Interpretative criteria on the regime for reporting related-party transactions
Published on 21st Feb 2022
The Spanish National Securities Market Commission ("SNSMC") published on 15 November 2021 interpretative criteria on the new regime for reporting related-party transactions introduced by Law 5/2021 of 12 April ("Law 5/2021"), which amended the consolidated text of the Spanish Companies Act ("SCA") that entered into force on 3 July 2021.
Law 5/2021 included in the SCA a specific regulation for transactions carried out by listed companies with related parties and also amended the SCA in order to grant the SNSMC supervision over the content of article 529 unvicies of the SCA, regarding the publication of information on related-party transactions.
Taking into account that this regulation introduces relevant changes with regard to the previous regulatory framework, and as a result of having received different consultations, the SNSMC published guidelines for the market participants for them to apply disclosure obligations properly.
It should be noted that the SNSMC considers it relevant that the information published by listed companies is comparable, bearing in mind that related-party transactions are significant for shareholders and investors to be able to properly assess and judge the financial situation of companies and their performance, as well as the risks that these transactions could represent.
The interpretative criteria addressed in the document published by the SNSMC are the following:
- The transitional regime for the application of the new regime for reporting and approval of related-party transactions;
- The aggregation of transactions;
- Related parties to the directors;
- Individual publication thresholds;
- The relevant amounts of related-party transactions;
- The time of publication of related-party transactions;
- The report of the audit committee;
- The distribution of dividends and other similar contribution returns.
The document published by the SNSMC is not of a regulatory nature. In addition, it will be updated with other future consultations, the SNSMC ´s supervisory experience, regulatory or case law changes, or common positions adopted at the European Union level.