The recent implementation of a new settlement model in the Spanish market, following the Reform approved in March 2023, marks a significant step towards harmonization with European standards. This change is led by Iberclear and aims to prepare the stage for the D+1 settlement cycle, a process that closes a decade of transformations in the country’s post-trading system.
With only a week elapsed since its implementation, the initial data point to the efficiency in settlement having reached outstanding levels, thus highlighting the success of the reform. This new phase, activated with the approval of Law 6/2023 and Royal Decree 814/2023, eliminates the old Information System for the supervision of trading, clearing, settlement, and registration of negotiable securities, known as PTI. This change is crucial as it decouples the registration management from the settlement process, thereby reducing operational risks and associated costs.
The streamlining of operational processes not only optimizes securities settlement but also minimizes incidents of transactions not carried out on the theoretical settlement date. Furthermore, aligning Spanish market operations with European standards will facilitate interoperability and enhance competitiveness, removing barriers that hinder cross-border investments and settlements.
Another milestone of this reform is its projection towards transitioning to the D+1 settlement cycle, scheduled for October 2027 in the European arena. This change is designed to further reduce risks and increase market efficiency, and is already being applied in recent IPOs in Spain, such as those of HBX Group and COX.
The implementation of these reforms represents the culmination of a ten-year cycle of evolution in the Spanish settlement system. This process began with Reform-1 in May 2015, which replaced the old Registration References system with the PTI, and continued with Reform-2 in September 2017, which unified the settlement of fixed income and equities into a single system.
José Manuel Ortiz, Acting Head of Securities Services at SIX, has emphasized that the success of this reform is the result of the joint efforts of the entire industry. The collaboration among all involved parties and the active participation of the CNMV have been essential for the proper development of the project. Ortiz has expressed his satisfaction with the boost that this reform provides to the efficiency and competitiveness of Spanish capital markets, as well as its settlement system.
Referrer: MiMub in Spanish
