The Mercado Alternativo Bursátil approves its new regulations

The Regulations have been updated following the publication of new financial legislation passed by the Spanish Parliament in 2015

The Mercado Alternativo Bursátil (MAB) has updated the Regulations and Circulars that govern it as a result of various changes in the Spanish financial legislation that took place in 2015 and which affect the prevailing regulations. As part of the amendment of the MAB’s Regulations, the market has added new obligations for Registered Advisers and Issuers which were previously voluntary and are now made mandatory.

The legislation passed in Spanish Parliament in 2015, which gives rise to changes, includes the Law 5/2015 for the Promotion of Corporate Financing, changes made to the revised text of the Securities Market Act, the Audit Act, the new Clearing and Settlement Legislation as well as Market Abuse and MiFID II European regulations.

Based on the experience gained and taking advantage of this overhaul, many of the voluntary recommendations contained in the Guía de Buenas Prácticas (Best Practice Guide) regarding Issuers and Registered Advisers have also been incorporated into the regulation as mandatory.

The changes are mainly concerned with the chapters about the admission to trading and exclusions of companies, the information these must provide and the functions of the Registered Advisers.

Among the main aspects are - in the section on exclusions from MAB – the admission to trading on the main stock market as a possible cause for delisting, be it voluntary or mandatory if the company’s capitalisation exceeds €500 million. Besides this, in these cases the obligation to buy shares from retail shareholders is eliminated. Other possible instances of exclusion from MAB concern those companies which enter into liquidation by means of bankruptcy proceedings or ordinary bankruptcy.

As regards the information to be supplied by the companies listed on MAB worthy of note is the obligation for them to have an auditor carry out a limited review of their half-yearly accounts and the extension of the presentation deadline to 4 months of the end of the six-month period. In addition to this, the requirements under the Audit Act of June 2016 demand that companies rely on an auditor for Public Interest Entities and the submission of a Report by the Audit Committee, which is to be made up with a majority of independent directors and presided over by an independent director. Likewise, the obligation to provide Registered Advisers with any information they need is expressly stated.

The new Regulations of MAB include numerous new aspects concerning Registered Advisers. Among the eligibility criteria are that they have to be supervised by the Spanish supervisor (CNMV), Banco de España, ICAC or else provide additional information. Besides this, such aspects as the extent and length of experience they are to have and their level of independence from the companies they advise are also required. Those firms that have previously been fined or banned by the CNMV cannot provide their services.

The functions of the Registered Adviser are divided into three main groups:
general functions, specific functions prior to incorporation and specific functions following incorporation.

- In the first group, one outstanding function is to provide advice to issuers to help them fulfill the obligations derived from their participation in the market and the submission of information as well as verifying that the company meets the admission criteria.

- In the second, assist in the drafting of the Listing Informative Report, verify that the information provided is in accordance with the law and does not omit relevant information and provide the Market with an accompanying report analysing and assessing the compliance with the said criteria.

- Following incorporation, the new regulations describe how regular contact with the company will allow the Registered Adviser to examine all the information the company is to provide, whether periodical or not, and closely track its dissemination in public events or through the media. The Registered Adviser will have to provide the Market with a report verifying each action.