IFs must have internal control and communication procedures and bodies to prevent and impede the performance of transactions relating to money laundering, and it is the body with authority to grant the authorisa-tion which will demand, on a mandatory basis, the report of the Executive Service on the adequacy of the control procedures and bodies.

All legislation applicable to IFs, both for the entitlement to engage in the activity and for the conduct of such activity, can be consulted at www.cnmv.es, in the Legislation section.

Instructions for use

The Guide has been designed in Word, so that if it is “downloaded” from the CNMV page www.cnmv.es, Legislation/Standard Forms section, it can be completed using this same tool.

In all cases, except for those in which greater detail is expressly reques-ted, replies must be clear, brief and concise.

The documents which are requested in each of the sections must be sub-mitted as documentation attached to the relevant section.

The following forms are included:

- UNDERTAKING TO JOIN THE INVESTMENT GUARANTEE FUND (ANNEX I)

- DRAFT GENERAL CERTIFICATE FOR PROFESSIONAL CIVIL LIABILITY INSURANCE (ANNEX II)

- QUESTIONNAIRE ON INTEGRITY AND GOOD GOVERNANCE (ANNEX III)

- ASSESSMENT BY THE APPLICANT OF THE SUITABILITY OF THE CANDIDATE PROPOSED TO BE MEMBER OF THE MANAGEMENT BODY OR TO BE THE GENERAL MANAGER (CEO) OR SIMILAR OFFICEHOLDER OF THE IF AND, WHERE RELEVANT, OF ITS PARENT INSTITUTION (ANNEX IV)

- ASSESSMENT BY THE APPLICANT OF THE OBSERVANCE OF THE RULES ON INCOMPATIBILITIES AND RESTRICTIONS OF CANDIDATES PROPOSED TO HOLD EXECUTIVE DIRECTORSHIP IN THE MANAGEMENT BODY OR TO BE THE GENERAL MANAGER (CEO) OF THE IF (ANNEX V)

- PROGRAMME OF OPERATIONS (ANNEX VI)

- ESTABLISHMENT OF ORGANISATIONAL STRUCTURE, HUMAN AND TECHNICAL RESOURCES, ADMINISTRATIVE AND INTER-NAL CONTROL PROCEDURES, RESOURCES TO GUARANTEE SECURITY, CONFIDENTIALITY, RELIABILITY AND CAPACITY, SAFEGUARD MECHANISMS FOR CESSATION OF BUSINESS (ANNEX VII)

- ASSESSMENT BY THE APPLICANT OF THE SUITABILITY OF THE CANDIDATE PROPOSED AS CONTROL FUNCTIONS OFFICER (COMPLIANCE, INTERNAL AUDIT, RISK MANAGEMENT) (ANNEX VIII)

Any doubt regarding completion and documentation to be attached may be raised at the Authorisation and Registries of Institutions Department of the Directorate General of Institutions, telephones 915 851 500 and 933 047 300.

Title V of the SMA regulates the conditions for entitlement to engage in the activity of BDs/SBs/PMCs. Chapter III of Title I of RD 217/2008 also regulates the requirements for authorisation and registration of BDs/SBs/PMCs, providing the possibility of establishment by new creation, by the conversion of an existing entity or by other corporate transaction.

(corporate name envisaged of the BD/SB/PMC)

1. Authorisation for the establishment of:

1.1 Establishment Procedure

Newly-created Conversion of another entity

Confirm the documents which are attached (art. 16.2. of RD 217/2008):

Audited balance sheet ending no earlier than the last business day of the quarter prior to the time of submission of the appli-cation, with an express reference and detailed description of the possible contingencies which could affect the valuation of the assets and liabilities.

Audited annual accounts of the last two financial years or sin-ce its creation, if the latter occurred during this period.

Declaration that the deed of incorporation and subsequent amendments, if any, do not contain any clause which restricts the entity’s capacity to be established as a BD/SB/PMC.

Other corporate transaction (merger, division, other transactions involving corporate modification) Describe the transaction envisaged indicating, where relevant, the documents which are provided, as well as those listed in sec-tion 2.1 of this Guide:

1.2 The applicant’s undertakings

Indicate: YES NO1. Undertaking to join the Investment Guarantee Fund

according to the form attached as ANNEX I:

2. Obtainment, prior to the registration of the IF in the CNMV registry, of the BIC code and LEI code:

3. Other undertakings: (If it exists, evidentiary documentation must be attached)

1.3 Prevention of money laundering and financing of terrorism

Articles 152.1.l) of the SMA and 14. 1 f) of RD 217/2008 provide that BDs/SBs/PMCs must have internal control and communication procedures and bodies to prevent and impede the performance of tran-sactions relating to money laundering and the financing of terrorism.

Such procedures shall be documented in a manual on prevention of money laundering and of the financing of terrorism, the minimum content of which is regulated in article 33 of Royal Decree 304/2014, of 5 May, approving the Regulations under Act 10/2010, of 28 April, on the prevention of money laundering and of the financing of terrorism.

In addition, the CNMV, as the authority with jurisdiction to grant the authorisation, shall demand, on a mandatory basis, the report of the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences (SEPBLAC) referred to in article 45.4.i) of Act 10/2010, regarding the adequacy of the internal control procedures and bodies.

A Manual is attached describing the structure and operation of the control and communication body and of the internal control procedu-res to prevent and impede transactions relating to money laundering and the financing of terrorism, which shall be sent by the CNMV to the SEPBLAC.

Indicate the contact person and data, from whom, where relevant, the SEPBLAC may directly request any additional information which it may require: ............................................................................................................................

1.4 Contact person for processing the project

If the contact person for processing the project is different from the applicants for the authorisation, you must provide the following infor-mation:

First name and surnames/corporate name:......................................................

Tax identification no. /passport no. /residence card (natural person)/tax identification code (legal persons):.......................................................................

Postal address:.............................................................................................................

Contact telephone:....................................................................................................

E-mail:...........................................................................................................................

1.5 Identification of the person liable for the CNMV fee

In accordance with the provisions of article 40 of Act 16/2014, of 30 Sep-tember, regulating the fees of the CNMV, the persons or entities that apply for the authorisation shall be liable for the relevant fee for the examination by the CNMV of the documentation necessary for the authorisation of the IF.

In addition, if the person liable is a person or entity not resident in the national territory, in accordance with article 6 of Act 16/2014, he/it must appoint a representative in Spain for the purposes of payment of the CNMV fees.

Identify the persons liable for the CNMV fee (i.e. the applicant or appli-cants for authorisation):

First name and surnames/corporate name: ......................................................... Tax identification no. /passport no./residence card (natural persons)/tax identification code (legal persons): ..........................................................................Postal address: ............................................................................................................... ....................................................................................................................................Contact telephone: .......................................................................................................E-mail: ..............................................................................................................................

If the applicant or the applicants for the authorisation for the creation of the BD/SB/PMC are non-residents, identify, for each of them, the persons or entities appointed by each as a representative in Spain for payment of the fees to the CNMV:

Representative in Spain of the following applicant:...........................................

First name and surnames/corporate name: ..................................................

Tax identification no. /passport no./residence card (natural persons)/tax identification code (legal persons): ...........................................................

Postal address:.........................................................................................................

.....................................................................................................................................

Contact telephone: ................................................................................................

E-mail: .......................................................................................................................

2. Articles of association

Articles 149.3. of the SMA and 16.1 a) of RD 217/2008 provide that the application for the creation of a BD/SB/PMC or for the conversion into such institution must be accompanied by draft articles of association and a cer-tificate of the Spanish Commercial Registry that there is no entity with the same corporate name as that proposed or proof that such name can be law-fully used.

Articles 152.1 of the SMA and 14.1 of RD 217/2008 provide that the institutions must have as their sole corporate purpose the engagement in the activities of an IF, which must take the form of a public limited liabili-ty company (sociedad anónima), incorporated for an indefinite period, that the shares forming their share capital must be registered shares, their name must comply with the provisions of article 7 of RD 217/2008 and they must have a management body formed by at least three members; in addition, in the case of a newly-created entity, it must be established by the simul-taneous establishment procedure, no special advantages or remuneration of any kind being reserved for its founders, it must have a minimum share capital fully paid up in cash, and that in the case of conversion, the differen-ce between the minimum share capital and the equity of the entity which requests the conversion must be paid in cash.

In addition, article 15.1 of RD 217/2008 sets the minimum share capital

at €730,000 for BDs, and €50,000 or €125,000 for SBs depending on the activity envisaged. As regards PMCs, they must have:

i. Minimum capital of €50,000 or ii. Professional civil liability insurance, a guarantee or other equivalent

security so as to be able to meet the liability for negligence in the course of their professional activity in the entire territory of the Euro-pean Union, with minimum cover of €1,000,000 per claim for dama-ges, and a total of €1,500,000 annually for all claims or.

iii. A combination of initial capital and of professional civil liability insu-

rance which gives rise to a level of cover equivalent to that of points i. and ii. above.

The initial share capital may be formed by one or more of the items men-tioned in article 26.1. a) to e) of Regulation (EU) no. 575/2013, of 26 June 2013.

Furthermore, given the status as a public limited liability company which BDs/SBs/PMCs must have, in compliance with the provisions of Royal Legislative Decree 1/2010, of 2 July, approving the consolidated text of the Corporate Enterprises Act, the share capital of SBs and PMCs may not, in any event, be less than €60,000.

In addition, article 241.1. of the SMA provides that the individual and consolidated accounts and management reports of each financial year of BDs/SBs/PMCs must be approved, within four months of year-end, by their respective general meetings, following an audit.

Finally, Act 3/2009 on structural modifications regulates some of the cor-porate transactions in which an IF may participate, and Royal Legislative Decree 1/2010 approving the consolidated text of the Corporate Enterprises Act regulates the system of operation of public limited liability companies, which is the corporate form which BDs, SBs and PMCs must have.

2.1 Procedure for establishment

Mark the documents which are attached:

Newly-created:

Draft articles of associationCopy of certificate of reservation of name issued by the Spanish Commercial Registry (Names Section)

Conversion or other corporate transaction:

Draft terms of merger/division/others

Draft articles of association

Certificate of corporate resolutions (management body or general meeting of shareholders/minutes of sole shareholder’s decisions), subject, where relevant, to the relevant authorisation of the CNMV

Copy of certificate of reservation of name issued by the Spanish Commercial Registry (Names Section)

2.2 Classes and/or series of shares

Are different classes and/or series of shares envisaged?

NO YES ➡ State the reasons which justify it:

2.3 Financial requirements: minimum share capital/Professional Civil Liability Insurance

Indicate the type of institution which you intend to establish (articles 143 of the SMA and 4.2. of RD 217/2008) and what the amount of its share capital and/or, where relevant, Professional Civil Liability Insurance will be:

Type of institution

Broker-dealer (BD)

Authorised to have on deposit funds or transferable

securities of its clients

Not authorised to have on deposit funds or transferable

securities of its clients

Professional Civil Liability Insurance

Guarantee or equivalent security

Combination of initial capital and of Professional Civil Liability Insurance

Share capital

Securities Broker (SB)

Portfolio Management

Company (PMC)

€730,000

€125,000

€60,000

€60,000

Minimum FinancialRequirements (article 15.1. of RD 217/2008)

A draft General Certificate of Professional Civil Liability

Insurance is attached (according to the form attached as Annex II)

A draft General Certificate of Professional Civil Liability

Insurance is attached (according to the form attached as Annex II)

Information regarding the planned guarantee or security

is attached

An independent expert’s report which proves the equivalence

of the cover is attached

Amount of the share capital envisaged/

Professional Civil Liability Insurance

In accordance with article 152.1.e) of the SMA and article 14.1.e) of RD 217/2008, BDs/SBs/PMCs and, where relevant, their parent institutions, must have a management body, formed by not less than three members.

