First CNMV sanction for a crowdfunding platform in Spain. The CNMV has imposed three sanctions on the Housers crowdfunding platform. Two of the infringements are considered very severe and the other simply as severe.
The spanish watchdog, CNMV (Comisión Nacional del Mercado de Valores), has imposed 3 sanctions, for a total amount of 215,000 euros, on the real estate crowdfunding platform "Housers".
The resolution was adopted by the CNMV on 5th September and has been published today, Thursday 26th September in the BOE (Boletín Oifcial del Estado). This is the text of the resolution:
The sanctions imposed on Housers Global Properties, PFP, SL for the commission of a very serious infraction, typified in article 92.1.h) of Law 5/2015, of the 27th of April, on the promotion of business financing, a very serious infraction, typified in article 92.1.d) of the same legal text and a serious infraction, typified in article 92.2.f) of the referred norm, having been declared firm through administrative channels, we proceed to publish, in accordance with what is established in article 93.3 of the aforementioned Law 5/2015, of 27 April, in relation to articles 313 ter and 313 quater of the revised text of the Securities Market Law, approved by Royal Legislative Decree 4/2015, of 23 October, the sanctions imposed by Resolution of the Council of the National Securities Market Commission dated 27 June 2019 which, after the presentation of facts and legal bases, concludes with the following Agreement:
– Enforcing Housers
1. For the commission of a very serious infringement, as defined in Article 92.1.h) of Law 5/2015, of 27 April, on the promotion of business financing, for the serious and repeated breach of the behavioural obligations referred to in Article 60 of the aforementioned law, for the breach of the principle of neutrality and action in the best interests of customers, in relation to information on returns, tariffs and commissions, risks and warnings; a fine of 90,000 euros (ninety thousand euros).
2. For the commission of a very serious infraction, typified in article 92.1.d) of Law 5/2015, of 27 April, on the promotion of business financing, for the performance, not merely occasional or isolated, of activities not included in its authorization; fine of 75,000 euros (seventy-five thousand euros).
3. For committing a serious infringement, as defined in Article 92.2.f) of Law 5/2015, of 27 April, on the promotion of business financing, for the publication of a project that does not meet the conditions of Article 49 of the aforementioned law; a fine of 50,000 euros (fifty thousand euros).
The Resolution that imposes the sanctions indicated in the present publication, is only firm in administrative way, without prejudice of the jurisdictional review powers that correspond to the Contentious-Administrative Chamber of the National High Court, competent to know of the appeals that in its case have been interposed or could be interposed.
Madrid, 5th September 2019. The President of the Comisión Nacional del Mercado de Valores, Sebastián Albella Amigo.
The first sanction, considered very severe, is for the serious and repeated breach of behavioural obligations, and in particular for the breach of the principle of neutrality and of acting in the best interests of customers, in relation to information on returns, tariffs and commissions, risks and warnings. The fine for this infringement is EUR 90 000.
This is Article 60 which refers to this first sanction, Law 5/2015 of April 27, promoting business financing, popularly known in Spain as "Crowdfunding Law".
Article 60. General Provisions.
1. Collaborative funding platforms shall operate according to the principles of neutrality, diligence and transparency and in the best interests of their clients.
2. Tendrán la consideración de clientes tanto los promotores como los inversores.
3. The information they provide to their customers on the rights and obligations they assume when trading through the equity financing platform should be clear, timely, sufficient, accessible, objective and not misleading.
The second infringement, amounting to EUR 75 000, has been imposed on Housers for carrying out activities which do not appear in its authorisation. In other words, for carrying out activities that are not within its competence.
This is the violated article:
The not merely occasional or isolated performance by the participatory financing platforms of activities that are not included in their authorisation.
And the third and final sanction, qualified only as serious and for an amount of 50,000 euros, is for the publication of a project that does not meet the conditions set out in Articles 92(2)(f) and 49.
Failure to comply with the obligations referred to in paragraph 1(a), (d), (h), (i), (j), (k), where they do not constitute a very serious infringement.
(a) repeated publication by participatory financing platforms of projects which do not fulfil the conditions set out in Article 49 or are not implemented through the forms provided for in Article 50
Article 49. Collaborative Funding Projects.
Collaborative Funding projects must:
a) Be targeted at a plurality of natural or legal persons who, investing professionally or not, expect to obtain a monetary return.
b) Be performed by promoters, natural or legal persons, who apply for funding in their own name.
c) To destine the financing that is tried to capture exclusively to a concrete project of the promoter, that will only be able to be of managerial type, formative or of consumption without in any case it can consist of:
1. The professional financing of third parties and in particular the granting of credits or loans.
2. The subscription or acquisition of shares, debentures and other financial instruments admitted to trading on a regulated market, on a multilateral trading system or on equivalent markets in a third country.
3. The subscription or acquisition of shares and units of collective investment institutions or of their management companies, of venture capital entities, other collective investment entities of the closed-end type and management companies of collective investment entities of the closed-end type.
d) To be financed through some of the forms foreseen in article 50 of this Law.