Keeping your regulators close – Linklaters

Regulators need to be open to close relationships with lawyers to help them in interpreting Spain´s fast-changing regulations

El sector financiero y el energético se han mantenido muy activos en los últimos tiempos. Sin embargo, para que las empresas se adapten a las normativas instauradas y las cumplan, una relación estrecha de los abogados con las autoridades reguladoras es vital, dice José Giménez de Linklaters.

Direct contact with regulators is crucial for many lawyers, says José Giménez, a Partner at Linklaters in Madrid. Whether it is financial services, telecoms, energy or the media, he adds, having an open regulatory regime provides much-needed guidance for advisers.
The openness of the regulators has increased in recent years, says Giménez. “The attitude is changing. Less than 10 years ago, they were closed and confidential, providing little guidance, which made it more complicated when advising clients on complying with procedures.”
Giménez says that financial services and energy-related work has been busy recently, but that some regulators have started to restrict access and advice. This is based largely on the fact that the legislative and economic situation in both sectors is in a state of fluctuation.
“Where the rules are clearer, regulators are approachable and provide feedback,” says Giménez. “The financial regulators, however, have taken a different approach to others of late. The uncertainty in the financial markets means that regulation keeps changing, and nobody quite knows what may happen next week.”
In the case of the energy sector, new regulations were approved in March that modify the operation of distribution and transmission grids in Spain, and the Government has announced a new modification, but  details are not expected until mid-June. There is little information being given out by the energy regulatory that is leading the modification – the Ministry of Industry – which has led to many deals being delayed.
“It is important to have an open and honest dialogue with regulators, whether it is on a confidential basis or not,” says Giménez. “An insight into the interpretation of regulations is very helpful. Otherwise it can be frustrating because, when a regulator refuses to provide advice, it means clients and their advisers have to attempt to interpret the rules and then wait to see if the regulator agrees.”