Bolsas y Mercados Españoles (BME)

Contact Details

Telephone:	+34 91 709 50 00/01
Fax:	+34 91 709 51 39
Email:	international@bolsasymercados.es
Web:	www.bolsasymercados.es/

Principal Officers and Directors of Bolsas y Mercados Españoles (BME)

Chairman & CEO	Antonio J Zoido
Vice-Chairman	José Barreiro
Vice-Chairman	Tomás Muniesa
Vice-Chairman	Margarita Prat Rodrigo
Vice-Chairman	Rosa María García
Board Member	Ignacio Benjumea
Board Member	Alvaro Cuervo García
Board Member	Javier Alonso
Board Member	Joan Hortalá
Board Member	Karel Lannoo
Board Member	Ramiro Mato
Board Member	Manuel Olivencia
Board Member	Ricardo Laiseca
Board Member	José Antonio Alvarez
Board Member	Carlos Stilianopoulos
Secretary	Luis María Cazorla
Vice-Secretary	Cristina Bajo
Legal Adviser	Jaime Aguilar
Chairman & CEO	Antonio J Zoido
Information Dissemination, IT & Consultancy Services, International Affairs	Ramón Adarraga
Legal Affairs	Jaime Aguilar
Human Resources	Gabriel Domínguez
Listing	Antonio Giralt
CFO	Javier Hernani
Derivatives Market & Fixed Income Market	Francisco de Oña
Clearing & Settlement	José Massa
IT	Francisco Nicolás
Corporate Communications	Pablo Malumbres
Cash Markets	Jorge Yzaguirre
Chairman & Chief Executive Officer	Antonio J Zoido
Chairman	Joan Hortalá
General Manager	José María Antúnez
President	José Luis Marcaida
Chief Executive Officer	José Luis Damborenea
President	Ángel Torre
Vice-President & CEO	Manuel Escámez
Chairman of the Board of Directors	Tomás Muniesa
Chief Executive Officer & General Manager	Fernando Centelles
President	Francisco de Oña
Chief Executive Officer & General Manager	Julio Alcántara
President	José Massa
Chief Executive Officer	Jesús Benito

Brief history

Brief history

Bolsas y Mercados Españoles (BME) is one of Europe's four leading stock market operators by trading volume. The Group was formed from several individual markets, some of them dating from the Middle Ages.

The origins of the Bolsa de Madrid can be traced to the 14th and 15th centuries with the Lonjas, the first commodity exchanges in Spain where local merchants could meet to trade grain, wool, silk and other commodities and the Juros Reales, government bonds issued in guarantee of a debt or loan, usually requested by the King.

Bolsa de Madrid was established in 1831. For more than a century it mainly traded fixed income instruments. From the 1960s equity trading on the Exchange increased in importance and today Bolsa de Madrid is mainly an equity exchange.

The roots of the Bolsa de Barcelona go back to the emergence of commodity exchanges at the time of the Commercial Revolution in Catalonia. The Ordinacions promulgated by King James I in 1271 is the oldest and most complete text regulating the role of the mercantile mediator.

Towards the middle of the nineteenth century, with the industrial boom and the birth of the first Catalan corporations, trading in securities started, with an active market in Barcelona where the role of the mediators was carried out by Corredores Reales, forerunners of the later Agentes de Cambio y Bolsa (stockbrokers). The Official Stock Exchange was created in 1915.

Bolsa de Bilbao was founded in July 1890. It was the Regent Queen Maria Cristina de Habsburgo-Loren, who signed the Royal Decree granting authorisation to establish a General Stock Exchange in Bilbao, enabling the official trading of securities. The founders of the Bolsa de Bilbao were entrepreneurs, representatives of the economic sectors linked to industry, trade and business in general.

Although Bolsa de Valencia is the youngest of the Spanish stock exchanges, its roots go back to 1283 when the Consulat del Mar (Sea Consulate) was founded. Bolsa de Valencia became an official stock exchange in 1980.

In 1989 the Spanish Securities Market Act (Law 24/1988 of 28 July) came into effect, entailing major changes. It involved the setting up of a modern structure for the securities market, linking Spanish exchanges to a single electronic order book (SIBE), changing membership requirements, developing a clearing and settlement house, and establishing a supervisory authority (CNMV).

