National Court Annulled the 91 million euro fine imposed by the National Competition Market Commission (CNMC) on four banking institutions Allegedly arranging to offer interest rate derivatives on terms other than those agreed with clients. The disputed Administrative Chamber considers that it has not been proven that, throughout the entire period examined from 2006 to 2016, there was a common plan among the sanctioned entities that justified the legal classification of a single and continuous violation.
The Sixth Part of the case anticipated appeals filed by Banco Santander, BBVA, Sabadell and Caixabank against the decisions of the National Competition Market Commission dated 13 February 2018, which imposed a fine of 31.8 million (Caixabank), 23.9 million. Agreement will be reached for (Santander), 19.8 million (BBVA) and 15.5 million (Sabadell) Setting the price above market conditions Derivatives used to hedge interest rate risk associated with syndicated loans for project financing.
The CNMC had imposed sanctions on these four organizations on the grounds that their actions had seriously violated Article 1 of Law No. 15/2007 on the Protection of Competition and Article 101 of the Treaty on the Functioning of the European Union, at least since 2006. Until 2016. However, the penalties imposed are one for each party. different result.
Agreed interest
However, collusion was proven in some operations, such as the contracts executed with the VAPAT Group between 2010 and 2012, and four banking institutions They agreed on an interest rate before making an offer to their customers Financial derivatives other than the customer-investor. According to the court, the client believed that the interest rate offered to him at the time of closing the transaction corresponded to the market price, when in fact it was the interest rate predetermined by the organizations. mutual agreementwithout taking into account market conditions.
As for the rest of the operations, the Court considers that the syndicated loan operation was linked to the conclusion of a contract. hedging tool (usually a swap type) with sanctioned entities at a fixed rate of the same percentage for all entities, i.e. a prior agreement between them To set this type. But, in the court’s opinion, “they relied on the fact that this set the price of the derivative higher than the price at market conditions, or, more importantly, that the process of determining the swap price was not transparent to the client”.
Even accepting as a hypothesis the compliance of organizations to set a fixed rate identical to the market rate, the Chamber adds in one of its decisions: Also, this does not prove that the incident happened behind the customer’s back. Because in these contracts it is not proven that the customers showed any complaints or surprise that they discovered undisclosed, unknown margins or commissions when formalizing the guarantee contract.
The Chamber reminds that there are concerted actions of financial institutions to reach agreements illegally. Supposedly more advantageous price for them “This is only illegal if it is carried out with complete disregard for the customer, and this aspect, which is the key to understanding that the agreement is illegal, occurs only in the activities of the VAPAT Group companies and not in the rest.”
The court states that an asset must be appreciated. single and continuous violation In its other operations other than those of the VAPAT Group companies, it would have been necessary for the CNMC to analyze the derivative contract terms in each operation, determine what that was, and determine what it was to show that the derivative was determined above the market level price. margin was imposed illegally.
By not doing so, the court rejected that all derivative contract transactions included in the sanctions decision were part of or could not be included in the same prejudicial scheme that could be pursued in relation to the VAPAT Group companies. Classifying the form of violation as single and continuous is considered unlawful.