Banking Law and Financial Market Infrastructure Law in Spain

Introduction

Financial market infrastructure law in Spain governs the systems and institutions that allow money, securities and derivatives to be traded, cleared, recorded and settled safely. These infrastructures are essential to banking because banks depend on payment systems, securities settlement systems, central counterparties and central securities depositories to complete transactions and manage liquidity and collateral.

The principal Spanish statute is Law 6/2023 of 17 March on Securities Markets and Investment Services (Ley 6/2023). It regulates, among other matters, trading venues and the registration, clearing and settlement of financial instruments. Spain's domestic framework operates together with major EU legislation, particularly EMIR (Regulation 648/2012), CSDR (Regulation 909/2014), MiFID II/MiFIR, the Settlement Finality framework and EU rules concerning digital-ledger market infrastructures.

Two authorities are especially important: the CNMV, which has major supervisory responsibilities for securities-market infrastructures, and the Banco de España, which oversees payment and settlement systems and cooperates with the CNMV on systemic stability.

1. Meaning of Financial Market Infrastructure

A financial market infrastructure, or FMI, is a system through which financial transactions are processed after or alongside trading.

Important categories include:

• payment systems;
• securities settlement systems;
• central securities depositories (CSDs);
• central counterparties (CCPs);
• trading venues;
• clearing arrangements;
• transaction-data infrastructures; and
• certain distributed-ledger-based market infrastructures.

The principal policy objective is that failure by one participant should not unnecessarily destabilize other participants or the wider financial system.

Financial infrastructure law therefore deals extensively with systemic risk, settlement finality, collateral, operational resilience, default management and supervisory oversight.

Legal and Regulatory Framework

2. Law 6/2023 on Securities Markets and Investment Services

Law 6/2023 is the central modern Spanish securities-market statute.

Article 1 expressly brings within its framework matters including financial-instrument issuance, trading venues and systems for the registration, clearing and settlement of financial instruments.

It also establishes rules relating to:

• regulated markets;
• multilateral trading facilities;
• organized trading facilities;
• investment firms;
• central counterparties;
• central securities depositories;
• investor protection;
• supervisory powers; and
• market conduct.

The law consequently provides the national legal architecture within which EU infrastructure regulations operate.

3. Central Securities Depositories

A Central Securities Depository (CSD) records securities and operates infrastructure facilitating securities settlement.

In Spain, the principal securities depository is Iberclear, within the BME infrastructure.

Spanish CSDs operate primarily within the European framework established by the Central Securities Depositories Regulation (CSDR), Regulation 909/2014.

Law 6/2023 expressly provides that authorization, withdrawal of authorization and operation of Spanish CSDs are governed by CSDR together with applicable Spanish and EU legislation.

This framework addresses matters such as:

• settlement systems;
• organizational requirements;
• operational risk;
• record keeping;
• participant requirements;
• settlement discipline; and
• supervisory responsibilities.

4. Central Counterparties

A Central Counterparty (CCP) places itself between parties to qualifying transactions.

Instead of A owing B directly, the CCP becomes the buyer to the seller and the seller to the buyer under the relevant clearing structure.

This mechanism reduces bilateral counterparty exposures but concentrates substantial risk within the CCP itself. Consequently, CCPs are heavily regulated.

The central EU legislation is EMIR — Regulation 648/2012.

Law 6/2023 provides that Spanish CCPs are governed by EMIR together with Spanish securities-market legislation. The CNMV is designated as the competent authority for authorization, supervision and sanctions concerning Spanish CCPs.

5. Settlement Finality

One of the most important concepts in financial infrastructure law is settlement finality.

Spain's Law 41/1999 on payment and securities settlement systems implements the European settlement-finality framework.

The principle is designed to ensure that transactions entered into qualifying systems become legally protected from reversal under defined circumstances.

This matters particularly when a participant becomes insolvent.

Without settlement-finality rules, insolvency proceedings could potentially unwind transactions already processed through an important payment or securities system, creating uncertainty and potentially transmitting losses throughout the financial sector.

Law 6/2023 amended Law 41/1999 partly to align Spanish terminology and rules with developments concerning CCPs and the consolidation of TARGET2 and TARGET2-Securities.

6. Payment Systems and Banco de España

Financial-market infrastructure extends beyond securities.

Payment systems enable transfers between financial institutions and ultimately allow households and businesses to transfer money.

Banco de España has responsibility for overseeing the operation of payment and settlement systems. Because it participates in the Eurosystem, its oversight also forms part of the broader European central-bank framework.

Its responsibilities include oversight of Spanish infrastructures and participation in cooperative Eurosystem oversight of infrastructures operating across borders.

Banco de España also supervises Iberpay, which manages Spain's national electronic clearing system, the SNCE.

7. TARGET Services

Spain's banking system is connected to the Eurosystem's TARGET infrastructure.

TARGET services support central-bank-money settlement and securities transactions across the euro area.

This infrastructure is important because banks need reliable mechanisms to:

• settle large-value payments;
• manage central-bank liquidity;
• transfer collateral;
• settle securities transactions; and
• conduct cross-border euro transactions.

