Equities
2
18
STRUCTURE ORGANISATION AND OPERATION
OF THE SPANISH SECURITIES MARKET
C. Warrants, turbo warrants,
inline warrants, bonus
warrants and certificates
Issues of warrants, turbo warrants, inline warrants,
bonus warrants and certificates are traded on the SMART
platform – warrants on the electronic trading platform.
This platform was launched in February 2009 and is
adapted to the new needs and features of these products.
The platform, based on Fix protocol which is widely
used in international markets, has allowed BME to im-
prove trading volumes by providing capacity for more
trades per second per market member, and features grea-
ter flexibility and efficiency in entering combined buy-
sell positions of specialists.
Trading takes place in a blind, fully electronic and
order-driven market, with continuous trading between
9.00am and 5.30pm, dissemination in real time and spe-
cialists to provide liquidity.
Each stock has a specialist through whom the issuer
contributes liquidity by introducing on a continuous ba-
sis in real time the buy and sell prices of their issues,
with minimum price ranges and volumes set by the stock
exchange on the basis of the stock’s features.
Specialists have specific functions that enable them
to more quickly enter and change their orders by combi-
ning them, enabling them to enter automatically orders
with limited buy and sell prices via an approved external
application. This injects liquidity into the system.
Operators can also enter orders via approved exter-
nal applications and through terminals
The market is anonymous for both orders and tra-
des. Stock market members have information on the
prices and volumes but do not have any information
on the market members involved in the trading.
Trading
The trade takes places automatically on the basis of
best price and time of introduction.
The orders are traded on the basis of best price (i.e. if it
is a buy order the lowest price and if it is a sell order
the highest price). In sell orders, priority is given to
the order with the highest price entered in the buy
order book. If the prices are the same, priority is
given to the orders entered first.
The automatic trading of orders can be interrupted for
a volatility auction, enabling price changes to be
controlled in a flexible and ordered way. Static and
dynamic price variation ranges are set on the basis
of the share price. If the price is outside the ran-
ge applied, there is a volatility auction lasting five
minutes plus a random closing of 30 seconds. The
volatility auction by breaking of the dynamic range
begins when the price to trade the security is out of
the range.
The dynamic price to which the dynamic range is
applied is, at the beginning of the session, the refe-
rence price, and during the session, the last traded
price of a stock, be it from the last trade or the price
resulting from the last auction.
The dynamic range is the price variation allowed,
which is applied on the basis of the type of stock as
per the listbelow:
• Warrants with a price below €0.10: 500%
• Warrants with a price equal to or above €0.10 and
equal to or below €1.00: 50%
• Warrants with a price below €1.00: 15%
• Turbo warrants and inline warrants: 500%
• Certificates and structured bonds: 15%
• Other products: 500%
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