The new code aims to promote responsible investment in listed and non-listed companies
New Spanish Stewardship Code
March 2, 2023

To whom does it apply?

On February 23, 2023, the Spanish Securities and Exchange Commission (“CNMV”) approved a voluntary Stewardship Code that sets out good practices for institutional investors, asset managers and proxy advisors based in Spain. The Code is also opened to other entities (e.g., holding companies, family groups and foreign investors) that voluntarily decide to follow its standards in the “apply or explain” form. Following the Code should not be burdensome for foreign investors and proxy advisors, since its content is consistent with international standards.

To become a signatory to the Code, organizations must apply to the CNMV, which will release a public signatory list. This list will include the link to the signatories’ websites where their engagement and voting policies, and any other information required by the Code, must be visibly and clearly published.

The “apply or explain” approach

The Code is voluntary and comprises seven “apply or explain” principles (the “Principles”). This means that, as a rule, signatories are free to decide whether they want to adhere to the Code but, once they do, they must apply all its Principles and explain how they do it.

However, the Code should be applied proportionately, which means that stewardship activities can be adapted to the specific circumstances (e.g., investor’s size and resources, percentage of the investment and nature of the assets invested).

Interim period

During the first three years, signatories may transitionally apply the "comply or explain" principle in their annual report, indicating the Principles applied and not applied, in which case, they must explain the reasons why they do not comply.

This “comply or explain principle” does not apply in connection with the conflict of interests management policy (Principle 6) that should be applied from the outset.

Those who want to benefit from this interim regime must apply to the CNMV and publicly commit to implementing all Principles by February 2026. They must also publish an adaptation plan and timetable.

The Principles

The code comprises seven principles covering the following:

March 2, 2023