The National Securities Market Commission (CNMV) has concluded that, with the information available, the Saudi group STC and its investment bank Morgan Stanley respected the market regulations in their surprise break-in at Telefónica. "In this case, with the information available today, collected in the exercise of the supervisory powers of the CNMV, there are no actions or circumstances that indicate that the applicable regulations have not been complied with in the recent notification of positions on Telefónica," sources from the supervisory body told this newspaper.

This concludes the analysis opened after announcing STC on the 5th that it had reached 4.9% of the capital of Telefónica, which makes it already the first shareholder of the operator with the intention of rising to 9.9%. The CNMV has monitored whether, in order to stealthily enter Telefónica, STC or its investment bank Morgan Stanley had exceeded 3% participation without notifying the market, which would violate the regulations.

However, their conclusion is that they only exceeded that threshold on the day of the announcement. That is, they could have had 2.9% acquired secretly in previous weeks through several subsidiaries of Morgan Stanley, but only reached 4.9% when they announced it.

The sovereign wealth fund PIF, which is personally chaired by Saudi Crown Prince Mohamed Bin Salman, has confirmed to the CNMV the ownership of 4.9% without the body appreciating irregularities.

Passing the CNMV exam does not yet imply that of the Government, which assures that it will analyze "rigorously" if the entry puts national security at risk as Telefónica is a strategic company.

"The regulations on notification of significant holdings in listed companies are harmonized at European level and are quite clear," they point out in the CNMV, which recalls that the body "has supervisory powers over the correctness of notificationsand to require additional information from market participants."

As they emphasize, "neither the letter nor the interpretation of the regulations allow an investor who builds a shareholding to fragment it or chop it into packages below the 3% threshold, to avoid or delay its publication." Consequently, "whether it is done directly or through an intermediary, investment vehicles, banks or custodians; whether it is done through shares or through derivatives that give the right to its acquisition and then to exercise voting rights. This would be contrary to the applicable legal regime."

The CNMV assures that it is a regulation that they constantly monitor. "In the past, when we have concluded defects in communication or lack of notification, we have exercised the sanctioning power on numerous occasions."

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