BME CLEARING, the Central Counterparty (CCP) of BME, has received the authorisation of the CNMV (the Spanish competent authority) for the launch of two new segments, Cash Equities and Interest Rate OTC Derivatives.
The authorisation follows the joint review with the European college of regulators envisaged in the EMIR Regulation, which governs the activity of CCPs in the EU.
In the Equities segment the CCP will offer clearing and CCP services for trades in equities listed on the markets operated by BME. The participation of the CCP in the post-trade constitutes a key element of the Reform of the Clearing, Settlement and Registration system in Spain, now underway.
In the Interest Rate OTC Derivatives segment, the CCP will offer clearing of OTC traded interest rate derivatives, mainly IRS (interest rate swaps) and FRA (forward rate agreements).
This service will help all participants in the interest rate derivatives to comply with their obligations to register and clear all OTC trades through a CCP when the level 2 regulations implementing the clearing obligation established under the EMIR Regulation take effect, in 2016.
With the creation of these two segments, customers will benefit from the efficiencies in capital consumption derived from using a CCP for clearing their trades, instead of keeping their transactions bilateral, which involves greater capital consumption. In addition, the use of the CCP strengthens the security of the markets by mitigating counterparty and operational risks and guaranteeing trade obligations are met.
Ignacio Solloa, CEO of BME CLEARING, stated that "the regulatory approval of the two new segments confirms that of our risk management and control systems comply with the requirements and will allow our customers to meet their post-trade obligations thanks to an efficient and cost-effective service".