TARGET integration demonstrates that Spanish financial-market infrastructure is no longer exclusively domestic. It forms part of an interconnected European settlement architecture.

8. Access to Clearing and Settlement Systems

Law 6/2023 establishes an important principle of non-discriminatory access.

Investment firms and credit institutions from other EU Member States can obtain access to qualifying Spanish CCP, clearing and settlement systems for transactions in financial instruments.

Access must be based on objective, transparent and non-discriminatory criteria equivalent to those applied to domestic participants.

This provision supports European capital-market integration by preventing Spanish infrastructure from becoming an unjustified barrier to institutions established elsewhere in the EU.

9. CNMV and Banco de España Cooperation

Financial infrastructure can fall within the responsibilities of more than one regulator.

Article 250 of Law 6/2023 therefore requires cooperation between CNMV and Banco de España regarding securities clearing, settlement and registration systems.

The authorities must work to ensure that national infrastructure preserves the stability of the financial system as a whole. They must also assess Spanish infrastructures against international best practices and recommendations.

This represents an important distinction between:

supervision — monitoring compliance by particular regulated institutions;

and

oversight — examining whether the infrastructure as a system operates safely and efficiently.

10. Distributed Ledger Technology

Spanish infrastructure law is also adapting to tokenized financial instruments and distributed-ledger technology.

Law 6/2023 introduced rules providing legal certainty for negotiable securities represented through distributed ledger technology (DLT).

These provisions facilitate Spain's participation in the EU's DLT Pilot Regime under Regulation 2022/858.

This represents an important development because securities traditionally recorded through centralized account structures may, under the applicable framework, be represented using distributed technological systems.

However, technological innovation does not eliminate traditional regulatory concerns. DLT infrastructures still raise issues involving:

• ownership records;
• transaction finality;
• cybersecurity;
• operational resilience;
• market integrity;
• investor protection; and
• supervisory responsibility.

Important Case Laws

There is not a large body of Spanish Supreme Court litigation specifically labelled “financial market infrastructure law.” Much of the governing framework comes directly from EU regulations and specialized regulatory decisions. The following EU cases are important for understanding the legal principles governing trading, clearing, payment and securities-market infrastructures applicable to Spain.

1. United Kingdom v European Central Bank — Case T-496/11 (2015)

This important case concerned an ECB policy framework relating to central counterparties clearing euro-denominated securities.

The United Kingdom challenged an ECB requirement under which certain CCPs handling substantial euro-denominated business would effectively have needed to be located within the euro area.

The General Court annulled the relevant policy framework because the ECB did not possess the necessary competence to regulate the activity of securities-clearing systems in that manner.

Significance

The case established an important institutional principle: financial-stability objectives do not automatically give a regulator powers that have not been legally conferred upon it.

For Spain, this is relevant because Spanish CCP and settlement infrastructure exists within a carefully divided framework involving the ECB, Banco de España, CNMV and EU authorities.

2. UK v Parliament and Council — Case C-270/12 (2014)

This case concerned powers granted to the European Securities and Markets Authority (ESMA) regarding short selling.

The United Kingdom challenged the legality of granting ESMA certain intervention powers.

The CJEU upheld the relevant framework.

Significance

The judgment is important for European financial-market governance because it confirmed that EU agencies can exercise significant regulatory intervention powers where those powers are sufficiently defined by EU legislation.

Spanish financial-market institutions therefore operate within a framework in which EU-level supervisory bodies may possess direct regulatory powers.

3. Spector Photo Group and Van Raemdonck — Case C-45/08 (2009)

This case concerned insider dealing under EU securities law.

The Court examined the circumstances in which possession and use of inside information could establish prohibited market conduct.

Significance

Although primarily a market-abuse case, it is relevant to infrastructure because regulated markets and trading systems must operate within a framework ensuring market integrity.

Infrastructure cannot be regarded merely as technology; it also supports regulatory surveillance and orderly trading.

4. Geltl v Daimler AG — Case C-19/11 (2012)

The CJEU considered when information arising during a lengthy process can constitute inside information.

The Court held that intermediate steps in a process may themselves satisfy the requirements for inside information where the legal conditions are met.

Significance

Modern trading infrastructure must facilitate proper disclosure and surveillance. The decision therefore contributes to the legal environment governing information flowing through European securities markets, including Spain.

5. Markus Gasser v MISAT — Case C-116/02 (2003)

Although primarily concerning jurisdiction under European procedural law rather than clearing regulation, Gasser illustrates the importance of legal certainty and predictable jurisdiction in cross-border commercial relationships.

Infrastructure relevance

Financial-market infrastructures routinely process transactions involving parties established in different Member States. Predictable jurisdictional and enforcement rules therefore form part of the wider legal environment supporting cross-border financial markets.

6. Peter Paul and Others v Germany — Case C-222/02 (2004)

The case concerned banking supervision and whether EU banking directives conferred an individual right to compensation following alleged supervisory failures.

The CJEU concluded that the relevant directives did not require national supervisory authorities to conduct prudential supervision specifically in the interests of individual depositors so as to create the claimed right.

