MEFF: Spanish Financial Futures and Options Exchange

Summary

This document describes MEFF, the Spanish Market of Financial Futures and Options, which began operating in 1989 and belongs to the BME holding. It explains how the market works, including its main activities, who may join and the types of market members, as well as its contract features, operations and the futures and options it offers.

Key points

MEFF is the Spanish Market of Financial Futures and Options, operating since November 1989 and part of the BME holding.
MEFF acts both as a market and as a clearing house, handling negotiation, settlement and clearing of futures and options.
Eligible applicants include securities companies and dealers, banks, credit unions, savings banks and official credit institutions.
There are three types of market members: Negotiating Members, Clearing Members and Custodian Clearing Members.
For each contract MEFF sets the contract size, unit price, expiration date, trading hours, minimum price variation, delivery date and collateral amount.
Members must provide an initial deposit (initial margin) and an additional daily settlement deposit (marking to market); settlement is daily and at maturity by physical delivery or by differences.

Test yourself

Companies that make up BME: MEFF

MEFF is the Spanish Market of Financial Futures and Options. It began operating in November 1989 and is part of the BME (Bolsas y Mercados Españoles) holding.

Its main activities are the negotiation, settlement, and clearing of futures and options on bonds and stock indices, such as the IBEX-35 and S&P Europe 350 (including sectoral indices), as well as futures and stock options. MEFF acts as both a market and a clearing house.

Joining the MEFF Market

To join the market, a company must submit an application to the Governing Body. Approval or rejection depends on fulfilling all requirements, as outlined in the Market Regulations. The following entities may be eligible:

Securities companies and dealers
Banks
Credit unions
Savings banks
Official credit institutions

Types of Market Members

Negotiating Members: Directly trade on the market.
Clearing Members: Settle and clear trades.
Custodian Clearing Members: Act as custodians of deposits made by clearing members.

Functions of Market Members

Function	Negotiating Member	Clearing Member	Custodian Clearing Member
Negotiate directly in the market on their own or client's behalf	Yes	Yes	Yes/No
Responding to the Governing Body for the execution of operations on their own, for clients, or other members	No	Yes	Yes
Make payments or collections to the Governing Body for settlements without delivery of the underlying asset	No	Yes	Yes
Make the sale with delivery in the settlements of the underlying asset	No	Yes	Yes
Receive, accept, on behalf of the House, and guard guarantees	No	No	Yes

MEFF Technical Features

MEFF determines the following for each contract:

Contract size
Unit price
Expiration date
Trading hours
Minimum price variation
Delivery date of the underlying asset
Amount of collateral

MEFF Operations

Order transaction to the Member.
Transfer of the Order to the Clearing House (MEFF), pending a reverse order.
Matching of contrary orders.
Request for warranty from the intermediary:
- Initial deposit (initial margin)
- Additional daily settlement deposit (marking to market)
Operation Settlement:
- Daily
- At maturity: physical delivery or by differences

MEFF Contracts

Futures:

10-Year Bond
IBEX 35
Mini IBEX 35
Stocks

Options:

Stocks
Mini IBEX 35 Future

FAQ

Who can join the MEFF market?

Securities companies and dealers, banks, credit unions, savings banks and official credit institutions may be eligible. Admission requires submitting an application to the Governing Body and meeting all requirements in the Market Regulations.

What is the difference between a Negotiating Member and a Clearing Member?

Negotiating Members trade directly on the market. Clearing Members settle and clear trades, and they can also respond to the Governing Body for operations and make settlement payments or collections, which Negotiating Members cannot do.

How are MEFF contracts settled at maturity?

At maturity, contracts are settled either by physical delivery of the underlying asset or by differences. Settlement is carried out daily as well.