August 3, 2020

The Government down by decree the sanctions to the bank | My money



The Council of Ministers approved on Friday a royal decree-law "omnibus" of payment services with the main objective, announced the Ministry of Economy, to transpose a European directive on the matter that improves the protection of users and that should be in force since last January. However, the Government took advantage of the text, composed of 95 pages published on Saturday in the State official newsletter (BOE), to introduce other legislative developments such as the creation of a whistleblower channel irregularities banking, the correction of "errors" to give more power to the FROB, as well as to allow soften the fines that the Bank of Spain imposes on entities financial when they commit infractions.

This last point was not included in the information note on the decree distributed by Economy, which limited itself to referring that the document contained another "series of improvements and technical adjustments". The explanatory statement of the rule points, however, that this change, included in one of the multiple additional provisions of the text, seeks "approve the sanctioning regime Spanish to that of other Member States and the European Central Bank ".

The difference is not less. Through a series of amendments to Law 10/2014, of June 26, on the organization, supervision and solvency of credit institutions, the Executive eliminates the minimum amounts of a good part of the fines possible, which will allow the Bank of Spain to lower the sanctions it imposes below the thresholds currently in effect.

In the case of very serious infractions a fine of between "triple and quintuple" of the benefit obtained by the entity due to abuse is maintained. However, when this gain is not quantifiable, the fine ceases to be "between 5% and 10% of turnover annual net "or" between five and 10 million euros, if that percentage was lower than this figure ", to be" up to 10% "or" up to 10 million ", without indicating the minimum amount required, which will be the Bank of Spain who decrees, now with a greater range of freedom .

In the same way, in the case of serious infractions with a non-quantifiable benefit, there is a fine of "between 3% and 5% of turnover", or "between two and five million euros", if less, to maintain only the two maximum caps. In the case of minor infractions, the Government even modifies the sanction for the quantifiable benefits, which will become the "double" of the profit obtained by the entity, instead of allowing it to charge up to "triple", as it was set in 2014. In the case of the profit obtained by the firm is not clear, the penalty will now be set at "up to 1% of turnover", or "up to one million euros" if it is less, eliminating 0.5% and 100,000 euros, respectively, they were established at least until now.

Thus, for an entity with a net turnover of 25,000 million annual, as in the case of some large Spanish financial institution, the maximum fine for a serious infringement would be 2,500 million but there would be no minimum, when until now the penalty could not go down 1,250 million. It will be necessary to see if these additions to the decree complicate their Recognition in Congress.

The decree also eliminates the possibility of imposing more than one fine for a case on the charges of administration of an entity that commits an irregularity.

Economy has used the decree to further expand the sanctioning field of Bank of Spain extending it to non-credit entities (such as fintech), or that perform their own functions without being authorized. In your case, the infractions will be punished based on your own resources (up to 10%, or one million euros, in very serious cases, 5%, or 500,000 euros, in the serious, or 1%, or 100,000 euros, in the minor).

When it comes to publicizing the sanctions imposed, the decree requires that serious infractions, and not only very serious ones, be published in the BOE explaining its nature and those involved, although it allows the supervisor, in addition to omitting the names, delay its diffusion even when it deems appropriate.

On the other hand, the standard enables a whistleblower channel in bank solvency before the Bank of Spain (whistleblowing, in Anglo-Saxon terminology) that establishes a series of guarantees for the informant, such as labor shield before accusations of disclosure of secrets or requests for compensation of the company, as well as the possibility of obtaining a certificate accrediting the supervisor or protecting his identity.

Despite the sensitivity of this type of complaints, however, the standard does not fully guarantee anonymity of the complainant, limiting confidentiality in case his personal data are necessary to initiate, instruct or resolve a process administrative or sanction, if required by a organ judicial, a authority European or if the data protection law allows it, which foreseeably limits trust in this channel of complaints and its effectiveness.

Correct "errors" to give more power to the FROB

More collection capacity. The Government has detected shortcomings in the transposition of the European directive of May 15, 2014 that sets the framework for restructuring and resolution of credit institutions and investment services companies so it has taken advantage of the royal decree-law of payment services approved last Friday to expand the powers of the Fund for Orderly Bank Restructuring (FROB). "It is urgent to correct errors detected in the transposition," says the norm, and expand the capabilities of the FROB to count "at all times with the necessary powers to carry out its mission" and do so with "maximum speed." To this end, the decree now leaves without effect the limitations established in the Revised Text of the Capital Companies Act on structural modifications of commercial companies, and the legislation applicable to credit cooperatives in relation to operations to increase and reduce capital, conversion of capital instruments, internal recapitalization, structural modifications or "any other necessary operation". A forgetting that tied hands to the FROB before certain assumptions of intervention of credit institutions. In addition, the regulation enables the fund to collect contributions from entities or branches in Spain from non-EU firms to feed the National Resolution Fund.

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