Furthermore, articles 152.1. f) of the SMA and 14.1.e) of RD 217/2008 provide that the chairmen, vice-chairmen, management body members, gene-ral managers and similar officeholders of BDs/SBs/PMCs, must have recognised integrity (in accordance with the definition and description established in ar-ticles 182.1. of the SMA and 14 bis. of RD 217/2008), knowledge and experience for the adequate performance of their functions (in accordance with the definition and description established in articles 182.2. of the SMA and 14 ter. of RD 217/2008) and must be in a position to engage in good gover-nance of the BD/SB/PMC (in accordance with the definition and description established in articles 182.3. of the SMA and 14 quater of RD 217/2008). In the case of parent institutions of a BD/SB/PMC, the integrity requirement must also be observed by the chairmen, vice-chairmen, management body members, general managers and similar officeholders and the majority of the ma-nagement body must have knowledge and experience for the adequate performance of their functions. Such requirements may also be demanded of any natural persons who represent legal persons on boards of directors.

In addition, article 155 e) and f) of the SMA provides that the authorisation may be refused due to lack of integrity, knowledge and experience, and capacity to engage in good governance of the firm of the members of the management body and of the persons in charge of the effective management of the mixed financial holding company, when the BD/SB/PMC is going to be a subsidiary of such holding company as part of a financial conglomerate, and due to the existence of serious conflicts of interest between the offices, responsibilities or functions held by the members of the management body of the BD/SB/PMC and other offices, responsibilities or functions which they simultaneously hold.

In addition, as established by articles 183.2. of the SMA and 14 quinquies.1.a) of RD 217/2008, the assessment of the observance of the above-mentioned requirements of integrity, knowledge and experience and of good governance must be carried out, as well as by the CNMV itself, by the applicants for the authorisation to establish the BD/SB/PMC.

In addition, whenever the activity engaged in by the BD/SB does not fall within the exemptions established by article 184.3. of the SMA, the mem-bers of the management body with executive functions at the BD/SB, as well as their general managers or similar officeholders, are subject to the rules on incompatibilities and restrictions of offices established in article 184 of the SMA.

3. Management body and governance

Furthermore, article 185.1. of the SMA imposes the obligation on boards of directors of BDs/SBs/PMCs to establish governance arrangements which guarantees effective and prudent management of the institution. Among the principles that governance arrangements of BDs/SBs/PMCs shall comply with, one should highlight that established in article 185.2.e) of the SMA, which points out that the chairman of the management body of a BD/SB/PMC may not simultaneously hold the office of managing director, unless the institution justifies it and the CNMV authorises it.

Finally, articles 186, 188 and 194 of the SMA provide, depending on the activity to be engaged in by the BD/SB (in accordance with articles 187, 189 and 194 of the SMA), the obligation of the institution to establish nomination, re-muneration and risk committees, as well as the possibility of requesting the combined exemption from having or establishing such committees.

3.1 Management body and general management of the BD/SB/PMC

3.1.1 List of management body members, general managers or similar officeholders of the BD/SB/PMC. Suitability requirements.

List, in accordance with article 16.1. e) of the RD 217/2008, the board members of the institution as well as the persons who will hold offices of general managers or similar offices.

First name and Office E/non-E(**) QI CR CVsurnames / corporate name (*)

(*) in the case of Legal Persons, include: Represented by ………………………………………

(**) the Executive (E) or non-Executive (non-E) nature of the office shall be indicated.

Each of the natural and legal persons listed in the table above must provide:

- Their questionnaire on integrity (QI), a standard form of which is attached, (see ANNEX III).

- A current certificate of their criminal record (CR) issued by the Spanish Ministry for Justice and/or by the equivalent Body of the home countries where the candidate has engaged in his/its professional activity in the last 10 years.

In the case of citizens of the European Union who are not Spanish, the Spanish Central Registry of Convicted Persons shall request from the central authority of the State of nationality of the person who makes the request, information regarding such criminal history in order to be able to include it in the certificate which is furnished to him.

- In the case of natural persons who are going to be management body members or general managers or similar officeholders of the BD/SB/PMC or who are going to be the legal representative of a management body member that is a legal person:

• photocopy of current national identity card, passport or residence card;

• their curriculum vitae or academic and professional history (CV), in which, in order to prove the observance of the knowledge and experience requirements in the terms established in article 14 ter. of RD 217/2008, they must provide the information indicated below:

• The candidate’s academic training. In the case of a university qualification, it shall be indicated whether the qualification is a primary or master’s degree (university courses whose duration is equal to or greater than five years will be deemed to have the status of a master’s degree). In addition, other specialised courses pursued by the candidate shall also be indicated.

• Professional history. Both the post currently held and the posts held in the last ten years must be indicated, specifying the activity of the institution for which he works or has worked (identifying, in the case of a financial institution, the Body which supervises it), the functions performed, delegated powers, the areas under his control and the number of employees who report to him.

- Both the CV and the CR must be submitted bearing the date and signature on all their pages of the person to whom they refer or, otherwise, of the applicant.

In relation to the members of the management body, general managers and similar officeholders proposed at the BD/SB/PMC:

- Indicate the name of the unit or body of the BD/SB/PMC which will be in charge of applying the internal procedure which the institution will have established, in compliance with articles 183.1 of the SMA and 14 sexies.1. of RD 217/2008, relating to the selection and ongoing evaluation of its members of the management body, general mana-gers or similar officeholders: …………………………………………………...……………………………………..

- In addition, the following document is attached:

Assessment performed of the observance by the proposed candi-dates of the requirements of integrity, knowledge and experience and good governance imposed in articles 152.1. f) of the SMA and 14.1.e) of RD 217/2008, according to the form attached as Annex IV.

3.1.2 Relations of the management body members and general managers (CEO) or similar officeholders of the BD/SB/PMC

In relation to the management body members and general managers (CEO) or similar officeholders, or natural persons who represent management body members of the BD/SB/PMC that are legal persons, describe, for the purpose of assessing that the circumstances described in article 155 f) of the SMA do not exist, the connections or relations (financial or otherwise) or interests or activities which they could have with other institutions, which are relevant because they could give rise to a conflict of interest with the BD/SB/PMC to be established, describing, in this case, the measures which they plan to adopt for the resolution of such conflict:

3.1.3 Governance arrangements of the BD/SB/PMC

The applicants for the establishment of the BD/SB/PMC give an undertaking that, when the institution has been established, its mana-gement body will define and approve the governance arrangements referred to in article 185 of the SMA, so that the system of governance established guarantees effective and prudent management of the institution, and includes the adequate distribution of functions in the organisation and prevention of conflicts of interests:

YES

Is it envisaged that the chairman of the BD/SB/PMC will also be appointed managing director?

NOYES ➡ Justify, pursuant to the provisions of article 185.2.e)

of the SMA, the reasons for such concurrence:

Institution with which he/it has

a connection

Description of the connection

Measures envisaged to avoid possible conflicts

of interest with the BD/SB/PMC

First name and surnames /corporate name of the

management body member of the BD/SB/PMC

Will the BD/SB be subject, given its envisaged activity, to the obligation to establish the nomination, remuneration and risk committees referred to in articles 186, 188 and 194 of the SMA?

NOYES ➡ do you request, pursuant to the provisions

of articles 186, 188 and 194 of the SMA, the excemption from having or the combi-ned establishing of such committees?

YES ➡ state the option chosen and the rea-

sons for your request:

If the exemption from having committees is requested, indicate the department or area of the BD/SB/PMC which will assume the performance of such functions: ……………………………………….

NO ➡ report on the composition and functions of each committee:

Will the management body members with executive functions and the general manager or similar officeholder of the BD/SB, given the envi-saged activity of the latter, be subject to the rules on incompatibilities of directorships established in article 184 of the SMA?

NOYES ➡ in which case the following

document is attached:

Assessment of the observance, by the proposed candidates, of the rules on incompatibilities established in article 184 of the SMA, if they are applicable to the BD/SB, as well as a table containing the list and type of directorships which they hold in other institu-tions, according to the form attached as Annex V

3.2 Management body and general management (CEO) of the parent institution of the BD/SB/PMC

Will the BD/SB/PMC have a parent institution whose management body members and general managers (CEO) must be registered in the registry of management body members and general managers of parent institutions, the creation and management of which is the responsibility of the CNMV, under the provisions of article 16.3. of RD 217/2008?

NO YES ➡ Complete the following table:

Corporate name of the parent institution:.....................................................Tax identification code or equivalent: ............................................................ Type of institution (financial holding company or mixed financial holding company: …..............................................................................................Registered office:....................................................................................................Postal address: ................................................................................................................................................................................................................................................

3.2.1 List of management body members, general managers (CEO) or similar officeholders of the parent institution of the BD/SB/PMC. Suitability requirements

If the question indicated in section 3.2. above has been answered affir-matively, list the management body members of the parent institution, as well as the persons who will hold offices of general managers (CEO) or similar officeholders.

(*) in the case of Legal Persons, include: Represented by ………………………………………

Each of the natural and legal persons listed in the table above must provide:

- Their questionnaire on integrity (QI), a standard form of which is attached, (see ANNEX III).

- A current certificate of their criminal record (CR) issued by the Spa-nish Ministry for Justice and/or by the equivalent Body of the home countries where the candidate has engaged in his/its professional ac-tivity in the last 10 years.

First name and Office QI CR CVsurnames / corporate name (*)

In the case of citizens of the European Union who are not Spanish, the Spanish Central Registry of Convicted Persons shall request from the central authority of the State of nationality of the person who makes the request, information regarding such criminal history in or-der to be able to include it in the certificate which is furnished to him.

- In the case of natural persons who are going to be management body members or general managers (CEO) or similar officeholders of the parent institution of the BD/SB/PMC or who are going to be the legal representative of a management body member that is a legal person:

• photocopy of current national identity card, passport or residence card;

• their curriculum vitae or academic and professional history (CV), in which, in order to prove the observance of the knowledge and experience requirements in the terms established in article 14 ter. of RD 217/2008, they must provide the information indicated below:

• The candidate’s academic training. In the case of a university qualification, it shall be indicated whether the qualification is a primary or master’s degree (university courses whose duration is equal to or greater than five years will be deemed to have the status of a master’s degree). In addition, other specialised courses pursued by the candidate shall also be indicated.

• Professional history. Both the post currently held and the posts held in the last ten years must be indicated, specifying the activity of the institution for which he works or has worked (identifying, in the case of a financial institution, the Body which supervises it), the functions performed, delegated powers, the areas under his control and the number of employees who report to him.

- Both the CV and the CR must be submitted bearing the date and signature on all their pages of the person to whom they refer or, otherwise, of the applicant.

In relation to the members of the management body, general managers (CEO) and similar officeholders proposed at the parent institu-tion of the BD/SB/PMC, the following document is attached:

Evaluation performed of the observance by the proposed candidates of the requirements of integrity, knowledge and experience and good governance imposed in articles 152.1. f) of the SMA and 14.1.e) of RD 217/2008, according to the form attached as Annex IV.

