Spain - Regulation

Spain - Regulation

International funds and fund management survey

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1.1 Type of funds

Spanish collective investment institutions (CIIs) may be organized as follows.

Financial CIIs which main purpose is the investment and management of financial assets by means of one of the following legal forms:

  • open-ended securities investment companies (sociedades de inversión de capital variable; SICAV), with variable share capital (open-ended)
  • investment funds (fondos de inversión; FI), which are set up as separated assets that belong to several investors.

Non-financial CIIs which main purpose is the investment and management of real estate assets by means of one of the following legal forms:

  • real estate investment companies (sociedades de inversión inmobiliaria; SII), with fixed share capital (closed-ended)
  • real estate investment funds (fondos de inversión inmobiliaria; FII).

To summarize, under Spanish Law, CIIs may be structured under one of the following legal forms:

Spanish CIIS Legal structure
Investment policy Fund Company
Financial FI SICAV
Non-financial (real estate) FII SII

This brochure, except as otherwise expressly indicated, will refer to financial CIIs, as they are the most common legal structures of collective investment in Spain.

1.2 Laws

The Spanish securities regulator is the Finance Ministry (Ministerio de Economía y Hacienda) which directly supervises the Spanish Securities Market Commission Comisión Nacional del Mercado de Valores (CNMV) as final responsible of the CIIs regulation.

Spanish CIIs are regulated, among others, by the following main provisions.

General regulation

  • Law 35/2003, dated 4 November 2003, as amended by Law 31/2011, dated 4 October, which modifies Law 35/2003. This Law was amended in order to incorporate in Spain Directive 2009/65/EC of the European Parliament and of the Council (hereinafter, UCITS IV).
  • Royal Decree 1309/2005, dated 4 November 2005, as amended, passing CIIs Regulation, which develops Law 35/2003.1
  • Law 24/1988, dated 28 July 1988, on the regulation of the Stock Market, This Law was amended several times in order to incorporate EU’s Rulings into the Spanish legislation, such as Directive 2004/39/EC of 21 April 2004 of the European Parliament and of the Council on markets in financial instruments (MiFID) and Directive 2006/73/EC of 10 August 2006 implementing Directive 2004/39/EC.
  • Royal Decree 215/2008, of 15 February 2008, which modifies certain aspects related to Non-financial CIIs.
  • Order EHA/596/2008, of 5 March 2008, that develops the functions that correspond to the custodian of the CIIs.
  • Order EHA/888/2008, of 27 March 2008, about transactions with derivative instruments to be made by financial CIIs.
  • Resolution of the CNMV, dated 13 June 2007, that regulates the so-called minor amendments to the CIIs´ management rules, incorporation projects, and articles of association.
  • Rule 3/2006 of the CNMV, dated 26 October 2006, regarding IIC prospectus.
  • Rule 6/2008 of the CNMV, dated 26 November 2008, about the net asset value and certain operational aspects of CIIs.
  • Rule 4/2008 of the CNMV dated 11 September 2008, regarding the content of the quaterly, semi annual and annual report of the CIIs. It was recently amended by Rule 4/2011, dated 16 November 2011.
  • Rule 1/2006, dated 3 May 2006, of the CNMV on Alternative Collective Investment Institutions.
  • Rule 6/2009, dated 9 December 2009 of the CNMV, regarding the intern control of the management companies and the investment companies.
  • Royal Decree 1818/2009, dated 27 November 2009, ammending Royal Decree 1309/2005, dated 4 November 2005, which develops Law 35/2003.
  • Rule 1/2009, dated 4 February 2009, of the CNMV, regarding the different categories of the CIIs given its investment policy. It was recently amended by Rule 3/2011, dated 4 October 2011.
  • Rule 6/2010, dated 21 December 2010, of the CNMV, regarding operations with derivatives of CIIs.

