A guarantee issued by a financial institution in favour of a customer of that institution.

Source: Banco de España

The Banco de España is the national central bank and, within the framework of the Single Supervisory Mechanism (SSM), the supervisor of the Spanish banking system together with the European Central Bank. Its activity is regulated by the Law of Autonomy of the Banco de España.

Source: Bank of Spain

The dependence of companies on bank financing is known as bankarisation. As stated in the preamble of Law 5/2015, which regulates crowdfunding in Spain, the effects of this strong bankarisation have been felt in the Spanish economy, sometimes with an excess of credit in the market and sometimes with the opposite effect.

It is one hundredth of one per cent, i.e. 0.01%. It is used to indicate changes in interest rates (the basis points are added to or subtracted from the reference rate): for example, if rates go from 2% to 2.25%, they are said to have increased by 25 basis points.

Source: CNMV

Fixed income transferable securities, similar to bonds but with shorter maturities (typically between 3 and 5 years).

Source: CNMV

In a broad sense, all of a person’s monetary resources – or resources that can be converted into money. In the context of a company, these are the contributions made by its partners for its creation. In the case of a public limited company, the share capital is divided into shares, which can be traded on the stock exchange. The principal of a debt or income is also called capital, as opposed to interest.

Source: Banco de España

Gains generated by an increase in the market price of a security. As long as the asset is held, these are potential or latent capital gains; the sale of the asset implies the realisation of these gains when the profits are realised.

Source: CNMV

The difference between actual receipts and payments made over a period of time as a result of a company’s activity (not the same as accrued income and expenses, which may be recorded in the accounts but are not always immediately reflected in the cash account). This inflow and outflow of cash is also called ‘cash flow’. In the field of business analysis and valuation, a distinction is made between the concepts of cash flow (profit after tax plus depreciation) and free cash flow. The latter is obtained by subtracting from cash flow the investments necessary to meet the company’s operating needs, and constitutes the effective liquidity of the company.

Source: CNMV

The difference between actual receipts and payments made over a period of time as a result of a company’s activity (not the same as accrued income and expenses, which may be recorded in the accounts but are not always immediately reflected in the cash account). This inflow and outflow of cash is also called ‘cash flow’. In the field of business analysis and valuation, a distinction is made between the concepts of cash flow (profit after tax plus depreciation) and free cash flow. The latter is obtained by subtracting from cash flow the investments necessary to meet the company’s operating needs, and constitutes the effective liquidity of the company.

Source: CNMV

The Comisión Nacional del Mercado de Valores (CNMV) is the body responsible in Spain for the supervision and inspection of the Spanish securities markets and the activity of their agents. It has three missions: to ensure market transparency, correct price formation and investor protection. According to the law regulating the operation of crowdfunding, platforms such as wecity must be authorised and registered with the CNVM.

The Spanish Commercial Register (Registro Mercantil) is an administrative institution whose purpose is to officially publicise the legal situations of the entrepreneurs registered in it, in addition to other functions assigned to it.

These are the model contracts to be used by firms providing investment services to formalise relations with their clients in certain transactions which, due to their regular nature, are widely disseminated.

This is the credit risk of an investment, which does not depend on the creditworthiness of the issuer, but on that of its country of origin. For example, there is country risk if there is a possibility that a state may decide to suspend the transfer of capital abroad, blocking payments, or withdraw the public guarantee of an entity; some countries have even suspended, at one time or another, interest and/or principal payments on public debt. Country risk is virtually non-existent in Western states with stable currencies.

Source: CNMV

This is the nominal interest that holders of a fixed-income security are entitled to receive; it is usually paid quarterly, half-yearly or, more frequently, annually. It may be fixed (established for the life of the issue) or variable (linked to the evolution of interest rates, stock market indices, etc.).

Source: CNMV

A crowdfunding or equity crowdfunding platform, such as wecity, is an entity (in this case, a company) dedicated to connecting project promoters seeking funds through the issuance of securities or equity with investors seeking a return on their investments.

Crowdfunding is a financing system based on the participation of a multitude of investors.

Crowdlending is a participatory financing system based on debt, in which a multitude of people lend the promoter of a project an amount of money in exchange for a financial return. Unlike crowdfunding, in the case of crowdlending the investors are not holders of securities or shares in the project they are financing.

Moneda en circulación en un país. Sin embargo, este término se emplea con frecuencia para hacer referencia a las monedas extranjeras.

