Financial Intermediaries: Roles in Securities Trading

Financial Institutions and Payment Processing

Institutions confirming payments offer administrative payment solutions with expertise, formalizing transactions between DIXA and its suppliers. They act as external intermediaries, managing client payments, endorsing operational risks, and handling administrative tasks. These entities issue letters confirming vendor payments, often providing financing, and may not match payment dates with customer payments. They typically earn revenue through supplier information and future receipts, not directly from the client.

Funds and Investment Companies

Funds and investment companies are popular for buying and selling securities. There are two types of intermediaries in the securities market:

1. Specialized intermediaries: Securities companies, portfolio management companies, and financial advisory firms.
2. General financial intermediaries: Banks, savings banks, and cooperatives with additional operational powers in securities.

Foreign intermediaries can operate in the Spanish stock market. Specialized intermediaries, known as Investment Services Entities, primarily provide investment services for instruments like shares and bonds. Their objectives include strengthening and decentralizing the market, allowing access for small and medium investors, democratizing capital, and contributing to the country's production structure financing. The Ministry of Economy and Finance authorizes the creation of these companies, with the SEC's proposal. Portfolio management companies also require this authorization. Financial advisory firms need CNMV accreditation. Once obtained, promoters and the company must register with the commercial registry and then with the SEC. For individual advisors, CNMV registration is sufficient.

Company Securities (Dealers)

Company Securities (Dealers) can operate professionally or for their own account. To trade on the stock market, they must be partners or shareholders of the leading exchange, becoming Securities and Exchange Societies. Members of a single exchange can only trade securities of that exchange. To trade securities not listed on their exchange, they must hire another broker. These companies receive orders from investors and manage subscriptions to investment funds. Their services include receiving, transmitting, and executing client orders, negotiating for themselves, managing investment portfolios, placing financial instruments, managing issuances, granting loans to investors, and providing investment reporting and analysis. Securities and Exchange companies can also trade securities on the exchange.

Agency Securities (Brokers)

Agency Securities (Brokers) are investment firms that operate only on behalf of others. They perform similar services to Securities Companies, except they do not negotiate for themselves, manage the issuance and placement of investment funds, or grant loans to investors. Membership in exchanges allows them to contract values, becoming Securities and Exchange Agencies. The main difference between Securities Companies and Agencies is that Companies execute customer orders and trade for their own profit, generating revenue from fees. Operating for themselves allows them to ensure equity and fixed income emissions and grant credits related to the purchase and sale of securities, which is forbidden to brokers, as they act on behalf of others and require less capital and assume less risk.