Almost a decade later, in 1998, the Law 37/1998 of 16 November amended previous legislation to meet the requirements of the Investment Services Directive (ISD). These important reforms led to the development of the other companies of BME.

Mercado de Opciones Financieras Español (MOFEX), established in 1989, was Spain's first financial options market, launching an option contract on a three-year notional bond. One year later, MEFF SA was created as the first futures market in Spain.

In 1991 MEFF Sociedad Holding de Productos Financieros Derivados SA acquired 100% of the shares of MEFF SA and MOFEX. These markets were reorganised as MEFF Renta Fija, which was located in Barcelona and traded interest rate futures and options, and MEFF Renta Variable, which was located in Madrid and traded stock index futures and options and equity options. In October 1999 the board of directors decided to merge the management and activities of MEFF Renta Fija and MEFF Renta Variable into a single exchange.

AIAF, the Spanish market for private fixed income, was established in 1987 with the support of the Bank of Spain.

SENAF (Electronic Trading System of Financial Assets) is the electronic platform for the trading of Spanish Public Debt Bonos and Obligaciones. The system began operations in June 1999.

Clearing and settlement systems in Spain were managed by two different entities until 2003: the SCLV (settlement system for equities and fixed income) which was created in 1992, and CADE, the clearing house for public debt managed by the Bank of Spain. In April 2003 IBERCLEAR was established as the Spanish Central Securities Depository. It is the result of a merger between the former SCLV and CADE and it is fully owned by BME.

In 2002, the four stock Exchanges, Iberclear, AIAF, MEFF, SENAF and BME Consulting were integrated in the incorporated Bolsas y Mercados Españoles (BME Spanish Exchanges).

In July 2006 Bolsas y Mercados Españoles launched its IPO, becoming a listed company. Since July 2007, BME has been included in the IBEX 35 index, the benchmark index of the Spanish market.

Bolsas y Mercados Españoles takes an active role in the World Federation of Exchanges (WFE), the Federation of European Securities Exchanges (FESE) and in the Iberoamerican Federation of Exchanges (FIAB). It is also an affiliate member of the International Organisation of Securities Commissions (IOSCO), and is member of the European Capital Markets Institute (ECMI)

Structure

Structure

Bolsas y Mercados Españoles (BME) integrates the companies that direct and manage the securities markets and financial systems in Spain. It brings together, under a single activity, decision-making and coordination unit, the Spanish equity, fixed-income and derivatives markets and their clearing and settlement systems. The BME Group is formed by Madrid, Barcelona, Bilbao and Valencia Stock Exchanges, MF Mercados Financieros (which includes the Corporate Debt and Public Debt markets – AIAF and SENAF – the derivatives market, MEFF and its CCP, MEFFCLEAR), IBERCLEAR (the securities registration, depository, clearing and settlement institution) and BME Consulting, which is focused in the areas of strategic consultancy, provision of services and exportation of the technological platforms developed by the companies of the Group.

Also part of the group is MAB an organised trading system supervised by the CNMV. This market's primary aim is to offer an organised system of trading, settlement, clearing and registration of trades in shares and other securities of collective investment institutions (CIIs); securities and instruments issued or linked to small caps; other securities or instruments that, by nature, require a special trading scheme.

The supervisory and sanction function is the responsibility of an administrative body (CNMV, the Spanish Securities Exchange Commission), which is the competent authority for that purpose, while the exchanges manage the market and carry out primary surveillance. In the case of Barcelona, Bilbao and Valencia, their respective autonomous governments have some responsibilities. Additionally, the Bank of Spain has surveillance authority over the public debt markets.

Markets

Markets

The current Spanish securities and derivatives markets structure is as follows.

In the Equity Market, an electronic trading platform (SIBE) accessed by the four stock exchanges operates a single equities market, based on an order-driven structure, with a single order book and a matching procedure based on price-time priority. A call market (Fixing) is also operated for less liquid stocks, with two daily auctions. More than 150 shares are traded in the main market.