3.2.2 Relations of the management body members and general managers (CEO) or similar officeholders of the parent institu-tion of the BD/SB/PMC

In relation to the management body members and general managers or similar officeholders, or natural persons who will represent management body members of the parent institution of the BD/SB/PMC that are legal persons, describe, for the purpose of assessing that the circumstances described in article 155 e) of the SMA do not exist, the connections or rela-tions (financial or otherwise) or interests or activities which they could have with other institutions, which are relevant because they could give rise to a conflict of interest with the BD/SB/PMC to be established, describing, in this case, the measures which they plan to adopt for the resolution of such conflict:

Institution with which

he/it has a connection

First name and surna-

mes / corporate name of

the management body

member of the parent

institution of the

BD/SB/PMC

Description of the

connection

Measures envisaged

to avoid possible conflicts

of interest with the

BD/SB/PMC

In accordance with article 16.1 d) of RD 217/2008, the request for authorisation of a BD/SB/PMC must be accompanied by the list of shareholders of the institution, indicating their stakes in the share capital and the information regarding them described in that article.

Furthermore, articles 155 b) of the SMA and 17 of RD 217/2008 provide that the authorisation may be refused when the suitability of the shareholders that are going to hold a qualifying holding in the BD/SB/PMC is not considered adequate, indicating some of the factors according to which such suitability will be appraised.

In accordance with article 174 of the SMA, qualifying holding shall mean that which directly or indirectly reaches at least 10 per cent of the capital or of the voting rights of the BD/SB/PMC, or that which, without reaching the percentage indicated, allows significant influence to be exercised over it, in accordance with the definition provided in article 84 of RD 217/2008.

Finally, article 155 c) of the SMA provides that the authorisation may be refused due to lack of transparency in the structure of the group to which the BD/SB/PMC may ultimately belong, or the existence of close links with other investment firms or other natural or legal persons (according to the definition established in article 17.3. of RD 217/2008) which impede the effective performance of the supervisory functions of the CNMV, and, in general, the existence of serious difficulties to inspect it or obtain the information which the CNMV may consider necessary for the adequate performance of its supervisory functions.

4. Shareholding and group structure

4.1 Shareholding Structure

4.1.1 Shareholders

Indicate all the members that will make up the share capital of the BD/SB/PMC, with the number of shares and their percentage stake in the capital, and in the voting rights:

(*) If there are different series/classes of shares, indicate those which belong to each of the shareholders.

TOTAL

Tax Identification

Number/Tax

Identification Code

First Name and

Surnames (Corporate

Name, where relevant)

No. Shares(*) %of share capital

%Voting Rights

(*) The percentage indirect shareholding in the member of the BD/SB/PMC shall be indicated

Will any of the persons or entities mentioned in article 151.1. and 3 of the SMA have control of the BD/SB/PMC?

NOYES ➡ Indicate:

In relation to each member listed in the first table of this section that have the status of a legal person (provided that they are not regulated financial institutions and listed companies, supervised by the CNMV, Banco de España, Dirección General de Seguros y Fondos de Pensiones), in-dicate the stakes in its share capital social which directly or indirectly represent a percentage exceeding 5%, by completing the following table:

Corporate name of the member of the BD/SB/PMC:

List of shareholders of the member that have a direct or indirect stake in it exceeding 5%:

Tax Identification

Number/Tax

Identification Code

First Name and

Surnames (corporate

name, where relevant)

% Direct

Shareholding Through % Shareholding(*)

Indirect Shareholding

4.1.2 Connections and commitments of the shareholdersto the project

In the event of failure to comply with the business plan envisaged, is there a formal commitment of the shareholders to provide financial support to the institution?

NOYES ➡ Indicate the following:

Description of the commitment

First name and surnames

or corporate name of the

shareholder

Has any shareholder signed or is going to sign any agreement with other shareholders or third parties relating to the exercise of voting rights, transfe-rability of the shares of the BD/SB/PMC or of its parent institution?

NOYES ➡ Briefly describe the agreement:

Does any kind of pledge or charge on the shares which you intend to subscribe or acquire of the BD/SB/PMC exist or is it planned to create such pledge or charge?

NOYES ➡ Indicate such pledge or charge:

4.1.3 Other connections of the shareholders

Describe the offices, functions or employment or professional relations which the direct or indirect shareholders have with other financial institutions or institutions related to the securities market and in non-finan-cial institutions, which are relevant for the purpose of assessing that the circumstances described in article 155 b) 3º of the SMA do not exist:

Institution at which he/it

provides services and its activity Office or function

First name and

surnames or

corporate name of

the shareholder

Person/entity with which

he/it has a close link

Activity, office or function held or

performed by such person/entity

First name and

surnames or

corporate name of

the shareholder

For the purpose of assessing that the circumstances described in article 155 c) and d) of the SMA do not exist, inform as to whether any of the direct or indirect shareholders have close links, in accordance with the provisions of article 17.3. of RD 217/2008 and of article 9.3. of RD 1333/2005, with other financial institutions or other natural or legal persons:

4.2 Additional information regarding shareholders with a qualifying holding

Identify the persons that will have, directly or indirectly, a qualifying holding in the BD/SB/PMC, as defined in article 174 of the SMA:

(*) The % indirect qualifying holding shall be calculated in accordance with the provisions of article 82.5 of RD 217/2008

4.2.1 Natural Persons

For each of the shareholders who is a natural person and who, directly or indirectly, is going to have a qualifying holding in the BD/SB/PMC, the following must be provided:

A. Information regarding his professional history and activity (CV) and questionnaire on integrity (QI), a standard form of which is attached as Annex III, and a current certificate of his criminal record (CR) issued by the Spanish Ministry for Justice and/or by the equivalent Body of the home countries where the candidate has engaged in his professio-nal activity in the last 10 years. Indicate the documents provided:

First Name and Surnames CV CRQI

B. Information regarding his wealth, solvency and financial strength and regarding the assets which he has to meet the commitments which he intends to assume due to his envisaged shareholding in the BD/SB/PMC (prepare a table for each shareholder):

First Name and Surnames:

First Name and Surnames

(corporate name, where

relevant)

Tax Iden-tification

Number/Tax Identifica-tion Code

%share capital

% direct qualifying holding in the BD/SB/PMC

%votingrights

%Sharehol-

ding(*)

Through %of

share capital

%voting rights

Shareholding% indirect qualifying

holding in the BD/SB/PMC

% total qualifying holding in the BD/SB/PMC

(*) It will be sufficient to provide a declaration that the current articles of association do not contain any clause which restricts their capacity to be a direct or indirect shareholder of the BD/SB/PMC.

(**) Audited Financial Statements, if any. (***) Identify in the tables below

4.2.2 Legal Persons

For each of the shareholders that is a legal person and that, directly or in-directly, is going to have a qualifying holding in the BD/SB/PMC, the fo-llowing must be provided: questionnaire on integrity (QI), a standard form of which is attached as Annex III, and a current certificate of its criminal record (CR) issued by the Spanish Ministry for Justice and/or by the equi-valent Body of the home countries where the candidate has engaged in its professional activity in the last 10 years; in addition, provided that they are not regulated financial institutions or listed companies supervised by the CNMV, one must provide their articles of association, annual accounts and management reports with the audit reports, if any, of the last two financial years, composition of their management bodies and detailed structure of the group to which they ultimately belong.

If there are no annual accounts, financial statements for the quarter prior to the application for authorisation. Indicate the documents provided:

For each direct or indirect shareholder with a qualifying holding in the BD/SB/PMC:

The shareholder’s name: ……………................................................……………………………………………........................................................................................................................…

A. Composition of the management body as of...... ..............., 20........

C. Information regarding shareholdings exceeding 10% in other institu-tions belonging or linked to the financial sector (prepare a table for each shareholder):

First Name and Surnames:

Corporate Name % ShareholdingControl

YES NOActivity

Shareholder’s name

QI CR Articles of Association(*)

Management Body(***)

Annual Accounts/Fin.

Statements (**)

Structure of the group (***)

YES NO

B. Organisational chart of the shareholder’s group in accordance with article 5 of the SMA as of .... ......., 20.... .

C. List of entities of the shareholder’s group subject to authorisation or supervision on an individual or consolidated basis by another supervisory body of the financial sector in their home country:

First name and surnames or corporate name (*) Office

Home Country Supervisory AuthorityThe entity’s corporate name

(*) In the case of legal persons indicate in parenthesis the natural person who represents it

(*) If the close link is maintained by the BD/SB/PMC with a natural or legal person that is governed by the laws, regulations or administrative provisions of a non-Member State of the European Union, one must prove that the application thereof will not impede the effective performance by the CNMV of its supervisory functions.

4.3 Group

4.3.1 Group to which the BD/SB/PMC will belong

Identify the entities that make up the group to which, where relevant, the BD/SB/PMC is going to belong, in accordance with the provisions of article 5 of the SMA.

Organisational chart of the group as of .... ......., 20... . (in which the percen-tage shareholdings in each of the entities that form it must appear).

Will the BD/SB/PMC or any of the entities of its group have close links with other investment firms or other natural or legal persons, in accordance with the provisions of article 17.3 of RD 217/2008?

NOYES ➡ Explain them:

BD/SB/PMC or Entity of the group with which it has the connection Type of connection (*)

(*) Global integration. (**) Proportional integration.(***) Equity.

4.3.2 Consolidated group of financial institutions

If, as pointed out by article 258.1 SMA, the BD/SB is going to create a decision-making unit with other investment firms and financial institutions, according to the provisions of article 42 of the Commercial Code and, in the light of the activities in which it will engage and of the provisions of Regula-tion (EU) no. 575/2013, of 26 June, one of the consolidated groups of finan-cial institutions envisaged in article 107 of RD 217/2008 must be formed, complete the following information:

Type of consolidated group of financial institutions:

Consolidated group defined in article 107.1. a) of RD 217/2008 Consolidated group defined in article 107.1. b) of RD 217/2008 Consolidated group defined in article 107.1. c) of RD 217/2008 Consolidated group defined in article 107.1. d) of RD 217/2008 Consolidated group defined in article 107.1. e) of RD 217/2008 Consolidated group defined in article 107.1. f) of RD 217/2008

Entities which will fall within the scope of the consolidation:

Corporate Name Consolidation Method

Consolidated Group

FC (*) E(***)PC(**)

Organisational chart of the consolidated group:

4.4 Other information of interest regarding the shareholding and group structure not envisaged in previous sections

Articles 149.3. of the SMA and 16.1 b) of RD 217/2008 require the submission of a programme of operations which contains the investment services, ancillary services and ancillary activities which the institution intends to provide, indicating the instruments in relation to they are going to be provided.

The type of institution (BD/SB/PMC) which it is intended to establish must be taken into account for the purpose of identifying the investment services, ancillary services and ancillary activities to be performed, accor-ding to the provisions of articles 143 of the SMA and 6 of RD 217/2008.

In addition, articles 152.1.j) of the SMA and 14.1 j) of RD 217/2008 establish as one of the requirements in order for an institution to obtain its authorisation as a BD/SB/PMC the submission of a business plan which reasonably proves that the project is viable in the future.

Finally, the minimum share capital and own funds requirements are determined in articles 152.1. d) of the SMA, and 14.1. d) and 15.1. of the RD 217/2008; as regards the calculation of the own funds requirements at indi-vidual and consolidated level, BDs/SBs/PMCs are subject, due to the referen-ce in articles 190, 196 and 258 of the SMA, to Regulation (EU) No. 575/2013, and implementing legislation.

