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- The entry of a new settlement model through a new Reform, coordinated by Iberclear, marks a milestone in the harmonisation of the Spanish market with European standards
- This change, which prepares the Spanish market for the T+1 settlement cycle, culminates a decade of post-trade transformations in Spain
- One week after the implementation of the Reform, good settlement efficiency data has remained intact and supports its excellent rating
A new era in the Spanish post-trade system. The new Iberclear Settlement process has come into force following the approval of Law 6/2023 (March 17), on Securities Markets and Investment Services, and Royal Decree 814/2023 (November 8). The Reform marks a new milestone in the harmonisation of the Spanish market with European standards.
The law includes the elimination of the obligation for the Central Securities Depository to have an Information System for the supervision of trading, clearing, settlement, and registration of negotiable securities (PTI or Post-Trading Interface), as a mandatory element for the traceability of operations on negotiable securities from trading to their final settlement.
The removal of this Information System is one of the most significant structural changes, as it eliminates the need to simultaneously link the management of the registry with the settlement process, significantly reducing operational risks and costs associated with post-trade processes. This change will increase efficiency in the settlement of securities, simplifying and streamlining operational processes, and reducing the volume of failed operations on their theoretical settlement date.
Furthermore, thanks to the implemented changes, the Spanish market complies with the European standard of matching criteria, known in the sector as Party 2. The adoption of this standard facilitates the interoperability of the Spanish market with the rest of Europe, thus aligning settlement processes with European practices. Along with this practice, the types of operations are also simplified and harmonised. This harmonisation of the Spanish securities market improves operational efficiency and increases its competitiveness by reducing barriers to cross-border investment and settlement.
Another very relevant aspect of the change is that it prepares the Spanish market for a successful transition to the T+1 settlement cycle (settlement in one day, instead of the current two), which is expected to be implemented in Europe in October 2027. This migration will further reduce risks by improving market efficiency. In Spain, IPO operations can already be settled in T+1, as demonstrated by recent operations from HBX Group and COX.
With these changes, a decade of transformation in the securities settlement system in Spain has culminated, starting with the initial Reform-1 (May 2015), which replaced the Registry References System (RRS) - an identifier of the origin of securities - with the PTI, and the subsequent Reform-2 (September 2017), which involved the harmonisation of the fixed income settlement system and the migration to Target2-Securities (T2S), unifying the settlement of equities and fixed income into a single system (ARCO).
“The implementation of this reform has been a joint effort of the entire industry. The collaboration and commitment of all stakeholders have been key to the success of the project, as well as the involvement and participation of the CNMV. The entry into force has been a success and this is reflected in the good settlement efficiency data over the last week. We are very satisfied with the boost to the efficiency and competitiveness of the Spanish capital markets and their settlement system that this reform brings,” explains José Manuel Ortiz, Head Securities Services a.i., SIX.
You can find more information about Iberclear on their website.