Latibex, also operated on the electronic trading system, is the first market in euros for Latin American shares. This market, created in 1999, facilitates European investment in Latin America as well as access to the European capital market for Latin American companies.

New products, such as warrants, are also traded in SIBE, utilising particular matching procedures for this sort of instrument.

The Derivatives Market's main activity is the trading, clearing and settlement of futures and options contracts on the equity index IBEX 35, on equities and on the Spanish 10-year Notional Bond. The market has members amongst the main banks and savings institutions.

Fixed Income instruments are traded on different platforms. Most of the volume is traded in the dealers market AIAF, which is an official financial market under Spanish law. It operates a quote-driven system. The Fixed Income Market is an organised secondary market, with members including the main banks and saving institutions.

The stock exchanges also operate a fixed-income market on the SIBE platform, with the same order-driven structure as for equities.

In the Public Debt Market there is a Multilateral Trading Facility (SENAF) supported by an electronic platform for the trading of Spanish public debt bonos and obligaciones (bonds), T-bills, strips, switches, covered bonds (cédulas) and repos.

It is neutral with respect to the debt market, since its legal status prevents it from taking a position and it is subject to the supervision of the CNMV (securities markets commission) and of the Bank of Spain.

The main European banks are among the clients of the market and it has terminals in London, Paris, Frankfurt and Milan as well as Spain.

The market has an automatic connection with Iberclear, the clearing and settlement system, and the CCP for repos operations.

The public debt secondary market is not only carried out in SENAF, but also in a first tier through official market members ('blind market') and a bilateral trading system among public debt account holders supported by the Bank of Spain's settlement service (SLBE). Some small volume is traded in the exchange's electronic platform, SIBE.

Business hours

Opening hours

Equity market – SIBE (Electronic Order Book)

Pre-opening auction	08:30-09:00
Open market	09:00-17:30
Closing auction	17:30-17:35
First fixing	08:30-12:00
Second fixing	12:00-16:00
Block trading	09:00-17:30
Special operations	17:35-20:00

Equity market – floor trading (Madrid, Barcelona, Bilbao & Valencia Stock Exchanges)

First fixing	08:30-12:00
Second fixing	12:00-16:00
Special operations	17:35-20:00

Equity market – ETF – SIBE

Pre-opening auction	08:30-09:00
Open market	09:00-17:35
Block trading	09:00-17:30
Special operations	17:35-20:00

Warrants – SIBE

Open market	09:00-17:30
Block trading	09:00-17:30
Special operations	17:30-20:00

Equity market – Latibex – SIBE

Pre-opening	08:30-11:30
Open market	11:30-17:30
Block trading	09:00-17:35
Special operations	17:35-20:00

Equity market – MAB – SIBE

Pre-opening	08:30-12:00
Open market	12:00-16:00
Net Asset Value (NAV) operations	08:30-16:00
Special operations	17:35-20:00

Fixed-income – SIBE

Private issues	08:30-16:30
Public debt	08:30-16:30

Fixed-income – AIAF

No fixed trading hours.

Public Debt – SENAF

General	08:30-17:15
Overnight	08:30-14:00

Index and stock derivatives – MEFF

Pre-opening auction	08:30-09:00
Open market	09:00-17:35

Bond futures – MEFF

Open market

08:00-17:15

Market size

Market size

(at 31 December 2009)

Number of listed companies	3,472
Market capitalisation, shares	EUR1,107.0bn

Largest domestic companies by market capitalisation
Position	Stock	Value (EUR)
1	Banco Santander, SA	95.0bn
2	Telefónica, SA	89.0bn
3	Banco Bilbao Vizcaya Argentaria (BBVA)	47.7bn
4	Iberdrola, SA	35.0bn
5	Inditex, SA	27.0bn
6	Endesa, SA	25.3bn
7	Repsol YPF, SA	22.8bn
8	Iberdrola Renovables, SA	14.0bn
9	Gas Natural SDG, SA	13.9bn
10	Criteria Caixacorp, SA	11.0bn

Trading statistics

Trading statistics

Equities

Trading value: Electronic Order Book (SIBE)*
	Value (EUR)
2000	488.8bn
2001	440.2bn
2002	439.2bn
2003	494.3bn
2004	636.9bn
2005	848.2bn
2006	1.15tn
2007	1.66tn
2008	1.24tn
2009	897.1bn
* Turnover is single counted (only the buying side of the transaction is counted).