Significance

The judgment highlights the distinction between systemic regulatory objectives and individual private-law remedies.

That distinction is particularly important in FMI regulation, where authorities frequently supervise infrastructure primarily to maintain market stability and orderly functioning.

7. Kotnik and Others — Case C-526/14 (2016)

This case concerned burden-sharing measures connected with bank restructuring and State aid.

The CJEU considered the compatibility of shareholder and subordinated-creditor burden sharing with EU law.

Infrastructure relevance

While not a clearing case, Kotnik demonstrates how financial stability, creditor rights and EU regulatory requirements interact during financial-sector distress. Similar tensions arise when a major participant or financial infrastructure encounters financial difficulties.

8. Banco Santander SA — Case C-274/14 (2020)

This case concerned the Spanish Tribunal Económico-Administrativo Central and whether it qualified as a “court or tribunal” capable of making a preliminary reference under Article 267 TFEU.

The CJEU concluded that it did not satisfy the necessary independence requirement.

Significance

The judgment illustrates a wider principle relevant to Spanish financial regulation: administrative decisions involving financial institutions remain embedded in a legal framework requiring effective judicial review by properly independent judicial bodies.

11. Systemic Risk and Infrastructure Regulation

Financial-market infrastructures can reduce risk but can also concentrate risk.

For example, central clearing replaces numerous bilateral exposures with exposures concentrated through a CCP. If the CCP operates effectively, this can improve risk management. If a systemically important CCP itself experiences severe difficulties, however, disruption could affect many institutions simultaneously.

This explains requirements relating to:

• margin;
• collateral;
• default funds;
• liquidity;
• operational continuity;
• participant-default procedures;
• recovery planning; and
• resolution.

EU Regulation 2021/23 establishes a framework for recovery and resolution of CCPs. Spanish legislation designates the CNMV as the competent Spanish authority for CCP resolution functions falling within that framework.

12. Relationship with Banking Law

Financial-market infrastructure law and banking law overlap significantly.

Banks are major participants in payment, clearing and securities-settlement systems. They may act as:

• settlement banks;
• clearing members;
• custodians;
• securities-market intermediaries;
• payment-service providers; and
• liquidity providers.

Consequently, problems affecting infrastructure can rapidly become banking-stability problems.

Spanish law recognizes this overlap. Where Banco de España and CNMV responsibilities intersect, supervisory coordination is required, with the CNMV focusing particularly on securities-market functioning while Banco de España retains relevant responsibilities concerning institutions under its prudential supervision.

13. Operational and Cyber Resilience

Modern financial infrastructure depends heavily on information technology.

A technical failure affecting a major payment, clearing or settlement platform could prevent transactions from completing even where the underlying banks remain financially solvent.

Infrastructure regulation therefore increasingly emphasizes:

Operational resilience: systems must continue critical functions during disruption.

Cybersecurity: infrastructures must protect transaction and participant information.

Business continuity: backup and recovery arrangements must exist.

ICT risk management: technological dependencies must be identified and controlled.

Incident response: major operational incidents must be managed and, where required, reported.

Banco de España notes that its supervisory and sanctioning responsibilities concerning payment infrastructure have expanded to include ICT-risk management for payment-system operators and other relevant participants.

14. Importance of Settlement Finality During Insolvency

One of the greatest systemic dangers arises when a participant becomes insolvent while transactions are still moving through the system.

Suppose Bank A sends a securities-transfer instruction before insolvency proceedings begin. If insolvency law could later reverse that transfer without regard to the settlement system's rules, other participants might suddenly discover that apparently completed transactions were not final.

Settlement-finality legislation seeks to prevent this type of systemic uncertainty.

It therefore interacts closely with:

• insolvency law;
• collateral law;
• banking resolution;
• payment law; and
• securities law.

For this reason, financial-market infrastructure law is an important component of financial-stability regulation rather than simply a technical part of securities law.

Conclusion

Financial market infrastructure law in Spain is a multilevel Spanish-EU regulatory system governing the mechanisms through which financial transactions are traded, cleared, recorded, transferred and finally settled.

The principal domestic legislation is Law 6/2023 on Securities Markets and Investment Services, supplemented particularly by Law 41/1999 on payment and securities settlement systems. At European level, EMIR, CSDR, MiFID II/MiFIR and related legislation provide much of the substantive framework.

The CNMV has central responsibility for securities-market infrastructures, including Spanish CSDs and CCPs, while Banco de España oversees payment and settlement systems and participates in Eurosystem oversight. Article 250 of Law 6/2023 specifically requires the two authorities to cooperate to ensure that clearing, settlement and securities-registration systems support overall financial stability.

The relevant jurisprudence—including UK v ECB, UK v Parliament and Council, Spector Photo Group, Geltl, Peter Paul, Kotnik, and Banco Santander—shows that infrastructure regulation must balance systemic stability, institutional competence, market integrity, legal certainty and judicial protection.

The continuing development of DLT-based securities, integrated European settlement systems and increasingly technology-dependent payment infrastructure means that Spanish financial-market infrastructure law is evolving from traditional clearing and settlement regulation into a broader framework of systemic-risk management, technological resilience and European financial integration.