The granting of these licences represents the first step towards the start of the new exchange traded funds (ETF) segment in Spain.
ETFs are mutual funds which track a stock exchange index and which can be bought and sold on the market with the utmost transparency and liquidity. These funds are known as exchange traded funds.
Barclays Global Investors, BBVA Gestión, Lyxor Asset Management and Santander Asset Management have been chosen from a group of entities interested in obtaining the licence. Among the requirements these entities had to meet was that of having assets under management exceeding € 5 bn as at 30 November 2005.
Besides the ETFs on the IBEX 35®, the segment will see the launching, in the near future, of new products on other indices from the IBEX 35® and LATIBEX families as well as international indices. With the incorporation of ETFs as a new market segment, Bolsas y Mercados Españoles meets the increasingly sophisticated demands of the Spanish financial market and investors. BME fulfils its goal of improving the competitiveness of the Spanish stock exchange industry while at the same time offering the financial community the development and incorporation of new financial products which meet the needs of issuers and investors.
The main feature of ETFs is that its units are traded on electronic markets in real time in the same way as any other traded security. It is a hybrid product that brings the diversification of a mutual fund as it comprises all the constituents of the index it tracks and the flexibility of shares. In addition this product relies on the specialist, who contributes liquidity and keeps a maximum bid-ask spread for a given trading volume.
The trading, supervision and transparency will be similar to those governing the Sistema de Interconexión Bursátil. The new segment will have its own logotype in keeping with the corporate identity and image of BME.
The Royal Decree 1309/2005 of 4th November, whereby the Reglamento de Ley 35/2003 for unit trusts is approved, adjusts the tax regime applied to unit trusts by adding the figure of the exchange traded funds, thus permitting the development of this product in the Spanish market. The Royal Decree establishes in its article 49 the definition, listing requirements and other characteristics that must be fulfilled by exchange traded funds.