The unit, due in October this year, is part of
an overhaul of the group’s post-trade functions, to reform the
registration, clearing and settlement system and to connect to
TARGET2 Securities (T2S). It will offer securities services including
custody and settlement, corporate actions and tax reclamations,
taking on local providers BNP Paribas Securities Services and
Citi.
The project includes an overhaul the clearing framework
for equities trades. Its Iberclear subsidiary is the natural
counterparty for derivatives trades. However, BME general manager
Javier Hernani said the market needed a proper clearing framework to
address the risk of all equity trades. It has also begun to clear
interest rate swaps.
Speaking at a press briefing on the
overhaul of post-trade services, Hernani added: “It will compliment
the value chain and lead to the beginning of new opportunities in
T2S. Today the level of netting is lower. With the introduction of
overhauled clearing in October we will begin to charge clearing and
settlement fees. With the change in clearing financial institutions
will be able to net their trades in T2S.”
The overhaul
involves new software, requiring substantial investment from the
banks to connect.
Hernani added that the overhaul is a natural
pull of post trade services in Spain into one company. This approach
will heap further criticism on the group for its monopolistic
ownership post trade services. BME also has a 50% stake in trade
repository Regis-TR.
Hernani confirmed the group would
co-operate with other institutions, including the launch of a market
data venture Mexico. Hernani added there are “opportunities” in
Chile and in Columbia the group is looking at the sale of post trade
reporting software to Columbian banks. “Regulation will follow in
LatAm where you will need a CCP,” he said.
BME provides further details of post-trade services development
Spanish Exchange Group, Bolsas y Mercados Españoles (BME), has detailed its new securities services unit.
Spanish Exchange Group,
Bolsas y Mercados Españoles (BME), has detailed its new securities
services unit.