5. Programme of operations, business plan and financial requirements

5.1 Programme of operations

For inclusion in the CNMV Public Registry of investment firms, comple-te, without signing, indicating the name of the BD/SB/PMC, the standard form of PROGRAMME OF OPERATIONS which appears as ANNEX VI.

5.1.1 Investment services (articles 140 of the SMA and 5.1. of RD 217/2008)

5.1.1.1 Receipt and transfer of orders

Is the provision by the BD/SB of the service of receipt and transfer of clients’ orders envisaged?

NOYES ➡ Describe the principal characteristics of

such service:

If as part of the service of receipt and transfer of orders, the BD/SB intends to engage in the activity of marketing of Collective Investment Schemes (CIS), indicate whether it intends to market:

A. Spanish or foreign CIS registered for the marketing thereof in the CNMV Registry, the management of which is entrusted to the BD/SB itself (by delegation of the relevant management companies) or to some entity of its group.

NOYES ➡ Describe in detail:

B. Spanishor foreign CIS registered for the marketing thereof in the CNMV Registry, the management of which is entrusted to third-party entities.


Does it intend to be the holder of global accounts in the marketing of CIS? (*)


(*) If it does not intend to provide the service of safekeeping and administration in relation to the instruments under article 2 of the SMA but does intend to be the holder of global accounts in the marketing of CIS, in the programme of operations (see standard form in Annex VI) which the BD/SB completes, it must indicate that the BD/SB intends to provide the ancillary service of safekeeping and administration of transferable securities, specifying in the section describing the particular characteristics or restrictions on the provision of services, that such ancillary service will be provided solely for the purposes of keeping, on behalf of its clients, the record on an individual basis of ultimate ownership of the stakes in CIS which are marketed by the BD/SB and which are entered in its name on behalf of clients in a global account.

5.1.1.2 Execution of orders

Is the provision by the BD/SB of the service of execution of orders on behalf of clients envisaged?


such service:

5.1.1.3 Dealing on own account

Is it envisaged that the BD will engage in the activity of dealing on own account?


such service:

Does it intend to acquire the status of member of a national and/or a foreign regulated market?

NOYES ➡ List the markets and the type of member:

Does it intend to acquire the status of member of Multilateral Trading Facilities (MTF)?

NOYES ➡ List the markets:

5.1.1.4 Discretionary Portfolio Management

Is it envisaged that the BD/SB/PMC will provide the service of discretio-nary and personalised management of investment portfolios in accordance with the mandates given by clients?


such service:

Does it intend to execute outside a regulated market or an MTF, for its own account, clients’ orders relating to shares listed on regulated markets, as a systematic internaliser?


Does it intend to manage the portfolio of institutions belonging to its group?


Does it intend to manage the portfolio of pension funds, venture capital institutions, CIS, hedge funds and/or CIS of hedge funds?


Does it intend to provide the service of discretionary portfolio manage-ment by automated means, using algorithm-based digital asset management platforms (“robo-adviser”), with the minimum human intervention possible?


5.1.1.5 Placement

Is it envisaged that the BD/SB will provide the service of placement of financial instruments?


such service:

5.1.1.6 Underwriting

Is it envisaged that the BD will provide the service of underwriting of issues or of placements of financial instruments?


such service:

5.1.1.7 Investment Advice

Is it envisaged that the BD/SB/PMC will provide the service of investment advice for clients?


such service:

Does the BD/SB/PMC intend to use automated systems, using digital platforms (“robo-adviser”), in the provision of the service of investment advice?


5.1.1.8 Management of Multilateral Trading Facilities

Does the BD/SB intend to provide the service of management of multila-teral trading facilities?

NOYES ➡ Identify the MTF, provide the Regulations on

market operation (article 153.2 of the SMA) and describe the functions which will be carried out by the BD/SB as manager of the MTF:

5.1.2 Ancillary Services (articles 141 of the SMA and 5.2. of RD 217/2008)

5.1.2.1 Safekeeping and administration of financial instruments

Is it envisaged that the BD/SB will provide the service of safekeeping and administration of financial instruments for the account of clients?

NOYES ➡ Describe the principal characteristics of such servi-

ce:

5.1.2.2 Granting credit facilities or loans to investors to perform transactions in which the BD is involved

Is it envisaged that the BD will grant credit facilities or loans to investors to perform transactions in which the BD is involved, relating to financial instruments?


such service:

5.1.2.3 Advice for companies relating to capital structure and related issues

Is it envisaged that the BD/SB/PMC will provide an advisory service for companies relating to capital structure, industrial strategy and related issues, as well as advice and all other services in relation to mergers and acquisi-tions of companies?


such service:

5.1.2.4 Investment research and financial analysis

Is it envisaged that the BD/SB/PMC will provide the service of investment report preparation and financial analysis or other forms of general recom-mendation with regard to transactions relating to financial instruments?


such service:

5.1.2.5 Other ancillary services

Is it envisaged that the BD/SB/PMC will provide any of the following anci-llary services: services relating to underwriting operations; currency exchan-ge services related to the provision of investment services; investment and ancillary services related to the non-financial underlying of the derivatives envisaged in paragraphs 3, 4, 5 and 8 of article 2 of the SMA, when they are linked to the provision of investment services or of ancillary services?


Options, futures, swaps, forward rate agreements and any other deriva-tive financial instrument contracts relating to securities, currencies, interest rates or yields, or other derivative financial instruments, financial indices or financial measures which may be settled physically or in cash.


5.1.3 Instruments and other activities

5.1.3.1 Financial Instruments (article 2 of the SMA)

In the tables below, specify the principal characteristics (for example: type of instrument, whether it is traded in a national or foreign trading centre-in what centre- or OTC, in the case of derivatives, type of underlying, etc.) of the financial instruments in relation to which the BD/SB/PMC will operate:

Transferable securities issued by persons or entities, public or private, and grouped as issues.


Options, futures, swaps, forward rate agreements and any other derivative financial instrument contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties otherwise than by reason of a default or other termination event.


Options, futures, swaps and any other derivative financial instrument contract relating to commodities that can be physically settled, provided that they are traded on a regulated market and/or a multilateral trading facility.


Options,futures, swaps, forwards and any other derivative financial instrument contracts relating to commodities, that can be physically settled not mentioned in the previous paragraph of this article and not being for commercial purposes, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are cleared and settled through recognised clearing houses or are subject to regular margin calls.


Derivative financial instruments for the transfer of credit risk.


Options, futures, swaps, forward rate agreements and any other derivati-ve financial instrument contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties otherwise than by reason of a default or other termination scenario, as well as any other derivative financial instrument contract re-lating to assets, rights, obligations, indices and measures not mentioned in the previous paragraphs of article 2 of SMA, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or a multilateral trading facility, are cleared and settled through recognised clearing houses or are subject to regular margin calls.


Financial contracts for differences.


5.1.3.2 Services relating to instruments other than those abo-ve or other ancillary activities which involve a prolon-gation of business (articles 142.2. of the SMA and 10 of RD 217/2008)

Does the BD/SB/PMC intend to provide investment or ancillary services relating to instruments other than those mentioned above?


Investment or Ancillary Service Instruments

Identify the total figure of expenses envisaged for the first year of business, providing a breakdown of the main items (salaries, rents, subcon-tracted services, services of external professionals, agents…)

Provide the balance sheet envisaged for the first year of business:

Does the BD/SB/PMC intend to engage in ancillary activities which invol-ve a prolongation of its business?


5.2 Business Plan

5.2.1 Turnover: income and expenditure

Describe the turnover envisaged for the first year of business, indicating the exact scope of the investment services, ancillary services and ancillary activities to be provided, the instruments and the group of clients at which each activity will be aimed. In addition, taking into account the booklet of maximum fees and chargeable expenses which the BD/SB/PMC will have, in accordance with the standard form in Annex I of CNMV Circular 7/2011, it must provide an estimate of the fee income for the first year of business for each service indicated in its programme of operations. If no income from a particular service is envisaged, this must be specified.

If the above-mentioned balance sheet shows losses for the first year, provide an estimate of results for the following 2 financial years and a forecast of measures to be adopted by the BD/SB/PMC, if any.

5.3 Financial requirements and information regarding solvency

Depending on the functions which are carried out by the BD/SB/PMC, different types of categories of IF are established, subject to different finan-cial requirements, which are summarised below:

1) Type 1 BD

a. Rules on individual solvency (articles 190 and 191 SMA):

i. Capital Ratios:

1. capital ratios referred to in article 92 of Regulation (EU) no. 575/2013;

2. additional requirement relating to the initial capital (article 93 of Regulation (EU) no. 575/2013 and Rule Five of CNMV Circular 2/2014); the own funds of the IF may not be lower than the amount of the minimum share capital for its category of IF.

3. compliance with capital buffers, leverage and liquidity (article 196 of the SMA)

4. subject to the observance of the limits for large exposures envisa-ged in Part IV of Regulation (EU) no. 575/2013 and in Rule Ten of CNMV Circular 2/2014.

ii. In addition, article 190.2. SMA establishes the obligation to have sound, effective and thorough strategies and procedures for the purpose of assessing and maintaining on a permanent basis the amounts, the types and the distribution of the internal capital which they consider adequate to cover the nature and the level of the risks to which they are or may be exposed. They shall publish annually the Annual Report on self-assessment of capital.

iii. Finally, article 191.1. SMA requires that, at least on an annual basis, duly integrated in a single document entitled «Information regarding

Solvency», the information referred to in Part VIII of Regulation (EU) no. 575/2013, of 26 June 2013. In other words, the obligation to dis-close relevant information to the market operators regarding certain aspects of the institution’s solvency (own funds, risk exposures, risk assessment processes, etc.).

b. If a group exists (article 258 SMA and 107 of RD 217/2008): it must comply at consolidated level with the solvency requirements referred to in Regulation (EU) no. 575/2013.

2) Type 2 BD

a. Rules on solvency at individual level (articles 190 and 191 SMA):

i. Capital Ratios:

1. capital ratios referred to in article 92 of Regulation (EU) no. 575/2013 in accordance with the limitations inserted by article 96 of the abo-ve-mentioned Regulation;

2. additional requirement relating to the initial capital (article 93 of Re-gulation (EU) no. 575/2013 and Rule Five of CNMV Circular 2/2014); the own funds of the IF may not be lower than the amount of the minimum share capital for its category of IF.

3. compliance with capital buffers, leverage and liquidity (article 196 of the SMA).

ii. In addition, article 190.2. SMA establishes the obligation to have sound, effective and thorough strategies and procedures for the purpose of as-sessing and maintaining on a permanent basis the amounts, the types and the distribution of the internal capital which they consider ade-quate to cover the nature and the level of the risks to which they are or may be exposed. They shall publish annually the Annual Report on self-assessment of capital.

iii. Finally, article 191.1. SMA requires, at least on an annual basis, duly included in a single document entitled «Information regarding Sol-vency», the information referred to in Part VIII of Regulation (EU) no. 575/2013, of 26 June 2013. In other words, the obligation to disclose relevant information to the market operators regarding certain aspects of the institution’s solvency (own funds, risk exposures, risk assess-ment processes, etc.).


