The Council of Ministers approves the Royal Decree that modifies the regime applicable to managers of credit institutions

Further to previous reports on this matter, on 12 April 2013 the Spanish Council of Ministers approved the Royal Decree 256/2013 that modifies several laws on reputation, experience and good governance in credit and financial institutions. The purpose of this Royal Decree is to include the European Banking Authority's (EBA) recommendations, issued in November 2012, in the Spanish legislation.

The Royal Decree applies equally to banks, savings banks, credit unions, financial conglomerates, credit institutions and payment institutions. The main new measures introduced by the Royal Decree are the following:

  • The reputational or experience requirements that directors or officers must meet have been made stricter. The Bank of Spain will analyse their theoretical and practical experience as well as their relations with the regulatory and supervisory authorities.
  • In relation to good corporate governance, the possibility of a conflict of interest existing as a result of personal or economic relations with other members of the board of directors, or past or current positions will also be analysed.
  • Entities must ensure that they put in place adequate internal systems and controls to ensure their compliance with the new measures.

The Spanish Supreme Court has limited criminal sanctions for breach of a shareholder's right to information

Article 293 of the Spanish Criminal Code establishes the penalties applicable to directors who deny shareholders' their right to information. In a recent case heard by the Spanish Supreme Court, two shareholders sued the directors who had failed to provide them with the company's bank statements, tax statements and a photocopy of its book of minutes. The Supreme Court ruled that the above article of the Criminal Code must be interpreted restrictively and that it would only apply to the most serious cases of breach, not automatically.