This document discusses going public in Spain. It outlines the key parties involved in a going public process, including the issuer/company, selling shareholders, global coordinator, underwriters, agent, auditors, and legal advisors. It also describes the CNMV, stock exchange, and systems management company's roles. The steps and requirements to go public are explained, such as eligibility, disclosure documents like the prospectus, and listing admission. Guidelines for advertising the transaction are provided regarding definition, timing, contents and online considerations. Finally, it covers new responsibilities as a listed company.

1. Going public in Spain

3. CONTENTS
1. INTRODUCTION 4
2. Going public: the parties involved 4
2.1 Issuer or company going public 4
2.2 Selling shareholders 4
2.3 Global coordinator / Lead manager of the issue 5
2.4 Underwriters and placement entities 5
2.5 Agent 5
2.6 Auditors 5
2.7 Legal advisors 5
2.8The CNMV, systems management company, stock exchange companies 5
3. Steps and requirements to conduct a going public process 6
3.1 Eligibility of the issuer and its shares 6
3.2 Preliminary steps 6
3.3 Disclosure requirements 8
3.4 Disclosure requirements: prospectus 8
3.5 Admission to listing 10
4.Advertising the transaction. publicity guidelines 11
4.1 Definition of advertising 12
4.2 Advertising activities in the context of a going public process 12
4.3Timing and contents of advertising 12
4.4 Special considerations for online advertising 13
5. New listed company status 14
6. Garrigues’ experience 14
3
Guide to going public in Spain:
key points to consider

4. Introduction
There are a variety of reasons why a company may
decide to go public:
• To obtain funding by raising capital from the public.
In this case the issuer itself makes an offering of shares
(public or private), by carrying out a capital increase
(initial offering, or IPO).
• To allow the existing shareholders to divest or cash
in their investments. In these cases the issuer’s
shareholders make a secondary offering of some or
all of their shares. Secondary offerings have proved to
be an effective mechanism to cash in on family
businesses or companies with a small number of
shareholders, for private equity investors to exit the
company, or to privatize state-owned enterprises or
state-owned interests in commercial companies.
• To disseminate ownership of its shares so as to give
liquidity to its shareholders and place the company
on the stock exchange. In this case the purpose may
simply be to offer liquidity and disseminated
ownership to the existing shareholders, or to prepare
the company’s succession in cases of family offices and
for future attempts at raising capital.
Moreover, the listing at the Stock Exchanges will facilitate
the valuation of the company and improve the corporate
image of the company.
Although primary or secondary offerings are normally
the first steps towards achieving the necessary
dissemination of ownership of the issuer’s shares to be
admitted to listing on an organized market, public
offerings and admission to listing are different concepts
which are not necessarily related, since public offerings
have taken place that have not resulted in admission to
listing (although this is certainly unusual), and shares can
also be admitted to listing without conducting a primary
or secondary public offering.
Moreover, there is often a combination of reasons, and
when the company goes public both a primary and
secondary offering are conducted.
This document is intended as a guide to companies
potentially willing to go public in Spain. The relevant
legislation for these purposes is:
(i) Securities Market Law 24/1988,of July 28,1988 (the
“Securities Market Law” or “LMV”);
(ii) Royal Decree 1310/2005, of November 4, 2005,
partially implementing Securities Market Law
24/1988, of July 28, 1988, on the admission to
trading of securities on official secondary markets,
on primary and secondary public offerings and on
the necessary prospectus (the “RD 1310/2005”);
and
(iii)the revised Corporate Companies Law, approved
by Legislative Royal Decree 1/2010, of July 2, 2010
(the “Corporate Companies Law").
Going public: the parties involved
2.1 Issuer or company going public
The issuer of the shares has a decisive role throughout
the going public process. Its participation is crucial in any
primary offering (because it will be the company that
resolves to perform the capital increase), but it is equally
necessary in the event of a secondary offering and in the
going public process, considering that:
(i) The majority of the information that will be included
in the prospectus (primarily in the registration
document) will be information about the issuer, to
provide investors with sufficient information to
allow them to evaluate its assets and liabilities,
financial position, income and loss and outlook.The
issuer may be responsible for that information (if it
draws up the prospectus itself). A comprehensive
legal and financial due diligence investigation is
generally performed on the issuer to validate the
information contained in the registration document.
(ii) Even if the issuer is not responsible for the
prospectus, it must still meet a series of obligations,
essentially disclosure-related (for example, if after
the close of the subscription period there is a
material change in the rights of holders that is not
envisaged in the prospectus, the public must be
informed immediately).
(iii) It may (and in practice will normally) be the issuer
that applies for the admission to listing of the shares.
