Regulation

Account: The section of the Trades Register where Trades, the resulting Positions, required Margins and Collateral are entered, along with any other transactions arising from the Trades registered that must be booked. 

Unless otherwise specified in this Rule Book and supplementing provisions, each Central Register Account shall comprise one or more Position, Margin or Collateral Account, which shall be an ancillary account, for the administration and operations of the Central Register and for risk management purposes. 

It is also a generic name for all Accounts for which a Member is accountable or all a Client's Accounts, both Central Register Accounts and the Second-Tier Register Accounts, as appropriate. 

Agent Member: General Clearing Member that acts in BME Clearing in the name and on behalf of a Direct Clearing Client.

BME CLEARING Supervisor: Person entrusted with the duty of supervising the orderly conduct of BME Clearing activities, applying the Rule Book and other applicable regulations by delegation of the Chief Supervisor. 

BME CLEARING: BME Clearing, S.A.U. 

Buffer Collateral Account: An ancillary Account where the Collateral posted at the end of the day to cover the collateral deficit in the Collateral Accounts is entered.    

Business Day: The day set forth as such in the schedule published by BME Clearing prior to the start of each calendar year for each Segment.

CCP / Central Counterparty: Entity performing Central Counterparty functions in accordance with the provisions of articles 103 and subsequent of the Consolidated Text of the Securities Market Law and article 26 and subsequent of the EMIR. In this Rule Book, this term refers to BME Clearing. 

Central Counterparty: Interposition in its own name by BME Clearing with regard to Members and Clients holding Central Register Accounts in relation with the settlement and clearing of obligations resulting from the Trades registered in these Accounts. 

Central Register: Registration system run by BME Clearing for Trades registered in the Accounts opened by Members in BME CLEARING, and the positions resulting therefrom, Margins required, Collateral and any other transactions arising from the Trades registered. 

Chief BME CLEARING Supervisor: Person appointed by BME Clearing entrusted with the duty of supervising the orderly conduct of BME Clearing activities, applying the Rule Book and other applicable regulations. 

Circular: Mandatory regulation, approved by BME Clearing , which implements and supplements the Rule Book and the General Conditions. 

Clearing: Creation of a single legal obligation which covers all the cash payment obligations and collection rights or delivery obligations and reception rights on securities or other financial instruments and assets resulting from the Trades registered in those Accounts with respect to which it is so stipulated in this Rule Book or in its supplementing regulations, whereby the parties will only be entitled to claim the net balance arising from such obligations and rights, reflected in a net Position.

Client: Individual, legal person, entity or institution that acts on one or more Segments, through a Clearing Member or a Non-Clearing Member and subject to the requirements prescribed in this Rule Book and the corresponding General Conditions and supplementing regulations, whose Trades, the Positions resulting from these Trades, Margins and Collateral are registered in an Individual Segregated Account (ISA Agency or ISA P to P) or an Omnibus Segregated Account (OSA), as specified.

Close Positions: The action ofperforming Trades with the opposite sign to the Trades previously entered in the corresponding Account. The General Conditions of each different Segment may set specific rules for closing Positions. 

Collateral Account:  An ancillary Account, where the Collateral posted to cover the required Initial Margin, reflected in the corresponding Margin Account, is recorded. 

Collateral: Assets posted in favour of BME Clearing, entered in the corresponding Collateral Accounts, in which the required Margins are posted, whose function is to cover the risk of Default on the obligations undertaken by Members and Clients.

Communication for Registration: Act whereby a Member or a Market, acting on behalf of a Member, notifies BME Clearing of a Market Trade for its Registration.

Competent Authority: The Comisión Nacional del Mercado de Valores, as the authority designated by Spain to conduct the activities of authorization and supervision of the CCPs established in Spain in pursuance of EMIR.

Also, any otherAuthority or Authorities that have been legally vested with powers relating to the authorization and supervision of the activities of Members, Clients, and BME CLEARING shall be deemed to be a Competent Authority. 

Counterparty: Interposition in their own name by Members with regard to their Clients and to their Ordinary Non-Clearing Members, and by Direct Clients with regard to their Indirect Clients, in respect of the clearing and settlement of obligations resulting from Trades registered in the Accounts where this is so established. 

Default: Situation in which a Member or Client does not meet the requirements or obligations stipulated in this Rule Book and supplementing regulations in the performance of their activities.

Defaulting Member/Client: Member or Client that Defaults as provided for in Chapter 9 of this Rule Book. 

Direct Clearing Client: Entity that, through an Agent Member and subject to the requirements prescribed in this Rule Book and the corresponding General Conditions and supplementing Circulars, acts in one or more segments, and where the Trades made on its account, the Positions resulting from these trades, Margins and Collateral are registered in the Proprietary Account of the Direct Clearing Member. 

