Clearing, Settlement & CNMV in Spanish Markets

Posted on Mar 1, 2025 in Economy

Clearing and Settlement

Clearing and settlement are fundamental processes in financial markets. After a trade is executed, the record is submitted to the clearing agency, which matches the buyer and seller records and confirms that the counterparts agree to the terms. The agency reports discrepancies to traders in case the reports do not match, who then try and resolve them. After the clearing process is performed, through settlement, agencies fulfill the delivery requirements of the securities object of a trade.

The settlement agency receives cash from buyers and securities from sellers and, at the end of the process, gives the securities to the buyer and the cash to the seller. Agencies perform an important function in case a trader is not trustworthy or creditworthy.

CNMV: The Spanish Securities Market Commission

The CNMV (Comisión Nacional del Mercado de Valores) is the agency responsible for monitoring and inspecting the Spanish stock markets and the activity of all the agents involved in them. It was created by Act 24/1988 on Securities Markets.

The aim of the CNMV is to ensure the transparency of the Spanish securities markets, the correct formation of prices on these markets, and the protection of investors by promoting disclosure of any information necessary in order to attain these ends.

Control Functions of the CNMV

  • Ensure the transparency of markets.
  • Enforce compliance with the standards of conduct by all participants involved in the securities markets.
  • Make the necessary arrangements for the development and enforcement of adopted rules in implementing the law.
  • Monitor the correct formation of prices.

Supervisory Functions of the CNMV

  • Examine the requirements for Dealer-brokers or Brokers in order to become members of the stock exchanges.
  • Verify the requirements to issue and admit securities to trading.
  • Receive information on acquisitions and transfers of shares in listed companies.

Advisory Functions of the CNMV

  • Advise administration officials on the securities market. One of the functions of the CNMV is to advise the Government and the Ministry of Finance on matters relating to the securities markets.
  • Promote the dissemination of market information.

Organizational Structure of the CNMV

The CNMV is managed by the CNMV Board that consists of:

  • A president (appointed by the Government) and a vice-president
  • Secretary General of Treasury and Financial Policy
  • Deputy Governor of the Banco de España
  • Three advisors

The CNMV Board shall exercise the powers assigned by law and assigned to it by the Government or the Ministry of Economy and Competitiveness. The organization also includes an Advisory Committee, an Executive Committee, and three Director Generals.

Functions of the Board

  • To approve the Circular to which Article 15 of the Securities Markets Act refers.
  • To approve the Regulations of the internal regime of the CNMV.
  • To approve the draft budget of the Commission.
  • To constitute the Executive Committee.