2.2 Selling shareholders
In secondary offerings,these are the shareholders that offer
for sale to the public all or part of their shares in the issuer.
They will be responsible for the actual public offering itself
and will sign the underwriting, placement and agency
agreements as the sellers.
Once the prospectus has been approved by the National
Securities Market Commission (the“CNMV”), the selling
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1
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5. shareholders must immobilize their shares to secure the
performance of the offering (although, in practice the
shares will be immobilized before the prospectus is
approved).
2.3 Global coordinator / Lead manager of the issue
The lead manager is the institution (which must be an
investment services firm or credit institution) that is
instructed by the issuer and/or the selling shareholders
to prepare the placement of the shares and oversee all
operations concerning the design of the financial
conditions, timing and commercial terms of the offering
or admission, and to coordinate dealings with the
supervisory authorities, market operators, potential
investors and all other placement agents and
underwriters.
In relation to a first admission to trading of the issuer’s
shares resulting from a secondary offering and the
prospectus that must be approved by the CNMV, the
lead manager must make all the checks reasonably
necessary under generally accepted market principles, to
verify that the information contained in the securities
note (relating to the transaction itself or the securities) is
accurate and contains all the material information
required by the applicable legislation.
These verifications may vary according to factors such as
the characteristics of the transaction, of the issuer and of
its business, the quality of the information available or
furnished by the issuer, or the lead manager’s previous
knowledge of the issuer, although normally, as mentioned
above, a comprehensive due diligence exercise will take
place.
The global coordinator is the institution that is instructed
to monitor the status and changes in demand for the
offering and coordinate the activities of the various
underwriters or placement agents involved in the
transaction, and will represent these in their dealings with
the issuer and the selling shareholders.
There may be one or more lead managers and/or global
coordinators:
(i) For each tranche of the offering (national,
international, retail investors, qualified investors,
employees, etc.).
(ii) Several co-lead managers.
(iii) Several global coordinators (in the case of very large
offerings).
The same entity may act as both lead manager and global
coordinator.
2.4 Underwriters and placement entities
The underwriters undertake, to the issuer and/or the
selling shareholders, to purchase or subscribe for any
shares that are not taken up by investors in the public
offering.
The role of the placement entities is to offer the shares
to investors and encourage them to acquire or subscribe
for those shares.
The placement entities may act with or without an
undertaking to underwrite the shares; if they do take on
both functions, they are placement entities and
underwriters.
2.5 Agent
The agent handles the purchase or subscription orders
for shares received by the placement entities, settles the
transactions and, if the offering is oversubscribed,
distributes the shares as required.
The agent generally takes on obligations throughout the
issue, as the payments manager or the custodian of the
securities, or to keep the book entry registry or similar
records.
2.6 Auditors
In view of their liability to investors for the contents of
the prospectus, the global coordinators and lead
managers generally ask the issuer’s auditors for an opinion
on the audited information that is included in the
prospectus, which is known as a comfort letter.
2.7 Legal advisors
There are usually two teams of legal advisors: those
advising the issuer and/or the selling shareholders and
those representing the underwriter and placement
entities syndicate.
These teams are responsible for drafting the legal
documents (underwriting, placement, agency, etc.
agreements) and for advising the issuer on preparing for
the going public process (corporate resolutions, bylaw
amendments, assistance with drawing up the prospectus,
coordination of dealings with the CNMV, the settlement
systems, the stock exchange, etc.).
2.8 The CNMV, systems management company, stock
exchange companies
The CNMV must approve the prospectus and other
documents relating to the offering. It may also review all
the advertising of both the offering and the company
carried out in the period immediately preceding or during
the offering,as described in more detail in section 4 below.
Guide to going public in Spain: key points to consider
5

6. Once the offering has concluded, any notices of material
events, periodical public information, notices of relevant
holdings and other information that must be disclosed by
the issuer, as explained in section 5 below, will be filed
with the supervisory body.
Iberclear, the systems management company which
belongs to Bolsas y Mercados Españoles (BME) group,
currently has the functions, assigned to it by the law, of
keeping accounting records in the form of book entries
of securities to be traded on an organized securities
market and of managing settlement of stock exchange
transactions. It is very important to bear its involvement
in mind in any going public process or public offering. It
should also be noted that a comprehensive overhaul of
Spain’s clearance systems is currently in progress (to be
completed in 2014), to adapt them to the European
environment.
Applications for listings are made to the stock exchange
companies (Sociedades Rectoras de las Bolsas),which have
regulations both on admission to listing and staying listed.
Steps and requirements to
conduct a going public process
Broadly speaking, to conduct a going public process a
series of requirements must be met, concerning (a) the
eligibility of the issuer and its securities, and (b) the
information to be filed with the CNMV.
