There are different public bodies overseeing the conduct of banking and financial services businesses in Spain. These public bodies have regulatory and supervisory authority over participants in both banking and financial markets.

The main supervisory authorities in Spain are the following:

The Bank of Spain

The Bank of Spain, together with the European Central Bank (ECB), has been supervising the Spanish banking system since the entry into force of Council Regulation (EU) No. 1024/2013, on 15 October 2013, establishing a single supervisory mechanism for banks in the euro area (SSM Regulation).¹

Moreover, the Bank of Spain also supervises (i) credit financial entities, which are financial institutions that are not allowed to take deposits from the public and that have a more limited corporate purpose; (ii) payment institutions, which are legally entitled to provide payment services; and (iii) e-money institutions, which provide almost identical services as the previous institutions but are also allowed to issue electronic money.

The Bank of Spain comprises a governor, a sub-governor, a governing council (which is composed of the governor, the sub-governor, six directors, the general director of the Treasury and Financial Policy, and the vice president of the Comisión Nacional del Mercado de Valores or CNMV), and an executive commission (made up by the governor, the sub-governor and two directors, although all general directors of the Bank of Spain may attend without voting rights).

The Bank of Spain is empowered with a wide range of functions, which can be classified into two broad categories:

1. Functions linked to its members-status of the European System of Central Banks
2. Functions as a National Central Bank:

• Holding and managing currency and precious metal reserves not transferred to the ECB
• Promoting the proper working and stability of the financial system
• Supervising solvency and compliance with specific rules of credit institutions, other entities and financial markets, for which it has been entrusted with supervisory responsibility
• Placing coins in circulation and performing, on behalf of the state, any other functions entrusted to it related to this function
• Preparing and publishing statistics relating to its functions and assisting the ECB in the compilation of statistical information
• Providing treasury services and acting as a financial agent for government debt
• Advising the government and preparing appropriate reports and studies
• Supervising credit institutions and other entities in order to ensure compliance with regulatory and disciplinary rules ̶  In order to perform and carry out the supervisory function, the Bank of Spain may, among others:

• Gather the information needed to check that the regulatory and disciplinary rules are being followed by the institutions and persons subject to its supervisory function.
• Require and communicate to the institutions subject to its supervision the information and measures included in the regulatory and disciplinary rules.
• Conduct all the necessary investigations or inspections.

European System of Central Banks

The European System of Central Banks is the central bank for the Eurozone’s single currency, the Euro. The ECBs main task is to preserve the euro’s purchasing power by maintaining price stability in the Eurozone.

As mentioned, in addition to the foregoing and pursuant to the SSM Regulation, the ECB has been vested with prudential supervisory powers to be exercised over credit institutions in the European Union. Together with each of the supervisory authorities of the participating member states, it constitutes the SSM, whose main purpose is to carry out thorough and effective banking supervision as well as to contribute to the safety and soundness of the banking system and to the stability of the financial system, guaranteeing equal treatment and conditions throughout the EU.

By virtue of the SSM Regulation, the ECB has exclusive competency to carry out, for prudential supervisory purposes, the following tasks in relation to all credit institutions (CIs) established in participating member states:

1. To authorize and, where appropriate, withdraw the authorization of CIs and to assess notifications of acquisition or disposal of qualifying holdings in CIs, with certain caveats in the case of bank resolutions
2. To act as the local competent authority for CIs established in a participating member state that wishes to establish a branch or provide cross-border services in a non-participating member state
3. To ensure compliance with EU law on prudential requirements (Pillar 1), supervisory review procedures (Pillar 2) and market disclosure (Pillar 3), comprising, among other matters, the analysis of own funds requirements, large exposure limits, liquidity, leverage, governance arrangements, the fit and proper requirements for senior management, internal control mechanisms, remuneration policies, and capital adequacy, including the assessment of internal risk models and the performance of stress tests
4. To carry out supervision on a consolidated basis over CIs’ parent firms established in a participating member state, including over financial holding companies and mixed financial holding companies (where parent firms are not established in a participating member state, the ECB will participate in colleges of supervisors, without prejudice to the participation of National Competent Authorities as observers)
5. To participate in supplementary supervision of financial conglomerates in relation to their CIs, assuming, where appropriate, the task of coordinator of the financial conglomerate
6. To supervise recovery plans and early intervention measures and, where appropriate, request that the measures needed to resolve problems be adopted, excluding any resolution powers
7. To impose more stringent requirements, in close coordination with the national authorities of participating member states in respect of own funds requirements, additional capital buffers and systemic or macro-prudential measures

These supervisory functions are, without prejudice to others, entrusted to the ECB in relation to significant CIs.

The CNMV

The CNMV is Spain’s national securities commission in charge of overseeing Spanish financial markets and supervising the activities of all market participants.

The main functions of the CNMV are to supervise and monitor the securities markets and the activity of all individuals or legal entities in relation thereto and, where appropriate, to impose sanctions following infringements of securities markets. It is also an advisory body to the central government and to the autonomous regions in all matters related to the securities markets.

Its main aim is to ensure the transparency and efficiency of the securities markets, orderly pricing therein and investor protection, as well as to disseminate any information that may be necessary for these purposes. Likewise, when so empowered by legislation, it can also issue circulars containing mandatory rules for the implementation and enforcement of the regulations issued by the Council of Ministers or the Minister of Economy and Business, on a case-by-case basis.

The  Directorate General of Insurance and Pension Funds

In relation to insurance, the Spanish Directorate General of Insurance and Pension Funds (DGSFP) is the body in charge of supervising in Spain the various activities carried out by: (i) insurance and reinsurance undertakings; (ii) pension plans and funds; and (iii) securitization vehicles.

In this financial sub-sector, insurance undertakings can adopt the following legal forms: (i) public limited companies; (ii) mutual insurance companies; (iii) cooperatives; and (iv) mutual benefit societies.

It must be taken into account that the DGSFP is also the body in charge of supervising other entities that might be related to the insurance business, such as intermediaries or actuaries.

Spanish Anti-money Laundering Commission

The Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offenses (SEPBLAC) is the supervisory authority concerning the prevention of money laundering and the financing of terrorism. Its main role is to fight money laundering and terrorism, and for this purpose, it has supervisory and enforcement authority relating to financial sanctions and countermeasures.

¹ Consistent with the exclusion made under Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council, dated 26 June 2013, on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms; the institutions identified thereunder are also excluded from the supervisory tasks conferred upon the ECB, which in the case of Spain affects the state-owned Instituto de Crédito Oficial.