BME is adapting to the changes arising from the entry into production of the Eurosystem's new TARGET service called ECMS, which stands for Eurosystem Collateral Management System. It is a unified platform for the management of assets used as collateral in Eurosystem credit operations, replacing the local collateral management systems of Eurosystem central banks.
Together with the other TARGET services operated by the Eurosystem (the T2 platform, which facilitates the settlement of payments, T2S, which handles the settlement of securities, and TIPS, which enables the settlement of instant payments), ECMS ensures the free movement of cash, securities and collateral across Europe. All TARGET services settle in central bank money.
Upgrade of BME's infrastructure
The Spanish Central Securities Depository, Iberclear (BME), manages the ARCO Settlement System (hereinafter referred to as the ARCO System), where collateral in the form of marketable assets used in the Eurosystem's credit and monetary policy operations is registered and held. These securities are mobilised as collateral by the Eurosystem's credit counterparties, resulting in settlement instructions that transfer the collateral and held it in the accounts opened by the participating institutions in the Central Register.
BME has implemented updates in line with the following adaptations:
- Interconnection with ECMS: Iberclear's ARCO System (BME) has been connected to the ECMS platform managed by the Eurosystem's central banks.
- Harmonisation of practices: Practices in the management of guarantees eligible by the Eurosystem have been harmonised, in accordance with the agreed requirements and standards defined in the Single Collateral Management Rulebook for Europe (SCoRE).
Benefits of connection and harmonization
The connection with the ECMS platform allows operations to be maintained for the mobilisation and demobilisation of pledged financial guarantees in favour of the Bank of Spain or other central banks in credit or monetary policy operations. This is implemented both through the use of collateral custody accounts registered by the entities in the ARCO System and through the links established by Iberclear (BME) with other central securities depositories.
Harmonisation is key to promoting interoperability between different systems and is crucial for the transparency and optimal functioning of global financial markets.
New market practices
Iberclear (BME) has harmonized its corporate event management services on the securities included in the ARCO System that are eligible by the Eurosystem as collateral in credit operations.
The communication flows of the event, the life cycle of corporate events, the minimum information required, the relevant dates and all technical processes have been carefully reviewed to comply with the standardization proposed in the SCoRE regulation.
Likewise, Iberclear (BME) has harmonized the monthly billing cycle, moving the monthly collection date of the invoice to the 15th of the month following the invoiced period, or to the next business day if it is a holiday.
With the implementation of these measures, Iberclear (BME) complies with the following corporate event standards defined in the SCoRE regulation:
In addition, Iberclear (BME) complies with the billing standards defined in the SCoRE regulation:
Innovation in messaging
In its commitment to the adoption of new market practices, Iberclear (BME) has developed and offers its participants messaging based on Extensible Markup Language (XML) of the ISO 20022 standard for the communication of information on corporate events, as an alternative to the currently used ISO 15022 standard, and billing information.
BME also provides a service that facilitates the transition to adoption of the ISO 20022 standard, by offering functionality for the exchange of messaging between entities and the ECMS platform, including the possibility of conversion between the ISO 20022 and ISO 15022 standards. This service is called "Technical Sender (TS)" and "Technical Sender Converter (TSC)".
This initiative represents a significant step forward for BME in its commitment to market modernisation and efficiency, underlining its commitment to innovation and continuous improvement.