The recent implementation of a new settlement model in the Spanish market, coordinated by Iberclear, represents a significant step towards harmonization with European standards. This reform is framed within Law 6/2023 of the Securities Markets and Royal Decree 814/2023, which establishes a D+1 settlement cycle, marking the end of a decade of post-trade transformations in the country.
One week after its implementation, the initial data indicates a noticeable improvement in the efficiency of settlement processes, achieving a performance rated as excellent. This new system also eliminates the requirement to have a specific Information System for the supervision of negotiations and settlements. This change separates the management of the registry from the settlement process, leading to a reduction in operational risks and associated costs.
The reform aims to increase efficiency in securities settlement, minimizing failed transactions on their theoretical settlement dates. The adoption of the new European standards, known in the sector as “Party 2”, facilitates the interoperability of the Spanish market with the rest of Europe, aligning settlement processes with the most common practices at a continental level.
This advancement also prepares the Spanish market for the transition to a D+1 settlement cycle, which is scheduled for implementation in Europe in October 2027. This improves efficiency and reduces operational risks. In the current context, IPO transactions can already be settled on D+1, as has been the case with the recent additions of HBX Group and COX.
This reform builds upon the changes introduced in the Reform-1 of May 2015, which impacted the registry system, and Reform-2 of September 2017, which unified fixed income and equity settlement into a single system. José Manuel Ortiz, Head Securities Services a.i. of SIX, has highlighted the joint effort of the entire industry to carry out this reform, emphasizing the success in its implementation and the positive impact it has had on the competitiveness of Spanish capital markets.
via: MiMub in Spanish