3.1 Eligibility of the issuer and its shares
In order to go public, a company must basically meet the
following requirements:
(i) the issuer must be validly incorporated;
(ii) it must operate in accordance with its deed
of incorporation and bylaws;
(iii)the shares must comply with the legal regime
governing them; and
(iv) the shares must be freely transferable.
The law also establishes that a minimum dissemination of
the shares to be listed has to be met (it is considered as
sufficient dissemination if, at least, 25% of the shares to
be listed are place among general public) and an
“expected market value” of €6,000,000 for all of the
shares requested to be admitted to listing.
Initially companies seeking to be listed do not generally
satisfy all of these requirements, especially those relating
to disseminated ownership of their shares. These
requirements are generally met through a previous
primary or secondary offering,which allows the company
to achieve the dissemination required not only by
applicable legislation but also by market standards.
3.2 Preliminary steps
Before outlining the disclosure requirements to
conduct a going public process with a public
offering, another series of preliminary steps must
be considered. These steps may be taken at the
same time as the documents and disclosure
requirements established in the Securities Market
Law are prepared and fulfilled, which is a way of
shortening the periods for performing and
conducting the offering. It must be understood,
however, that this is a complex process that will
require the involvement of many different parties.
(i) Due diligence. As indicated in section 2 above,
once the project has been launched, and at a very
initial stage, the legal and financial due diligence
investigation on the issuer will start.This process
will paint a comprehensive picture of the company
and allow any contingencies to be remedied, as a
preliminary step to the public offering. It will also
be necessary for completion of the prospectus.
Accordingly, the due diligence will be performed
very shortly before the transaction is performed,
and will be continuously updated.
(ii) Corporate resolutions and bylaw amendments.
Simultaneously with this process, the corporate
resolutions necessary for the issuer to go public and
to adapt its bylaws to its new “listed company”
status will be prepared:
a) Resolutions inherent to the going public pro-
cess. Resolutions relating to the conduct of a
primary and/or secondary offering and to
applying for the admission to trading of the
issuer’s shares.
These resolutions must specify, at least, the
essential characteristics of the offered shares,
the basic structure of the offering and the
acceptance period.
It must be borne in mind that if the capital
increase to issue new shares in a primary offering
is made without applying preemptive subscription
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7. rights, the related requirements established in the
Corporate Companies Law must also be met.
b) Corporate website. Resolution to create a
corporate website that must be registered at the
Commercial Registry or notified to all the
shareholders.
c) Rules on the right of attendance Rules on the
right of attendance (subject to the limit established
in article 179.2 of the Corporate Companies Law)
and, where appropriate, on remote voting in
accordance with the regime applicable to listed
companies.
d) Rules on the right to information. Rules on
the shareholders’ rights to general information in
accordance with the provisions of articles 518,
519, 520 and 521 of the Corporate Companies
Law for listed companies.
e) Rules on the shareholders’ rights to appoint
proxies. Rules on the shareholders’ rights to
appoint proxies in accordance with the
provisions of articles 522 to 526 of the
Corporate Companies Law for listed companies.
f) Corporate governance. Certain changes will also
have to be made to the bylaws to set out the
operating rules for meetings of the shareholders,
the board and the various committees that must
be set up for these purposes (audit committee,
remuneration committee and nominations
committee), along with any other changes
needed to adapt to the corporate governance
legislation and recommendations applicable to
listed companies (in accordance with the Unified
Code of Good Corporate Governance approved
by the CNMV1
) .
Alongside the corporate bylaws, the regulations
on the shareholders’ board meetings, and the
internal code of conduct of the issuer must be
approved (or where appropriate amended) to
adapt them to the issuer’s new listed company
status (in accordance with the provisions of
articles 113, 114 and 115 of the Securities
Market Law and of articles 512,513,528 and 529
of the Corporate Companies Law).
g) Shares represented by book entries and free
transferability of shares.The issuer’s bylaws must
be amended to have the shares represented by
book entries, to appoint the registry and
settlement systems (Iberclear) as the entity
responsible for keeping the accounting records,
and to remove any restrictions on the free
transferability of shares.
(iii) Procedure for converting shares into book
entries. Once the relevant resolution has been
adopted by the shareholders’ meeting, the following
procedure (described below in view of its specific
characteristics) must be implement to convert the
shares into book entries:
a) The conversion resolution must be recorded in a
public deed and registered at the Commercial
Registry.The public deed must also be filed with the
entity responsible for keeping the accounting records
(the registry and settlement systems) and with the
CNMV, for registration and deposit.
b) A notice must then be published in the Official
Gazette of the Commercial Registry and in one
of the daily newspapers with the widest
circulation in the place where the company has
its registered office, indicating the period and
procedure agreed for the conversion of shares
into book entries.
c) Once the above notices have been published,the
shareholders must submit their share certificates
to the adherent entities in the registry and
settlement systems, within at least one month
from the date of publication of the notice.