Most active shares on SIBE: 2009*
Position	Stock	Value (EUR)
1	Banco Santander, SA	218.3bn
2	Telefónica, SA	206.2bn
3	Banco Bilbao Vizcaya Argentaria (BBVA)	124.8bn
4	Iberdrola, SA	67.0bn
5	Repsol YPF, SA	50.7bn
6	Inditex, SA	16.8bn
7	Banco Popular Español, SA	15.7bn
8	Endesa, SA	15.6bn
9	Gas Natural SDG, SA	9.7bn
10	Gamesa, SA	8.9bn
* Turnover is single counted (only the buying side of the transaction is counted) and traded exclusively through the Electronic Order Book.

Derivatives Market

Trading volume (contracts)
Equities	2007	2008	2009
IBEX 35 futures	8.4m	7.3m	5.4m
mini IBEX 35 futures	2.9m	3.3m	3.1m
mini IBEX 35 options	5.7m	8.3m	4.3m
Stock futures	21.3m	46.2m	44.5m
Stock options	13.6m	18.3m	35.5m
Total equities	51.9m	83.4m	93.0m

Public Debt Market (OTC Market + Electronic Platform SENAF)

Trading volume (EUR)*
	2007	2008	2009
Total Cash market	3,032.5bn	2,201.1bn	2,441.4bn
* Only cash operations. Repo operations not included

Corporate Debt Market (AIAF)

Trading volume (EUR)*
	2007	2008	2009
Commercial paper	554.7bn	576.8bn	528.6bn
Bonds & cédulas	238.6bn	922.2bn	1,773.3bn
Securitised bonds	310.1bn	896.5bn	1,424.3bn
Preferred shares	4.5bn	4.0bn	5.6bn
Total	1,107.9bn	2,400.6bn	3,691.8bn
* Turnover is single counted (only the buying side of the transaction is counted)

Public Debt Market (SENAF)

Trading volume (EUR)*
	2007	2008	2009
Cash market	55.7bn	27.8bn	45.0bn
Repo market	38.1bn	43.8bn	88.6bn
T-bill market	2.8bn	10.4bn	4.1bn
Switches market	–	–	–
Total	96.6bn	82.0bn	137.7bn
* Turnover is single counted (only the buying side of the transaction is counted)

Main indices

Main indices

• IBEX 35

• IBEX 35 Short

• IBEX 35 DIV IMPACT

• Ibex Medium Cap & Ibex Small Cap

• Ibex TOP Dividendo

• FTSE Latibex series

• FTSE4Good IBEX

• IGBM

• BCN GLOBAL-100 & BCN MID-50

• BILBAO 2000

• IGBV

• AIAF 2000

IBEX 35 is the official index of the Electronic Order Book of the Spanish exchanges. It is a traded index, comprising the 35 most liquid stocks traded on the SIBE electronic order book trading system. Both price and total return series are calculated on a real-time basis. The IBEX-35 index constituents account for 75% of total market capitalisation (excluding foreign stocks).

The IBEX 35 Short index tracks the daily changes in the IBEX 35 Total Return in the opposite direction; that is, if for a trading session the return on IBEX 35 Total Return is positive, the return on IBEX 35 Short for the same trading session will be negative in a similar proportion.

The IBEX 35 DIV IMPACT index reflects the accumulated amount of the dividends paid by the constituent companies of the IBEX 35 index during a specified period.

The Ibex Medium Cap and Ibex Small Cap indices aim to reflect the performance of mid and small cap companies traded through SIBE.

The Ibex TOP Dividendo index aims at measuring performance of the top 25 companies included in IBEX 35, IBEX Medium Cap and IBEX Small Cap, in terms of dividend yield.

The FTSE Latibex index series measures performance of Latin American stocks traded in the Latibex Market, denominated in euro and trading in real time. The FTSE-Latibex series comprises three indices,

The FTSE Latibex All Share index comprises all securities listed on Latibex market subject to a EUR300m minimum size rule.