3) Type 3 and 4 BD/SB:

a. Rules on solvency at the individual level (articles 190 and 191 SMA):

i. Capital Ratios:

1. capital ratios referred to in article 92 of Regulation (EU) no. 575/2013 in accordance with the limitations inserted by article 95.2 of the abo-ve-mentioned Regulation;

2. additional requirement relating to the initial capital (article 93 of Re-gulation (EU) no. 575/2013 and Rule Five of CNMV Circular 2/2014); the own funds of the IF may not be lower than the amount of the minimum share capital for its category of IF.

ii. In addition, article 190.2. SMA establishes the obligation to have sound, effective and thorough strategies and procedures for the purpose of evaluating and maintaining on a permanent basis the amounts, the types and the distribution of the internal capital which they consider adequate to cover the nature and the level of the risks to which they are or may be exposed. They shall publish annually the Annual Report on self-assessment of capital.

iii. Finally, article 191.1. SMA requires, at least on an annual basis, duly integrated in a single document entitled «Information regarding Sol-vency», the information referred to in Part Eight of Regulation (EU) no. 575/2013, of 26 June 2013. In other words, the obligation to dis-close relevant information to the market operators regarding certain aspects of the institution’s solvency (own funds, risk exposures, risk assessment processes, etc.).


4) Type 5 BD/SB/PMC

a. Rules on solvency at individual level (articles 190 and 191 SMA):

i. Capital Ratios:

1. capital ratios referred to in article 92 of Regulation (EU) no. 575/2013 in accordance with the limitations inserted by article 95.2 of the abo-ve-mentioned Regulation;

5) Type 6 BD/SB/PMC: there are no capital requirements in addition to those arising from its status as an IF with the form of a public limited liabi-lity company subject to the provisions of Royal Legislative Decree 1/2010, of 2 July, approving the consolidated text of the Corporate Enterprises Act.

5.3.1 Type of investment firm for the purposes of the provisions of articles 190 and 191 of the SMA.

Identify the type of IF which will correspond to the institution, according to the activity in which it will engage:

TYPE DESCRIPTION

1 BD authorised to provide the service of dealing on own account or underwriting or placement of financial instruments on a firm commitment basis.

2 BD which is not authorised to provide the service of underwriting or placement on a firm commitment basis, which will be authorised to provide the service of dealing on own account and which either:

a) will operate for its own account for the sole purpose of executing client orders or of accessing a clearing and settlement system or a recognised market when it acts as an agent or executes client orders.

or: b) will fulfil all the following conditions:

- It will not keep client’s money or securities. - It will only operate for its own account. - It will not have external clients. - The responsibility for the execution and settlement of its

transactions will belong to a clearing institution and will be guaranteed by the latter.

3 BD/SB not authorised to provide the service of dealing on own account nor that of underwriting or placement of financial instruments on a firm commitment basis, which will include in its programme of operations the activity of safekeeping of finan-cial instruments or will keep clients’ instrumental and temporary credit accounts.

4 BD/SB not authorised to provide the service of dealing on own account nor that of underwriting or placement of financial ins-truments on a firm commitment basis, which will not include in its programme of operations the safekeeping of financial instru-ments nor the receipt of funds from the public, so that it may not, in any event, be indebted to its clients, and which will be autho-rized to provide at least one of the following investment services:

a) Placement of financial instruments without a firm

commitment. b) The management of multilateral trading facilities.

5.3.2 Identification of the own funds of the BD/SB/PMC and of its consolidated group

If applicable, indicate the amount of the own funds (see Part Two of Re-gulation (EU) no. 575/2013 and Delegated Regulation (EU) no. 241/2014), at individual and consolidated level for the first year of business.

Individual

(for IFs of type 1 to 5)

Consolidated


Amounts in thousands

of euros

Share Capital

Share Premium

Reserves

Year’s eligible result

Other eligible own funds

(-) Year’s losses

(-) Intangible Assets

(-) Other deductions

COMMON EQUITY TIER 1

Additional Equity Items (Net)

EQUITY TIER 1

Equity 2 Items (Net)

TOTAL EQUITY

If it has other eligible own funds or other deductions which are signifi-cant, explain their nature. Also explain the nature and characteristics of the additional Equity 1 and Equity 2 items.

TYPE DESCRIPTION

5 BD/SB/PMC whose programme of operations does not include the safekeeping of financial instruments nor the receipt of funds from the public, so that it may not, in any event, be indebted to its clients, and which:

a) Will be authorised to provide the service of execution of client orders or of discretionary management of clients’ portfolios.

b) Its programme of operations will only include in addition the service of receipt and transmission of orders or of investment advice.

6 BD/SB/PMC whose programme of operations does not include the safekeeping of financial instruments nor the receipt of funds from the public, so that it may not, in any event, be indebted to its clients, and which: will only be authorised to provide the service of receipt and transmission of orders or that of investment advice.

5.3.3 Identification of the own funds requirements of the BD/SB/PMC and of its consolidated group

5.3.3.1 Risk exposure of the BD/SB/PMC and of its consolida-ted group

Indicate the risk exposure amount, on an individual and consolidated basis, for the first year of business, as established in articles 95, 96 and 97 of Regulation (EU) no. 575/2013, and CNMV Circulars 1/2011 and 2/2014:

Individual


Consolidated


Description of exposures (Amounts in thousands of euros)

Credit Risk

Market Risk

Counterparty Risk

Operational Risk

Others

TOTAL

TOTAL excluding the

operational risk exposure

If the risk exposures amount is calculated in accordance with internal methods, list the documentation which you provide as an annex for the pur-poses of the assessment thereof:

If it is a BD/SB of type 1 to 4, the observance of the additional require-ment relating to the initial capital (article 93 of Regulation (EU) no. 575/2013 and Rule Five of CNMV Circular 2/2014) must be observed. Therefore, the amount of total equity (own funds) shown in the first table of this section may not be less than the amount of initial capital required at the time of its authorisation.

5.3.3.2 Fixed overheads of the BD/SB/PMC and of its consoli-dated group

Indicatethe amount of the fixed overheads and of the risk exposure as-sociated with them, at individual and consolidated level, for the first year of business, as established in articles 95.2 and 97 of Regulation (EU) no. 575/2013, Delegated Regulation (EU) no. 241/2014 and Rule Six of CNMV Circular 2/2014:

5.3.3.3 Capital Buffers

If the BD to be established is an institution of type 1 or 2, indicate whether or not it will be obliged to have capital buffers, under article 196 of the SMA:

YES ➡ Determine the amount of the buffer:

Individual (for IFs of type 1 to 5)

Consolidated (for IFs of type 1 to 4)

Description of the items of expenses (Amounts in

thousands of euros)

Expenses(+) (+)(+)

Deductions (*) (-) (-)(-)

NET TOTAL

25% of fixed overheads

TOTAL risk exposure (12.5 * 25% of fixed overheads)

%Amount

(in thousands of euros)Kind of buffer

ConservationCountercyclical

OthersTOTAL

If the amount of the deductions was significant, explain their nature and the reason for deducting them:

5.3.5 Large Exposure Limits

Indicate whether the BD, if it is a type 1 IF, and, where relevant, the future consolidated group of which the BD will form part, comply with the limits established for the large risks envisaged in Part IV of Regulation (EU) no. 575/2013 and in Rule Ten of CNMV Circular 2/2014:

NO YES ➡ Describe in detail any investment which exceeds

the limit as well as the measures to be adopted in order to comply with the above-mentioned limits:

Type

1

2

3

4

5

Own funds requi-

rements

Sum of risks + capi-

tal buffers

(if it is not an SME)

Sum of risks

(excluding operatio-

nal risk)

+12.5 * 25% fixed

overheads

+ capital buffers

(if it is not an SME)

Greater of:

a) Sum of risks

(excluding

operational risk)

b) 12.5 * 25% fixed

overheads

Risk Exposure

Capital Buffers

Eligible Own

Funds

Group

Eligible Own

Funds BD/SB/

PMC

Capital Ratio

BD/SB/PMC

%

Capital

Ratio Group

%

NO ➡ Explain the reasons why it will not be required:

5.3.4 Calculation of the capital ratios of the BD/SB/PMC and its group

Determine the Capital Ratios of the BD/SB/PMC and of its Group, for the first year of business (expressing the amounts in thousands of euros and the ratios as a %) in order to prove compliance with the minimum ratios requi-red by article 92 of Regulation (EU) no. 575/2013:

5.4 Rules on activity in Spain

5.4.1 Branches

Does it intend to open branches in Spanish territory? (Rule Five of CNMV Circular 1/2013).

NOYES ➡ Indicate:

5.4.2 Agents

Does it intend to hire agents under the terms and conditions established in article 146 of the SMA, in Chapter IV of Title I of RD 217/2008 and in CNMV Circular 5/1998?

NO YES ➡ Describe in detail, if known:

3. When the BD/SB/PMC uses an agent established in another Member State of the European Union, such agent will be treated as equivalent to a branch and will be subject to the provisions of article 165.6. of the SMA for the cross-border activity of a BD/SB/PMC by means of a branch.

5.5 Rules on cross-border activity

Will it provide investment services and/or ancillary services, in the fra-mework of its programme of operations, outside Spanish territory (articles 164, 165, 166 and 167 of the SMA and 55 and 56 of RD 217/2008)?

NOYES ➡ Indicate:

Geographical area of operation ActivitiesLocality

Scope of activity Geographical area of operation First name and surnames or corporate name

Under Freedom to Provide Services3/ Branch

Type of clientsCountry Investment services and ancillary services

Articles 149.3. of the SMA and 16.1.c) of RD 217/2008 establish the duty to provide information, in the framework of the application for authorisa-tion of a BD/SB/PMC, regarding the organisation and resources envisaged for the conduction of the institution’s activity, providing a description of its administrative and accounting organisation, adequate technical and hu-man resources for its programme of operations, as well as the procedures for internal control, access and safeguarding of computer systems.

Articles 152.1.g) of the SMA and 14.1 f) of RD 217/2008 establish, as one of the requirements so that an institution can obtain its authorisation as a BD/SB/PMC, that it has procedures, measures and resources to comply with the organisational requirements provided in paragraphs 2 and 3 of article 193 of the SMA.

Chapter I of Title II of RD 217/2008 and CNMV Circular 1/2014 implement the organisational requirements contained in article 193 of the SMA for BDs/SBs/PMCs, establishing, inter alia, the obligation to have a compliance function and an internal audit function, and to approve risk ma-nagement policies, the minimum requirements which must be observed by such general control and risk monitoring policies being specified in article 194 of the SMA, Title VI of RD 217/2008 and in the above-mentioned CNMV Circular 1/2014.

Those responsible for control functions (compliance, risk management and internal audit) are subject to compliance with the suitability require-ments provided in articles 152.1. f) of the SMA and 14.1.e) of RD 217/2008.

If the BD/SB/PMC intends to delegate services or functions to third parties, articles 152.1.k) of the SMA and 14.1.k) of RD 217/2008 establish the duty to provide adequate documentation regarding such services or functions.

Finally, if the BD/SB/PMC has envisaged the provision of telematic services, it must, in compliance with article 14.1.f) of RD 217/2008, describe the resources which it will have in order to guarantee the security, confiden-tiality and capacity of the service provided.

6. Organisational structure

If it is envisaged in the table above that it will have agents, in accordance with the provisions of articles 165.6 and 166 of the SMA, indicate, if known:

Scope of activity Country of operationFirst name and surnames or corporate name

6.1 Registered Office and Technical Resources

6.1.1 Registered office or Headquarters or Main Office

Street, Avenue: .........................................................................................................Town and Province: ................................................................................................Square metres of premises: ..................................................................................System of possession:

Ownership: Lease:

Will it share the premises with other institutions?

