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Corporate Governance Updates 1-2013

03/24/2013

CONTENT AND STRUCTURE OF ANNUAL CORPORATE GOVERNANCE REPORTS AND ANNUAL REMUNERATION REPORTS AND OF OTHER DISCLOSURE INSTRUMENTS

1. INTRODUCTION

The Sustainable Economy Law (Law 2/2011, of March 4, 2011) and the legislation on governing bodies and other components of the legal rules on savings banks (Royal Decree-Law 11/2010, of July 9, 2010) laid down new corporate governance obligations each for listed companies (sociedades anónimas) and savings banks (cajas de ahorros). Principally to implement those obligations, Order ECC/461/2013 was published on March 23, 3013 in the Official State Gazette, after being approved by the Ministry of Economy and Competitiveness on March 20, 2013, an order determining the content and structure of the annual corporate governance reports, of the annual remuneration reports and of the other disclosure instruments of listed companies, of savings banks and of other institutions issuing securities admitted for trading on official securities markets.

The order’s main aims are as follows:

  • Update the content of annual corporate governance reports and group together in a single ministerial order all of the obligations in connection with this report for listed companies, savings banks and other institutions issuing securities admitted for trading on official securities markets.
  • Implement the content of the annual remuneration report, established as an obligation in the Sustainable Economy Law, also jointly for listed companies and savings banks.
  • Update the information that listed companies and savings banks must include on their websites.

The order came into force on the day following the date of its publication in the Official State Gazette, although (to prevent distortion of the shareholders’ meeting period that has already started) in a transitional provision it determines that the reporting obligations it contains will not apply in the fiscal year commenced on January 1, 2012, which will be governed by the legislation previously in force.

This order repeals Order ECO/3722/2003, of December 26, 2003, on the annual corporate governance reports and other disclosure instruments of listed companies and other institutions and Order ECO/354/2004, of February 17,2004, on the annual corporate governance reports and other information of savings banks that issue securities admitted for trading on official securities markets.

It also amends Order EHA/1421/2009, of June 1, 2009, implementing article 82 of the Securities Market Law (Law 24/1998, of July 28, 1998), to add a provision on the dissemination of significant facts on websites, a provision that had already appeared in Order ECO/3722/2003 which has been repealed.

The Spanish Securities Market Commission (“CNMV”) has been authorized so that, within three months, it can detail the content and structure of annual corporate governance reports and annual remuneration reports. Until then, the CNMV Circulars hitherto in force on this subject will apply (Circulars 1/2004, 4/2007 and 2/2005).

In relation to annual corporate governance reports, this publication summarizes the key new provisions in the order, without describing therefore the information already being included in annual corporate governance reports on the forms approved by the CNMV, or in an attachment to them with the new information required by the Sustainable Economy Law.

2. GENERAL PROVISIONS

3. PRINCIPAL AMENDMENTS CONCERNING THE ANNUAL CORPORATE GOVERNANCE REPORTS OF LISTED COMPANIES

4. PRINCIPAL AMENDMENTS CONCERNING THE ANNUAL CORPORATE GOVERNANCE REPORTS OF SAVINGS BANKS ISSUING SECURITIES ADMITTED FOR TRADING ON OFFICIAL SECURITIES MARKETS

5. PRINCIPAL AMENDMENTS CONCERNING THE ANNUAL CORPORATE GOVERNANCE REPORTS OF INSTITUTIONS ISSUING SECURITIES TRADED ON OFFICIAL SECURITIES MARKETS

6. TYPES OF DIRECTORS

7. PUBLIC DISCLOSURE

8. ANNUAL REPORT ON DIRECTORS’ REMUNERATION

9. ANNUAL CORPORATE GOVERNANCE REPORTS AND ANNUAL REMUNERATION REPORTS OF OTHER SAVINGS BANKS

10. DISCLOSURE INSTRUMENTS

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