The FTSE Latibex TOP is a tradeable real time index consisting of the 15 most liquid securities from the Latibex market. It is free-float adjusted.

The FTSE Latibex Brasil index is the only euro-denominated tradable index covering Brazilian stocks and ranks the 10 most liquid Brazilian shares listed on Latibex by free-float adjusted market cap.

The FTSE4Good IBEX Index comprises companies in the BME's IBEX 35 Index and the FTSE Spain All Cap Index that meet good standards of practice in corporate social responsibility. These companies are working towards environmental sustainability, developing positive relationships with stakeholders and upholding and supporting universal human rights.

IGBM is the general index with regard to shares listed on the Bolsa de Madrid, grouped by industry sectors.

The BCN GLOBAL-100 and BCN MID-50 indices measure the performance of securities traded at the Bolsa de Barcelona. BCN GLOBAL-100 is Bolsa de Barcelona's official index and comprises the 100 most traded companies of the Bolsa de Barcelona. BCN MID-50 represents the mid cap companies of the Spanish securities market and comprises the companies included in IBEX Medium Cap and IBEX Small Cap.

The Bilbao 2000 index tracks the performance of the 50 most liquid stocks of the Spanish capital market.

The IGBV is the general index of Bolsa de Valencia. It is a price index and groups shares in terms of economic sectors.

The AIAF 2000 aims at reflecting the profitability to date of the AIAF Corporate Debt market by measuring quotation and prices. It is adjusted by returns paid.

Securities traded

Securities traded

Stock exchanges (Madrid, Barcelona, Bilbao and Valencia)

Ordinary shares, preference shares, rights, warrants, certificates, fixed income, public debt and ETFs.

Mutilateral trading facilities (Latibex, MAB)

Ordinary shares, preference shares, rights, investment funds.

Corporate Debt Market (AIAF)

Commercial paper, bonds & covered bonds (cédulas), preferred shares, securitisation bonds, government guaranteed bonds.

Public Debt Secondary Market (SENAF)

Spanish public debt bonds, strips, repos on public bonds, Treasury bills, government guaranted bonds.

Derivatives Market (MEFF)

Futures and options contracts.

Trading system

Trading system

Equity Market

BME conducts 99% of its securities trading through the SIBE electronic platforms, fully developed in-house. SIBE allows the interconnection of the four Spanish stock exchanges, providing a single integrated order book. In addition, floor trading also takes place, although in September 2009, open outcry pits were transferred to an electronic trading pit environment. A company cannot be traded on both SIBE and the trading floor.

SIBE – Equity Module

The Spanish equity market is an order-driven market with prices up to four decimal places. Shares are grouped in different categories with specific trading mechanisms aimed at addressing the particular characteristics of the various stocks.

• 'Continuous' market category: Securities that offer high or average liquidity. They are traded on a continous basis on the electronic order book system. Most shares traded on SIBE form part of this category.
• 'Fixing' category: Securities with lower liquidity. Stocks are auctioned throughout the session, with two periods for allotment of the shares. This facilitates efficient price discovery and reduces volatility. These orders are managed through an order book that operates continuously but are matched just twice a day at 12:00 (with a random 30-second end period) and at 16:00 (with a 30-second random closing).

In the first category the system operates with the following phases.

The opening auction. During this period, the order book is partially visible and orders can be entered, altered or cancelled but no trades can be executed. All previous days' orders remaining in the order book and entered during the Opening Auction participate. There is a 30-second random end period to prevent market manipulation. When it ends, the allotment period begins, during which the shares included in orders subject to execution at the fixed auction price are traded. During the allotment period, orders cannot be entered, altered or cancelled. Once the shares are allotted, members receive information on the total or partial execution of their orders. All non-executed orders in the allotment period remain on the order book. The market is informed of the opening price, trading volume, time of each trade and the identity of the trading members. After this, the market is open. On special occasions, the opening auction may be extended.

The closing auction. The session ends with a 5-minute auction with the same characteristics as the opening auction and a 30-second random closing period. The price resulting from this auction is the closing price of the session. The random series that indicates the end is not known beforehand or detectable.

