CNMV Stand On Funds Investing Directly In Cryptocurrencies

The CNMV (CNMV – Comisión Nacional del Mercado de Valores, in English – National Securities Market Commission) is the Spanish government organization that regulates the securities markets. They recently gave their stand on registered funds investing in cryptocurrencies directly.

A Questions and Answers document was recently addressed to fintech companies regarding the activities and services that may have a relationship with the commission. In that document, the question “Can a fund registered by the CNMV directly invest in cryptocurrencies?” was asked, and the commission replied thus: “This type of funds would have a legal place in Law 22/2014, which regulates, in addition to venture capital entities, other collective investment entities of closed type and their management entities.”

Law 22/2014 establishes, among others, closed-end collective investment entities (EICC), closed-end investment funds (FICC), and closed-end investment companies (SICC), Iclg describes.

According to explanations given by the CNMV, investments could be made through EICC, FICC or SICC.

The above law states concerning EICC in Article 2.1 that “the divestment policy of its participants or partners” must meet two requirements which are:

The fund’s “disinvestments [must] occur simultaneously for all investors or participants,” as detailed by the commission.

“What is received by each investor or participant is based on the rights that correspond to each one of them, according to the established terms in its bylaws or regulations for each class of shares or participation.”

The CNMV specified that FICC and SICC have their own “numerous requirements and conditions.” A FICC registered with the Commission must be “managed by a management company of closed-end type collective investment entities (SGEIC) or by a collective investment institution management company (SGIIC) that is authorized to manage this type of funds.”

Also, based on the provisions of article 85 of Law 22/2014, “the FICC and the SICC are not subject to the supervision of the CNMV (except [for] self-managed SICC).”

The Commission insisted on numerous factors to consider even as registered funds can theoretically invest in cryptocurrencies directly: “The investment of FICC and SICC in cryptocurrencies raises a series of practical problems on how to comply with the regulations regarding the valuation of assets, the management of liquidity and the custody guarantee.”

As reported earlier this month by Europa Press, the CNMV “will apply [its] securities regulations to cryptocurrencies until there is European regulation.”

Victor Rodriguez, the general director of Strategic Policy and International Affairs, was quoted saying: “The approach adopted by the CNMV is to try to apply the existing securities regulations as long as we do not have an international or European reference standard.”


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