Attention to the Complaints and Enquiries of Investors Annual Report 2017 Attention to the Complaints and Enquiries of Investors Annual Report 2017 Comisión Nacional del Mercado de Valores Edison, 4 28006 Madrid Passeig de Gràcia, 19 08007 Barcelona © Comisión Nacional del Mercado de Valores Reproduction of the content of this report is permitted provided that the source is acknowledged. All of the CNMV's regular reports and publications can be found on the Internet at www.cnmv.es Layout: Composiciones Rali, S.A. ISSN: 1989-2071 Contents 1 Introduction 11 2 Changes in the complaints handling procedure 19 2.1 Regulatory changes in 2017 21 2.2 Issues that need to be adapted 23 2.2.1 Reasons for rejection 23 2.2.2 Duration of the procedures 24 2.3 Transitional adaptations to the procedure laid down in Order ECC/2502/2012 resulting from the obligation to adapt to Law 7/2017 25 3 2017 activity 27 3.1 Documents filed with the CNMV’s Complaints Service 29 3.2 Processing of the documents 33 3.2.1 Pre-processing stage 33 3.2.2 Processing and resolution stage 33 3.2.3 Follow-up stage 35 3.3 Complaints resolved in 2017 37 3.3.1 Pre-processing stage 37 3.3.2 Final stage 42 3.3.3 Follow-up stage 53 3.3.4 Ranking of respondent entities 54 3.4 Information provided by the entities 67 3.5 Procedures with other CNMV directorates, departments and units 72 3.6 International cooperation mechanisms 73 3.6.1 Financial Dispute Resolution Network (FIN-NET) 73 3.6.2 International Network of Financial Services Ombudsman Schemes (INFO Network) 75 3.6.3 Cross-border complaints 75 4 Criteria applied in the resolution of complaints 77 4.1 Marketing/simple execution 81 4.2 Investment advisory services and client portfolio management 101 4.3 Prior information 111 4.3.1 Securities 111 4.3.2 CIS 118 4.4 Subsequent information 124 4.4.1 Securities 124 4.4.2 CIS 144 4.5 Orders 151 4.5.1 Securities 151 4.5.2 CIS 167 4.6 Fees 172 4.6.1 Securities 172 4.6.2 Investment funds 182 4.7 Execution of wills 194 4.8 Ownership 212 4.9 Operation of entities’ Customer Service Departments 222 5. Enquiries area 227 5.1 Enquiries 229 5.1.1 Volume and channels of enquiries 229 5.1.2 The subjects of enquiries 231 5.1.3 Key subjects of enquiries 232 5 5.1.3.1 Enquiries regarding the resolution of Banco Popular Español, S.A. adopted on 7 June 2017 232 5.1.3.2. Request for information on purchase prices of securities listed on an official Spanish secondary market 237 5.1.3.3 Issues relating to the company Abengoa, S.A. 237 5.1.3.4 Suspension from trading of the shares of Urbas Grupo Financiero, S.A. 238 5.1.3.5 Enquiries relating to the obligation to have an LEI code 238 5.1.3.6 Administration and custody fee in suspended or delisted companies 239 5.2 Warnings about unauthorised firms (boiler rooms) 241 5.3 Other activities of the Investors Department 246 5.3.1 Analysis of possible crowdfunding platforms 246 5.3.2 Extension of the scope of the warnings to other types of entity 247 5.3.3 Analysis of the marketing of complex products by Cypriot entities under the freedom to provide services 247 5.3.4 Participation in training courses for judges, prosecutors and state law enforcement agencies 248 5.3.5 Cooperation with other CNMV directorates, departments and units 248 Annexes 251 Annex 1. Public warnings in respect of unauthorised entities 253 6 List of figures Figure 1 Type of investors who contact the Complaints Service 29 Figure 2 Origin of the investors who contact the Complaints Service 30 Figure 3 Type of entities 30 Figure 4 Complaints against credit institutions 31 Figure 5 Complaints against investment firms and management companies 31 Figure 6 Complaints against investment firms and CIS management companies compared with credit institutions 32 Figure 7 Percentage distribution by filing method 32 Figure 8 Place of filing 33 Figure 9 Distribution of PRP concluded in 2017 38 Figure 10 Reasons for petition for rectification 39 Figure 11 Answer to petitions for rectification 40 Figure 12 Reasons for petition for pleadings 41 Figure 13 Response to petitions for pleadings 42 Figure 14 Complaints finalised in 2017 42 Figure 15 Types of non-admissions 46 Figure 16 Reasons for non-admission following petition for pleadings 46 Figure 17 Reasons for non-admission not rectified following response 47 Figure 18 Time to completion by type of non-admission 48 Figure 19 Distribution of the type of complaint resolution 49 Figure 20 Percentage of resolution type 50 Figure 21 Time to conclusion by type of complaint 52 Figure 22 Follow-up actions 54 Figure 23 Replies of the complainants 54 Figure 24 Percentage of decisions favourable to the complainant by entity 61 Figure 25 Percentage of acceptances/mutual agreements by entity 63 Figure 26 Enquiries by subject 232 Figure 27 Number of warnings from the CNMV on