BME to create a trade repository for OTC financial products

BME to create a trade repository for OTC financial products

03/11/09

Bolsas y Mercados Españoles (BME) is going to create a Trade Repository for a wide range of Over the Counter (OTC) financial instruments, in line with the European Commission’s Communication of October 20th with the aim of achieving greater operational control and transparency in the trading of these products. The project is expected to be completed by the second quarter of 2010. Visit this link for more information: (http://ec.europa.eu/news/economy/091022_en.htm).

According to the European Commission the appropriate management of systemic risk requires supervisory authorities to have a thorough vision of OTC derivatives markets and this can only be attained if all trades are reported to a Trade Repository, which in turn makes the information available to the supervisory authorities. In this scenario, it is very important that the Trade Repositories are managed in an independent, professional and efficient manner in such a way that they fulfill their main function without the limitations that arise from conflicts of interests of those who still prefer to keep the markets opaque. It is against this backdrop that BME starts the Trade Repository, confident of its capacity to respond satisfactorily to the demands brought about by the current situation.

The new service will initially be provided in Spain although it has a clear international orientation. The system can in the future be shared with other markets or implemented by BME in other countries. The Trade Repository will encompass a broad scope of financial instruments, among them bilateral securities lending, Bank Loans or Credit Claims as well as OTC derivatives whose underlying assets are Fixed Income, Equities, Currencies, Commodities or others.

By launching this project BME takes one step forward in its strategy of expanding its business line in the context of past and future developments affecting the markets and their regulation and supervision.