Open market. During this period, orders can be entered, altered or cancelled, with trading taking place at the price fixed according to the open market's matching rules, generally in accordance with the priority established by price and time of order entry criteria. The order book is open and available to all market members (buying and selling member codes are shown). While the market is open, trades are matched.

Volatility auctions. During the open market period auctions can be automatically activated on the basis of stock volatility and price swings based on a double range (dynamic and static).

SIBE provides a facility to deal with large volumes of shares during the open market phase by means of a special segment known as the Block Segment. It also offers an after-hours trading facility, the Special Operations Segment.

In the Block Segment there are two types of operation:

• Agreed Blocks. A ±1% fluctuation from the mid point of the range between the best buy and sell positions in the order book is allowed. The minimum volume of a trade depends on the average daily traded turnover of the stock:

Average daily traded turnover	Minimum volume (EUR)
< EUR500,000	50,000
EUR500,000 to < EUR1m	100,000
EUR1m to < EUR25m	250,000
EUR25m to < EUR50m	400,000
Greater than or equal to EUR50m	500,000

• Parametrised Blocks. Trades can fluctuate within a maximum share price range of 15% from the static price. The effective volume must be above EUR500,000 and must represent at least 5% of the effective daily trading volume in the orders market in the last complete calendar quarter.

Through the Special Operations Segment shares can be traded between previously agreed counterparties once the trading session is closed. Authorised or Communicated operations must fulfil certain cash and price requirements. Operations involving the exercise or expiration of futures and options contracts are also entered on this segment.

ETFs

Exchange-traded funds have a dedicated market segment within SIBE. Its main characteristics are as follows:

• Prices are quoted in units and in euros with up to four decimals places.
• Volatility auctions can take place.
• ETFs may be traded on the Block Segment.
• ETF specialists provide liquidity.
• Creation/redemption takes place through special operations.
• Information is provided about NAV, AUM and baskets.

Warrants, certificates and related products

Warrants, certificates and other related products have a dedicated market segment within SIBE. Several thousand warrants, certificates and other related products – such as structured bonds – are listed on this market segment. Its main characteristics are as follows:

• Prices are quoted in units and in euros with two decimals places.

• Volatility auctions can take place.
• Warrants may be traded on the Blocks and Special Operations Segments.
• Market makers provide liquidity.

Latibex

Latibex is a Multilateral Trading Facility operated by BME that channels European investment towards leading Latin American companies through a single market, with a single operating system for trading and settlement and a single currency, the euro. The market is based on the trading and settlement platform of the Spanish equities market, and Latin American securities listed on Latibex are traded and settled like any other Spanish security.

Other main features of Latibex are:

• Securities traded: original shares (not ADRs).
• Brokers: all members of the Spanish stock market and members of Latin American markets.
• Specialist brokers: provide a bid and ask price at all times, linked to a certain trading volume in order to meet the requirements of any investor.
• Transparent information: the listed companies provide the market with the same information that they supply to the regulatory entities of their markets of origin.

Currently, 33 companies from Mexico, Brazil, Argentina, Chile, Peru and Puerto Rico are traded on Latibex.

MAB

MAB, Mercado Alternativo Bursátil, is a Multilateral Trading Facility operated by BME that offers an organised trading system for shares and other securities linked to growth companies and collective investments schemes which, due to their specific characteristics, require a special trading scheme. Trading on MAB is carried out using the SIBE electronic trading platform.

Currently, there are three product categories in MAB: a segment for SICAVs (open-ended funds), a segment for venture capital and hedge fund securities, and a segment for growth companies.

Trading in SICAV shares can be carried out in two ways:

• Fixing Module. Auction system with prices set at 12:00 and 16.00, designed to meet the needs of securities with low liquidity and capitalisation.
• Module at net asset value (NAV): The price is the NAV of the SICAV at the session close. In this module the price is not known prior to the trade.

The two trading modules operate side by side in the market.

Trading in securities issued by venture capital companies, hedge funds and growth companies is carried out through the Fixing Module.

Public Debt Secondary Market

SENAF platform

SENAF is a Multilateral Trading Facility that provides its members with access to the Spanish public debt market, as well as to Repo, Treasury Bill, Basis, Switches and government guaranteed bonds.