Reporting and accountancy regulation

  • Rule 5/2008 of the CNMV, dated 5 November 2008, regarding statistical information requirements about the assets and liabilities of European Union CIIs.
  • Order of the Ministry of Economy, dated 20 December 1990 which entitles the CNMV to regulate issues regarding reporting and accounting rules on investment funds.
  • Order of the Ministry of Economy, dated 18 April 2001, regarding CIIs’s prospectus, quarterly reports and information obligations.
  • Rule 2/1998 of the CNMV, dated 27 July 1998 regarding statistic information of CIIs of the European Union, as amended by Rule 1/2007, dated 11 July 2007.
  • Rule 1/2001 of the CNMV, dated 18 April 2001, regarding CIIs prospectus forms, amended by rule 3/2006 of the CNMV dated 26 October 2006.
  • Rule 2/2011 of the CNMV, dated 9 June 2011, regarding information of the foreign CIIs registered at the CNMV relevant registries.
  • Rule 3/2008 of the CNMV, date 11 September 2008 on accountancy rules, annual accounts and informative disclosed statements of the CIIs (modified by Circular 11/2008 of CNMV, dated 30 December regarding the solvency of the investment services companies and its accounting groups).
  • Rule 7/2008 of the CNMV, dated 26 November 2008, on accountancy rules, annual accounts and informative disclosed statements of management companies of CIIs.
  • Rule 1/2007 of the CNMV, dated 11 July regarding the statistic information required of the EU CIIS, partially modifying the Rule 2/1998, dated 27 July.
  • Rule 3/2009 of the CNMV, dated 25 March, regarding the content of the semi annual compliance report of the supervision and control of the custodians.
  • CNMV Resolution, dated 7 October 2009, regarding the minimum registries to be maintained by a investment services company.
  • Circular 11/2008 of CNMV, dated 30 December regarding the solvency of the investment services companies and its accounting groups.

Real estate investment companies and funds (non–financial CIIS)

  • Law 19/1992 of 7 July 1992 regarding non-financial CIIS.
  • Law 20/1998 of 1 July 1998, regarding tax and legal regulation of the non-financial CIIS.
  • Rule 2/2008 of CNMV, dated 26 march of the CNMV, partially modifying the Rule 4/1994 dated 14 December in regard to accounting regulation information obligations, VAT and investment average calculation and actuations valuation of the real estate calculate of the real estate investment companies or trusts.
  • Law 11/2009, dates 26 October, regulating the Real Estate Listed companies (SOCIMI).

Other relevant norms

  • Order of the Ministry of Economy, dated 30 July 1992, on the role and obligations of custodians.

1.3 Managers, trustees, and custodians


Management Companies: (Sociedades gestoras de instituciones de inversión colectiva (SGIIC/Management Company) are special corporations whose main corporate purpose is the administration, management and representation of CIIs. Likewise Management Companies may also be authorized to carry out the following activities:

  • management of investment portfolios in accordance with mandates given by investors on a discretionally client-by-client basis, including those belonging to pension funds
  • management, administration, representation, and marketing of venture capital funds.

In addition, when the Management Company is authorized to undertake the management of portfolios on a discretionally basis, it may also undertake the following complementary activities:

  • advisory on financial investments
  • custody and management of shares and/or units of CIIs.

At this regard, Management Companies may, totally or partially, delegate to third parties the management of the CIIs’s assets.

Their corporate domicile and central administration must be located in Spain.

According to UCITS IV, a Management Company authorized in other EU Member State, may undertake in Spain, either by opening a branch or under the free provision of services regime, the activity for which it was authorized in its home country (Management Company Passport). The Management Company Passport covers all the activities for which the Management Company has been authorized in its Home Member State. Such authorization shall be valid in all Member States. Therefore, no additional authorization is required in the UE country where such activity is intended to be carried out.

The project for the incorporation of a new Management Company must be previously authorized by the Ministry of Economy through the prior proposal of the CNMV. Once the incorporation procedure is completed by means of its previous registration with the corresponding Mercantile Registry, the Management Company must also be registered with the CNMV.

The minimum amount of share capital required is EUR300,000, represented by registered shares, fully subscribed and paid-up. Notwithstanding the above, there are certain situations in which the Management Company is obliged to increase its share capital depending on the variation of the effective value of the assets of the CIIs managed according to the following chart:

Percentage (%) of the assets managed As of (EUR) Up to (EUR)
0.5 - 60,000,000
0.3 60,000,001 600,000,000
0.2 600,000,001 3,000,000,000
0.1 3,000,000,001 6,000,000,000
0.05 6,000,000,001 -


At least 60 percent of the Management Companies’ equity must be invested in listed securities on OECD countries’ stock exchanges. The remaining equity must be invested in any other assets suitable to the Management Company corporate purpose.

SGIICs must be managed by a Board of Directors, whose members must comply with certain requirements related to honesty and proved professional experience. These requirements are also applicable to members of the Board of Directors of Open-Ended Securities Investment Companies (SICAVs).

Management Companies may receive a maximum management fee that in general terms is calculated as follows:

  • when calculated according to the fund assets, it cannot exceed 2.25 percent of the same
  • when calculated according to the fund profits, it cannot exceed 18 percent of the same.

When both, assets and profits of the fund, are taken into account in calculating the management fee, it cannot exceed 1.35 percent of the assets and 9 percent of the profits.

