Chi-X Europe has become the latest multilateral trading facility (MTF) to take advantage of recent changes to clearing and settlement rules in Spain, which it says will offer trading participants “significantly reduced post-trade costs”.
Under the new rules, which came into force on 18 January 2011 and will be implemented by Chi-X Europe on 3 May, MTFs will have direct access to the Spanish settlement system via their central counterparties (CCP). EMCF is the pan-European CCP used by Chi-X Europe.
To settle trades in Spanish stocks currently, MTFs obtain an identification number generated from one of the country's four exchanges in Madrid, Barcelona, Bilbao or Valencia, so that the Spanish central securities depository Iberclear can make the appropriate transfer of stock ownership.
To circumvent this requirement, MTFs sent all Spanish trades to a local broker at the end of each trading day so they could be put through the exchange and generate the required identification number.
Turquoise, the MTF majority-owned by the London Stock Exchange, said at the start of the month that it would also take advantage of the new settlement procedures on 3 May and introduce a three-month pricing promotion at the same time.