Investment Services Company (ESI)

Investment services companies (ESIs) are all entities authorized in Spain to develop activities and services in the securities markets.

First of all, it should be taken into account that “ESIs” are not the only ones authorized to provide investment services. Also, credit institutions that have the authorization of the Bank of Spain may lend them.

Investment service companies are born with the purpose of offering a specialized service. In principle, they try to be an alternative to credit institutions in relation to certain investment services. In addition, in order to authorize an ESI for the provision of investment services, it is required, by regulations, that the executive members have a recognized professional honor in the sector. Therefore, the degree of specialization of this type of companies is usually quite high.

The National Securities Market Commission (CNMV)  is the competent supervisory body that authorizes these services for the collection, management and investment of third party funds.

Supervision of investment services companies in Spain

According to the regulations, the CNMV supervises all those entities authorized to provide investment services:

  • Investment Service Companies
    • Securities Company (SV)
    • Securities Agency (AV)
    • Portfolio Management Company (SGC)
  • Management companies of collective investment institutions (SGIIC)
  • National credit institutions (providers of investment services)
  • Foreign credit institutions (authorized to operate in Spain)

In addition, the investor can check in the official records of the CNMV which entities are really authorized. In the case of credit institutions, the investor must go to the official records of the Bank of Spain.

Legally, EAFs (financial advisory companies) are not considered within this regulatory framework related to “investment services”.

Types of Investment Services Companies in Spain

They are regulated in the Securities Market Law and in RD 217/2008, of February 15, on the legal regime of Investment Services Companies:

  • Securities company (SV):They are entitled to offer all kinds of investment services both for their own account and for their own.
  • Securities agency (AV):They are only authorized to operate on behalf of others.
  • Portfolio management company (SGC):Its functions are limited to discretionary management and investment portfolio advice.

Activities and services provided by Investment Services Companies

Activities and Services SV av SGC
Financial advice to companies and investors YES YES YES
Discretionary portfolio management YES YES YES
Receipt, transmission and execution of third party orders YES YES DO NOT
Subscription of issues and Public Sale Offers (OPV)      
·         Mediation YES YES DO NOT
·         Assurance YES DO NOT DO NOT
Deposit and administration of financial instruments YES YES DO NOT
Granting of loans and loans to investors YES DO NOT DO NOT
Self-acting YES DO NOT DO NOT

 

Leave a Comment