RDL 5/2021 on extraordinary measures to support business solvency in response to the Covid-19 pandemic amended the LMV so that the CNMV can subject to authorization the advertising of investment in crypto-assets.
Thus, the system extends the supervising, inspecting and sanctioning powers covering an area previously unregulated. This article will focus on the regulatory change and the consequences of this new system.
The functions of the National Securities Market Commission include the supervision and inspection of the securities markets and the activity of those who participate in them. Its supervision and inspection actions are accompanied by sanctioning authority plus other powers of control and correction.
The objective of endowing the CNMV with these powers is to ensure the transparency of the markets and their prices and the protection of investors. Tasks for which it is essential to promote a neat and transparent information regime.
In this sense, the Securities Market Law already required authorization from the Ministry of Economy and Competitiveness when it came to advertising certain activities. Furthermore, the authorization regime also implied the possible intervention of the CNMV by sanctioning or imposing the cessation or rectification of illicit advertising.
RDL 5/2021, of March 12, on extraordinary measures to support business solvency in response to the Covid-19 pandemic, tries to protect the productive fabric against the income's reduction that the health crisis has entailed. To this end, it has issued packages of measures aimed at increasing the liquidity of companies. Among them: financial support, moratoriums and direct aid.
But apart from direct promotion measures, the public authorities have also considered it necessary to protect both citizens and investors in terms of investment in financial assets in the digital sphere.
In this sense, crypto-assets do not have a specific regulatory framework yet (either at the national or community level), despite representing an increasingly prominent volume in our economies.
These financial products present specific risks, which the CNMV and the Bank of Spain try to tackle in defence of the small investor.
RDL 5/2021 defines crypto-assets as "digital representations of value or rights that can be transferred and stored electronically through distributed ledger technology or similar".
As we can see, the real difference between crypto-assets and another class of assets with digital representation (such as money itself) lies in their transmission and storage systems.
Crypto-assets have several advantages. They are fast, safe, confidential (to a certain extent). But they also have their counterparts:
Alerted by these risks, the CNMV and the Bank of Spain warned on February 9 (although they had already addressed the matter on previous occasions) about the volatility, potential lack of liquidity and complexity of these investments. They particularly highlighted the dangers of these risks for small investors.
Precisely for this reason, They reformed the Securities Market Law, increasing the powers of the CNMV. With the entry into force of RDL 5/2021, the body may:
Endowing the CNMV with powers of control would be useless if not coupled with the sanctioning function. In this sense, the modification of the LMV includes another article dedicated to infractions due to breach of obligations.
Thus, the art. 292.4 of the LMV is amended to consider a serious offence advertising in violation of arts. 240 and 240 bis and its implementing regulations. We are not, therefore, before a mere duty. Rather, it is an obligation, the breach of which carries legal consequences.
Such consequences include the following penalties:
In any case, the firm sanctions regarding this matter feature in the BOE. Thus, the infringement of the measures adopted in RDL 5/2021 will not only affect the company's patrimony but also its reputation.