Source: CNMV

The potential for the value of investments to be affected by changes in exchange rates. For example, if an investor purchases dollar-denominated securities, the depreciation (loss in value) of the dollar against the euro would have a negative impact on the price.

Source: CNMV

Wecity’s debt operations are based on the granting of loans to the developer of a real estate project, with fixed and variable returns. The fixed tranche is established as a pre-established percentage of the loan granted, while the variable tranche is linked to the success of the operation.

A decrease in the theoretical value of a company’s outstanding shares when capital is increased without a share premium (i.e. at par or at a price below market value). In the absence of a premium, the company’s reserves remain the same amount as before the capital increase, but have to be distributed over a larger number of shares, so that their theoretical value is reduced. It is this effect that justifies the granting of pre-emptive subscription rights to shareholders.

Source: CNMV

This is the part of the company’s profit that is distributed among the shareholders. Together with the possible capital gains obtained through revaluation, it is the main source of profitability of the shares, and constitutes the economic right par excellence of its holders (recognised in article 48 of the Spanish Companies Act). Occasionally, the general meeting may decide not to distribute the dividend. See sections on Return on equity and Corporate decision-making bodies.

Source: CNMV

Ratio that serves to indicate the greater or lesser remuneration received by the investor through dividend payments. It is calculated as the quotient between the amount of dividends accrued per share during the year and the share price on a given date. The last share price of the year or the average change over the last quarter is usually used, but other possibilities are possible. It is important to know the reference date in order to make comparisons between different companies or in different financial years.

Source: CNMV

It is the process by which a potential buyer evaluates a target company or its assets with a view to an acquisition. Due diligence theory holds that conducting this type of investigation contributes significantly to informed decision-making by optimising the quality and quantity of information available to decision-makers and by ensuring that this information is systematically used to thoughtfully deliberate the decision in question and all its costs, risks and benefits.

Source: Wikipedia

A form of guarantee consisting of a commitment by one person – guarantor – to respond to the obligation contracted by another – guarantor – in the event of default by the latter.

Financial instrument whose profitability is not defined in advance, but depends on various factors, including the profits obtained and the issuing company’s business expectations. In general, they do not have a predetermined maturity. The most representative equity securities are shares. See the section on equities in the Investor section.

Source: CNMV

Equity is a synonym for capital. In the world of investment, equity operations are those in which the investor acquires a portion of the company’s capital in exchange for the economic resources (money) that it provides.

Financial instruments whose future performance is neither fixed nor known with certainty in advance, but is linked to the economic performance of the issuing entity.

Source: Banco de España

In general terms, it refers to the effect that indebtedness has on profitability. In equity markets, it refers to the fact that small amounts of money can be used to make an investment that behaves like an investment of much larger size.

Source: CNMV

The term fintech, from Finance and Technology, refers to all activities involving the use of innovation and technological developments in the design, supply and delivery of financial products and services.

Source: CNMV

A financial instrument issued by a public company or institution, representing a loan that the entity receives from investors. Fixed income confers economic but not political rights; the principal is the right to receive the agreed interest. Although traditionally in fixed income, interest was fixed from the date of issue until maturity, today there are other possibilities. Interest is often variable and linked to interest rates, such as Euribor, stock market indices or even the performance of a share or basket of shares.

Source: CNMV

Fixed interest is the percentage that is paid or charged for borrowing or lending an amount of money when this percentage remains unchanged for the duration of the transaction (the term of the loan).

A guarantee of a principal obligation, for example, by means of a document signed by a third party to guarantee to a bank the successful completion of a customer’s credit operation. It is also referred to as the set of assets that are affected by the successful completion of an operation, usually a credit operation.

Source: Banco de España

Not just anyone can launch a crowdfunding platform. The regulator requires, for example, that directors must be persons of recognised business or professional repute and possess adequate knowledge and experience in the matters necessary for the exercise of their functions. The law, which takes into account the factors of good repute, knowledge and experience, states that “those who have shown personal, commercial and professional conduct that does not cast doubt on their ability to carry out the sound and prudent management of the platform are of good repute”.

El endeudamiento o ratio de endeudamiento es la relación entre la finaciación exterior que ha recibido una empresa (su deuda) y sus recursos propios.

The process of price increases in a country, which are sustained (maintained over a period of time) and generalised (affecting a significant number of goods and services). It implies a decrease in the purchasing power of money, and is measured through the CPI (consumer price index). It is the opposite of deflation.