As and when the shareholders submit their share
certificates, the adherent entities will forward the
relevant information to the systems management
company.
In the case of registered shares, before recording
the registration reference numbers, the systems
management company will check with the share
register that the registration reference numbers
are actually assigned to the persons registered as
shareholders.
d)After the end of the one-month period mentioned,
any shares that have not been converted will be
removed, although they may subsequently be
entered in favor of anyone evidencing that they
hold the right. If after three years any shares have
not been allotted, the registry and settlement
systems will proceed to dispose of the securities
Guide to going public in Spain: key points to consider
7
1.- The Unified Code of Good Corporate Governance is under CNMV.

8. on behalf and at the risk of the parties concerned,
through one or more stock brokers, dealers or
market members, and the amount obtained from
the sale will be deposited in favor of the parties
concerned at the Bank of Spain or the Caja
General de Depósitos.
e) Moreover, under certain specific provisions, the
shares of certain entities (credit institutions,
investment services firms, private television
concession holders, etc.) must be registered
shares. Although in the Corporate Companies
Law, the distinction between registered and
bearer shares seems only to apply to shares
represented by share certificates and not to
shares represented by book entries, any listed
companies which by law are required to have
registered shares will keep the reference to
registered shares in their bylaws.
If it has registered shares represented by book
entries, the company must keep its share register.
The registry and settlement systems’ operating
rules therefore include specific provisions to ensure
that the necessary information on the transfer of
shares will be given to those entities to allow them
to continue to keep their share register (role, that
usually is engage to a adhere entity which keeps
the book on behalf of the company).
3.3 Disclosure requirements
There are three essential disclosure requirements for
admission to listing:
(a) filing and registration of the issuer’s audited financial
statements;
(b) filing and registration at the CNMV of
documents evidencing that the issuer and its
shares are subject to the applicable legal
regime; and
(c) filing, approval and registration of a prospectus at
the CNMV and its subsequent publication.
3.3.1 Audited financial statements
The issuer must file, with the CNMV, its individual
financial statements, and if applicable, its consolidated
financial statements, for the last three years audited in
accordance with the legislation of the issuer.
An exception may be made, where the CNMV so
decides in the interests of the issuer or the investors, if
the CNMV considers that the investors have the
information they need to form a sound opinion on the
issuer and on the securities for which admission to
trading is requested.
Regulations do not require a clean audit report
(without conditions).
3.3.2 Applicable legal regime
In the case of sociedades anónimas (Spanish
corporations/public limited-liability companies)
organized in accordance with Spanish law, their
incorporation documents must be submitted; it will be
recommendable in some cases for them to be
accompanied by a certificate issued by the Commercial
Registry for the issuer’s registered office.
3.3.3 Prospectus
The prospectus must contain information on the issuer
and on the shares to be listed.
This information must be sufficient, according to the
characteristics of the issuer and the shares, to allow
investors to evaluate, easily and in a comprehensible
manner, the assets and liabilities, financial position,
income and loss and outlook of the issuer and of the
rights attached to the securities.
3.4 Disclosure requirements: prospectus
The contents of the prospectus must comply with the
relevant format established in Commission Regulation
(EC) No 809/2004, of April 29, 2004, implementing the
Prospectus Directive, by reference to the type of issuer
and whether the shares are in a socieded anónima
(Spanish corporations/public limited-liability company).
The prospectus may be prepared as one or several
separate documents. Outlined below are the different
parts of the prospectus (registration document, securities
note and summary note), along with their approval and
publication.
3.4.1 Registration document
The registration document will contain the information
on the issuer. It will include detail description of the
issuer activities, its assets and liabilities, financial
condition and corporate governance, among others.
3.4.2 Securities note
The securities note will contain the information on the
securities the subject of the application for admission
to listing (the issuer’s shares, in this case) and, as the
case may be, the terms and conditions of the IPO or
secondary offer.
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9. 3.4.3 Summary note
The prospectus must contain a summary note with the
following key characteristics:
(i) it must be drawn up in accordance with a
standardized format;
(ii) it must be drafted concisely using non-technical
language to make it readily understandable by
investors; and
(iii) it must provide the essential information to help
investors, together with the rest of the prospectus,
to decide whether or not to invest in the securities,
for which purpose it must include the characteristics
of the issuer, as well as the essential characteristics
of the securities and of the risks associated both
with the issuer and the securities.
The summary note must contain an express warning
that:
(i) It must be read as an introduction to the
prospectus.