Direct Client: For the purposes of indirect clearing, a credit entity or investment services firm, which in its capacity as Non-Clearing Member, Ordinary Non-Clearing Member or Clearing Member Client provides clearing services to an Indirect Client under an Indirect Clearing Agreement.  

Final Net Balance: Cash value resulting from applying to the Position registered in each Account the measures to close Positions, execute Collateral and for the close-out netting of the obligations and rights of a Member or Client, which is the sole legal obligation that can be required by BME Clearing vis-à-vis the Member or Client, or between the latter two parties, in relation with these Accounts, in compliance with the provisions of article 42.3 and article 43 and subsequent of this Rule Book. The cash value resulting from the close-out netting of the different Net Balances found in the form described above is also classified as a Net Balance, and hence all obligations and rights of a Member or Client, which is the sole legal obligation that can be required by BME CLEARING vis-à-vis the Member or Client, or between the latter two parties, in relation with these Accounts, in compliance with the provisions of article 42.3 and article 43 and subsequent of this Rule Book. 

Financial Instrument: Generic name for all trade able securities and derivative financial instruments referred to in Article 2 of the Securities Market Law, which are the object of Trades for which BME Clearing carries out any of their functions.

General Clearing Member: Type of Member, which participates in BME Clearing acting as clearing member in accordance with article 2.14 of EMIR and that will have BME Clearing as Central Counterparty, that may carry out all the activities established in this Rule Book for Members, holding all types of Accounts and acting on its own account, and on behalf of its Clients', Non-Clearing Members and Ordinary Non-Clearing Members. Only General Clearing Members may act as Agent Members. 

General Conditions: Rules that, supplementing and forming an integral part of this Rule Book, establish the terms and conditions applicable for each Segment to the services and functions that BME Clearing carries out, and which may establish particular conditions and requirements relating to the activity of Members and Clients in relation to the Segment to which they refer.

Gross Registration Omnibus Segregated Client Account- Indirect Clearing (Indirect Clearing GOSA): An Account whose holder is a Clearing Member, a Non-Clearing Member or the Client of Clearing Member, where the Trades, Positions and Margins held on behalf of each Indirect Client of the Account holder or of an Ordinary Non-Clearing Member of the General Clearing Member Account Holder are recorded, in addition to the Collateral posted on behalf of these Indirect Clients. 

Indirect clearing agreements: A set of contractual relationships between the Clearing Member, the Direct Client and the Indirect Client that allow the Direct Client to provide clearing services to the Indirect Client. 

Indirect Client: For the purposes of indirect clearing, an individual, legal person, entity or institution, the client of a Direct Client which indirectly receives clearing services on one or more segments through a Direct Client, where the Trades made on its account, the Positions resulting from these Trades, Margins and Collateral are registered in the Central Register managed by BME CLEARING, in an Indirect Clearing OSA or an Indirect Clearing GOSA, according to the preference of the Indirect Client, under an Indirect Clearing Agreement.

Individual Clearing Member: Type of Member, which participates in BME Clearing acting as clearing member in accordance with article 2.14 of EMIR and that will have BME Clearing as Central Counterparty, that may carry out all the activities established in this Rule Book for Members, although only on its own account and on behalf of its Clients, but not for any other Member. 

Individual Segregated Client Account – Agency (ISA Agency): An Account whose holder is a Client, where an individual record is kept of the Client’s Trades, Positions, Margins and Collateral. 

Individual Segregated Client Account- Principal to principal (ISA P to P): An Account, whose holder is a Clearing Member, where an individual record is kept of the Trades, Positions, Margins and Collateral held by the Clearing Member, in its own name and on behalf of a sole Client.

Instruction: Mandatory regulation of specific application approved by BME Clearing, which supplements or implements the Rule Book, General Conditions and Circulars.

Margin Account: Ancillary Account where the amounts corresponding to Initial Margin required in relation to Registered Positions in the Position Accounts, which can be calculated net or gross, are entered. Accounts where the amounts corresponding to Margins required from a Member in relation its activities in each of the corresponding Segments, other than Initial Margins (contribution to the Default Fund, Individual Fund and Extraordinary Margin) are registered, are also classified as Margin Accounts.

Margin Collateral Account:  An ancillary account where the Collateral posted to cover the different Margins required to a Member other than Initial Margins (differentiating contribution to the Default Fund, Individual Fund and Extraordinary Margin) is recorded.

Margin: Amounts required from Members or Clients, as applicable, in accordance with the provisions of this Rule Book and its supplementing regulations, registered in the corresponding Margin Accounts, to cover the risk of Default on the obligations undertaken by Members and Clients. 

Market Trade: Trade on Financial Instruments or other assets admitted to trading on Market with which BME Clearing has entered into the corresponding agreement, and which arises from trades performed in the corresponding Market.