Source: CNMV

Institutional investors are banks and savings banks, insurance companies, mutual fund management companies, pension plan management companies, investment funds and investment companies, etc. In general, entities that have large amounts of money available to invest in assets. In general, entities that have large amounts of money available to invest in assets.

The price of money, i.e. what the debtor must pay the creditor for having access to capital during a given period (in a loan, credit or any other financial obligation). It is usually expressed as an annual percentage rate.

Source: CNMV

Payment of accrued interest under the terms of a bank account agreement (interest rate, settlement period, etc.).

Source: Banco de España

This is the interest rate at which the expected future flows of receipts and payments on an investment are discounted to equal the initial value of the investment (giving a Net Present Value equal to 0). It indicates the return on the investment, i.e. the rate at which it is indifferent whether to dispose of the capital at the present time or to defer its availability until the expected collection dates. See Net present value of an investment, NPV.

Source: CNMV

The crowdfunding law sets limits on the amount that each project can raise through a crowdfunding platform, which vary depending on whether they are accredited or non-accredited investors. Non-accredited investors may not invest more than €3,000 in the same project or more than €10,000 in projects on the same platform in any twelve-month period.

The relationship between the risks you are willing to take and the returns you expect to achieve. In general, the investor profile can be conservative, medium and aggressive.

The purpose of the Land Register is the registration or annotation of acts and contracts relating to ownership and other rights in rem over immovable property. The aforementioned entries or annotations shall be made in the register in whose territorial jurisdiction the immovable property is located.

The Spanish Land Registers are under the Ministry of Justice. All matters relating to them are entrusted to the Directorate General of Legal Security and Public Faith.

La totalidad del Territorio de España está dividido en circunscripciones, denominados distritos hipotecarios. A cada distrito hipotecario le corresponde un Registro de la Propiedad, a cargo de un registrador de la propiedad. La totalidad de los registradores de España se integran en el Colegio de Registradores de la Propiedad, Mercantiles y de Bienes Muebles de España.

Source: Land Registry

Lemon Way is a Limited Company with its registered office at 14 rue de la Beaune in Montreuil, France and was accredited on 24/12/2012 by the “Autorité de Contrôle Prudentiel et Régulation” (ACPR) as a Hybrid Payment Institution, under the number (CIB): 16568 and is authorised in Spain by the Bank of Spain to carry out its activity as a payment institution without permanent establishment in accordance with the applicable regulations. It is used by more than 1,400 websites across Europe, including 200 crowdfunding platforms.

The quality of an investment whereby it can be converted immediately into cash. For listed securities, a good degree of liquidity generally means high trading volumes and frequencies, and little difference between bid and ask prices. This means that securities can be bought and sold instantaneously without the price of the transaction being affected by the absence of counterparties.

Source: CNMV

Possible penalty in the price of a security, in the event that the investment needs to be unwound in order to recover capital quickly. Generally speaking, listed securities are arguably more liquid than unlisted securities, as there is a greater chance of finding counterparties at a reasonable price (unlisted securities sometimes incorporate some kind of liquidity clause or guarantee from the issuer or a third party, although there is no transparency as to the price). The less liquid a security is, the greater the decrease in price an investor must accept in order to sell his securities. In cases of extreme illiquidity, it may be impossible to recover the investment at the desired time.

Source: CNMV

This is the fee associated with the management of the company operating the property or the Manager in charge.

The potential loss due to changes in the factors determining the price of a security: interest rates, exchange rates, etc.

Source: CNMV

Marketplaces are platforms that connect both sides: those who want to sell with those who want to buy. There are hundreds of examples, both for products and services, but some of the most representative ones could be Amazon, eBay, Alibaba, Etsy or Airbnb.

In addition to establishing a limit on each investor’s investment, the law sets a cap on the amount of funds raised per crowdfunding project. In this case, the amount raised by each project may not exceed two million euros per year. When the projects are aimed exclusively at accredited investors, the aforementioned maximum amount may reach five million euros.

La inversión mínima es la aportación de dinero que se requiere como mínimo para convertirse en inversor en un proyecto determinado.

A real right that encumbers real estate and is normally used to obtain the necessary financing for its purchase (although movable property can also be mortgaged). The mortgage is registered in the Land Registry.

Source: Banco de España

It is the present value of all the receipts and payments expected to be generated by a given financial asset in the future. To ‘fetch’ or discount these flows, an interest rate appropriate to the risk and time horizon of the asset is generally used, under the assumption that it will remain unchanged throughout the life of the investment (this assumption is usually used for operational simplicity). See reinvestment risk and discount rate.

