Long-term shareholder engagement: Public consultation began in July 2018 on the draft bill to transpose the European Directive on shareholder rights. Although the Directive represents little change in the law applying to Spanish companies, certain provisions of the Spanish Companies Act are expected to be amended (in particular, those relating to institutional investors and proxy advisers).

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Shareholders’ right to be bought out when companies do not pay dividends:A proposal is being considered to amend article 348 bis of the Spanish Companies Act (the right of shareholders to be bought out when companies do not pay dividends). The amendment is aimed at mitigating the negative consequences of the rule applying strictly, in particular, the possibility for this right to be abused by minority interests.

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Foreign investment: The scope of proposals for screening foreign direct investment inflows into the EU is expected to be set in April 2019. These may entail greater restrictions on investments in strategic assets and sectors.

Insolvency law: A draft of the new revised Insolvency Act was published in March 2017. The intention is to make Spanish insolvency law more systematically logical, incorporate the successive legislative reforms that have been made to it and clarify certain provisions in view of judgments made by Spanish courts in recent years. The intention would now appear to be for this hugely important bill to go through parliament in 2019.

Business restructuring and second chance: In October 2018, the European Council agreed its position on the business insolvency and second chance directive. The directive, expected to be approved in 2019, is aimed at providing access by viable enterprises in financial difficulties to preventative restructuring frameworks.

Money laundering: Spanish AML regulations are expected to be revised further in the coming months to adapt to the fifth directive (AMLD V), approved in June 2018.

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New European prospectus regulation: The new EU prospectus regulation (Regulation (EU) 2017/1129) will apply fully (certain provisions are already in effect) and directly in all Member States from 21 July 2019. With regard to other implementing rules (levels 2 and 3), the European Commission is expected to adopt an Implementing Regulation before January 2019 on the content and format of prospectuses (annexes). The ESMA will also publish, among other things, final versions of the guidelines on risk factors and the minimum disclosure requirements for exchange offers, mergers or spin-offs to benefit from the exemption from publishing a prospectus for offering/listing before March 2019.

Basel reforms: On 23 November 2016, the European Commission set out a package of legislative measures to strengthen the resilience of EU credit institutions and investment firms and enhance financial stability. Amendments are expected to be made in 2019 to: (i) the Capital Requirements Regulation (CRR II) and Capital Requirements Directive (CRD V), approved in 2013; and (ii) the Bank Recovery and Resolution Directive (BRRD II), approved in 2014.

Prudential rules for investment firms: The European Commission is working on a new prudential and supervisory framework for investment firms, which will take into account each firm’s particular risk profile. Trilogue discussions are expected to begin at the start of 2019.

EU NPL reforms: In March 2018, the European Commission published a draft Directive and Regulation, aimed at accelerating the reduction of NPLs in Europe. The proposals in the draft Directive would require implementation by 2021.

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Securitisation:An amendment of Law 5/2015 of 27 April 2015, encouraging lending to businesses, was put out for public consultation in July. The change is to adapt current securitisation regulations to Regulation (EU) 2017/2402 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation.

Digital transformation of the financial system. Regulatory sandbox: A draft bill is in progress containing steps for the digital transformation of Spain’s financial system. Measures include a regulatory sandbox or controlled testing ground, aimed at technology-based financial innovations.

Mortgage reform: The bill to regulate credit agreements for property, which partially incorporates Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property, is still going through the Spanish Parliament. Among others, we highlight the new requirements to be met when demanding that consumers repay mortgage loans early.

Housing: The government has announced a shift in housing policy in 2019. Changes in the law are planned to safeguard the constitutional right to housing throughout the Spanish state, defining this as a public service, and to prevent public housing from being sold to investment funds. Further measures are aimed at benefiting developers of social housing and boosting available rental housing.

Financial transaction tax: The Spanish government has published a draft bill creating an indirect tax for buyers of shares in Spanish listed companies (with a market cap above €1 billion), irrespective of brokering agents’ country of residence. Liability for the tax, which will apply at a rate of 0.2%, will generally lie with the broker that transmits or executes the buy order.

Measures to combat tax fraud: The Spanish government has published a draft bill of measures to prevent and combat tax fraud, transposing EU Directives 2016/1164 against tax avoidance practices and 2017/1852 on tax dispute resolution mechanisms in the European Union. A broad range of tax measures is set out, notably to enhance international tax transparency, to increase taxation in Spain of income coming from low tax territories, and to introduce the so-called exit tax on gains earned in Spain by companies that move to another company.

Digital services tax: The government has published a draft bill proposing a 3% indirect tax on those digital services where users make an essential contribution to adding value for the service provider.

Local capital gains tax: A bill has been proposed to amend Spain’s local tax authorities act (Ley de Haciendas Locales) with respect to the urban land tax (Impuesto sobre el Incremento de Valor de Terrenos de Naturaleza Urbana). The aim is to introduce exemptions from the tax where taxpayers can prove that they did not make any profit from selling land. Under the proposal, this reform is expected to apply retroactively from June 2017.

Tax intermediaries directive: The fifth amendment to the administrative co-operation directive was approved in May, establishing the obligation for intermediaries and, on occasion, taxpayers, to report “potentially” aggressive cross-border tax planning arrangements. The directive allows for a long transition period: before the first information exchange (set for 31 August 2020) mechanisms must be reported that began between the date the directive came into force (25 June 2018) and the date it applies (1 July 2020).

Anti-trust infringements and bars from public contracts: The CNMC has announced plans to apply this measure under the Spanish Procurement Act (Ley de Contratos del Sector Público), which could be imposed for the first time in enforcement decisions by the competition authority in 2019.

Damages claims for anti-trust infringements: Damages claims against companies penalised for anti-trust infringements are expected to grow in 2019, settling Spanish court case law as the positions taken by different courts need to be harmonised.

Foreign exchange inquiry: Following a World Bank report that found Australia was the third most expensive G20 country for consumers and small businesses to transmit money, the ACCC will examine the supply of foreign currency conversion services. The final report into the inquiry is due May 2019.