NO Yes

Web domain(s): .........................................................................................................

Person(s), department or area in charge of verifying that the BD/SB/PMC and the institutions of its group, if any, have established the necessary measures (separate areas, information barriers, etc.) to impede the flow of inside information, and to verify that there is an adequate separation of functions between the different areas of activity. (article 229 of the SMA, RD 217/2008, article 6 of Order ECO/734/2004):

.........................................................................................................................................

.........................................................................................................................................

6.1.2 Technical Resources

Software applications: computer-related control and security mechanisms.

• Identify the person(s), department or area in charge of verifying the sufficiency of the computer equipment and software applications and the adequate functioning thereof, and of guaranteeing the security, confidentiality, reliability and capacity of the service provided by electronic means: ………………………………………………..……….

• Does it intend to establish a system of personal keys to access the different levels of software applications which guarantee their security?

NO YES

Identify the total number of persons that will work in the institution, both as employees and on a self-employed basis: ....................

Complete, for each Department or Area identified in the organisational chart above, the information required in the table below:

6.2 Organisational structure envisaged

The BD/SB/PMC must have an organisational chart with defined, transpa-rent and coherent lines of responsibility, adequate and proportionate to the activities envisaged.

Describe in detail the organisational structure envisaged:

(*) If a person is going to simultaneously provide services in different departments or areas of the BD/SB/PMC, you must identify them, in-dicating the % of time which such person will devote to each of them. Likewise, in relation to the no. of persons that simultaneously provide services in other institutions, you must identify the institutions in question as well as the % of time that they will devote to the BD/SB/PMC.

6.3 Functions by department or area

Taking into account each of the investment and ancillary services and ancillary activities indicated in the programme of operations envisaged and on the basis of the organisational structure described in the Organisational Chart above, complete:

Investment/ ancillary

service/ancillary activity

Departments or Areas which perform

middle-office functions

Departments or Areas which

provide it (front office)

Departments or Areas which

perform back-office functions

Department or Area Personnel assigned

Name Internal Total no.Outsourced No. on a full-time basis

No. on a part-time basis (*)

Personnel that simultaneously provide services

in different departments or areas of the BD/

SB/PMC

Personnel that simultaneously provide services

in other institutions

(*) If any of the functions is going to be delegated to third-party institutions, reference shall be made to the information in this respect in section 6.5. “Delegation of Functions” of this Guide. If the persons in charge of control functions have yet to be hired, this shall be stated, indicating the professional profile required.

Information regarding the units which will assume control functions: compliance, risk management and internal audit.

• Identify, in accordance with the provisions of articles 193 and 194

of the SMA and articles 28, 29 and 30 of RD 217/2008 and of CNMV Circular 1/2014, the person(s) or departments or areas that are going to be responsible for the performance of control functions (compliance, risk management and internal audit):

• For the assessment of their suitability under the terms provided in articles 152.1.f) of the SMA and 14.1.e) of RD 217/2008, each of the persons listed in the table above must provide:

- Their questionnaire on integrity (QI), a standard form of which is attached.

- A current certificate of their criminal record (CR) issued by the Spanish Ministry for Justice and/or by the equivalent Body at the home countries where the candidate has engaged in his/its professional acti-vity in the last 10 years.

In the case of citizens of the European Union who are not Spanish, the Spanish Central Registry of Convicted Persons shall request from the central authority of the State of nationality of the person who makes the request, information regarding such criminal history in order to be able to include it in the certificate which is furnished to him.

- In the case of functions which are going to be assumed by natural persons, a Curriculum Vitae or Academic and Professional History (CV) proving their knowledge and experience in the performance of the relevant control function.

If such functions are going to be assumed, by delegation, by legal persons: a document, signed by those in charge of such institutions to which functions are delegated, proving their knowledge and experience in the performance of similar functions in other financial institutions.

First name and surnames / corporate name(*)

Control function to be carried out QI CVCR

• The following documents are attached:

Declarations of the applicants for authorisation to establish the BD/SB/PMC (in accordance with article 14 quinquies. 1. a) of RD 217/2008), relating to the assessment performed of the observance by the proposed candidates of the requirements of integrity, knowledge and experience imposed in articles 152.1. f) of the SMA and 14.1.e) of RD 217/2008, according to the standard form attached as Annex VIII.

In relation to any persons in charge of control functions that have yet to be hired at the time of the application for authorisation of the BD/SB/PMC, an undertaking is provided of the applicants for authorisation to establish the BD/SB/PMC to send, at the time of the application for regis-tration of the BD/SB/PMC in the administrative registry of the CNMV, their identification, CV, certificate of criminal record and questionnaire on integrity, and to send the written Declarations of the applicants for authorisation to establish the BD/SB/PMC (in accordance with article 14 quinquies. 1. a) of RD 217/2008), relating to the assessment performed of the observance by the proposed candidates of the requirements of inte-grity, knowledge and experience imposed in articles 152.1. f) of the SMA and 14.1.e) of RD 217/2008, according to the standard form attached as Annex VIII.

Indicate the person(s) or department or area that is going to perform the following functions; if it is not known, indicate the professional profile re-quired:

Head of the customer service department or service and, where relevant, customer Ombudsman (article 5 of Order ECO/734/2004):

...........................................................................................................................................Internal control body responsible for the application of the proce-

dures for prevention of money laundering and of the financing of terrorism (article 35.1. of RD 304/2014):

..........................................................................................................................................

Representative at the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences, who will be responsible for the fulfilment of the information obligations established in Act 10/2010 (article 35.1. of RD 304/2014):

..........................................................................................................................................

Person(s), department or area responsible for the recording in the accounts of all transactions relating to clients’ securities and financial instruments (article 193.2.d) of SMA) so that the institution’s internal records allow one to ascertain at all times the position of securities and pending transactions, and of funds, of each client (article 193.2.e) and 193.3.c) of the SMA):

..........................................................................................................................................

Person(s), department or area responsible for keeping the accounting of the BD/SB/PMC, and for the filing in the CNMV of the financial and

solvency information which is applicable to the institution (article 27.4. of RD 217/2008):

..........................................................................................................................................

Person(s), department or area responsible for verifying that the BD/SB/PMC and its group, where relevant, has sound, effective and thorough strategies and procedures for the purpose of assessing and maintaining on a permanent basis the amounts, the types and the distribution of the internal capital which they consider adequate to cover the nature and the level of the risks to which they are or may be exposed (article 190.2. of the SMA):

..........................................................................................................................................

Person(s), department or area responsible for verifying that the BD/SB/PMC has the records which are applicable to it (articles 32 and 33 of RD 217/2008 and CNMV Resolution of 7 October 2009):

..........................................................................................................................................

Person(s), department or area responsible for verifying that the systems of remuneration and of establishment of incentives of its management body, employees and authorised representatives comply with the statutory provisions established in this respect (articles 188 of the SMA and 31 quinquies of RD 217/2008):

...........................................................................................................................................

Person(s), department or area of the BD responsible for the prepara-tion, if applicable to it, of the recovery plan under the terms provided for this purpose by Act 11/2015, of 18 June, and by Royal Decree 1012/2015, of 6 November, which gives effect to that Act:

..........................................................................................................................................

Indicate the person(s) or department or area that will be in charge of applying and monitoring the policies/systems relating to the appropriate-ness assessment, the incentives, the handling of conflicts of interest and the execution, accumulation and attribution of orders:

Applying the policy/system Monitoring the policy/system

Monitoring the policy/systemPolicy/system

Will the BD/SB/PMC have training plans which guarantee that its person-nel are aware of the characteristics and the risks of the financial instruments in relation to which it provides services?

NOYES

Describe briefly the experience and specific qualification of the personnel engaged in the provision of the investment services of discretionary portfo-lio management and investment advice, and, if it is going to engage in acti-vities relating to derivative financial instruments or to unlisted securities, of the rest of the personnel engaged in these activities.

First name and surnames/Category: ......................................................................

Knowledge and experience/profile: .......................................................................

6.4 Requirements regarding internal organisation, internal control policies, procedures and mechanisms

Articles 152.1.g) and 193 of the SMA and 14.1 f) and Section 1 of Chapter I of Title II of RD 217/2008 provide that BDs/SBs/PMCs must have adequate internal control procedures and mechanisms which guarantee the proper and prudent management of the company, including risk management pro-cedures.

Furthermore, article 194 of the SMA, Title VI of RD 217/2008 and CNMV Circular 1/2014 establish the requirements which must be observed by the general policies for control and monitoring of risks which may be establi-shed by BDs/SBs/PMCs.

An undertaking is attached relating to the establishment of an or-ganisational structure, technical and human resources, administra-tive, accounting and internal control procedures (see ANNEX VII), which will be submitted for the registration of the BD/SB/PMC.

The BD/SB/PMC must draw up manuals which describe the policies and procedures applicable to the activities to be carried on.

Indicate:

- Body(ies) in charge of developing them: ………………………………………………..

- Body in charge of approving them: …………………………………………………………

- Body in charge of supervising compliance with them: ……........................

Frequency …………………..

- Body in charge of updating them: ………………………………………………………………

Frequency …………………..

- Body in charge of checking that the persons/areas affected are adequa-tely informed of the procedures applicable to them: ……………………………

6.5 Delegation of functions

Articles 152.1.k) of the SMA and 14.1 k) of RD 217/2008 establish among the requirements for the authorisation of a BD/SB/PMC the possibility of delegating services, functions or activities, provided that this does not distort the authorisation sought or render it devoid of content.

In addition, article 193.3. d) of the SMA provides that BDs/SBs/PMCs which delegate the performance of investment services or the discharge of essential functions for the provision of such services must adopt the neces-sary measures so that the operational risk is not unduly increased.

Finally, section 4 of Chapter I of Title II of RD 217/2008 defines the con-cept of essential function and regulates, inter alia, the conditions for dele-gating the performance of investment services or the discharge of essential functions for the provision of such services.

6.5.1 Delegation of internal control functions

Indicate the internal control functions which it intends to delegate

6.5.2 Other delegations

Does it intend to delegate some other activity or service in addition to those mentioned above?

NOYES ➡ Briefly describe them, identifying the functions, ac-

tivities or services to be performed and the institu-tions to which they will be delegated:

Tax Identification Code/Number Corporate Name / First Name and

Surnames

Delegatee

Function which is delegated(mark with an X if affirmative)

Internal Audit

Compliance

Risk Management

Is it planned to have a contingency plan which allows, in the event of damage or catastrophes, the continued and regular provision of services?

NOYES ➡ Provide brief information:

Indicate the frequency of making backup copies of information:………………………………….......……………………………………………………………………….........

Indicate the person or department of its organisational structure which will be in charge of supervising the functions or services delegated:

Do any of the above-mentioned delegatees belong to the group, if any, of which the BD/SB/PMC will form part?

NOYES ➡ Indicate which of them:

6.6 Security mechanisms and contingency plans

Brief description of physical safeguard plans, filing and access to docu-mentation, indicating, where relevant, whether there is any archive for the safekeeping of backup copies located outside the institution:

6.7 Other information of interest relating to the organisational structure not envisaged in the previous sections

Other information:

7.1 Internal Rules of Conduct

Articles 152.1. h) of the SMA and 14.1 g) of RD 217/2008 establish among the requirements so that an institution may obtain its authorisation as a BD/SB/PMC the obligation to have Internal Rules of Conduct in compliance with the provisions ot the SMA.

