Spain – your gateway to Latin America? – part 2 – 13 October 2010
First Published Wednesday, 13th October 2010 02:05 pm from Fidessa : Steve Grob
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Following my previous post on Spain I received the
following email from Bernardo Mariano at ERDesk which I reproduce
here with his permission:
I saw your article
on Spain "Spain - your gateway to Latin America? - 8 October
2010" where you commented "Spain is a unique outlier in the
global fragmentation 'experiment'. Despite being part of Europe
and subject to the MiFID best execution requirements introduced
in November 2007, alternative venues have found it almost
impossible to establish a foothold there."
Spain has
been immune to fragmentation given Iberclear's settlement
requirements - ie, to transfer ownership of stocks,
Iberclear, needs an id number, which can only be generated from a
trade on the exchange's paltform (SIBE).
Chi-X
and Turquoise tried to circumvent this requirement by aggregating
trades and sending them to a local broker, which then execute
them in the SIBE's closing auction, but participants have been
reluctant to change the existing settlement
process(1)
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BME's position is very
vulnerable to competition - 62% of its revenues come from equity
trading and equity clearing & settlement . . .
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Its fees are over 10x higher
than ChiX's
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And 72% of its turnover is
concentrated in five stocks traded across Europe
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Bernardo Mariano
