The

National Securities Market Commission

(CNMV) has activated the alerts after detecting an increase in complaints and cases of alleged scams related to financial fraud committed through investment offers and calls on public administrations for greater coordination to deal with the situation .

This has been said by the president of the Spanish markets supervisor,

Rodrigo Buenaventura

, in the appearance this Tuesday before the Committee on Economic Affairs and Digital Transformation of the Congress of Deputies.

It is "a growing phenomenon that worries us", he assured in his speech.

It is not the first time that the regulator echoes this type of increasingly frequent behavior in the investment ecosystem, but doing so today before the Lower House gives a good measure of the degree of concern that exists among supervisors.

"We have observed that there are several cases that have accumulated in recent months in the form of complaints filed by those affected, about unregulated entities and admitted to processing in the competent courts," explained Buenaventura, as well as "an increase in inquiries from investors for offers received from unregistered entities and for alleged scams, many of them linked to

assets or derivatives on currencies, shares and raw materials

".

But the CNMV's concern does not stop there. The supervisor has also detected changes in recent months in the way retail investors are hired, among which "

supposedly free intermediation

" has proliferated

and that increase, in his opinion, "may generate dynamics like those observed a few years ago. months in the

Gamestop

case

requiring regulatory attention. "

Faced with these behaviors, Buenaventura has called for "a joint effort by the various State institutions, including of course the Parliament," to address a set of measures to improve the fight against financial fraud.

In his view, this effort should focus on improving financial education "so that citizens do not fall for fraudulent offers and detect them by the public authorities as soon as possible", and on the preparation of an

Action Plan

against financial fraud.

SPAC and Capital Markets

In his speech, Rodrigo Buenaventura also wanted to highlight other current issues and challenges that the CNMV faces in the coming months and among them is to give relevance to the capital markets, especially in the face of the recovery of companies after the coronavirus pandemic. Although Buenaventura has said it more directly:

"Europe suffers from rickets in its stock markets

.

"

Bank debt weighs 30% on the balance sheet of European companies, compared to 8% of US companies, while the volume of institutional investment funds reaches 70% of GDP in Europe, compared to 281% of GDP in the United States. .

"This has been a chronic problem in our society, but in the current circumstances it is on the way to becoming an acute problem," he assured.

Especially in Spain, where companies have few own resources, a lot of bank debt and large investment needs.

The European funds that are yet to arrive are a historic milestone, but they will not cover more than a minority part "of what is required.

According to the estimates of the CNMV, Spanish companies will have to

raise up to an additional 10,000 million euros in the capital markets every year for the next decade

, hence the importance of financing through capital markets and hence also the need to "strengthen these markets, provide them with adequate legal frameworks and facilitate access to them by international companies and investors."

Along these lines, the President of the Commission has once again insisted on the need to streamline regulation to promote

SPACs

in Spain and thus prevent the country's companies from going to other international markets with more facilities for this type of vehicle.

"IPOs have started to pick up, which is great news, but we must look for imaginative solutions that facilitate the exit of Spanish companies to the Spanish market (not the Dutch or the US). SPACs are one of those solutions. Not for all cases, and not exempt from risks and conflicts. But it is necessary to contemplate and regulate them in accordance with their nature. At the CNMV we have analyzed the matter, we already have clear criteria for supervision and we are open to analyzing specific operations ", Buenaventura has said.

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