Access to these markets is provided through SENAF terminals or via an API interface which allows members to integrate SENAF market information in their systems and to send market orders from automatic trading systems.

The messages that can be processed fall into two general types:

Requests: These are messages sent by members to the SENAF market. They are regarded as firm orders, but are not deemed valid until they have been fully processed, registered and published by the SENAF central system.

Publications: These are messages sent by the market to members. SENAF publishes every price quoted and every operation crossed in the market to all its members.

SIBE – Fixed-Income Module

Public debt, recorded in the Bank of Spain's book entry system (Government bonds, Treasury bills, etc), as well as private corporate bonds listed on the Spanish Stock Exchanges are also traded through the fixed-income segment of SIBE.

This is a blind market with real-time trading and dissemination of information. Trading is carried out on the basis of ex-coupon prices, except for certain issues for which it is not possible to calculate the accrued interest when the coupon is included in the price. Zero coupon issues are traded according to their yield.

There are two types of trading:

A) Multilateral trading: order and block segments

Order segment. Transactions with no limits on volume, either when the order is introduced or executed, are carried out in this market. During this period, orders can be entered, altered or cancelled, with trading taking place at the price fixed according to the open market's matching rules: this is in accordance with the priority established by price and time of order entry criteria.

Orders can be simple or be restricted by special conditions such as 'all or nothing', 'execute or kill', 'minimum volume' or 'duration' (as a maximum until the end of the month). Simple orders are traded during the session and are automatically executed by time/price priority. At the end of the trading session, outstanding orders are cancelled depending on the order validity.

Blocks segment. Block trading involves transactions ('blocks') for more than a minimum nominal value of EUR150,000 for corporate fixed income assets and EUR300,000 for book-entry government debt.

When the block is entered into the market, it must be stated whether its volume will be traded in one operation or whether it can be traded in several stages, in which case the number of equal trades from dividing up the total volume must be established, provided the amount of each one is equal to or greater than the minimum volume for each product.

The order's access to the market and its on-screen display are prioritised according to the time of introduction and price. The procedure for closing operations, however, is not automatic; the operator chooses the counterparty required.

B) Bilateral trading: agreed operations and prices

The fixed income market also allows bilateral transactions in which the two sides agree the operation and then introduce it into the system. Two types can be distinguished:

• Agreed-price transactions carried out between two market members
• Cross-trades carried out between a market member and a client or between two clients of the same market member.

The amount of any corporate fixed-income transaction must be over EUR150,000. There is no limit for book-entry public debt. In both cases, the price is considered 'unofficial'.

All bilateral operations are disseminated and settled through the same systems as all other operations

Derivatives Market

MEFF's main activity is the trading, clearing and settlement of Spanish and European stock futures and stock options contracts, IBEX 35 and IBEX 35 DIV IMPACT equity index futures and Spanish 10-year Notional Bond contracts. MEFF acts both as the market and as the clearing house.

The trading system is based on the S/MART platform developed by MEFF for trading and clearing financial derivatives. The system consists of a central nucleus and terminals with a flow of messages between them using standard communication procedures.

MEFF has its own trading terminals (MEFFSTATION) and has developed front office and back office tools for efficient portfolio management, with market information in real time. The system is also accessible through the Fix protocol.

Market Data Systems

BME Market Data specialises in the generation and commercialisation of information from the different regulated markets and Multilateral Trading Facilities managed by BME Group, as well as in the development of value added solutions addressed to the securities industry.

BME Market Data also offers an information system that provides transaction reporting services. This service allows investment service companies or credit institutions to report to the CNMV transactions performed in markets or systems other than those operated by BME in instruments admitted to BME markets, or instruments admitted to other regulated markets, or instruments not admitted to any regulated market or Multilateral Trading Facility.

Infobolsa services cover all information related to domestic and international exchanges: equities, bonds, derivatives and commodities. They also deliver information of forex, news, fund data, forecasts and consensus and financial data along with portfolio and charting tools.

Exchange holiday schedule

2013

• 01 January
• 02 April
• 05 April
• 01 May
• 24 December
• 31 December