Additionally, neither the subscription and redemption fees nor the discounts to be applied in favor of the fund and nor the sum both, charged by the Management Company, should exceed 5 percent of the FI units’ net asset value.

According to Law 35/2003, Management Companies are obliged to meet and answer all queries and complaints of shareholders and/or unitholders. To this respect the figure of the ombudsman should be present within the organization of the CIIs. In the case of foreign Management Companies acting in Spain under the Managament Company Passport, they must answer all queries and complaints of shareholders and/or unitholders in Spanish.

The project of CIIs Regulation introduces a new set of rules concerning conflicts of interests between the Management Companies and the CIIs. According to these rules, Managemente Companies will be obligued to identify potential conflicts of interest, to adopt an effective policy in this regard and to communicate to investors those decisions taken to avoid specific situations of conflicts of interest.


Only commercial and savings banks (including the Confederación Española de Cajas de Ahorros and Caja Postal), Securities companies and Brokers (Sociedades y Agencias de Valores), credit co-operatives, and recently, Management Companies (see the comments in paragraph 1.3 above) can act as custodian entities of CIIs. Their corporate domicile and central administration must be located in Spain.

A prior authorization from the CNMV is required to be entitled to act as a custodian. Likewise, subsequent registration with the corresponding Registry of the CNMV is mandatory.

All custodians must be members, directly or indirectly, of the Clearing and Settlement System of the stock market in which they operate.

Each CIIs must have an unique custodian entity. No entity can simultaneously be a Management Company and a custodian of the same CIIs, except temporarily, under special situations. In principle, no entity can be a custodian of investment funds or companies managed by a Management Company belonging to the same group, unless the corresponding measures (that is, Chinese walls) have been implemented to guarantee independence and avoid conflict of interests.

The custodian entity’s commission cannot exceed 0.2 percent of the nominal value of the net equity in its custody.

1.4 Investment restrictions

As a general rule, CIIs cannot invest in securities issued or guaranteed by another entity, which exceed 5 percent of their own assets with the exception of investments in securities issued or guaranteed by entities belonging to the same group which percentage may be increased up to 15 percent. Besides, this 5 percent percentage could be increased in the following additional cases:

  • to 10 percent, if the total amount of investments which exceed 5 percent (up to the limit of 10 percent) is lower than 40 percent of the CIIs’ assets
  • to 35 percent, when the investment is made in securities issued or guaranteed by a Member State, one of the Spanish Autonomous Communities, International Organizations of which Spain is part or other countries belonging to the OECD with a solvency rating at least equivalent to the Spanish solvency rate
    1. Such 35 percent limit could even be increased in investments related to these types of institutions if this circumstance is clearly detailed in the CIIs Prospectus and promotional materials.
  • to 25 percent, when the investment is made in specially guaranteed bonds issued by credit institutions and non-subordinated securities issued by mortgage securitization funds.

In this respect, the limit of the 5 percent would not be applied for the ETFs funds (please see paragraph 1.10) where the threshold may be increased to 20 percent of the CIIs’s assets.

The investment in shares/units issued by a sole EU Harmonized or non-Harmonized CIIs according to the Directive 85/611 shall not exceed the 45 percent of the CIIs’s assets (this limit would not apply for those CIIs whose respective investment policy consists on the investment of a unique fund).

Finally, it is important to emphasize that in order to comply with the liquidity ratio guidelines, CIIs should maintain a 3 percent of its assets’ liquidity ratio.

1.5 Borrowing

CIIs cannot borrow an amount of money exceeding 10 percent of the value of its assets. The term of such loans cannot be longer than one month and may only be granted to solve temporary cash deficits. This information must be submitted to the CNMV, who will handle its publication. Exceptionally, Non-financial CIIs may borrow this amount for a term no longer than 18 months in order to solve temporary treasury difficulties that they might have.

1.6 Accounts and prospectus

CIIs are obliged to publish the following documents:

  • a prospectus, which must be verified by the CNMV, is required prior to the registration of the corresponding CIIs within the special registry of CNMV
    1. According to UCITS IV, the simplified prospectus that had be provided to each potential shareholder or unitholder prior to the subscription of shares or units is replaced by the Key Investor Information Document (KIID), which offers standardized, key information content for investors.
  • annual accounts report, which are subject to verification by auditors
  • bi-annual report containing financial information on the relevant CIIs
  • quarterly accounts along with a report containing financial information on the relevant CIIs
    1. This report must be submitted to the CNMV during the month following the quarter to which it refers. Its delivery to the unitholders and shareholders of the relevant CIIs is only mandatory if requested by them.

All this documentation is registered at a special registry of the CNMV and is available to the general public.

