Structure of the markets managed by BME

The Spanish securities market is organized into three markets: equity, fixed income and derivatives. In equities, shares, ETFs, warrants and certificates (stock exchange) are traded. In fixed income, public and private debt (AIAF, MARF and SENAF) and derivatives, where trading in options and futures is carried out on shares, bonds, indices, dividends, and electricity derivatives (MEFF). Post-trading involves clearing services, with BME Clearing as the operator, and settlement and registration services. Settlement and registration are performed by the Central Securities Depository, Iberclear. The National Registry for Greenhouse Gas Emission Allowances (RENADE) is also managed through this system. All markets are subject to the supervision of the National Securities Market Commission (CNMV).

In recent years, the Spanish securities market has undergone an intense and profound process of change and growth. The technical, operational and organizational systems on which it is based have made it possible to channel significant investment volumes, while increasing levels of transparency, liquidity and efficiency.

At present, Spanish regulations on securities markets and financial instruments consist mainly of European regulations which have been gradually transposed into Spanish law. From the 1993 Investment Services Directive (ISD) to the profound reform that entered into force in 2018, which involved the application of MiFID II and the MiFIR Regulation, the laws have been adapted to the complexity reached by financial services, instruments and markets.

The last three decades have also seen major changes in the operation and structure of European securities markets. The new trading environment is characterized by the opening up to greater competition, where regulated markets coexist with other newly created players, notably multilateral trading facilities (MTFs).

The Markets in Financial Instruments Directive (MiFID) recognizes the regulated market as the reference and establishes the need for strict requirements for its authorization and that of operators and intermediaries. In Spain, they are called official secondary markets and refer to the Stock Exchange, the public and private fixed income market (AIAF) and the futures and options market (MEFF), all of which are managed by BME.

The Spanish regulated equity market is managed by the stock exchanges and operates on an electronic trading platform, which guarantees the interconnection of the four Spanish stock exchanges that operate as a single market.

It is based on an order-driven model, a single electronic ledger and a system for matching trades that operates on a price-time priority basis. In addition to shares, warrants, certificates and exchange-traded funds (ETFs) are traded. In some of its segments, it has specialists who provide liquidity.

Since January 2018, the AIAF fixed income market, managed by BME, is the only regulated market in Spain that admits for trading and lists government, regional and local public debt, as well as private debt.

A wide range of assets and products tailored to the needs of issuers and investors are listed and traded in the fixed income market, with all the possibilities in terms of maturities and according to their strategies for raising funds, in the case of issuers, and for managing their assets, for investors.

Fixed income markets have undergone significant changes with the entry into force of MiFID II, as they resemble equity markets in terms of transparency, execution and protection. The new directive establishes pre- and post-trade transparency obligations for share prices and volumes with regard to fixed-income securities.

The regulated derivatives market, MEFF, trades futures and options whose underlyings are referenced to individual shares, the IBEX35® and various European stock market indices. This provides investors with tools for risk management, portfolio construction and hedging that are tailored to each profile. Since the 2008 financial crisis, derivatives markets have been under great scrutiny and regulatory pressure has been mounting. Since the entry into force of MiFID II in 2018, they have been subject to regulations to improve systemic risk and transparency for the first time.

Multilateral trading facilities are operated by an investment services firm or by an official secondary market management company. They must have as their exclusive corporate purpose the management of a system that allows to bring together the various buying and selling interests in financial instruments of multiple third parties, in accordance with their non-discretionary rules.

According to the structure of the Spanish securities market, in addition to the regulated markets, they operate multilateral trading facilities that trade both shares admitted to regulated markets (exchanges) and public debt securities and private fixed income or corporate debt securities.

These markets are geared to small-cap companies looking to expand, with tailor-made regulation designed specifically for them and costs and processes adapted to their characteristics. In this way, they benefit from the advantages of a market, such as obtaining financing, visibility, liquidity and valuation.

BME Growth was established in 2006 with the aim of providing access to capital market financing to small companies that would not have been able to access markets of a different size.

BME Scaleup, on the other hand, is the Spanish stock market aimed primarily at companies in an early stage of development with a proven and scalable business model from any sector.

In addition to the growth companies included in BME Growth, other types of companies such as ICVCs (open-end investment companies), REITs (real estate investment trusts), VCCs (venture capital companies) and hedge funds (“SIL” – “sociedades de inversión libre”) are listed in different segments of BME MTF Equity. 

Launched in 2013, it is a market primarily aimed at institutional investors, offering fixed income securities of medium-sized companies, usually not listed on the stock market. It is an initiative promoted with the objective of channeling financial resources to companies with more flexible requirements and greater agility in the processing of their issues than in regulated markets, thus facilitating financing processes.

Established in 1999, it is the only international market for Latin American securities only. They are traded in euros on the electronic system of the Spanish Stock Exchange and the companies supply the market with the same information as they do to the regulators of their home markets.

It is a trading platform for Spanish public debt, both in cash and in repo and simultaneous transactions. It is aimed at institutional investors.

Both BME Scale Up and BME Growth and MARF are multilateral trading facilities managed by BME Sistemas de Negociación and BME Renta Fija, respectively. They are also multilateral trading facilities, subject to MiFID I, MiFID II, Latibex and SENAF regulations.