NEX Markets, a NEX (LON:NEX) business which provides electronic trading technology services in the fixed income and foreign exchange (FX) markets, announced today that BrokerTec Europe Limited has signed an agreement with BME Clearing, the Spanish Central Counterparty (CCP) operated by BME, to launch a new clearing option for BrokerTec’s existing clients. The agreement expands BrokerTec’s footprint in Spain by providing additional clearing services to the broader bank community. It will also enable BME to provide repo clearing services to existing BrokerTec clients.
Currently many banks 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 repo trading in Spain. Banks will benefit from access to a deeper pool of liquidity and improved efficiency by moving to an electronic market.
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, up from 60% in 2013.
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.
Ignacio Solloa, Managing Director BME Clearing, added:
While the electronic Spanish repo market has expanded in recent years, the bilateral bank-to-bank market has steadily contracted. We are delighted to connect to the BrokerTec platform to extend to their clients our CCP services and a deeper pool of liquidity.