October 2013

corporate & commercial LAW


 1. What is the Alternative Fixed-Income Market (MARF)?



 4. WHAT reporting obligationS DO issuers ASSUME?

1. What is the Alternative Fixed-Income Market (MARF)?

The Alternative Fixed-Income Market (“MARF”) is an unregulated multilateral trading facility established in accordance with articles 118 and 126 of the Securities Market Law, by resolution of the Board of Directors of AIAF Fixed-Income Market, S.A. (“AIAF”), dated 7 May 2013.

AIAF is the governing body of the MARF, responsible for its organisation and internal operation.

The MARF is aimed at creating an alternative corporate financial channel by issuing debt fixed-income securities for institutional investors. The issuers will benefit from faster access to the market and greater simplicity regarding compliance with the reporting obligations of a typical securities market. This flexibility is intended to result in lower costs and a simplification of the process to make it easier to obtain financing for medium-sized companies, among others.

This initiative is supported by the Spanish government which has enacted certain legislative reforms to promote this means of raising corporate finance, in particular:

(A) The non-application of the limit established in article 405 of the Companies Law to the total amount of the issuing of bonds and other securities that create or recognize debt by the company itself (paid-in capital plus reserves) for the placement of issuances that comply with any of the following requirements (essentially, those addressed to institutional investors):

(i) To be exclusively addressed to qualified investors or to those who acquire securities valued at a minimum of EUR 100,000.

(ii) For issuances with a nominal value of at least EUR 100,000.

(B) The issuances of bonds or other securities that create or recognize debt that will be admitted to trading on a multilateral trading facility (such as the MARF) need not be granted through a notarial deed, be registered with the Commercial Registry or be published in the Official Gazette of the Commercial Registry.

(C) For securities and rights traded in the MARF to be considered eligible financial instruments for (i) the coverage of technical provisions of insurance companies and (ii) investments made by pension funds.

On 23 October 2013 AIAF announced the authorisation of the registration and enrollment of the first Members and Registered Advisors. This authorisation is a major milestone for the operation of the MARF given that (i) the MARF Members are those who can participate in the running of the market, and the buying, selling and settling of securities, and (ii) all companies that list their securities on the MARF must have a Registered Adviser to advise them in the listing process on the MARF.


The following securities may be traded on the MARF:

(A) Fixed-income securities, such as promissory notes, bonds or other securities that create or recognize debt.

(B) Securities that grant the right to acquire shares or equivalent securities to shares, by conversion or by the exercise of the rights that grant such securities, provided that they are issued by the issuer of the underlying shares or by an entity of the group of the issuer.

(C) Other trading securities based on the fixed-income securities referred to in paragraph (A) above, such as asset-backed securities.

(D) Units of collective investment schemes which investment policies include investment in securities issued by the companies that are listed on the MARF.

The issuance of the securities to be admitted to the MARF should be exclusively addressed to qualified investors, be an issuance with a nominal value of at least EUR 100,000 and be a security that is not admitted to trading in any of the markets operated by companies belonging to the group BME (Bolsas y Mercados Españoles).

The securities should be issued in book-entry form and registered with Iberclear.

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Both the issuing entities and the MARF Members may request the inclusion of trading securities.

Issuing entities should appoint a Registered Adviser. The Registered Adviser, equivalent to the adviser created for the Alternative Stock Market (Mercado Alternativo Bursátil), is an independent expert who will act as an intermediary between the issuing entities and the MARF. The advisor will collaborate with the issuer and advise it on the inclusion of the securities in the MARF, the compliance with its obligations and duties related to this inclusion and the drafting and submitting of the required financial and business information.

The process of the first inclusion of securities in the MARF starts by submitting a written application to the MARF which must be accompanied by the following documents:

(A) A certification of the incorporation of the issuing entity and a certificate of its registration with the Commercial Registry and, if applicable, a certification of its articles of association.

(B) A certification of the agreements for issuance and its inclusion in the MARF.

(C) Valid powers of attorney for the parties signing all the required documents.

(D) If applicable, a guarantee document.

(E) A report on credit and risk assessment concerning solvency for the issuance or a solvency report issued by a registered entity and certified by ESMA.

(F) The annual accounts and, where appropriate, the consolidated accounts of the last two years together with the corresponding audit report, with a certification of the filing of the accounts with the Commercial Registry. The accounts must include an auditors’ opinion.

(G) When required by the MARF, a report assessing the initial issuance and the included securities, regarding price, return or interest rate.

(H) The applicable regulations exempt securities listed on the MARF from the requirement of issuing a prospectus. Nevertheless, a “listing information document” should be drafted containing basic information regarding the issuer and the securities to be listed on the MARF.

Finally, when so required by the characteristics of issuers or the included securities, the MARF may require the implementation of measures to promote the liquidity of securities (such as having a liquidity provider).

4. WHAT reporting obligationS DO issuers ASSUME?

After listing, issuers undertake to provide specific information to the MARF. In order to ensure transparency and market flexibility, a balance between the principles of simplicity and completeness of the information has been sought. The information to be provided by issuers includes:

(A) If applicable, a periodic assessment of the securities and the issuances in which they are included.

(B) The modification or variation of the terms and conditions of the securities. For these purposes, the following will be understood as modification or variation, among others: (i) changes in interest rates, (ii) nominal reductions, (iii) the redemption of securities, (iv) the enforcement of early payments or (v) market foreclosure.

(C) The audited annual accounts for public viewing, as well as the corresponding management report as soon as they are available and no later than the date of the calling of the general meeting or assembly in which the accounts are to be approved.

(D) The same relevant information as that to be provided to the Spanish National Securities Market Commission (Comisión Nacional del Mercado de Valores), so long as the issuer is obliged to do so under the general legislation regulating the securities markets. In addition, the issuer will make available to the MARF all relevant information according to the legal nature of the entity and the acquisition and loss of a significant interest. Among other cases, the modification of the legal nature of the issuer, its articles of association or equity financial structure, the calling of a general shareholders meeting or the agreement to request market foreclosure will be considered relevant information.

All relevant information about listed securities and issuers will be held in the corresponding public registry of the MARF and will also be published on its website.

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The information contained in this Newsletter is of a general nature and does not constitute legal advice