Stock agency (AV)

A Securities Agency (AV) is an investment services company (ESI) that has the powers to provide financial intermediation activities and investment services on behalf of third parties in Spain.

First of all, it should be noted that the Securities Agency cannot act on its own. You can only carry out operations on behalf of your clients. Therefore, the powers of securities dealers are limited compared to those of securities firms.

On the other hand, Securities Agencies are created with the purpose of offering a specialized service. In principle, they try to be an alternative to credit institutions that provide investment services. Furthermore, in order to authorize a VA to provide investment services, it is required, by law, that the executive members have recognized professional repute in the sector. For this reason, the degree of specialization of this type of company is usually quite high.

Supervision of the Securities Agency (AV) in Spain

According to the regulations, the CNMV supervises all those authorized entities to provide investment services:

• Investment services companies.
• Management Companies of Collective Investment Institutions (SGIIC).
• National credit institutions (investment service providers).
• Foreign credit institutions (authorized to operate in Spain).

In addition, the investor can consult in the official registries of the CNMV which securities agencies are really authorized. The National Securities Market Commission (CNMV) is the competent supervisory body that authorizes these investment proposal services to companies and individuals.

Types of investment services companies in Spain

On the one hand, they are regulated in the Securities Market Law and, on the other, in RD 217/2008, of February 15, on the legal regime of investment services companies:

• Securities company (SV): They are legitimized to offer all kinds of investment services, both on behalf of others and on their own.
• Stock agency (AV): They are only authorized to operate for someone else's account.
• Portfolio Management Company (SGC): Its functions are limited to the discretionary management and advice of investment portfolios. In the case of discretionary management, the investor delegates his own powers to the company, which makes investment decisions on his assets. In advising, it is the investor himself who makes the final decision.
• Financial advisory company (EAFI): They are exclusively authorized to provide financial advisory services.

Activities and services provided by the Securities Agency

These are the activities that securities agencies can carry out:

See comparison between all investment services companies.

Representatives of the Securities Agency

Securities agencies can carry out their activity through the head office or through branches. In addition, they have the possibility of empowering representatives to market AV services. Said representatives maintain a commercial relationship with the AV. In other words, the representatives are not salaried workers of the AV, but rather they render certain services in exchange for a variable remuneration or commission. Payments are made with invoices, not through a payroll.

On the other hand, the representatives are not authorized to provide all the services of the AV. In no case, can they act on their own behalf but all their activities are carried out in the name and on behalf of the Securities Agency.

The following table differentiates the activities and services that, in any case, must be carried out by the AVs (headquarters and branches) of which the representatives may be authorized: