The Spanish Collective Investment Institutions Regulation approved.

Originally published November 8, 2005

Following a process taking more than one year, the new Collective Investment Institutions Regulation (subsequently the "Regulation"), intended to modernize the Spanish industry, was approved on November 4, 2005.

The most relevant issues included in the final version of the Regulation are discussed below.

The regulation provides for specific rules applicable to:

1. Investment in non-harmonized Collective Investment Institutions (CII), in which daily value would be required.
2. Use of derivatives, permitting the use of credit risk and volatility as underlying for derivatives and establishing the rules applicable for the use of index as underlying, including specific rules preventing the use of index-derivatives to invest in non eligible assets.