Current situation of the Reform. Test and CalendarJesús Benito. Chief Executive Officer of Iberclear, BME
Participant Entities in IBERCLEARJesús Benito. Chief Executive Officer of Iberclear, BME
Members in BME Clearing. OnboardingManuel Andrade. Managing Director Sales, BME Clearing, BME
Market Members in BMEBeatriz Alonso-Majagranzas. Equity Unit Deputy Director, BME
Migration. Calendar and HighlightsBeatriz Alonso-Majagranzas Equity Unit Deputy Director, BME
Agenda
Spanish equity market
STOCK EXCHANGE
CCP
IBERCLEAR
BME
PROJECT IMPACT
STOCK EXCHANGEChanges in interfaces
BME CLEARING CCPNew infrastructure
ARCO – IBERCLEAR SYSTEMNew systemN
EW
TR
AC
EA
BIL
ITY
AN
D
SU
PE
RV
ISIO
N S
YS
TE
M
Reform Calendar
PHASE I- EQUITY
PHASE I PHASE II
PHASE II- EQUITY & FIXED INCOME
Current situation
Legal frameworkLegal frameworkLaw 24/1988Law 24/1988Royal DecreeRoyal DecreeRegulationsRegulationsCircularsCirculars
Migration designMigration designDocumentation Documentation CTA 27/04CTA 27/04
Functional designFunctional designFunctional doc.Functional doc.Procedures manualProcedures manual
Local CSDsLocal CSDsSFI ModelSFI Model
PTIPTIFeesFees
Testing Phase Testing Phase
2015MAY JUN JUL AUG SEP OCT
Testing Phase
Voluntary testing
Certification mandatory testing
Daily Activity
PRODUCTION connectivity
Start-up & Migration
18/05 – 17/07
22/07 – 28/07
01/07 - 30/09
29/07 – 05/08
26/08 – 02/09
09/09 – 16/09
23/09 – 30/09
10/08 – 14/08Settlement T+2
Participants in Equity (SCLV platform)
Participants in Fixed Income (CADE platform)
Certification tests
Contents
Participants in Iberclear
Before the 15th of Maythey have to state their
intention of
PARTICIPATING IN arco
Indicating membership condition
NOT PARTICIPATING IN arco
Indicating to what Participant will they transfer the securities
18th of May – 17th of July CERTIFICATION TESTSMandatory for Participants using their own Technical Means
Before the 4th of SeptemberRequest for opening accounts in arcoIn order to undertake the migration process
Before the 31st of July Presenting arco membership contracts
Participants in Equity (SCLV platform)
Before the 17th of July
CERTIFICATION TESTSfor CADE Participants which are also acting
as the Agent Bank for any of the issuances registered in the platform
Participants in Fixed Income (CADE platform)
• SCLV Participants using their own Technical Means in arco• CADE Participants acting as Agent Bank for any of the registered issuances
• Performed in the FORM testing environment• Certification Guide with the details of tests• Specific testing ISIN codes
• Open period from the 18th of May to the 17th of July• Pending to determine the date for these tests:
Corporate Actions Supervision Sending registrations requested by the issuer
Who?
How?
When?
Results
Certification Tests
• IBERCLEAR will send each Participant a report after the end of the period• The Participant will send a suitability certificate to IBERCLEAR• IBERCLEAR will inform on the passing of the mandatory tests
A new segment for BME Clearing
Members in BME Clearing
Necessary Documentation
Conformance tests
Margins
Open accounts
Summary
Index
The onboarding process is very quick and simple
Membership dossier will be available by the end of this month
From August 11 till September 1 you can submit the dossier
BME Clearing approval till September 30
August 10 Expected date for approval of the new segment
From August 11You may sign in by sending the documentation
requested
Members in BME Clearing
Need to sign only:- In case of being a clearer: • Agreement CM and BMEC• POA (authorization to settle in Iberclear accounts)• LRSLoan (only for lenders)
- In case of NOT being a clearer:• Agreement NCM and BMEC• Agreement NCM and GCM
In case of just being an Ordinary NCM:• Agreement ONCM and BMEC• Agreement ONCM and GCM
• Form of general info and contact persons
• List of authorized signatories
Existing Members
Necessary documentation
Form/request to join as a member
Form of general info and contact persons
Request certification to Spanish regulator
Questionnaire with seven questions
Certification of Spanish regulator
Photocopy of bylaws
Agreement Member and BMEC
Agreement GCM and NCM
Target 2 account
Credit rating
New Members
Necessary Documentation
Who?
• List of tests and certifications: • Set-up allocation references, filters and parameters
• Trades with external and internal allocations with no parameters and with filters
• Trades with module of parameters
• Trades including the account or the allocation reference in the order
• Hold and release
• Cancelation of Last Resort Securities Loan
• Member certifies BMEC that it correctly receives and interprets the information sent by BMEC
• BMEC will confirm with Iberclear that member has passed test of submitting bilateral trades from Iberclear for clearing at the CCP
• BMEC will confirm with SIBE that kill button test has been passed
• Compulsory to achieve membership in BME Clearing• In case of ISV it will be sufficient to have its conformance test
• From May 18 till July 17
Conformance tests
When?