The foreigner’s identity number, NIE. This number is issued by the Directorate General of Police for non-nationals who have permission to reside in Spain.

Tax identification number. This is a code that identifies individuals for carrying out commercial activities in Spain. It is also commonly used for tax purposes.

The total return on an investment is obtained by dividing the total profit (capital gains or losses and dividends or interest) by the initial value of the investment, and to transform it into a percentage you have to multiply the result by 100.

Any investor who does not qualify as an accredited investor as defined in Law 5/2015.

The difference between the two is that the nota simple is purely informative, i.e. it serves to inform the applicant of the basic content of the Register, and only in respect of holders, rights and charges in force at the time of the application; therefore, the nota simple cannot provide information on old holders or rights that have already been cancelled.

Source: Colegio de Registradores de España

Risk of errors in the transmission and execution of instructions to buy or sell securities by intermediary entities. This may be due to computer failures, deficiencies in control systems or human error. Its control requires strict verification of the contents of the orders and subsequent checking that the executions correspond to the instructions received and the market situation.

Source: CNMV

Agreement between shareholders of a company to define the direction of voting at general meetings, or in order to establish limits or conditions on the free transferability of its shares (or securities convertible or exchangeable for shares). The regulations stipulate that the conclusion, extension or amendment of such an agreement in listed companies must be immediately notified to the company itself and to the CNMV, which will publish it as a significant event. The agreement shall not produce any effect until it has been notified and published, i.e. until it is known to the public. Knowledge of these agreements is relevant for minority shareholders, as their existence will generally determine the most relevant corporate decisions.

Source: CNMV

In the field of collective investment, it is the unit of investment in a fund; it represents each of the equal parts into which the assets are divided, and is considered a negotiable security. Its price is called the net asset value.

Partners’ agreements are nothing more than agreements entered into between the partners in order to regulate the internal relations governing the company, by means of which various aspects related to the operation of the company are established. In this sense, they are the most widely used and recommended instruments, as commercial law is rigid and does not allow for the regulation of all aspects inherent to the business. Shareholders’ agreements complement, specify or extend the provisions of the articles of association and cover business issues that go beyond the rules.

Source: Garrigues

A payment gateway is an e-commerce application service provider’s service for authorising payments to electronic (online) businesses, the equivalent of a physical point-of-sale (POS) terminal. Payment gateways encrypt sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant.

Source: Wikipedia

They are a type of institution to which the Banco de España has granted an administrative authorisation to provide and execute one or more of the payment services regulated in Royal Decree Law 19/2018 of 23 November on payment services and other urgent measures in financial matters, such as:

• The deposit of cash into a payment account.
• The withdrawal of cash from a payment account.
• The execution of payment transactions through a payment account by means of credit transfers, direct debits or payment transactions by card or similar device (debit payment transactions).
• The execution of payment transactions when funds are covered by a credit line, by means of credit transfers, direct debits or payment transactions by card or similar device (credit payment transactions).
• The issuing of payment instruments or acquiring of payment transactions the sending of money the initiation of payments or account information services.

Source: Banco de España

A portfolio is the set of investments, or combination of financial assets that constitute the wealth of a person or entity.

Source: CNMV

The return on an investment is the ratio between the amount invested and the returns it provides.

Miden el rendimiento de una empresa, poniendo en relación los beneficios obtenidos con distintas magnitudes. Los más utilizados son el ROA (Beneficios netos / Activo total) y el ROE (Resultados después de impuestos / Fondos propios medios).

Source: CNMV

PropTech (Property Technology), also called ReTech (Real Estate Technology), has been used to group together innovations and the application of new technologies for the real estate sector. In general terms, Proptech refers to a group of startups that use disruptive technologies to change the way different market players (buyers, sellers, investors, real estate agents, builders, landlords) do business, changing the way they build, design properties, sell, lease and manage real estate.

Source: Wikipedia

An analytical tool for assessing the risk of a company or an issue. Issuers with lower financial strength (lower rating) are usually required to provide higher yields to compensate for the higher risk assumed. It rates credit risk in a standardised way according to the criteria of an agency: AAA, AA, A, A, BBB, or other similar notations.

Source: CNMV

The real return is the return that takes inflation into account in its calculation. To obtain the real return we must first calculate the nominal return. The formula for the real return will be: (1+ Nominal return) = (1 + Real return) x (1 + Inflation) Therefore, the inflation figure must be known in order to calculate the real return.

