Bolsas y Mercados Españoles (BME), which runs the Spanish stock exchanges of Madrid, Barcelona, Bilbao and Valencia, has expanded its Ibex35 index family with two new tradable indices designed to be used as the underlyings of index-linked products.
“These new indices are intended to serve as underlying assets for financial products, such as warrants, certificates and exchange-traded funds (ETFs),” said a BME spokesperson. “These new indices provide investors with a broad range of investment strategies.”
The Ibex35 Leverage Net x10 offers ten times exposure to the daily return on the Ibex35 Net Return through the investment of an initial capital plus an equivalent loaned capital. A positive daily return on the Ibex35 Net Return also yields a positive return but ten times that amount for the Ibex35 Leverage Net x10 and vice versa, on a daily calculation basis.
The Ibex35 Short X10 is linked to a multiplied by ten performance of the Ibex35 Total Return in an inverse direction – that is, a negative yield of the Ibex35 Total Return returns a ten times positive yield for the Ibex35 Short X10 and vice versa.
The launch follows the expansion yesterday of BME’s post-trade clearing and depository services for financial institutions.
The new BME Securities Solutions introduces changes to the registration, clearing and settlement system that will become operational in October, as well as the planned connection to Target 2 Securities (T2S), which will significantly modify existing systems of post-trade in Spain.
“This technical management solution provides firms with complex systems that comply with the requirements and procedures set out in these infrastructures,” said BME in a statement. “The platform offers the most advanced security and contingency systems and guarantees its operation every day of the year.”
BME Securities Solutions is based on three management modules (post-trade, clearing and depository) that interact among themselves and with the real-time infrastructure, making transaction monitoring and management easy, fast and simple, from trading to settlement and registration, said the firm.
These management modules are already available in an initial voluntary testing phase for financial institutions that may request them, stated the Spanish exchange.
A protocol to connect to Visual Trader, BME’s routing technology subsidiary, has also been developed from this platform, providing access to more than 50 markets and information to trading members about customer securities and assets, as well as about the risks arising from transactions pending settlement.
There are over 360 live structured products featuring Spain’s Ibex35 benchmark across markets of which 168 were marketed in Spain, 73 in Sweden, 40 in Finland, 25 in Switzerland, and 18 in Portugal. Other markets with live products featuring the Ibex35 index include Norway, Germany, the US, Italy, Mexico, Belgium and Israel among others.
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