Market: Official secondary market, multilateral trading facility or organised trading facility with which BME Clearing has a corresponding agreement to perform some of the functions relating to the trades carried out therein.

Member with the Capacity to run a Second-Tier Register: Individual or General Clearing Member that manages a Second-Tier Register.

Member: Generic name which includes all kinds of Members of BME Clearing from among those defined in Chapter 2 of this Rule Book. 

Non-Clearing Member: Type of Member, with BME Clearing acting as its Central Counterparty, that may carry out all the activities established in article 6.2 of this Rule Book, holding the Accounts described in article 7.1.b), and acting on its own account or on behalf of its Clients and Indirect Clients. 

Omnibus Segregated Client Account (OSA): An Account, whose holder is a Clearing Member, where the Trades, Positions, Margins and Collateral held by the Clearing Member, in its own name and on behalf of multiple Clients are recorded. 

Omnibus Segregated Client Account- Indirect Clearing (Indirect Clearing OSA): An Account whose holder is a Clearing Member, a Non-Clearing Member or the Client of a Clearing Member, where the Trades, Positions, Margins and Collateral held on behalf of multiple Indirect Clients of the Account holder or of an Ordinary Non-Clearing Member of the General Clearing Member Account Holder are recorded. 

Ordinary Non-Clearing Member: Type of Member, with its General Clearing Member as its Counterparty and not holding Accounts in BME Clearing's Trades Register that may carry out all the activities established in article 6.3 of this Rule Book, acting on its own account or on behalf of its Indirect Clients. 

OTC Trade: Trade on Financial Instruments or other assets arising from transactions performed outside of the Markets, with which BME Clearing has entered into the corresponding agreements, in relation to Financial Instruments or other assets admitted or otherwise to trading on such markets. 

Position Account: Ancillary Account where Trades and the Positions arising therefrom are entered. Position Accounts may be gross or net registration accounts.

Position Settlement: In the Segments in which it is so determined it is General Conditions, a procedure whereby the obligations of Members, Clients and of BME Clearing arising from open Positions are met, via the delivery of securities, Financial Instruments or assets and cash in the related settlement system.

Position: Financial Instruments, assets and cash balance arising at any time from the Trades registered in a specific Account. The resulting Position will be net in those Accounts with respect to which the application of netting has been established, and it will be gross in other cases. 

Proprietary Account: Account held by a Clearing Member or a Non-Clearing Member where the Trades, Positions, Margins and Collateral of the Member holding the Account are registered. 

Registration: Act whereby BME Clearing registers the Trades in the corresponding Accounts of the Central Register and Members with the Capacity to run a Second-Tier Register simultaneously enter the Trades in their Second-Tier Registers.

Request for Registration: Act by which a Member or a settlement system with which BME Clearing has reached the corresponding agreement for the Settlement of the Positions registered in BME Clearing, acting for the account of a Member, requests the Registration of an OTC Trade from BME Clearing. 

Rule Book: This Rule Book, which constitutes organisational and disciplinary regulation of the Securities Market, of mandatory compliance for all BME Clearing participants. The General Conditions of each Segment are an integral part of the Rule Book.

Second-Tier Register Account: in cases where this is provided for a particular Segment in the corresponding General Conditions, and with respect to OSA Central Register Accounts, these are Accounts whose holders are Clients where the Transactions, Positions, required Margins, and where applicable, Collateral contributed by the Client shall be entered, reflecting the Client's Position vis-à-vis the Clearing Member holding the OSA.

Second-Tier Register: Registration system, managed by each Member with the Capacity to run a Second-Tier Register, for the Trades, Positions, Margins and Collateral registered in the Accounts of the Second-Tier Register opened by Clients with such Members, in relation to OSA accounts in the Central Register and for those Segments in which it is so required by the corresponding General Conditions. 

Segment: Group of Financial Instruments or assets of similar characteristics and related Trades, which are considered jointly for the purposes of the specific regulations applicable in relation to the services provided by BME Clearing and the methodology for calculating the Margins required. 

Settlement Fails: In those Segments in which it is so established by the corresponding General Conditions, any delay in the fulfilment of the delivery obligations relating to the securities or cash resulting from the Position Settlement. 

Settlement: Generic name for all types of operations applied to determine and enforce cash amounts or volume of Financial Instruments or assets owed that are carried out in relation to registered Trades.

Trade: Generic name for all legal transactions on Financial Instruments or other assets determined by BME Clearing, in relation to which BME Clearing carries out any of their functions. 

Trades Register: Term which includes the book-entry registration system comprising the Central Register and the Second-Tier Register. 

Transfer: Book-entry whereby the Registration of a Trade, or of all or part of a Position, is changed from one Account to another.

Valuation Interval: Price range bounded by a maximum value and a minimum value that a Financial Instrument may have, used to calculate Margins.