Royal Decree-Law 38/2020 - General issues relating to the financial sector

The purpose of the Spanish Royal Decree-Law (hereinafter, RDL) is the adoption of measures applicable to financial services with the aim of guaranteeing the protection of Spanish clients, establishing a legal mechanism for British firms to fulfil their obligations, thus increasing legal certainty with regard to the duration of contracts. The measures seek to prevent increased uncertainty and loss of access to the European market from affecting financial stability or harming financial services clients.

A principle of continuity is established for contracts concluded, prior to the date of entry into force of the RDL, by firms domiciled and duly authorised in the United Kingdom providing services in Spain. These contracts will remain in force after said withdrawal and, consequently, the obligations of each of the parties contained therein will remain in effect.

See the full text of Article 13 of the RDL on the continuity of contracts.

Without prejudice to the foregoing, as from 1 January 2021, firms domiciled and authorised in the United Kingdom providing investment services in Spain, referred to above, will be subject to the regime laid down in the Spanish Securities Market Act and other sectoral regulations for firms from third States.

These firms will have to apply for a new authorisation to enter into new contracts, renew contracts concluded prior to 1 January 2021 or to incorporate amendments to them that involve the provision of new services in Spain or that affect the essential obligations of the parties, or in those cases where the activities linked to the management of said contracts require authorisation.

The authorisation or registration initially granted by the competent British authority will remain valid provisionally, until 30 June 2021, in order to carry out the necessary activities for an orderly termination or transfer, under the contractual terms and conditions envisaged, of the contracts concluded prior to 1 January 2021 to firms duly authorised to provide financial services in Spain.

During such period, the CNMV and the other supervisory financial authorities will have the powers attributed to them by prevailing legislation, and they may even render ineffective the temporary regime in the event that the requests issued to said firms are not met.

The CNMV, in the areas of its competence, may adopt such measures as may be appropriate to ensure legal certainty and to safeguard the interests of users of financial services that may be affected by the withdrawal of the United Kingdom from the European Union.