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BOLSAS Y MERCADOS ESPAÑOLES,
SISTEMAS DE NEGOCIACIÓN, S.A.
Circular 6/2010
OPERATING FRAMEWORK FOR SPECIALISTS IN THE LATIN AMERICAN
SECURITIES MARKET
The Latin American Securities Market Regulations require market members to adopt
measures to provide liquidity to securities traded on the Market.
Members of the Latin America Securities Market may become specialists, either after
having undertaken liquidity commitments through an agreement with the entity issuing
the respective securities or after having done so unilaterally.
The Board of Directors of Bolsas y Mercados Españoles, Sistemas de Negociación S.A.
approved on 4 January 2010 the following Circular.
One. Register of possible liquidity commitments
These liquidity commitments, as well as any amendments thereto or their termination,
shall be disclosed in general terms by the Market and shall be contained in a public
register.
Market members may request from the Market Supervisory Committee the register of
commitments that require improving the liquidity of certain securities traded on the
Market. The Supervisory Committee shall send this information to the Spanish Securities
Market Commission (CNMV).
Said liquidity commitments must allow members to comply with this Circular and its
provisions. They may be adopted in the following ways:
-
Commitments with entities issuing the related securities or instruments,
through which members must boost their liquidity on the Market.
-
Commitments undertaken unilaterally by members.
BOLSAS Y MERCADOS ESPAÑOLES,
SISTEMAS DE NEGOCIACIÓN, S.A.
Two. Requirements for specialist status
Market members having registered a liquidity commitment may become specialists of the
related securities traded on the Latin America Securities Market, according to the terms of
this Circular.
Three. Specialist operations
Specialists shall be subject to the following requirements in any activity involving traded
securities for which they are acting in the capacity of a specialist:
1. Types of orders
The Supervisory Committee shall establish timely technical measures to identify
orders placed by members in their capacity as specialists.
Orders filled for members acting in the capacity of specialists must be limited
orders.
2. Market presence
a) Auction period
For each auction period, the specialist must provide bid and ask positions for a
minimum cash amount with a maximum spread between bid and ask prices for each
security's reference price and with sufficient time prior to the end of the auction.
b) Open session
- Spread: The specialist must provide positions to maintain a maximum spread
between the best bid and ask prices on the market.
- Minimum turnover amount: The specialist must provide positions to enable the
buying or selling of shares of the security in question for a minimum effective amount.
- Response time: The specialist must take the steps stated in the previous
sections within a reasonable timeframe once the situation calling for acting in that
capacity arises.
BOLSAS Y MERCADOS ESPAÑOLES,
SISTEMAS DE NEGOCIACIÓN, S.A.
c)
Temporary release from obligations
In highly volatile situations, due to price variations for the security in question
over the last auction price or last traded price, or when the specialist has accumulated
during the session a buyer or seller balance higher than the established amount, the
specialist may request a temporary release from specialist-related obligations from the
Supervisory Committee until the situation has normalised or the balance falls below the
indicated level. This would be effective exclusively during that session.
d) Setting parameters
Bearing in mind the different characteristics of the securities in question and based
on whether the securities' market of origin or the market in which they are most liquid is
open, the Market Supervisory Committee shall establish, through Operating Instructions,
the market presence parameters for the minimum amount, maximum spread and
closeout time for auction periods and open session. The same applies for balances above
which the specialist may request a temporary release.
Depending on trading figures, average spread between the best bid and ask position on
the market and market depth, said market presence parameters may be amended by the
Market Supervisory Committee to promote greater liquidity for the security in question.
The benchmark price stated in this Circular is in all instances the benchmark price for the
session, as provided for in the Latin American Securities Market Trading Regulations.
3. Specialist rights
The members acting as specialists have the following rights in their sphere of
activity:
a)
Announcement of specialist status
The status of specialist shall be displayed in a timely fashion on the trading screen
and published in the studies and reports prepared by the Supervisory Committee and the
Latin American Securities Market Bulletin.
b) Evaluation of activity
Each specialist's activity shall be subject to Supervisory Committee evaluation.
BOLSAS Y MERCADOS ESPAÑOLES,
SISTEMAS DE NEGOCIACIÓN, S.A.
This evaluation shall assess the specialist's contribution to the best price formation and
increase in existing bid and ask positions, trading volume, closeout time and market
presence.
c)
Trading of Blocks
Specialists may trade blocks of the related security, with a minimum €150,000
threshold.
Four. Exclusion from the status provided for in this Circular
The specialist status may be removed automatically, voluntarily or mandatorily.
a)
Automatic removal: The specialist status will be automatically revoked should
the entity acting in the capacity of specialist cease to be a member of the Latin
American Securities Market.
b)
Voluntary removal: The Supervisory Committee must be notified at least 15
days prior to the effective date of the voluntary removal of specialist status.
Prior notification is not required when the voluntary removal stems from
amendments made to the parameters by the Supervisory Committee that go
beyond commitments undertaken by the specialist.
c)
Mandatory removal: Repeated specialist incompliance with the
rules established in this Circular may lead the Market Supervisory Committee
to revoke the specialist status.
Removal of specialist status shall be reported in a timely fashion and the specialist shall
be removed from the register provided for in the first section of this Circular.
Five. Hours of operation for Latin American specialists in the Latin America
Securities Market.
Latin American members of the Latin American Securities Market that have specialist
status in said market shall carry out their specialist activity
during the hours of operation of their respective markets of origin.
Should the specialist acquire liquidity commitments outside the trading hours of the
market of origin, the Market Supervisory Committee will be notified. The Committee will
then report this via the corresponding notification.
Six. Date of application
This Circular shall be applicable starting the date on which it is announced in an
Operational Instruction.
The English translation is for the convenience of English-speaking readers. However, only the Spanish text has
any legal value. Consequently, the translation may not be relied upon to sustain any legal claim, nor should it be
used as the basis of any legal opinion. Bolsas y Mercados Españoles, Sistemas de Negociación, S.A. expressly
disclaims all liability for any inaccuracy herein.
BOLSAS Y MERCADOS ESPAÑOLES,
SISTEMAS DE NEGOCIACIÓN, S.A.
Madrid, 4 January 2010
THE SECRETARY
Ignacio Olivares Blanco