1.7 Supervision

The details of the supervisory authority for CIIs, Management Companies, trustees, custodians, and marketing entities are as follows:

Comisión Nacional del Mercado de Valores

Miguel Angel, 11

28010, Madrid

Tel: +34 91 585 15 00

1.8 Fund ownership

There are no specific restrictions on the maximum percentage that an individual or a legal entity is allowed to hold in a CIIs.

Notwithstanding the above, Open-Ended Securities Investment Companies (SICAVs) or its managers,, and managers of FIs, as the case may be, must notify the CNMV the identification data of shareholders or unitholders which hold significant holdings in the relevant CIIs (20 percent, 40 percent, 60 percent, 80 percent, or 100 percent).

In principle, the number of shareholders in a CIIs may not be less than 100. The same minimum limit applies for the number of unitholders of funds.

This number must be achieved at the end of the first year of the incorporation of the CIIs.

1.9 Fund structure

In addition to the basic financial and non-financial types of CIIs detailed in paragraph 1.1 above, the following special CIIs types are permitted under the Spanish regulation.

Expressly regulated:

  • listed FIs (technically known as exchange traded funds or ETF)
  • hedge funds (IIC de inversión libre; IICIL)
  • funds of hedge funds (IIC de IIC de inversión libre; IICIICIL)
  • main/subordinated CIIs (IIC principal/subordinado).2

Non-expressly regulated:

  • index CIIs: IIC índice.

1.10 Stock exchange

Royal Decree 1309/2005 (and the current project for its amendment) governs exchange traded funds or ETFs (fondos cotizados) and are defined as those which units are listed in the stock exchange.

The first ETFs to be marketed in Spain did replicate the performance of the IBEX 35, the main index of the Spanish Stock Exchange, but there are also other ETFs which track the movements of other national or international stock market indexes.

In addition to the requirements for being quoted, similar to those applicable to public quoted companies, ETFs are also deemed to comply with the fulfillment of the conditions required to be registered as CIIs at the CNMV.

The operating of ETFs in relation to its liquidity, transparency, timing of sale and purchase, intermediation, management and deposit fees, tax regime, investment diversification, accessibility, dividends’ distribution, and trading hours are half way between investment funds and listed shares.

1.11 Anti-money laundering

Spanish legislation on anti money laundering (Law 10/2010, dated 28 April 2008, on prevention of money-laundering and terrorism financing) is applicable, among others, to financial entities, securities companies and brokers, insurance entities, pension funds and pension funds managers as well as to CIIs, Management Companies, and custodians. All of them should comply with certain obligations in relation to their clients (client identification and KYC rules, among others) and operations in order to avoid money laundering.

Therefore, besides the aforementioned general legislation, there is no special regulation on anti money laundering measures which is exclusively applicable to CIIs.

1.12 Fund set-up

The CNMV is the body entitled to authorize the incorporation of CIIs.

The set up and registration of a Spanish CIIs may take approximately three (3) months.

The administrative procedure of incorporation establishes that applications for setting up a CIIs must be authorized in a maximum period of two months (for CIIs that have the form either of funds or companies – SICAV – that have appointed a manager) or three months (in the case of SICAVs that have not appointed a manager) since the date of the reception by the CNMV of the relevant application. In case five months have elapsed since the date of the application and the CNMV has not notified either its authorization or the refusal, the authorization may be deemed as granted.

Minimum share capital/net equity requirements:

Open-ended securities investment company (SICAV) 2,400,000
FI 3,000,000

A FI may be incorporated with a net equity of EUR300,000, provided that within a six-month period following its registration with the CNMV, the above-mentioned minimum net equity requirement is reached. Otherwise, the fund must be dissolved and wound up.

1.13 Foreign funds

The legal requirements for marketing foreign CIIs in Spain will depend on whether they are recognized as EU-harmonized CIIs (fall under the scope of UCITS IV) or Non-EU-harmonized (not fall under the UCITS IV).

In the event of EU-harmonized CIIs, their marketing in Spain is permitted. UCITS IV simplifies the notification process, which now takes place directly between regulators of the relevant countries. In this sense, the Management Company will submit a request to its Member State regulator who, in the maximum term of ten business days will submit the request to the CNMV. Please note that the following issues must be taken into account.

