Investigatory powers

What powers do national financial services authorities have to examine and investigate compliance? What enforcement powers do they have for compliance breaches? How is compliance examined and enforced in practice?

The powers of supervision and inspection of the Bank of Spain and CNMV are very wide and, among others, include the ability to:

  • access and receive a copy of any document in any form whatsoever;
  • request information from any person; and
  • perform inspections on site in any office or premises.

If the Bank of Spain (or the ECB) or the CNMV detects that a provider is not complying with its obligations or if the authority simply wants to review procedures to ensure compliance, it may initiate an investigation, which may lead to a sanction if the entity has breached its duties.

Disciplinary powers

What are the powers of national financial services authorities to discipline or punish infractions? Which other bodies are responsible for criminal enforcement relating to compliance violations?

The Bank of Spain and the CNMV may impose administrative penalties on financial services firms and their managers if they infringe financial regulations. These sanctions are independent of any criminal proceedings. The Bank of Spain and the CNMV have no powers to sanction crimes.

There are three levels of administrative infractions: very serious, serious and minor. The level of seriousness depends on various parameters such as the nature of the infraction, the responsibility that the entity had when it committed the infraction, the economic situation of the entity and the consequences for third parties.

The sanctions to be imposed will depend on the seriousness of the infraction committed, the reoccurrence of the infraction, the harm produced and the cooperation with the public authorities during the course of the investigation, among others.


What tribunals adjudicate criminal and civil financial services infractions?

Administrative and criminal infractions are not heard by the same tribunals. Administrative proceedings, such as the ones dealt with before the Bank of Spain or the CNMV, can only be reviewed by administrative courts. Criminal infringements (even if financial in nature) may only be dealt with by the criminal courts.

Criminal proceedings prevail over administrative ones. Therefore, if a regulated financial services provider is investigated by a supervisory authority and, at the same time, criminal proceedings are initiated for the same conduct, the authority will halt its investigation until the criminal proceedings are finalised.


What are typical sanctions imposed against firms and individuals for violations? Are settlements common?

Infractions normally lead to a sanction, which is usually a fine. However, in some cases the Bank of Spain and the CNMV may also take other measures, such as revoking the authorisation granted to the services provider.

At the same time, the Bank of Spain and the CNMV may also impose sanctions on the management body of the regulated financial services provider. These sanctions may consist of fines or even the removal of the manager from his or her position, whether temporarily or permanently.

Additionally, the Bank of Spain and the CNMV may also publish the sanctions in the Spanish Official Gazette.