The CNMV wants to protect small investors at all costs, and has taken on the task of ensuring that banks have been more transparent in marketing their best-selling mutual funds in recent months and that they make it clear what return they can offer. at maturity. The Spanish market supervisor in public consultation has a technical guide on fixed income funds with buy and hold strategy. The decision comes after 2022 – the year in which both equities and fixed income posted huge losses – 32 mutual funds with this profile and 41 others with a specific return target are registered. The goal of CNMV is for entities to provide more transparency and inform the client that they may incur losses.
CNMV president Rodrigo Buenaventura admitted yesterday that he is “not interested” in how to market this type of vehicle, given that subtle warnings have already been included but he aspires to “make them clearer and more specific”. Thus, he later indicated that he is wary of whether banks are making small investors aware of the returns paid by this type of vehicle which, at times, are not included in the brochures and which are sent through other subsequent documents or emails.
Yesterday, the Spanish market supervisor presented the strategic lines of its work for this year and 2024. In this period, the CNMV wants to accelerate the strict supervision of the stock markets with particular attention to financial stability. Likewise, it aspires to strengthen the protection framework for retail investors to prevent them from falling into “fraudulent schemes and to combat inappropriate practices such as greenwashing” or “greenwashing”. In doing so, you will ensure that the design and sale of investment products and services avoid potential conflicts of interest and realistically explain their “characteristics, such as ESG factors built into products.” In this way, he seeks to focus on products with ESG characteristics or sustainable investment goals, since, he points out, “there may be a risk that this value will not be realized or that it is difficult for the investor to identify, particularly in retail.”
CNMV also wants to revitalize the capital markets to promote growth and transition to a sustainable economy and aspires to monitor the effects of financial and technological innovation on stock markets.
For all this, the supervisor created a total of 48 initiatives, including setting up a unit to prevent money laundering, accelerating authorization processes for venture capital funds and analyzing whether listed companies well reflect the impact of rising inflation and the change in the interest rate cycle.
Likewise, it will conduct an analysis of the transparency of IBEX 35 compared to other European and global indices on the methodology for its calculation and the inclusion and exclusion of values. Buenventura has also come forward that it hopes to conduct another similar study on the Market for Alternative Fixed Income (MARF).
Another point that the regulator will focus on this year is monitoring the contributions of Spanish credit institutions to the Euribor account. The head of CNMV has ruled out an “underlying problem” with these collaborations, and has argued that employers are seeking to “improve monitoring tools”.
IPOs awaiting stability in the market
After several years of market turmoil that nearly paralyzed IPOs, yesterday the head of CNMV chose to be cautious and didn’t offer his forecast for this year in terms of stock market contracting. Buenaventura noted that when stability returns to the stock market, issuers are expected to consider the option of going public. A situation that is not expected to happen in the market before the second half of the year. The last IPO was OPDE in July last year, though it halved the money raised through the capital raise.
Buenaventura acknowledged that market instability caused a drop in the company’s valuations and did not rule out a recovery in the companies’ operations, such as that announced this week at the fund supermarket Allfunds, which although Spanish is listed in Amsterdam.
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