The Comisin Nacional del Mercado de Valores (CNMV), Spains stock exchange regulator, has launched a public consultation to reform the clearing, settlement and registration processes of the Spanish stock markets, suggesting it may introduce a CCP, eliminate References of Registry (RRs) and address the firmness of trading move from execution to settlement.
Registration in Spain is a notorious obstacle to settlement efficiency in the country, requiring an RR code (issued by the matching engine of the exchange platform) for every trade communicated to the CSD, Iberclear. It is a hurdle that has left equities trading on MTFs in Spain at nearly naught, notably low in comparison to the rest of the European markets where a significant proportion of overall trading volumes occur on MTFs.
CNMV in early 2010 expressed a desire to adapt Spanish regulation closer to T2S standards but was reticent to drop the registration requirement; rather, its proposal was to maintain the RRs but as a post-trade reference instead. Now, it says it could replace the RR system with segregated accounts held at the CSD, with trades debited and credited from the accounts without the need to generate an RR for each individual trade. The new system would offer equal security and possibility of supervision, according to the CNMV.
As well, CNMV proposes the creation of at least one CCP, like other European markets, which it says would minimize the risks involved in securities trading.
CNMV is accepting feedback on the proposals until February 28. Full details of the proposed reforms may be found here (Spanish).