Reform of the legal regime applicable to managers of credit institutions

The Spanish Minister of Economy and Competition has submitted a draft bill that modifies the legal regime applicable to credit institutions. The purpose of the draft bill is to regulate the requirements that must be met to hold certain management positions (for example directors, CEO or other officers).

The following requirements have been imposed.  The person:

  • must have demonstrated integrity and have been of good repute throughout their professional career;
  • must have adequate knowledge and the experience required to perform their duties at the credit institution; and
  • must have the necessary time and capacity to devote to their work.

An applicant's reputation will be assessed taking into account:

  • The person's track-record in the sector and their relations with the regulatory and supervisory authorities;
  • The reasons why the person has been discharged from or left previous positions;
  • The person's solvency and their compliance with their obligations; and
  • Whether or not the person has committed criminal offences and, if so, the seriousness of those offences.

Supreme Court decision on "prohibited negotiations" interpretation

The Spanish Supreme Court has controversially disqualified a public official from public office as a result of engaging in "prohibited negotiations", a criminal offence oursuant to article 442 of the Spanish Criminal Code. The public official was found to have disclosed confidential information and awarded operating licences to businesses while avoiding the normal procedures for doing so.

The controversy in this case revolves around the requirements that must be met for the offence to have taken place, which are:

  • use of confidential information for financial benefit, either of oneself or a third party.
  • the exchange of information requires the payment of a fee.

In this case, the public official did not obtain any financial payment for imparting the information, but the Supreme Court nevertheless found that the official undeniably wished to receive favourable treatment from the people to whom he was disclosing the information.