BME, through its BME Clearing subsidiary, and NEX Markets, which provides electronic trading technology services in the fixed income and FX markets, have signed an agreement whereby BME Clearing will start offering repo clearing services to participants currently connected to NEX Market’s BrokerTec platform.

#BMEClearing to provide NEX Market´s clients with a new clearing option https://t.co/mHw1hMbINg pic.twitter.com/GZwQXq7mb5

— BME (@BolsaBME) July 18, 2018

Financial institutions trade Spanish repo bilaterally and clear via BME Clearing. Through the agreement with BME Clearing, NEX Markets will allow banks to trade via the BrokerTec platform, the primary venue for Spanish repo trading, while keeping BME Clearing as their preferred clearing venue. Financial institutions will thus benefit from access to the deeper pool of liquidity provided by an electronic market as well as from the transparency and reliability of BME Clearing.

As the sovereign debt markets have evolved in recent years, many international financial institutions have been increasingly active in the Spanish bond markets. In the past year alone, Spanish repo ADV on the BrokerTec platform has increased over 33%. Alongside this, the market has become almost entirely centrally cleared through CCPs, up from 60% in 2013.

Ignacio Solloa, Managing Director of BME Clearing, said: “While the electronic Spanish repo market has expanded in recent years, the bilateral market has steadily contracted. We are delighted that the BrokerTec platform offers our CCP services to their clients.”

John Edwards, Managing Director, BrokerTec EMEA, said: “The Spanish repo market has seen tremendous growth over the past few years and BrokerTec is a major venue in this market with a solid footprint of Spanish banks. By signing this agreement with BME Clearing, we are further expanding that client footprint in Spain, while also providing a new alternative clearing option for our clients.”

Source: BME