(ii) Any decision to invest in the securities must be
based on the investor’s assessment of the
prospectus as a whole.
(iii) Where a claim relating to the information contained
in the prospectus is brought before a court, the
plaintiff investor might, under the national legislation
of the Member States, have to bear the costs of
translating the prospectus before the legal
proceedings are initiated.
(iv) No civil liability may be sought against anyone
exclusively on the basis of the summary note,
including any translation thereof, unless the
summary note is misleading, inaccurate or
inconsistent with the other parts of the prospectus,
or unless it fails to provide, when read with the
other parts of the prospectus, essential information
to help investors decide whether or not to invest
in the securities.
3.4.4 Supplements
Any new significant factor, inaccuracy or error that may
be material, relating to the information included in the
prospectus, and likely to affect the evaluation of the
securities must be recorded in a supplement, if it arises
or is noted after the prospectus is approved but before
the shares start to trade.
The supplement will be approved in the same way as
the original prospectus, within up to five business days
from the date on which the new significant factor,
inaccuracy or error that may be material becomes
known, and will be published, at least, on the same
channels as the original prospectus. Any necessary
additions must be made to the summary note and any
translation of it to include the new information in the
supplement.
3.4.5 Language of the prospectus
The prospectus may be drafted in Spanish,in a language
commonly used in the field of international finance
(generally English) or in any other language acceptable
to the CNMV.
3.4.6 Approval
The prospectus must be approved by the CNMV
before it is published.Approval of the prospectus is an
express act by the CNMV in which it concludes that
the prospectus is complete and comprehensible and
that the information it contains is consistent. The
CNMV thus ensures that the information contain in
the prospesctus satisfies the minimum requirements
to allow an investor to make an informed decision on
the securities. It should be clarified, however, that its
approval does not, under any circumstances, imply a
judgment on the quality of the issuer applying for its
shares be admitted to trading, or on the quality of
those shares.
The maximum period for approval of the prospectus
will be ten or twenty business days from its filing date
(depending if the prospectus to be approved is related
to listing of the shares or to a public offer).This period
may be tolled if the CNMV requires any additional
information.The absence of an express decision will be
construed as rejection.
If the CNMV considers that the filed prospectus is
incomplete, it must notify the person applying for
admission to trading of the additional information
needed, which must take place within the approval
period. In this case, the approval period will be tolled
between the date the CNMV makes the request and
the date the information is sent.That information will
generally have to be sent within ten or twenty business
days from the date following that on which the request
for information was received by the interested party.
The CNMV may extend that period where necessary
in view of the nature or complexity of the information
requested.
In practice,a schedule is usually agreed with the CNMV
in order to have a certain degree of certainty as to the
Guide to going public in Spain: key points to consider
9

10. date of approval, which is essential for the successful
completion of the transaction, given the large number
of parties involved.
To speed up the approval process, it is also highly
recommendable to be familiar with the interpretation
criteria applied by the CNMV, as it will thus be easier
to reach agreements with the CNMV in complex cases,
and in particular, to keep very much in mind the
following documents which, although not primary
legislation, do set out certain interpretation criteria
applied by the regulators:
•The CNMV’s guide for approval of equity
transactions2
.
• The questions and answers guide prepared by the
European Securities and Markets Authority (ESMA),
clarifying certain matters relating to the information
to be included in the prospectus3
.
3.4.7 Registration
Following its approval,the prospectus must be recorded
at the relevant administrative registry and made available
to the public free of charge.In all cases,the contents and
format of the prospectus published must be identical to
the contents and format approved by the CNMV.
3.4.8 Publicación
The prospectus may be published on the following
media, as chosen by the person that applied for
admission to trading:
(i) In one or more newspapers circulated in the
Member States in which admission to trading is
applied for, or in one or more newspapers with
wide circulation in that Member State.
(ii) In a printed format which must be made available
free of charge to the general public at the offices
of the market on which the securities are to be
admitted to trading (the stock exchanges) or at
the registered office of the issuer and the offices
of the financial intermediaries placing the securities,
including the payment agents.
(iii) In electronic format on the website of the issuer
or, where applicable, of the financial intermediaries
placing the securities,including the payment agents,
at least throughout the period of validity of the
prospectus.
(iv) In electronic format on the website of the market
on which the securities are to be admitted to
trading (the stock exchanges), at least throughout
the period of validity of the prospectus.
(v) In electronic format on the website of the CNMV,
if the CNMV offers this service for prospectuses
approved by it.
If the prospectus is made available to the general public
in electronic format, the person applying for admission
to trading must provide any investors who so request
with a printed copy free of charge.
