Spanish law regulates a wide array of banking and financial activities. As a general rule, entities wishing to carry out those activities in Spain will need to obtain the necessary license from the relevant supervisory authority, for which they will need to meet certain criteria.

Banking activities

Under Article 3 of the CSSCIA, the activity of taking repayable funds from the public, either in the form of a deposit, loan, temporary assignment of financial assets or otherwise, and irrespective of their final destination, is an activity reserved for CIs in Spain. Any entity wishing to carry out such an activity must be duly authorized and registered with the Bank of Spain as a CI. In addition, CIs may provide on a regular basis the full range of investment and ancillary services where their legal regime and their specific authorization enable them to do so.

Without prejudice to the above, CIs duly authorized in other member states may, by virtue of the EU-banking passport, provide this service in Spain (as well as all those activities itemized in the Annex of the CSSCIA¹) without applying for a Spanish license.

Financial services

The promotion and provision of investment services on a professional and regular basis can only be conducted by institutions that have been duly authorized for such purposes. In this sense, credit and investment firms are the main entities. However, management companies of collective investment schemes can also be authorized to provide certain types of investment services.

According to Article 122 of the SMA, investment firms are entities that have as their main corporate purpose the provision, on a professional basis, of investment services to third parties in relation to financial instruments described in Article 2 of the SMA.

In relation to what constitutes an “investment service,” Article 125 of the SMA lists the following activities:

• Reception and transmission of orders from clients in relation to one or more financial instruments
• Execution of orders on behalf of clients
• Dealing on own account
• Portfolio management
• Placing of financial instruments without a firm commitment basis
• Underwriting and placing of financial instruments on a firm commitment basis
• Investment advice
• Operation of Multilateral Trading Facilities
• Operation of Contractual Organized Facilities

Similarly, Article 126 of the SMA classifies as ancillary investment services the following activities:

• Safekeeping and administration of financial instruments for the account of clients
• Granting of credits or loans to an investor to allow them to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction
• Provision of advice to undertakings on capital structure, industrial strategy and related matters, and advice and services relating to mergers and the purchase of undertakings
• Provision of services related to underwriting transactions
• Administration of investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments
• Provision of foreign exchange services where these are connected to the provision of investment services
• Provision of investment services and activities, as well as ancillary services related to the non-financial assets underlying those financial instruments such as options, futures, swaps, forward rate agreements and other derivative contracts relating to financial instruments, currencies, financial variables, commodities or emission allowances, when connected to the provision of investment or ancillary services, including the storage or delivery of goods that are deliverable

Pursuant to Article 129 of the SMA, all “investment services” and all “ancillary investment services” are reserved for investment firms. There are two exceptions for (a) the provision of advice regarding undertakings on capital structure, industrial strategy and related matters, and advice and services relating to mergers and the purchase of undertakings; and (b) the carrying out of investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments. Consequently, any entity wishing to pursue any of those services will need to obtain prior authorization.

Crypto service providers: Registration and marketing

Spanish implementation of the Fifth Anti-Money Laundering Directive imposed AML obligations on the following providers:

• Providers of exchange between virtual currencies and fiduciary currencies (Article 1.2.6 of Act 10/2010); and
• Custodian wallet providers (Article 1.2.7 of Act 10/2010).

Those crypto service providers established in Spain or in other countries but offering their services to Spain-based individuals or legal entities (either through a branch, agents or in free provision) should also be registered with the Bank of Spain.

Access to the register shall be conditional upon (i) the existence of adequate AML procedures and internal control bodies (as required by the AML Act) and (ii) compliance with the requirements of commercial and professional honorability.

Notwithstanding the above, once Regulation 2023/1114 of the European Parliament and of the Council, of 31 May 2023, on markets in crypto-assets (MiCAR) enters into force, Spain will be subject to harmonized EU requirements that will apply to cryptoasset service providers and issuers of cryptoassets within the scope of MiCAR.

Spain has also issued specific rules in terms of crypto advertising by means of the Circular 1/2022, dated 10 January, by the CNMV on advertising of cryptoassets or other assets and instruments that are presented to the public as an investment opportunity (Circular 1/2022).

The main obligations set forth under Circular 1/2022 are: (a) the need to include warnings and references to risk factors of the advertised product; (b) the need to notify CNMV 10 business days prior to any massive advertising campaign; and (c) the obligation to keep a register of the advertising campaigns carried out in the previous year.

¹ The list enclosed as Annex to the CSSCIA mirrors the list of activities subject to mutual recognition included in Annex I of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.