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Repo

 

BME Clearing Repo is the current commercial denomination for the Fixed Income Securities Segment of the Central Counterparty (CCP) operated by BME Clearing since 2003, formerly known as MEFFClear.

Participants of BME Clearing Repo may be all entities that wish to be Clearing Members or those who wish to be Clients of a Clearing Member under an account within the latter.

BME Clearing is an entity that acts as a Central Counterparty (CCP) for transactions of Fixed Income Securities traded on exchanges, electronic trading systems or OTC between Clearing Members and/or Clients. Nowadays, BME Clearing Fixed Income Segment operating proceduresare based on Buy/Sell back transactions on Sovereign Spanish Debt.

With the incorporation of Iberclear to TARGET2 Securities (T2S) Settlement System in September 2017, BME Clearing has modified its clearing services of the Repo Segment, as its previous model was not compatible with T2S, the new settlement system. In this way, the CCP has adapted to a standard service offered by other CCP´s, with netting being involved in the settlements, carrying out the settlement of the same and its corresponding monitoring.

BME Clearing receives in real time information on transactions that the members intend to novate and confirms the novation of the transaction to the corresponding Platform, updating the Member´s position in the corresponding CCP account. BME Clearing generates the settlement instructions in real time for the Overnight buy/sell back initial legs, and after the netting and aggregation process to send them to Night-Time settlement period for the rest of transactions.

BME Clearing is an Indirect Participant (ICP) in T2S, and as CCP, sends settlement instructions through Iberclear with TOP priority (only Central Bank or Central Securities Depositaries(CSD) have higher priority).

Additionally, both in real time and at the end of each session, BME Clearing calculates the risk for each Clearing Member by the outstanding position pending to be settled requiring margins to cover it and informing the entities involved. Members are also provided with the result of the settlement managing the fails that may occur.

 

 

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