3.4.9 Period of validity of the prospectus
The prospectus will be valid for twelve months from
the date of its approval by the CNMV for public
offerings or admission to trading on a Spanish official
secondary market or a regulated market in the
European Union, provided that any necessary
supplements (see subsection 3.4.4 above) are added.
3.5 Admission to listing
Once the prospectus has been registered and the
offering conducted, the shares must actually be admitted
to listing on Spain’s four stock exchanges (Madrid,
Barcelona, Bilbao andValencia).
If the shares are to be admitted to trading on more than
one stock exchange, a single check that all the necessary
requirements are met will be valid for all of them.
A decision by the governing body of each official
secondary market concerned, however, will be required
for the shares to be admitted to trading on that particular
market.This may be requested by the issuer, on its own
responsibility, once the securities have been issued or the
relevant book entries made.
In line with the comments outlined above, the supporting
documentation to be filed for admission to listing and the
procedure for admission to listing may be summarized as
follows:
(i) In the case of a new share issue, the document
evidencing that the shares are represented by book
entries must be filed with the registry and
settlement systems, the CNMV and the stock
exchanges.
(ii) The agent sends a certificate to the stock exchange
evidencing its role in the operation.
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2.- Available in Spanish at : http://www.cnmv.es/portal/~/verDoc.axd?t={fb1494b7-0675-48a1-bc21-099ee157984b}.
3.- Available at: http://www.esma.europa.eu/system/files/2014-esma-35_21st_version_qa_document_prospectus_related_issues.pdf

11. (iii) The stock exchange sends a “tape” with all of the
details of the subscribers/investors (the “X-32”
document).
(iv) The registry and settlement systems register the
securities in the names of the subscribers/investors
and send a certificate to the CNMV.
(v) The stock exchange sends the “27k” certificate
(named after article 27k of the Stock Exchange
Regulations).
(vi) The application for verification of fulfilment of all
requirement to admission to trading of the new
shares, together with the dissemination tables
(“cuadros de diffusion”) for the offering, signed by
the issuer, is filed with the CNMV.
(vii) The relevant application is filed with the stock
exchanges, accompanied by the certificate of the
resolutions of the managing bodies, the company’s
bylaws, the official copy of the deed recording the
capital increase, where applicable, or document
evidencing the information on the book entries, and
any other document that may be necessary and is
requested by the stock exchange company.
(viii)The CNMV approves the application and tables and
notifies the stock exchanges.
(ix) The stock exchange managing bodies resolve in
favor of the admission to listing and the shares start
to trade.
Advertising the transaction.
publicity guidelines.
A key issue to bear in mind when a company decides to
go public on the stock exchange is how the transaction
can be advertised.
The law sets out a series of restrictions on the advertising
activities, in the broadest sense , that can be conducted
in Spain in connection with a primary or secondary
offering, either before or during the offering.
It is important for all the parties involved in the company’s
offering and going public process to be aware of these
restrictions,which makes it advisable to convey the details
of these restrictions, at a very early stage of the
transaction, to all the members of the project team and
representatives of each of the participants (that is, the
company, the lead managers and coordinators, the agent,
the placement entities and underwriters, their respective
directors, executives, employees and external advisors,
including public relations advisors, any advertising agency,
company shareholders and persons acting on behalf of
any of them, to the extent that concerns them) who may
have contact with the press or with analysts, so that they
may decide who in their respective organizations will be
responsible for ensuring that these restrictions are
observed, or who otherwise may distribute key
information relating to the offering.
Guide to going public in Spain: key points to consider
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12. It is customary for the transaction’s legal advisors to be
informed, in advance, of any initiatives relating to the
distribution of information on the offering, promotional
campaigns or other advertising activities planned by the
company, and for drafts of the relevant material to be
sent to them, so that they may give any necessary and
appropriate directions from a legal standpoint.
4.1 Definition of advertising
For the above purposes, advertising must be understood
to mean not only the activity defined in the General
Advertising Law (“Any kind of communication made by
an individual or legal entity, whether public or private, in
the performance of a commercial, industrial, artisanal or
professional activity, designed to promote directly or
indirectly the sale of personal or real property, services,
rights or obligations”), but also, the publication in the
media of any news or interviews, and any other
procedure for the distribution of information relating to
the offering or the issuer.
By way of example, these activities include: the press,
messages in videos, DVDs or CD-ROMs, commercial
documents of the company, information available on the
Internet, all kinds of interviews (by telephone, on radio
or television) and, in general, any information that may be
distributed to the public or circulated widely, including to
the company’s employees.
4.2 Advertising activities in the context of a going public
process
The CNMV’s approval is not required for the advertising
activities carried out in the context of a public offering.