  • Foreign CIIs are subject to Spanish legislation in all those matters not regulated by EU Directives, in particular, regarding publicity, regulation, and reporting obligations criteria.
  • Foreign CIIs should take all measures which the Spanish authorities may deem necessary to guarantee the shareholders’ or unitholders’ rights.
  • Additionally, foreign CIIs must file the following documentation before the CNMV in order to verify that they fall under UCITS IV:
    1. prior communication of the marketing project, as well as a copy of such communication sent to the authorities of the CIIs home country
    2. certificate from the home country’s authorities stating that the conditions of the fund are in accordance with the above-mentioned EU Directive
    3. KIID and full prospectus
    4. the fund’s regulations or the investment company’s articles of association
    5. last annual and bi-annual reports
    6. report of the shares or units to be marketed in Spain in which the subscription/reimbursement procedure, as well as the settlement of these operations, is detailed
    7. letter issued by the foreign CIIs stating the existence of a distribution agreement by virtue of which the Spanish entity is entitled to market its shares/units in Spain.

If the foreign CIIs does not fall under the scope of UCITS IV (that is, Non-EU harmonized), its marketing in Spain is subject to express prior authorization by CNMV.

In this sense, the registration in Spain of this type of CIIs will be submitted to a restrictive regulation.

The CNMV is entitled to waive compliance with the obligation of notification/registration when certain exceptional conditions are given (such as, marketing in Spain targeted exclusively for professional/institutional investors or limited to no more than 100 investors in each Member State). However, the exemption to registration is not applicable for open-ended funds.

Among other documentation to be provided to CNMV, the foreign non-harmonized CIIs must prove that the legislation of its home country protects shareholders or unitholders at least as much as Spanish legislation does. Likewise, a favorable report from the supervisory authority of its home country will be required (full and simplified prospectuses and financial statements will be also required).

The CNMV charges EU CIIs a fee amounting to 0.014 percent of the volume of CIIs´ assets or units marketed in Spain with a minimum and a maximum that are fixed every year. A person responsible for payment of all applicable fees must be appointed.

1.14 Cross-border mergers

The cross-border merger of CIIs has not been incorporated in Law 35/2003 after its modification but is foreseen in the project of its corresponding Regulation. Therefore, it will be necessary to wait until the modification process of the CIIs Regulation comes to an end to see the regime applicable to cross-border mergers.

However, according to the principle contained in UCITS IV, the project of CIIs Regulation that has been made public foresees that cross-border mergers shall be subject to prior authorization by the competent authorities of the merging CII Home Member State.

1.15 Master-feeder structures

With the modification of the CIIs Regulation that will likely take place before the end of the first semester of 2012, it will be possible for a CII (a feeder CII) to invest at least 85 percent of its assets in units of a master CII. It will be also possible to transform an existing CII into a feeder CII.

According to the project of CIIs Regulation that has been made public, the feeder CII must provide its investors with the following information:

  • a statement that the competent authorities of the feeder CII home Member State (i.e. the CNMV) approved the investment of the feeder CII in units of such master CII
  • the key investor information concerning the feeder and the master CIIs
  • the date when the feeder CII is to start to invest in the master CII
  • an statement that the unit-holders have the right to request within 30 days the repurchase or redemption of their units without any charges other that those retained by the CII to cover disinvestment costs.

CNMV shall authorize the investment of a feeder CII in a master CII within fifteen business days since the submission of the complete application.

1.16 Bearer shares

Shares of Spanish investment companies may be represented by registered titles or book entries; shares of different series may be issued. The shares of the same class shall have the same face value and grant the same rights.

Likewise, Spanish fund’s units may be represented by registered certificates or book entries. The same fund or sub-fund may have units of different classes, each with different commission fee structures.

Therefore, bearer shares or bearer units are not allowed for Spanish CIIs according to the applicable legislation.

1.17 Use of internet

internet as a marketing tool for the distribution of investment funds is nowadays widely used, either through fund supermarkets or exclusive channels, especially in the banking sector. The main general regulation regarding financial contracts and services provided via the internet is Law 22/2007, dated 11 July, on the Distance Marketing of Financial Services to Consumers. This Law completes the implementation of Directive 2002/65 in the Spanish legislation. Besides, it is also applicable the Royal Decree 1906/1999, dated 17 December, on Contracting General Conditions, as well as the Information Society Services and Electronic Commerce Law 34/2002. In particular for the financial sector, Rule 3/2001 of Bank of Spain modifies to these effects Rule 8/1990 on transparency and client protection.


1Please note that CIIs Regulation in now in the process of amendment in order to incorporate the changes in Law 35/2003 following the incorporation of UCITS IV in Spain. The most foreseeable scenario is that the modified CIIs Regulation is passed before the end of the first semester of 2012.

2Please note the main-subordinated structures currently foreseen in the CIIs Regulation will change after the modification of the CIIs Regulation to incorporate the master-feeder structures foreseen in UCITS IV (see 1.15).

© 2017 KPMG Abogados, S.L., a Spain legal liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

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