As the legal entity managing the ARCO Securities Settlement System, Iberclear settles trades executed in markets and multilateral trading facilities, and also trades performed outside of these systems. Iberclear often settles trades after the involvement of a central counterparty (CCP) that manages counterparty risk.
To perform its functions, Iberclear relies on a group of participant entities which directly form part of the registry system and assume certain rights and obligations related to the settlement of trades with which they are concerned. These participants are always financial institutions, such as investment services companies and credit institutions, and they have a legal and commercial relationships with non-participant investors. Similarly, other central securities depositories and central counterparties have access to the ARCO System.
Iberclear has signed an agreement with the European Central Bank and the group of central banks that form the eurozone (collectively, the Eurosystem) for the provision of technical services for the settlement of securities which facilitates central bank cash settlements through the TARGET2-Securities (T2S) technical support managed by the aforementioned central banks.
In addition to their connection with Iberclear, participants can opt to establish a direct connection to T2S to exchange settlement information. However, they must have the technical means to comply with and maintain their technical and security requirements up to date, which are applicable at any time within the T2S framework.