In this respect, article 16.1 f) of RD 217/2008 provides that the application for authorisation of a BD/SB/PMC must be accompanied by Internal Rules of Conduct in which the rules on personal transactions of its management body members, employees and authorised representatives are provided.

Internal Rules of Conduct (IRC) are enclosed:

IndividualGroupFOGAIN (General Investment Guarantee Fund) standard form(*)

7. Rules of conduct

Chapter I of Title VII of the SMA provides that BDs/SBs/PMCs must observe the rules of conduct contained in the above-mentioned title, the Codes of Conduct which may be approved by the Government and the rovisions of their own Rules of Conduct.

In addition, it establishes the obligation of BDs/SB/PMCs to classify their clients as retail clients, professional clients and eligible counterparties, and to keep them adequately informed.

Title IV of RD 217/2008 develops the system of information for clients of BDs/SBs/PMCs.

7.2 Client Protection Regulations

Since Order ECO/734/2004, which gives effect to Act 44/2002, establishes the need to deal with the complaints and claims of clients, institutions must have a customer service department or service and Client Protection Regu-lations.

Applicants undertake to enclose, at the time of applying for registration of the BD/SB/PMC in the administrative registry of the CNMV, the Client Protection Regulations

(*) In this case only a document certifying its intention to adhere to the standard form must be sent to the CNMV.

Person or department in charge of supervising the adequacy of the infor-mation indicated in the previous section and the transmission to clients, as established in article 60 of RD 217/2008:

7.3 Information Booklet of Maximum Fees and Chargeable Expenses

RD 217/2008 establishes the need for BDs/SBs/PMCs to draw up an infor-mation booklet of fees for all the activities in which the institution habitually engages. In this respect, Order EHA/1665/2010 and CNMV Circular 7/2011 regulate the minimum content of the information booklet of fees and the rules on publicity of such fees.

Applicants undertake to enclose, at the time of applying for registration of the BD/SB/PMC in the administrative registry of the CNMV, the Fee Booklet (according to the standard form in annex I of CNMV Circular 7/2011)

7.4 Information for clients

Article 209 of the SMA provides that BD/SB/PMC must keep their clients adequately informed at all times. All information aimed at clients must be impartial, clear and not misleading. Clients must receive from the BD/SB/PMC adequate reports on the service provided.

In this respect, Chapter I of Title IV of RD 217/2008 establishes, inter alia, the conditions which must be fulfilled by the information in order to be impartial, clear and not misleading, as well as more specific aspects of the information which the BD/SB/PMC must send to clients within the scope of its activity.

7.4.1 Department or area in charge of preparing and supervising information and of classifying clients.

In line with its programme of operations indicate the department(s) or area(s), which appear in the institution’s organisational chart, which are going to prepare information for clients, including potential clients, in ac-cordance with the provisions of articles 62 et seq. of RD 217/2008:

Person or department in charge of supervising the classification of clients in accordance with the internal policies and procedures which the BD/SB/PMC has established for this purpose, in accordance with the provisions of article 61.4 RD 217/2008:

7.4.2 Information route in the case of branches or agents

If it will operate through branches or agents, explain the route which will be followed by information to clients:

7.5.2 Identification of client

If it is envisaged that orders will be received by remote communication (telephone, internet, etc.). Briefly describe for each channel of receipt, the procedures and systems used to guarantee the identification of the client:

7.5 Marketing

7.5.1 Marketing Channels

Indicate the marketing channels which the BD/SB/PMC intends to use:

YES NOFace-to-face Telephone Internet Others(*)

(*) If affirmative, describe them:

7.5.3 Prior information for clients

If it is envisaged that orders will be received by remote communication (telephone, internet, etc.). Briefly describe the procedures and systems used to ensure the effective delivery, or availability to clients, of the information required by law prior to the provision of the service in question, in accordan-ce with the provisions of articles 62 et seq. of RD 217/2008:

7.5.4 Knowledge of investment products and training plan of salespersons

Indicate the department or area in charge of ensuring that the persons in charge of marketing the investment products know the characteristics and the risks inherent in them and that the transmission of information to clients is correct.

Indicate the training plans envisaged, if any:

7.6 Other information of interest

ANNEXES

I hereby undertake to carry out the necessary procedures for .......................................................................................................... to join the Investment Guarantee Fund (*), when I obtain the authorisation for the establishment thereof, and in any event prior to the registration in the CNMV Registry of Investment Firms, in accordance with the provisions of Title VI of the SMA and of RD 948/2001.

In .........................., on ...... ...................., 20...

Signed: ..................................................

ANNEX IUndertaking to join the investment guarantee fund

(*) For the processing of membership you must contact Gestora del Fondo General de Garantía de Inversiones, S.A., at Paseo de la Habana no. 72, Madrid. Tel. 91 443 06 50.

This certificate is only for information purposes in relation to the existence of insurance and does not amend, extend or restrict howsoever the content of its General, Particular and Special Conditions, which have been accepted by the insured and govern the cover of the policy which is summarised below.

INSTITUTION Corporate name of the PMC: ........................................................................................................................ The insurer ...................................................................... with an address at ...............................................

.................. (street), in ............................, holder of Tax Identification Code ...................................

C E R T I F I E S

That it has entered into a Professional Civil Liability Policy, recorded with num-ber ................. with effect on …..../….../......... and expiring on …..../….../........., under which the Insured is .........................................., with an address at ....................................

The validity of this Certificate is subject to proof that the premium for the insured period indicated has been actually paid.

That, under the terms and conditions agreed by contract in the policy indica-ted above, the Professional Civil Liability which may arise due to negligence in the course of its professional activity in the entire territory of the European Union, as established in article 15 of RD 217/2008, of February 15 (BOE (Official State Gazette) of 16.2.08), is covered, with the following cover and the limits on the sums insured:

Civil Liability per claim € ...........................Civil Liability per year of insurance: € ...........................

That, in accordance with the conditions of the policy, in the event of a claim, the deductible(*) indicated below is applicable:

Applicable in each claim: € ...........................

That claim shall mean any claims which are submitted to the insurer while the policy is in force, provided that the event giving rise to the obligation to indemnify has occurred during that period or one year prior to the date of entry into force of the insurance, it be-ing necessary in the latter case, for the insured not to have been aware of the events which might give rise to a claim at the time of obtaining the insurance.

That claims submitted to the insurer during the year after the cancellation of the policy are also covered provided that the event giving rise to them has occurred while the policy is in force.

That for the purposes of applying the insured limit, all claims arising from the same event giving rise to civil liability (series of events) will be considered a single claim.

In witness whereof, in relation to the relevant parties, this certificate is issued in ............................, on ............... ............................................., ............

ANNEX IIDraft general certificate for professional civil liability insurance

(*) If a deductible applicable to each claim is established, the applicant for the authorisation of the establishment of the PMC, must also provide an independent expert’s report which proves the equivalence of the cover.

1. COMMENTS

Purpose

To collect information in relation to the requirements of:

- Integrity and good governance of the chairmen, vice-chairmen, management body members or directors, general managers and similar officeholders, of investment firms (IFs).

- Integrity and good governance of the chairmen, vice-chairmen, management body members or directors, general managers and similar officeholders of parent institutions of IFs.

- Integrity and good governance of the natural persons who are representatives of legal persons that are chairmen, vice-chairmen, management body members or directors, general managers and similar officeholders, of the IF or of its parent institution.

- Integrity of the persons in charge of internal control functions and other key function holders for the daily conduct of the activity of IFs and of their parent institutions, if any.

- Integrity of shareholders with a direct and/or indirect qualifying holding in the IF.

Who must complete the questionnaire and in what procedures?

In applications for authorisation of an IF, it must be completed by:

- The persons proposed to hold the offices of chairmen, vice-chairmen, management body members or directors, general managers and simi-lar officeholders, of the IF and, where relevant, of its parent institution.

If management body members or directors are legal persons, the questionnaire must be completed in relation to such legal person and to the natural person that is its representative on the management body of the IF or of its parent

institution.

- The persons proposed to occupy offices responsible for internal control functions and holders of other key posts for the daily conduct of the activity of the IF and, where relevant, of its parent institution.

- The shareholders who will hold a significant direct or indirect sharehol-ding in the IF.

ANNEX IIIQuestionnaire on integrity and good governance

Instructions for completion

- A) The relevant reply must be indicated with an “X” and all pages of the questionnaire, as well as those attached to it, must be submitted duly signed.

- B) Any natural person who, on behalf of a legal person, replies and signs the questionnaire must sufficiently prove his representative authority.

- C) Questions 17 and 18, relating to the conditions for engaging in good governance at the IF or at its parent institution, must be answered solely by members of its management body, general managers (CEO) or similar officeholders.

- D) Except for those that refer to circumstances that can only affect natu-ral persons, the questions must be answered taking into account both the individual activity -business or professional- of whoever answers the questionnaire, and that carried out in the discharge of the duties of management offices at legal persons.

Management offices shall mean those of directors or members of collective management bodies, general manager or similar officehol-ders, the latter being the persons who carry out senior management functions reporting directly to the management bodies or to their executive committees or managing directors.

Thus, for example, in relation to question 8 it must be borne in mind whether insolvency proceedings have been pursued either in rela-tion to whoever completes the questionnaire as an individual trader or professional, or in relation to legal persons at which he has held a management office, according to the definition given.

- E) If an affirmative reply is given to a question, the information relating to the subject matter of that question must be stated on a separate sheet. In particular, in the case of convictions for offences or misde-meanours or of penalties for the commission of administrative infrin-gements (questions 9, 10 and 11), the following must be indicated:

- The wilful or reckless nature of the offence, misdemeanour or admi-nistrative infringement.

- Whether or not the conviction or penalty may or may not be appealed.

- The seriousness of the conviction or penalty imposed.

- The classification as an offence or infringement of the facts which gave rise to the conviction or penalty, especially in the case of property-related offences, money laundering, offences against the public interest and against the Treasury and the Social Security system, or which involve infringement of the rules regulating the conduct of banking, insurance or securities market activity, or in relation to money laundering or consumer protection.

- Whether the acts which gave rise to the conviction or penalty were performed for one’s own benefit or to the detriment of the inte-rests of third parties the administration or management of whose business affairs has been entrusted to you and, where relevant, the relevance of the acts for which the conviction or penalty was imposed in relation to the functions which have been assigned or are going to be assigned to the office in question at the institution.

- The time barring of criminal offences or administrative infringe-ments or the possible extinguishment of liability.

- The existence of mitigating or aggravating circumstances (inter alia, the recurrence of convictions or penalties for offences, misde-meanours or infringements).

- F) The information obtained by means of this questionnaire will be used solely in the procedure pursued for the assessment of suitabili-ty for the office for which the person concerned has been designated.

- G) In cases in which professional or business activities have been carried out on an individual basis or management offices have been held outside Spain, the questions will be deemed to refer both to the activity carried out in Spain and to the legal circumstances which are or have been in the relevant country similar to those of the activities the subject matter of the questionnaire in Spain.

