BME seeks to promote retail investment in derivatives

Despite a decrease in trading volumes in regulated markets over the last decade, there is untapped potential among retail investors in Europe. Salmerón stated, “For BME Derivatives Exchange and for the rest of Europe, the main growth opportunity is in retail which relies on financial literacy and trying to move retail traders in Europe to exchange-traded derivatives (ETD)."

Gustaf Renkwitz, supervisor at MEFF, added, " We are working with the regulators to clearly differentiate OTC and the products traded on exchange because sometimes the difference between those two products is not presented to the public including the clear benefits of trading on an exchange with a central counterparty behind."

In spite of the popularity of CFDs among retail investors due to their ease of understanding and low fees, it is crucial to highlight that these instruments are not cleared through a central counterparty clearing house, making them susceptible to risks in case of broker default. In contrast, ETDs offer greater security.

Salmerón also highlighted in this interview the main measures related to the derivatives market, including those outlined in the Whitepaper on fostering the competitiveness of Spanish capital markets, published by BME earlier this year. These include greater agility in Clearing European-level authorization processes for launching new products, the importance of European regulators taking into account the sector and market participants if they need to intervene in the market in any way, and the necessary work for companies to clearly announce their dividend policies.

Discover BME's key strategies for driving derivatives growth in the full article here.