Rental transactions are based on the purchase and rental of a property, which is then sold. In wecity, rental transactions have an average term of between three and five years and offer two types of return: the average rental return is between 3% and 7%, while the net capital gain return ranges from 10% to 15%.

La rentabilidad en el alquiler de una vivienda es el ratio entre el valor de compra del activo y la renta anual obtenida por el alquiler del mismo. Por ejemplo, si se adquiere una vivienda por 100.000 euros y se alquila por 5.000 euros al año (417 euros al mes) la rentabilidad será del 5%.

Gains generated by the increase in the market price of an asset from purchase to sale are called capital gains.

From a financial point of view, risk means uncertainty about the performance of an asset, and indicates the possibility that an investment will perform differently than expected (either for or against the investor, although logically the investor is only concerned with the risk of incurring losses). The different types of risks associated with marketable securities are detailed in the sections Fixed income. Risk factors and Equity investment risks.

Source: CNMV

It is a basic principle of financial market operations that risks can be controlled if the overall amount to be invested is spread across products with different risk and return expectations. The underlying idea is that, by integrating assets with opposite risks, these can be offset to varying degrees, so that the risk of the aggregate is lower.

Source: CNMV

Ratio that indicates the ratio between the net profit obtained by the company and its equity, providing a measure of the profitability offered by the company’s owners, i.e. its shareholders.

Source: CNMV

Collateral in the form of tangible goods, securities, pledges, etc.

Source: Banco de España

Porcentaje del capital de una sociedad en manos de un accionista, de forma directa o indirecta (a través de otras personas o entidades) y que supera un determinado umbral fijado en cada momento por la normativa. En estos momentos, en España se entiende que un accionista dispone de participación significativa cuando posee al menos un 3% del capital social. Las modificaciones en una participación significativa deben ser comunicadas a la CNMV por el accionista y difundidas en la página web de la sociedad.

Listed Real Estate Investment Companies (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria, Socimi) are companies whose main activity is the acquisition, development and rehabilitation of real estate assets for leasing, either directly or through shareholdings in the capital of other Socimi.

These are the model contracts to be used by firms providing investment services to formalise relations with their clients in certain transactions which, due to their regular nature, are widely disseminated.

Source: CNMV

Start-ups, usually founded by one or more entrepreneurs, based on technology, innovative and supposedly with a high capacity for rapid growth.

This is the fee charged by the promoter of the company on the dividends it distributes to investors.

Conjunto de preguntas que las entidades financieras realizarán a sus clientes para obtener información sobre sus conocimientos y experiencia previos, así como sobre sus objetivos de inversión y su situación financiera. Estos datos permitirán a la entidad recomendar las inversiones más adecuadas para el inversor. Dicho test se realizará con carácter previo a la prestación de los servicios de asesoramiento o de gestión de carteras.

Source: CNMV

A quality of a financial market in which there is an adequate and sufficient flow of information from companies and markets. Transparency means that all relevant information for investors is transmitted to the market in a clear, truthful and equitable manner. Spanish regulations impose certain reporting obligations on market participants to ensure transparency, both in the primary market (at the time of the public offering of securities) and in the secondary securities markets. For example, listed companies must periodically disclose information on their financial and accounting data, as well as any relevant facts that may affect the price of the security.

Source: CNMV

Entities specialised in the valuation of real estate, approved for this activity and supervised by the Bank of Spain.

Source: Banco de España

A value-added transaction is one that involves the purchase of a property, its refurbishment and subsequent sale, after having generated a revaluation of the property. Wecity’s value-added operations have a term of between twelve and 36 months and offer a net return of between 13% and 18%.

El interés variable es el porcentaje que se paga o cobra por obtener o prestar una cantidad de dinero cuando este porcentaje varía a lo largo de la duración de la operación (la vigencia del préstamo) en plazos determinados. Para proceder a esa revisión se suele fijar un tipo de referencia, cuya evolución determina el incremento o reducción del pago de intereses.

Procedure whereby a shareholder who is unable to attend a General Shareholders’ Meeting in person or does not hold the minimum number of shares required, appoints other shareholders, third parties, directors or the Chairman of the Board of Directors to represent him and exercise his voting rights in his place. The proxy may be granted in writing or by telematic means (if so provided for in the company’s articles of association).

Source: CNMV

Participatory Financing Platform authorised by the National Securities Market Commission (CNMV), registered under registration number 30.