2. IDENTIFICATION

DATA ON THE IF WHICH GIVES RISE TO THE ASSESSMENT OBLIGATION

Corporate name of the IF:

Registration no. at the CNMV (if any):

Corporate name of the parent institution of the IF, only in the case of appointments to offices at the latter:

DATA ON NATURAL PERSON / REPRESENTATIVE OF LEGAL PERSON (NATURAL PERSON)

First name and surnames:

Tax identification no./passport no./ residence card no.:

Nationality:

Date of birth:

Address:

Telephone:

E-mail:

Legal person that he represents, where relevant:

DATA ON LEGAL PERSONCorporate name:

Tax identification code (or equivalent number for foreign legal persons):

Address:

Telephone:

Webpage:

Representing it: First name and surnames:

Tax identification no./passport no./ residence card no.:

Address:

Telephone:

E-mail:

Office which he holds at the company:

3. QUESTIONS

3.1. PERSON BOUND

(1) Does this questionnaire relate to a natural or legal person designated to hold an office subject to assessment at the IF?

YES NOIf so, indicate the office to which such person has been appointed:

(2) Does this questionnaire relate to a natural or legal person designated to hold an office subject to assessment at the parent institution of the IF?

YES NOIf so, indicate the office to which such person has been appointed:

(3) Does this questionnaire relate to a natural or legal person that intends to be a shareholder with a qualifying holding in the IF or, in the case of IFs already registered in the Administrative Registry of the CNMV, that has decided to acquire a qualifying holding in the IF, or either to exercise significant influence at such institution, or to increase his/its stake so that the resulting percentage stake is equal to or greater than the legislative thresholds (20, 30 or 50 per cent)?

YES NOIf so, indicate the direct or indirect stake which such person will hold in the IF:

3.2. INTEGRITY

(4) Have you engaged or do you currently engage, on a habitual basis, in professional or business activities outside Spain? YES NO If so, indicate the countries:

(5) Have you previously had relations, in the course of your professional activity, with national or foreign regulatory and supervisory authorities, other than the CNMV?

YES NO If so, indicate those authorities:

(6) Have you been dismissed or removed from administrative and/or mana-gement or similar posts previously held?

YES NO If so, identify the companies from which you were dismissed or

removed and the reasons for the dismissal or removal offered by them:

(7) Have you held posts of responsibility in credit institutions or in invest-ment firms which have undergone a recovery or resolution process?

YES NO

(8) Have any judicial insolvency proceedings been pursued or are such pro-ceedings being currently pursued in relation to you?

YES NO If so, provide the essential data of the proceedings. In addition, if

the pursuit of such proceedings already ended, indicate whether you were disqualified in accordance with Insolvency Act 22/2003, of 9 July, without the disqualification period established in the judgment assessing the insolvency having expired, or whether you were declared an undischarged bankrupt and insolvent in insolvency proceedings prior to the entry into force of the afore-mentioned Act.

(9) Have you been convicted of offences or misdemeanours?

YES NO If so, provide the information referred to in section 1.E of this ques-

tionnaire.

(10) Has any penalty been imposed on you for the commission of administrative infringements of the rules regulating the conduct of banking, insurance or securities market activity, or in relation to money laundering or consumer protection?

YES NO If so, provide the information referred to in section 1.E of this

questionnaire.

(11) Has any relevant penalty been imposed on you for administrative infringements other than those mentioned in the previous question?

YES NO If so, provide the information referred to in section 1.E of this

questionnaire.

(12) Has some intervention or substitution measure been applied to you under the provisions regulating the financial system and the institutions which operate within it?

YES NO

(13) Are you disqualified or involved in a disqualification procedure, in Spain or abroad, from holding public office or administrative or manage-ment posts in financial institutions or other kind of companies?

YES NO If so, provide the essential data of the procedure.

(14) Have you been sued or have you been the subject of enforcement in any judicial declaratory or enforcement proceedings on grounds of breach of contractual obligations or non-payment of debts?

YES NO If so, provide the essential data of the proceedings.

(15) Do you have a criminal record, in Spain or abroad?

YES NO If so, indicate the offence or offences which have caused it:

(16) Are you the subject of criminal or administrative proceedings or investigations concerning facts relating to property-related offences, money laundering, offences against the public interest and against the Treasury and the Social Security system, or for infringement of the rules re-gulating the conduction of banking, insurance or securities market activity, or in relation to money laundering or consumer protection?

YES NO If so, indicate the type of facts investigated, the stage of the

proceedings, the procedural situation of the person concerned, the offence, the misdemeanour or the administrative infringement of which you are accused (indicating the seriousness thereof), the sentences or penalties provided and the mitigating or aggravating circumstances, if any, which are envisaged.

3.3. GOOD GOVERNANCE

(17) Are there circumstances or situations which may give rise to potential conflicts of interest with the institution, which may pose an impediment or difficulty in engaging in good governance at the institution, arising from:

- the offices held in the past or at present in the same institution or in other public or private organisations?

YES NO If so, describe in detail the aforementioned circumstances or situations.

- your relations (professional or business or, where relevant, personal) with the institution itself, its parent or subsidiaries or with the members of their respective management bodies, and with the shareholders that con-trol it?

YES NO If so, describe in detail the aforementioned circumstances or situations.

(18) Are you in a position to devote sufficient time to duly carry out the functions involved in the office?

YES NO

I DECLARE, UNDER MY RESPONSIBILITY, that the statements contained in this questionnaire are true and I authorise the National Securities Market Commission to consult public files in order to confirm them.

I also DECLARE that a sufficient power of attorney to sign this docu-ment was granted to me on ………………….. (date) (representative of legal persons).

In .............................., on ...... ......................., 20.........

Signed: ..................................................

1. Identify the candidate assessed.2. Identify the office which will be held by the candidate assessed in the BD/SB/PMC or in the parent institu-

tion. In the case of natural persons that are representatives of members of management bodies of the SSB/PMC that are legal persons, this must be stated.

Mr./Ms. ......................................................................................................, as applicant for the authorisation to establish the BD/SB/PMC, declares that:

1) in accordance with the obligation provided in articles 183.2. of the con-solidated text of the Securities Market Act, approved by Royal Legislati-ve Decree 4/2015, of 23 October (SMA) and 14 quinquies.1. a) of Royal Decree 217/2008, of 15 February (RD 217/2008), he/she has considered tha1 ....................................... has complied, in relation to the office of2 ...................................... which he/she is going to hold at the BD/SB/PMC or at the latter’s parent institution, with the requirements envisaged in articles 152.1.f) of the SMA and 14.1. e) of the RD 217/2008, of::

Business and professional integrity Knowledge and experience Capacity to engage in good governance in accordance with the definitions of business and professional integrity, knowledge and experience and of capacity to engage in good governance established in article 182 of the SMA and implemented in articles 14 bis., 14.ter. and 14.quater. of the RD 217/2008.

2) the candidate assessed has responded affirmatively to some of the ques-tions indicated in questions 9, 10 or 11 of his/her questionnaire on inte-grity and good governance:

NO YES ➡ In this case, details must be attached on a separate sheet

of the analysis performed in this respect by the units or bodies of the SSB/PMC1 in charge of applying the internal procedure for assessment of suitability of the members of its management body or general management, and of the reasons which lead to the final conclusion that the candi-date assessed complies with the requirements of business and professional integrity under the terms established in securities market legislation.

Signed: ...................................................................... In .............................., on ...... ..............................., 20........

Annex IVAssessment by the applicant for the authorisation of the suitability of the candidate proposed to be mem-ber of the management body or to be the general manager (CEO) or similar officeholder, of the BD/SB/PMC or of its parent institution

Mr./Ms. ................................................................................................................, as applicant for the authorisation to establish the BD/SB/PMC, declares that he/she has confirmed that1.................................................., as a member of its management body2 with executive functions/ general manager/similar offi-ceholder3 of the BD/SB/PMC, complies with the rules on incompatibilities and restrictions established in article 184 of the SMA, and does not hold at the same time, further offices apart from those envisaged for credit institu-tions in article 26 of Act 10/2014, of 26 June, taking into account, for this purpose, the criteria established in paragraphs 2 and 3 of rule 34 of Banco de España Circular 2/2016, of 2 February.

Also enclosed, for information purposes, is an explanatory table of the list of offices, if any, held by ..................................................., in other institu-tions, indicating whether they are executive or nonexecutive offices, the group to which such institutions belong, whether they form part of an institutional protection scheme, whether the BD/SB will have a qualifying holding in them or whether they are non-profitmaking organisation or or-ganisations which do not pursue commercial purposes.

Signed: ......................................................................

In .............................., on ...... ..............................., 20..........

1. Identify the candidate assessed.2. In the case of a natural person who is a representative of a member of the management body that is a legal

person, this must be stated.3. Delete where not relevant.

Annex VAssessment by the applicant for the authorisation of the rules on incompatibilities and restrictions of candidates proposed to hold directorship in the management body or to be the general manager (CEO) of the IF

Corporate

Name of

the institution

YES NO YES NOYES NO YES NO

Group to which it belongs

LIST OF OTHER INSTITUTIONS IN WHICH1 HOLDS OFFICES

Executive

nature of the

office

Office which

he holds

The institution

forms part of

an IPS

The BD/SB has

a qualifying

holding in the

institution

The institution

is a non-profit-

making

organisation

or one which

does not pursue

commercial

purposes

Inve

stm

ent F

irm

nam

e:

Complete the standard form of programme of operations attached below:

ANNEX VIProgramme of operations of the BD/SB/PMC

Inve

stm

ent F

irm

nam

e:

INSTITUTION Corporate name of the BD/SB/PMC: .................................................................

For the registration of the institution in the CNMV registry, it will be necessary to enclose a certificate of the Secretary of the Management Body of the BD/SB/PMC in which he certifies that the Management Body of the BD/SB/PMC, in compliance with the provisions of articles 152.1.f), paragraphs 2 and 3 of article 193 and article 194 of the SMA, and of article 14.1 f), of Section 1 of Chapter I of Title II and of Title VI of RD 217/2008, and of CNMV Circular 1/2014, has adopted resolutions to establish the necessary procedures, measures and rsources to comply with the organisa-tional requirements in keeping with what is established in this Guide.

Signed: ........................................................

ANNEX VIIEstablishment of organisational structure, human and technical resources and administrative and internal control procedures

ANNEX VIIIAssessment by the applicant for the authorisation of the suitability of the candidate proposed as control functions officer (compliance, risk management, internal audit) of the BD/SB/PMC

Mr./Ms. ....................................................................................................., as applicant for the authorisation to establish the BD/SB/PMC, declares that:

1) in accordance with the obligation provided in article 14 quinquies.1. a) of Royal Decree 217/2008, of 15 February (RD 217/2008), he/she has con-sidered that1 ....................................... has complied, in relation to the office of2...................................... which he/she is going to hold at the BD/SB/PMC, with the requirements envisaged in articles 152.1.f) of the SMA and 14.1. e) of the RD 217/2008, of:

Business and professional integrity Knowledge and experience

in accordance with the definitions of business and professional integrity and knowledge and experience established article 182 of the SMA and im-plemented in articles 14 bis. and 14.ter. of the RD 217/2008.

2) the candidate assessed has responded affirmatively to some of the questions indicated in questions 9, 10 or 11 of his/her questionnaire on integrity and good governance:

NO YES ➡ In this case, details must be attached on a

separate sheet of the analysis performed in this respect by the units or bodies of the SSB/PMC1 in charge of applying the inter-nal procedure for assessment of suitability of the members of its management body or general management, and of the reasons which lead to the final conclusion that the candidate assessed complies with the requi-rements of business and professional inte-grity under the terms established in securi-ties market legislation.

Signed: ...................................................................... In .............................., on ...... ..............................., 20...........

1. Identify the candidate assessed.2. Identify the control function (compliance, risk management or internal audit) which will be assumed by the

candidate proposed.

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