Equity is the segment through which the Central Counterparty (CCP) of BME provides clearing and CCP services for the trading of securities listed on its equity markets, specifically shares, rights, warrants, certificates and exchange-traded funds (ETFs).
To this end, BME Clearing stands between a buyer and a seller in the market, thus becoming the counterparty to each trading party.
Prior to issuing the settlement instructions a process called netting (the clearing of net balances) takes place, in such a way that the only obligations to be honoured by each participant in the CCP as well as by the CCP itself are those arising from their net positions.
The main advantages of the segment are that it allows customers to benefit from capital consumption efficiencies by using a CCP instead of taking on counterparty risk, which entails higher capital consumption and risk. In addition, thanks to the regulatory mechanisms providing the CCP with solid legal protection, the CCP contributes to greater market stability by mitigating counterparty and operational risk and ensuring the finality of trades.
The CCP also helps optimise the management of guarantees in such a way as to minimise the impact on participants of compliance failures.