Transactions Registration

The register of a transaction at BME CLEARING involves the automatic novation of the buyer and seller rights and obligations. These are extinguished arising new rights and obligations with BME CLEARING as the unique counterparty: buyer facing the seller and seller facing the buyer. Thus, giving more efficiency in settlement through netting and the control of securities and cash delivery.

Transactions subject to registration are buy/sell-back transactions and classic repos in Spanish, Italian, Portuguese, French, German, Austrian and Dutch debt. Market standard assumes buy/sell back for Spanish Debt and classic repo for European debts, however, members can specify trades different from the market standards.

Underlying Securities of the accepted transactions to registry are:

• Sovereign Bonds and Obligations with fixed and variable coupon and indexed to inflation.
• Treasury Notes.

Debt Strips and transaction terms that exceed 36 months are not accepted.

BME CLEARING is authorized to register simple transactions and double, buy/sell-backs or classic repos.

The transactions can be received from SENAF and BrokerTec Platforms and those admited to be settled in IBERCLEAR acting as Platform. In addition, BME CLEARING allows direct registration through the CCP.

In the Central Register and for the Fixed Income Segment can be opened different types of Clearing Accounts:

• Proprietary Account (PA), whose holder is the CCP Member, in which the Member´s proprietary transactions are registered.
• Individual Client Account (ISA), whose holder can be any natural or legal person and where Client Position is displayed at any moment.
• Individual Segregated Account (OSA), with positions of many clients whose holder is a Member, which may be in gross or net register.

Proprietary Account can only target a Proprietary Account or an Individual Account at IBERCLEAR, while the Individual Segregated Account may also target a Third-Party Account at IBERCLEAR. Omnibus Segregated Accounts can only be addressed to a Third-Party Account at IBERCLEAR.

The opening of BME CLEARING Fixed Income Clearing Accounts aimed at a Third-Party Account at Iberclear is subject to a prior request from the Member concerned.

The communication and the exchange of information between the different participants that participate in the registry of transactions at BME CLEARING Fixed Income is shown in the following table:

(1)   The Central Counterparty (CCP) will receive in real time information on transactions that the member intends to novate coming from IBERCLEAR or SENAF and BrokerTec platforms.

(2)   The CCP will confirm the novation of all trades to the Platform.

(3)   The CCP calculates the risk of each account in real time. In addition, at the end of the session, the CCP calculates the risk of the outstanding position pending to be settled, for each Clearing Member. Margins to cover such risk are required to be posted next morning.

(4)   The CCP generates the Settlement Instructions and sends them to T2S through the CSD (IBERCLEAR); then the CSD sends it to its Settlement Participants.

(5)   The CCP will provide its Members, and IBERCLEAR its Settlement Participants, the result of the settlement and the CCP will manage the fails that may occur.

(6)   Debit and credit orders for cash collateral.

(7)   Blocking/ unblocking of securities collateral.

(8)   Cash investment through buy/sell-back transactions.

(9)   If applicable, interests payments resulting from investment.

(10) Debit and credit orders for other concepts of cash movements, i.e. payment of fees, penalties for fails, etc.