The CNMV is nevertheless authorized to monitor any
advertising carried out by the issuer, the offerors and any
entities participating in the placement of the securities.
For these purposes, all advertising material must be
available to the CNMV, throughout the period stipulated
by it.
In view of its authority to monitor advertising activities, it
is advisable that, in practice, any advertising material that
is to be used in the context of the offering, both before
and after the prospectus is approved, should be reviewed
by it before it is used, so that the CNMV can make any
recommendations in relation to that material.
The CNMV’s review process of advertising material is
usually quite quick, although it is advisable to submit the
material as early as possible so as to avoid any delay.
Likewise, any press releases to be published should also
be sent in advance to the CNMV, unless they simply
reproduce information contained in supplements to the
prospectus, material events or additional information.
The CNMV may direct, at any time, in a reasoned
decision, that any advertising that fails to comply with the
applicable legislation must be corrected or pulled.
4.3Timing and contents of advertising
Advertising of activities in the context of an offering may
be divided into two types according to when they take
place:
4.3.1 Before approval of the prospectus:
Under the applicable legislation,advertising activities are
allowed before the prospectus is approved by the
CNMV, provided the following conditions are met:
(i) Any advertising carried out in connection with the
offering must be clearly recognizable as such.
(ii) The information the advertising contains must not
be inaccurate or misleading.
(iii) The information must be consistent with that to
be included in the prospectus.
(iv) The advertising must expressly state that a
prospectus will be published, and specify how
investors can obtain the prospectus once it has
been registered.
(v) It must not include any declarations or information
on future projections, outlook or business
opportunities of the company.
Despite this permission, it must be kept in mind that
the nature and intensity of any advertising activities
carried out must not be sufficient for them to be
considered a public offering in themselves, as for this
purpose there must first be a prospectus approved by
the CNMV.
In addition, to prevent distortions and delays in the
approval process of the prospectus by the CNMV, it is
advisable for formal notice of the company going public
to be given as late as possible, ideally coinciding with
the presentation to analysts, in order to avoid the
appearance of press articles and news reports that
might hinder the process.
Following the presentation to analysts, and again with
a view to making the CNMV’s approval process easier,
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13. the appearance of any news on the company going
public,or even on the company itself,should be avoided
as far as possible.
Nevertheless, the going public process should not
prevent the company from carrying on its customary
advertising or news-related activities, before the
decision to make the offering.
4.3.2 After approval of the prospectus:
(i) Advertising activities
Once the prospectus has been approved by the
CNMV, this should be the main advertising or
promotional document,as it must be made available
to potential investors.
Any advertising carried out after the prospectus has
been approved must fulfill the requirements
described above, adapted to this new stage of the
process, i.e.:
a) Any advertising carried out in connection with
the offering must be clearly recognizable as such.
b) The information the advertising contains must
not be inaccurate or misleading.
c) The information must be consistent with that
included in the prospectus.
d) The advertising must expressly state that a
prospectus approved by the CNMV has been
published, and specify how investors can obtain
that prospectus.
In all cases,it is advisable at this stage also to avoid
any verbal or written declarations, by the
company, the shareholders, or any other entity
acting on their behalf, relating to future
projections, outlook or business opportunities, or
any future financial estimates or foreseeable
results of the company.
A last point to note is that any advertising carried
out will be subject to the general advertising
legislation and, in particular, to the provisions of
the General Advertising Law.
(ii) Supplement to the prospectus
As mentioned in subsection 3.4.4 above, any new
significant factor, inaccuracy or material error
relating to the information included in the
prospectus, which arises or is noted after the
prospectus is approved but before the shares start
to trade and may affect the evaluation of the
shares must be recorded in a supplement which
will be approved in the same way as the original
prospectus, within up to five business days, and will
be published, at least, on the same channels as the
original prospectus. Any necessary additions to
include the new information in the supplement will
be made to the summary note .
4.4 Special considerations for online advertising
Online advertising will be subject to the same restrictions
as above, although in view of the global nature of internet
access, the following recommendations should be borne
in mind:
(i) Any mention of the offering made online may be
seen by investors in countries where the offering is
not permitted, so it would be advisable to include
express disclaimers in this respect.
(ii) Internet users should only be able to access pages
with information and advertising on the offering if
they have first replied affirmatively to questions
designed to control the persons accessing that
information (questions on country of residence,
town/city, zip/post code, confirmation of physical
presence in Spain, etc.).
(iii) Any advertising relating to the offering must
expressly mention that the offering has been
registered exclusively with the Spanish National
Securities Market Commission (CNMV).
(iv) No declarations by the company, the shareholders,
or any other entity acting on their behalf, relating to
future projections, outlook or business
opportunities, or any future financial estimates or
foreseeable results, of the company should be
included.
