Duties of information of financial institutions. Commentary on the Spanish Supreme Court ruling, dated April 10th

Banking law

Abstract

The protection currently provided by the Spanish legal system, incorporating European regulations on pre-contractual information in the contracting of financial products, and especially the control of prior and accurate information to clients regarding such products, has been strengthened by the entry into force on April 7th of Law 6/2023, dated March 17th, on Securities Markets and Investment Services. This framework law establishes the rules of the game in this particular type of contracts. However, in accordance with the general principle of non-retroactivity of laws, disputes arising in this specific area are subject to the regulations in force at the time of the contract, so it is prudent to recall the applicable regulations for contracts entered into before that date. This study extracts the doctrine of the Spanish Supreme Court on financial products for financing, particularly the application of regulations related to the MiFID Directive and its impact on loan agreements containing pre-drafted clauses by the institution regarding complex products, specifically financial derivatives defining the loan's price. Financial institutions have the obligation to inform the client, and when this pre-contractual information is not offered with the clarity required by the law, this in contrahendo´s fault can give rise to contractual liability of 1101 CC, as stated in the recent Spanish Supreme Court decision of April 10th., 2023.