Non-bank financial intermediation and the new debt funds created by act 18/2022 on the creation and growth of companies

Non-bank financial intermediation and the new debt funds created by act 18/2022 on the creation and growth of companies

Abstract:

This paper analyzes the sources of business financing, focusing on those that are part
of the broad concept of non-bank financial intermediation (“NBFI”), as an alternative
to traditional bank financing. The origin and evolution of the NBFI is analyzed, how the
organizations that ensure financial stability pointed out the need for regulation and
supervision of these new forms of financing, and how the European Union has created a
highly harmonized legal framework, particularly in the field of collective investment institutions.

The paper deals in particular with debt or direct lending funds, which, being part of
the collective investment CIIs, lacked ad hoc regulation in Spain, despite the fact that
certain regulated entities, such as closed-end investment entities, could carry out the activity of debt funds.

It has been Act 18/2022, of September, on the creation and growth of companies (“Create and Grow Law”) that has expressly regulated
closed-end collective investment entities for loans, incorporating them into Act 22/2014 by which venture capital entities, other closed-closed type collective investment entities and the management companies of closed-type collective investment entities are regulated. The purpose of the regulation has been to alleviate the debt situation of some companies and facilitate their growth again, particularly after the economic crisis resulting from the pandemic.

Keywords: Financing, non-bank alternative lending, venture capital, closed collective investment schemes, debt funds, debt closed collective investment schemes