Securities Market and Financial Operations in Spain

Securities Market Law (LMV) in Spain

The Securities Market Law (LMV) regulates both the primary and secondary securities markets in Spain. Key concepts and entities include:

Placement Firm: The broker acquires all the securities and subsequently attempts to sell them on the market.
Selling Syndicate: The investment services firm seeks individuals or entities interested in acquiring the securities, returning any unsold securities to the issuer.
Firm Commitment Underwriting: The investment services firm underwrites the issue and assumes the risk of any unsold securities. This is a direct placement technique.

National Securities Market Commission (CNMV): The regulatory body overseeing the Spanish stock market. Its objectives are to ensure the transparency of securities markets, proper price formation, and investor protection.
Investment Services Firm: A financial institution whose primary activity is providing investment services to third parties on a professional basis.
Portfolio Management Companies: Manage portfolios and provide advice on behalf of multiple investors.
Securities Holdings: All investments are financial products, representing assets.
Investment Guarantee Fund: Assets without legal personality, represented and managed by one or more fund management companies, with participation from investment services firms that created the fund.

Primary Markets: Facilitate the acquisition of new liabilities or financial assets.
Secondary Markets: Enable the buying and selling of existing securities already held by individuals or entities.
Holding Company: A company that controls and directs subsidiaries by owning their shares.

Iberclear: Established in response to the Law on Measures to Reform the Financial System, it handles the accounting for book-entry securities and manages clearing and settlement.
Stock Exchange Governing Body: Each stock exchange is organized, managed, and administered by one of these companies, providing support to member entities.
Spanish Stock Exchange Interconnection System (SIBE): A computer network interconnecting the four Spanish Stock Exchanges.
Auctions: Periods during which investors can enter, modify, and cancel orders without executing transactions.

Open Session: Continuous trading session with ongoing order entry and trade execution.
Volatility Auctions: Five-minute auctions triggered when price swing limits, considered normal for a security, are exceeded.
New Market: A segment for trading securities of innovative technology sectors with high growth potential but also high risk.
Fixing System: A market segment where prices are fixed only twice a day based on executed trades.
Latibex: A market where stocks and bonds of top Latin American companies can be traded, facilitating European investment in these companies.
Floor Trading (Outcry Market): Low-volume trading in “corros” (circles) for companies with smaller dimensions and less liquid shares compared to the continuous market.

Fixed Premium Mutuals: Members pay a predetermined fee at the beginning of each period for risk coverage.
Variable Premium Mutuals: Non-profit private insurance organizations based on mutual aid, where partners share risks and pay premiums after claims occur.
Co-insurance: Companies formed by freely associated individuals, operating democratically to meet their economic and social needs.
Factoring Companies: Entities that assume invoices and receivables from a seller to buyers. The factor is responsible for collecting payments and may assume the risk of non-payment.
Leasing: A contract where a person instructs a leasing company to purchase a specific asset and lease it for a defined period. The user can then extend the lease, purchase the asset at a predetermined price, or return it.
Credit Card Issuance: Issuing cards to consumers for payments, which are billed later, either in full or in installments.