Investment services company (ESI)
An investment services company (ESIs) is any entity authorized in Spain to develop activities and services in the securities markets.
First of all, it should be taken into account that the “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 services 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 to provide investment services, it is required, by law, that the executive members have recognized professional integrity in the sector. For this reason, the degree of specialization of this type of company is usually quite high.
The National Securities Market Commission (CNMV) is the competent supervisory body that authorizes these services for attracting, managing and investing 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 services companies
- Securities company (SV)
- Stock agency (AV)
- Portfolio management company (SGC)
- Management companies of collective investment institutions (SGIIC)
- National credit institutions (investment service providers)
- Foreign credit institutions (authorized to operate in Spain)
In addition to this, the investor can check in the official CNMV records 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 firms) are not considered within this regulatory framework relating to "investment services".
Types of investment services companies in Spain
The following 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 types of investment services both on behalf of others and on their own.
- Securities agency (AV): They are only authorized to operate on behalf of others.
- Portfolio Management Company (SGC): Its functions are limited to the discretionary management and advice of investment portfolios.
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|
|Reception, transmission and execution of orders from third parties||YES||YES||NO|
|Subscription of issues and Public Offerings of Sale (OPV)|
|Deposit and administration of financial instruments||YES||YES||NO|
|Granting of credits and loans to investors||YES||NO||NO|
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