unauthorised firms 241 Figure 28 Number of CNMV warnings about unauthorised firms notified by supervisory bodies of EU Member States 242 Figure 29 Sources of information in 2017 243 Figure 30 Resolution of proceedings in 2017 245 7 CNMV List of tables Attention to the Complaints and Enquiries of Investors Annual Report 2017 Table 1 Filing method 32 Table 2 Complaints finalised in 2017 37 Table 3 PRP concluded in 2017 38 Table 4 Non-admissions finalised in 2017 43 Table 5 Type of non-admissions 43 Table 6 Complaints concluded in 2017 48 Table 7 Resolution of complaints concluded in 2017 49 Table 8 Reasons for the complaints concluded in 2017 51 Table 9 Follow-up actions favourable to the complainant 53 Table 10 Ranking of entities by number of resolved complaints 56 Table 11 Ranking of entities by timescale for reading the notification of the opening of complaint proceedings 57 Table 12 Ranking of entities by timescale for responding to the initial petition for pleadings 58 Table 13 Ranking of entities by percentage of decisions favourable to the complainant 60 Table 14 Ranking of entities by number of acceptances and mutual agreements 62 Table 15 Ranking of entities by percentage of follow-up actions communicated following decisions favourable to the complainant 64 Table 16 Ranking of entities by percentage of acceptance of criteria or rectification following decisions favourable to the complainant 66 Table 17 Complaints filed in 2017 relating to the securities market 69 Table 18 Complaints not admitted by entities in 2017 relating to the securities market 70 Table 19 Complaints submitted and resolved by entities in 2017 relating to the securities market 72 Table 20 Number of enquiries by channel 230 Table 21 Sources of information on boiler rooms 243 Table 22 Telephone enquiries about boiler rooms 243 Table 23 Opening of proceedings on boiler rooms 244 Table 24 Resolution proceedings relating to boiler rooms 244 Table 25 Public warnings by source of proceedings 245 8 List of exhibits Exhibit 1 Summary of complaints relating to simple execution/marketing 100 Exhibit 2 Summary of complaints relating to advisory services/portfolio management 110 Exhibit 3 Summary of complaints relating to information prior to the purchase of securities 117 Exhibit 4 Summary of complaints relating to information prior to the purchase of CIS 123 Exhibit 5 Summary of complaints relating to subsequent information on the securities 144 Exhibit 6 Summary of complaints relating to subsequent information on CIS 150 Exhibit 7 Summary of complaints relating to securities orders 166 Exhibit 8 Summary of complaints relating to CIS subscriptions and redemptions 171 Exhibit 9 Summary of complaints relating to securities fees 181 Exhibit 10 Summary of complaints relating to CIS fees 193 Exhibit 11 Summary of complaints on execution of wills 211 Exhibit 12 Summary of complaints relating to ownership 221 Exhibit 13 Summary of complaints relating to the operation of the Customer Service Department or Customer Ombudsman 225 9 1 Introduction 1 Introduction This Annual Report on Complaints shows the steps taken by the CNMV to deal with claims, complaints and enquiries made by investors in 2017 through the Complaints Service. The legal requirement to prepare an annual report derives from Article 30.4 of Law 44/2002, of 22 November, on Financial System Reform Measures, whereby “the Bank of Spain, the National Securities Market Commission and the Directorate- General of Insurance and Pension Funds shall publish an annual report on their res- pective complaints services including at least a statistical summary of the enquiries and complaints handled and the criteria applied by said services in relation to the complaints and the respondent firms, indicating whether the findings were favour- able or unfavourable to the complainant”. This Annual Report is prepared under said legal obligation and includes informa- tion on how the CNMV handled claims, complaints and enquiries in 2017. As a new feature, this year’s Annual Report includes actions and data relating to unauthorised entities that have been the subject of a warning by the CNMV, the publication of other warnings on other types of entities, as well as other activities carried out by the CNMV’s Investors Department. Investors may file a complaint when they feel their interests or rights have been harmed by the actions of an entity providing investment services. With the aim of obtaining a favourable report, investors may file a formal complaint with the Com- plaints Service with regard to material incidents arising from the acts or omissions of the respondent financial institutions, which may result in the entity’s actions being declared contrary to the rules of transparency and customer protection or good financial customs and practices.