Tests
Position Margin (by October 6)
•October 7 at 9am trades will start to be booked.•The intra day limit to book trades increasing margins is set to be the Individual Margin plus 5% of your equity (with a cap of 10 m for less than BBB- or non rated).•From that moment, if you exceed the limit we call you to post the excess plus 20% of excess.•Strongly recommended to ADVANCE margin to cover risk of 1 day.•How much? Approximately the amounts obtained within the test we will be running with real trades.
Default Fund
Individual Margin(not mutualized)
Position Margin
MarginsContribution to the Default Fund (by September 30)
• ICM: 0.5 m• GCM: 1 m
2% of all position margins called for all the accounts (by September 30)
• ICM: min. 0.5 m and max. 1 m• GCM: min. 1 m and max. 1.3 m
You may open accounts sending an e-mail with a specific form.
By default we will open the accounts reported in the form with static data to be sent before June 12.
From September 9 you may send us modifications.
Open accounts
May 29: Membership dossier is available
May 18 till July 17: Conformance tests
August 10 or before: Approval of the new segment by CNMV
From August 10 or before till September 1: Members will be sending the dossier
From September 1 till 30: BME Clearing will approve memberships
From September 9: Modify account set-up
Till September 30: Post contribution to DF and Individual Margin
Till October 6: Advance position margin.
Summary
BME Trading Members
BME Trading Members
Contracts for Trading Members
Conformance Tests
New Fields in Order Messages
Index
• Designation of Clearing Member (to perform conformance test with)
• Submit declaration of test performance with or without service provider (back office)
• Deadline for counterparty members in the SICAV segment to designate a Clearing Member and Clearing Account
Before May 15
BME Trading Members
Before July 31
Before September 4
• Submit certificate of suitability
• Distribution of Conformance Test results
• Market Member Contracts Signed
Adhesion Contract
All market members have to sign it (up to 4 member codes) Acceptance of new market regulation (stock exchange regulations)Uniformity along the rest of infrastructuresSimplify current process
Kill button contract
To be signed by Non-Clearing Trading Members (tripartite)Part of the Adhesion ContractRequires conformance test
Notice of February 24, 2015
Contracts for Trading Members
1. Adhesion contract to the condition of Member of a Stock Exchange To be signed by all members of the different Exchanges. In addition, it is foreseen:
The certification of traders designated by the member and those that will be needed in order to request their training
A notification by the market member to the Exchange of its Clearing member at BME Clearing
An authorization to the Clearing member to use the technical facilities that enable to interrupt its trading activity
2. Tripartite contract: Market member, Clearing member and Sociedad de Bolsas to grant access to technical resources (BME PC Terminal)
3. Tripartite contract: Market member, Clearing member and BME Clearing to enable the Kill Button facility
Contracts for Trading Members
CONTRACTS WITH THE GOVERNING BODIES OF THE EXCHANGES
• Order testing (FIX 4.0)• Kill Button function
Conformance Test
SIBE SMART
• Ownership communications• Market members will have to inform when testing
has been fulfilled in order to be verified
OWNERSHIP COMMUNICATIONS
TRANSACTION REPORTING
• Reception of files
Who?
When?
How?
Conformance TestKill Button
• Market members• To be completed together with the Clearing member
• From May 18 to July 17 • Market members will receive a proposal of dates to complete
the test
• Access of the clearing member through BME PC• The clearing member code used in the market will be used in
the CCP
Who?
When?
How?
Conformance TestOwnership Communications
Market members
From May 18 to July 17
Ownership communications and ammendments:• Ownership communication of trades with BME Clearing• Ammendments to ownership previously communicated
Reception of information:• Generated files for market members• Information requests and reception of requested information• Members will certify the reception and interpretation of information
1. Clearing Member*
2. Allocation Reference
3. Mnemonic
4. Clearing account*
1.Identification of the receiving participating entity2.Clearing account of the receiving entity3.CCV (Securities account) of the receiving participating entity4.Identification of delivering participating entity5.Clearing account of the delivering entity6.CCV (Securities account) of the delivering participating entity
* Fields that must be filled in by the counterparty member of SICAVs
MARKET ORDERS
New Fields in Order Messages
TRADES THAT ARE NOT SETTLED THROUGH IN CCP
First day of
arco settlementLast day of SCLV negotiation
Start of the CCPStart of the PTI
Last day of SCLV settlementDisconnection of AUD for Equities
TU06/oct/15
W07/oct/15
TH08/oct/15
F09/oct/15
S10/oct/15
SU11/oct/15
M12/oct/15
Migration. Key dates
Migration
• Mailing of forms and documents completed by the entities for the configuration of the post-trading real environment: Market Members, BME Clearing members and Iberclear participating entities.
May 12
• Pre-production environment configured to test go live and migration
July 29
June 12• Last day for the entities to submit the Communication
Configuration
• Go live and migrationOctober 7 - 12
• Last window and ‘end of day’ process• Balance sent to all the entities (all the accounts and all the ISIN
codes)• Validation required by all the entities (vía e-mail)
(The process of sending balances will begin 3 weeks before the migration, to make it easier for the entities)
• Balance conversionarco
arco • Balance sent to all the entities • Validation of the balance conversion required by the all the entities• Reorganization of the balances among the entity accounts• Validation of the reorganized balance
MigrationIberclear
October 9
October 10
SCLV
FIX 4.0 protocol will be available in July
Incorporation of the new reform fields as an option (orders with validity post Octubre 7, 2015)
The current FIX protocol will be discontinued
Implementation of Information required for the Reform
AUD for Equities will be discontinued
MigrationThe Market
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