Spanish securities regulation: Q&A with Sebastián Albella of the CNMV

Sebastián Albella, executive chairperson of the National Securities Market Commission (CNMV) in Spain, has given a boost to the Spanish securities regulator since he arrived in late 2016, both in proactive regulation and in measures to welcome financial services firms from the City considering a post-Brexit move to Madrid. He chats to Karina Robinson, CEO, Robinson Hambro


The CNMV recently undertook its first ‘mystery shopping’ trip. CNMV officials, along with an external firm, visited banks in 20 cities, posing as clients. The results made headline news in the Spanish media.

The CNMV has already contacted the institutions reviewed urging them to pay attention to their practices in marketing investment products at their branches, as the exercise highlighted certain weaknesses at the stage of initial customer contacts with the institution:

  • Implicit verbal recommendations not being recognised as advice.
  • Use of commercial datasheets with vague or invalid relevant information from the KII (Key Investor Information) of investment funds, which is the product offered in the majority of cases.
  • Certain deficiencies in the information regarding risks and costs.

Some commentators argue that the pendulum has swung too far in terms of regulation – there was too little before the crisis, now there is too much, and it is impeding business and the financing of companies. Do you agree?

Not totally. I would not say that there was too little regulation before the crisis; there were some regulatory loopholes that had to be dealt with, in light of the events that we all saw during the financial crisis that started in 2007. 

One of the main factors that gave rise to a regulatory reaction was a lack of funding that led to a macroeconomic crisis. In this sense, I believe that the regulation issued was a proper response but, taking into account the complexity of financial markets and consequently the complexity of regulation, there could be some room for review work in order to identify duplicities or excessively rigorous requirements. In fact, this is what the European Commission is now doing, in the context of its Capital Markets Union project.

In any case, significant impact assessment exercises have been performed on regulation since the financial crisis, and the economic impact of all measures adopted has been taken into account.

President Trump is pushing for Dodd-Frank to be repealed in the US. If it happens, Europe’s financial institutions will be at a disadvantage to US ones. How will Europe react to this?

If there is a disruptive position of the new north American administration in this regard – which I do not foresee right now – I would assume that the EU would react somehow. Otherwise, we would be on an unlevel playing field that could have significant consequences on various levels of financial activity and, therefore, on the economy.

There is an argument that since the updated Markets in Financial Instruments Directive (MiFID II) extends to all institutions in the future, there is no need for UK financial firms post-Brexit to have a European passport, that they can use MiFID II to continue doing business on the continent. What are your thoughts on that?

I do not understand that statement. Unless the UK becomes a member of the EEA along the lines of Norway or otherwise retains access to the single market, post-Brexit financial services firms operating out of the UK will find themselves in a similar position to non-EEA based financial institutions.

In this sense, MiFID II contemplates granting financial institutions in non-EEA states the right to use a modified version of the MiFID passport to offer their services in the EEA, provided that their home jurisdiction is deemed MiFID equivalent. This ‘equivalence decision’ is in the European Commission remit but I also see some room to reflect on the possibility of introducing some amendments to this regime.

In any event, we have to wait until we see how Brexit is dealt with.

Given current developments in the West, regulatory convergence is surely finished?

Not at all. A large number of regulatory developments for the major pieces of European legislation will come into force in the next years. Now we need to adopt the necessary changes at national level in order to incorporate the regulations that will apply in the short term.

In addition, the European Securities and Markets Authority (ESMA) and the national competent authorities in the EU are working together to build a common supervisory culture among national competent authorities to promote sound, efficient, and consistent supervision throughout the EU, while at the international level, I am not expecting a major disruption in the US approach.

In any case, regulatory convergence is not an option but a need.

Has the impetus behind the single European Capital Market been lost?

I do not think so. In fact, the Commission services launched in January 2017 a public consultation on the planned Capital Market Union mid-term review. This consultation offers an opportunity for stakeholders to provide targeted input to complement and advance actions put forward in the CMU Action Plan.

The CNMV has always been in favour of the main ideas behind a Capital Market Union.



Published: 17 May 2017
  • Change
  • Compliance, Regulation & Risk
  • Capital Markets & Corporate Finance
  • Mifid II
  • Spain

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