(v) Before the offering, the company would be well-
advised to review the contents of its website to
ensure they are updated (for example,checking that
it contains no information that is contradictory to
or inconsistent with that included in the
prospectus). The website must not contain any
research reports on the company, or links to any
such reports.
(vi) Any hyperlinks from or to other non-company
documents or documents not prepared by the
Guide to going public in Spain: key points to consider
13

14. company may imply that the company accepts the
information contained in such documents as its own
and takes liability for it, therefore they should be
carefully reviewed.
New listed company status
Once the company’s shares have been admitted to
trading, it will become a “listed company” and will be
subject, among others, to the relevant provisions of
articles 495 to 539 of the Corporate Companies Law.
These include, in addition to certain provisions on the
procedures of shareholders’ and board meetings (which
will be included in the bylaws and their respective
regulations, as indicated above), provisions relating to
subscription for shares and non-application of pre-
emption rights, a limit on treasury stock, no limit on the
issue of bonds, and the obligation to disclose any
shareholders agreements that include rules on the
exercise of voting rights at shareholders’ meetings or
limits or conditions on the free transferability of shares.
Moreover, the listed company will have to comply with
the transparency legislation, which includes the obligation
to make certain disclosures, envisaged in the Securities
Market Law and implementing legislation, and which are
summarized briefly below:
(i) Material information.
(ii) Financial periodic disclosures (yearly, half-yearly and
quarterly).
(iii) Significant interests and treasury stock.
(iv) Information on the total number of voting and
capital rights at the end of each calendar month in
which there has been a capital increase or
reduction.
(v) Preparation of the annual report on the
remuneration of the managing body.
(vi) Preparation of the annual corporate governance
report which must include at least the ownership
structure, procedures of the shareholders’ meeting,
management structure, related-party transactions,
risk control system, control internal systems related
to release of financial information and degree of
compliance with corporate governance
recommendations.
The regulated information must be published on the
company’s website. .
Simultaneously with its publication, the regulated
information must also be distributed by the issuer on a
channel that ensures quick, non-discriminatory and open
access throughout the European Union.The distribution
may be made directly by the issuer or entrusted to a third
party (the discloser), which may be the CNMV or other
entities, such as the stock exchanges or media outlets. In
practice, this distribution is generally entrusted to the
CNMV.
For its distribution, the regulated information must be:
(i) transmitted by the issuer to the discloser in
complete and unaltered form (in the case of
periodical public information, the website where it
may be consulted may be specified);
(ii) transmitted in a way that protects the security of
the notice,minimizes the risk of data corruption and
unauthorized access, and provides certainty
regarding the source of the information; any failure
or disruption in the transmission of information
under its control must be remedied as soon as
possible by the issuer (the company will not be
responsible for any systemic errors or defects at the
discloser to which the regulated information has
been transmitted); and
(iii) transmitted such that it is clear that it is regulated
information, clearly identifying the issuer, the subject
matter of the regulated information and the date
and time of the communication.
Garrigues’ experience
We are known for providing a seamless service to our
clients, backed by multidisciplinary teams that ensure the
same service quality worldwide.This level of service to
our clients has led to the recognition of Garrigues as a
leading law firm in Capital Markets in the most prestigious
legal directories: IFLR 1000, Chambers & Partners and
Legal 500, highlighting in particular the all-round strength
of Garrigues’ securities market practice.
Garrigues’ worth has also been recognized in the various
awards it has received, including in 2013 alone:
• Chambers Europe Awards for Excellence 2013:
Client Service Award (Client Choice Award).
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15. • Iberian Lawyer 2013: Client Trust Award (Premios
Oro España).
• International Financial Law Review (IFLR) /
Euromoney. Law Firm of theYear: Spain.
• International Law Office: Firm of theYear in Spain in
the Client Choice Awards 2013.
The professionals in the Securities Market practice have
a multidisciplinary vocation, a high level of expertise and
comprehensive knowledge of this complex sector. We
provide support to companies intending to go public at
all stages of the process: decision-making, legal
implications and implementation of corporate
governance.We also advise the financial institutions acting
as lead managers and global coordinators.
Our advisory services take in the drafting of all the
necessary legal documentation (prospectus, official
notices, mandate, agency, placement, underwriting
agreements, etc.) and following up on steps with the
CNMV, the stock exchange companies and the registry
and settlement systems, as well as following up on
dealings with these entities and the global coordinators.
We also have proven experience in providing advisory
services to companies which securities are listed on
Latibex (the Latin American securities market) or on
Spain’s MAB alternative stock exchange (Mercado
Alternativo Bursátil).
Guide to going public in Spain: key points to consider

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www.garrigues.com