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The Spanish Stock Exchange is a transparent and secure market, with strict rules for operating and controlling operations. However, the large number of transactions and their increasing complexity can lead to errors and subsequent complaints and claims. In order to adequately respond to this demand, the Bolsa de Madrid created the figure of the Investor Ombudsman that tries to ensure the correct fulfillment of the orders issued.
For these purposes, Ms. Gloria Martínez-Picazo, as Investor Ombudsman of Madrid, Barcelona, Bilbao and Valencia Stock Exchanges, fulfills the mission of ensuring the good outcome of the operations carried out on the Stock Exchange, examining and attending to the claims and complaints that any person or entity direct in relation to said operations and in the actions directly related to them.
General information
The growth in the number of stock market transactions and their increasing complexity has increase the probability of errors in transactions or irregularities that could affect the legitimate rights and interests of individuals and entities involved in their planning, trading or settlement.
The transformation of stock market traffic as a result of new technologies, globalisation of markets, internationalisation of brokers and other issues has produced big changes in the form of investments and created more opportunities and instruments for savers. But it has also produced more uncertainty and increased the risk of conflicts.
This greater possibility of incidents and controversies makes it advisable to install flexible and quick ways to correct such mistakes or anomalies, providing investors with agile channels to efficiently oversee their rights and interests and resolve any problems that may arise.
In response to these demands, the Bolsa de Madrid decided to establish an Ombudsman on October 22 1991 in order to assist and defend stock market investors.
The Ombudsman is appointed by the Board of Directors of the Bolsa de Madrid and has full autonomy to develop his functions and organise and avail himself of the necessary resources.
Any person or entity that believes its rights and interests have been damaged during stock market transactions has the right to use the services of the Ombudsman.
The procedure is confidential and free. The process ends with a Final Report if there is no agreement among the parties concerned.
Complaints and claims can be made against the following entities:
- Banks and savings banks who receive orders
- Brokers and broker-dealers who carry out transactions.
- Companies that issue shares or bonds listed on the Bolsa.
The ombusdman examine complaints, claims and challenges by investors regarding transactions on the Bolsa de Madrid and in relation to them analyse the actions of market members, institutions receiving orders, entities issuing securities and other parties involved in contested operations. A final report is drawn up which contains a proposed solution to the conflict and also suggestions and recommendations.
In short, the Ombudsman's functions are:
- Take preventative steps, endowing broker-investor relations with greater transparency which clarifies positions in conflicts when they arise and tries to avoid complaints and challenges.
- Reconcile the parties concerned, creating the conditions and having the resources (the procedure) to clarify issues and bring the sides closer together and the scope to reach an eventual agreement. Disseminate the annual report of the Ombudsman with the criteria and core doctrine, helping to bring about an end to the conflict and avoiding a Final Report.
- Act as arbiter and provide a channel for the issues and allegations that lead to the drawing up of a Final Report, which contains a proposed solution.
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Information, in all directions. Prior to the presentation of the complaint, or subsequently, in order to show the investor how to proceed if the Ombudsman rules that he is not able to deal with the issue.
The Ombudsman's functions and responsibilities do not include the following:
- Complaints whose handling and resolution could damage third parties.
- Issues that are pending a court decision or which, after being raised, may be submitted to a court.
- Issues that are subject to an arbitration procedure.
- Complaints being handled by the customer defender or an equivalent body of any entity.
- Claims that are pending or being submitted to the National Securities Market Commission and the Bank of Spain's Complaints Department.
The main principles which guide the activities of the Ombudsman are:
Self-regulation. The actions of the Ombudsman are founded on the principle of institutional autonomy which requires recognition of the necessary self-regulation capacity in order to tend to stock market traffic and the best fulfilment of its purposes.
Confidence Versus Coercion: Underlying this procedure is the desire to replace coercion instruments by institutional coexistence and confidence so that complaints can be settled. An ethical and professional response from the entities the subject of complaints is required, recognising that there could have been correct and incorrect decisions and that they should not ignore them but be the first to know about them and take the right steps.
Conflicts, bad investment. The basic criterion that inspires the institution is that "from the financial standpoint, conflict is a bad investment". And not from the strict angle of the handling of the resources committed, which in many cases are not important but because of the upset it can cause to client-broker relations. All of this makes an urgent solution advisable, which prevents an erosion of confidence. There is an attitude in these situations which first of all aims to avoid it and if this is not possible, examine the factors behind the complaint, reduce the margins of discrepancy and move towards a rapprochement and eventual agreement.
Independent space. The procedure offered by the Ombudsman constitutes an independent space for formulating challenges against operations and an audience for the entity concerned which tries to quickly bring the sides closer together and restore the broker-client relation, either through agreement or a Final Report. We do not propose the agreement.
Speed: The object of the stock market trading - the securities - does not have a stable valuation, but is subject to price changes. Only a procedure which handles the changes in share prices can hope to provide fair solutions.
Dissemination and transparency. The dissemination of reports has built up a core of doctrines for resolving conflicts which have a preventative value, making broker-client relations more transparent and avoiding the presentation of complaints.
Fairness: The reports of the Ombudsman follow common legislation, the specific regulations of the stock market and stock market rules and uses. In addition, the implementation of stock market rules and the interpretation of the market's usual uses and practices introduce criteria of fairness in order to be able to appreciate and evaluate the damage and the harm done to the rights and interests of investors. The special nature of stock market conflicts and the transformations that have taken place in the code of commerce makes this obligatory.
Separation of functions. The Ombudsman works on the basis of the separation of the functions assigned to the supervision, inspection and monitoring institutions. His function is limited to defending the rights and interests of investors that have been supposedly violated and he cannot become involved in disciplinary matters, such as supervision or inspection of market members. He is excluded from other adjacent issues that have their own channels of information and resolution.
