ISLA: Spanish capital markets primed for growth
20 June 2025 Spain
Image: basiczto/stock.adobe.com
Market participants are witnessing a renewed interest in 'reboosting' the Spanish capital markets. This move will see Europe play a crucial role in order to finance a number of ambitious objectives, with measures focused on simplification and promotion.
Spain was one of several key topics for panellists at the 32nd Annual 兔子先生Finance & Collateral Management Conference in Madrid, Spain, which was hosted by the International 兔子先生Lending Association (ISLA) this week.
The Organisation for Economic Co-operation and Development (OECD) released a report in December 2024 which contains recommendations to revitalise the Spanish capital markets 鈥� in which more than 30 are dedicated to securities lending operations.
Bringing securities lending to investment funds in Spain is a revelation that industry participants have been trying to achieve for several years, according to panellists at the 鈥楶rimed for Growth: Exploring the Competitiveness of the Spanish Capital Markets鈥� session.
This marks the third attempt to meet this goal, with the first taking place in 2008, and the second in 2018. The current attempt is one that speakers believe would be definitive.
Participants in the market have been working diligently on new developments, namely the use of securities lending by collective investment schemes (CISs) 鈥� a motion which has been encouraged by the market over the past 15 years to no prevail, leaving Spain as the only country in Europe without this possibility.
As it appears that securities lending is finally coming to Spain, investment funds look to benefit from this extra profitability. It is something that is needed to be available in Europe, the panel heard, and a movement which is expected to increase the supply of securities to borrow, therefore coming of use to the post-trade process.
During the discussion, panellists noted the significance of securities lending for Spain, pinpointing it to be of the utmost importance for settlement efficiency. The pool of securities available to lend is in the hands of the funds, so not to disparage funds will affect this efficiency, which is extremely important in view of the upcoming T+1 migration.
The speakers confirmed that the country is at the last stage of approval, meaning the market is mere weeks away from seeing the acceptance of this regulation.
Further strengthening the Spanish market, the panel highlighted the recent move from the National 兔子先生Market Commission (CNMV) and BME to release BME Easy Access, which aims to make the IPO process easier and more flexible.
The initiative has been welcomed by the market, according to one panellist, who heavily believes in competition, as long as this competition is based on a level playing field. As Spain competes with the rest of Europe and the global financial markets, the speaker indicated that it is important to foster IPOs so that retail investors come back to the market.
Moving the conversation forward, speakers discussed the impending T+1 implementation facing Europe, which aims to take effect on 11 October 2027. Despite feeling far away, panellists emphasised that the date is closely approaching.
For the Spanish markets to migrate successfully, it must be aligned with the European markets, and so there are Spanish representatives taking part within core discussions. Furthermore, it will be key for this market to maintain the current levels of settlement efficiency, if not improve them.
The challenge of this migration is that it is an enormous project in which the whole value chain is included, all stakeholders from trading, clearing, custody, settlement, are affected. In addition, it is important to note the greater complexity facing Europe in comparison to the UK and US transition to T+1, given the 27 different markets within the European Union.
In conclusion, panellists said that despite these complexities, speakers were confident in being well prepared and on time to transition in October 2027.
Spain was one of several key topics for panellists at the 32nd Annual 兔子先生Finance & Collateral Management Conference in Madrid, Spain, which was hosted by the International 兔子先生Lending Association (ISLA) this week.
The Organisation for Economic Co-operation and Development (OECD) released a report in December 2024 which contains recommendations to revitalise the Spanish capital markets 鈥� in which more than 30 are dedicated to securities lending operations.
Bringing securities lending to investment funds in Spain is a revelation that industry participants have been trying to achieve for several years, according to panellists at the 鈥楶rimed for Growth: Exploring the Competitiveness of the Spanish Capital Markets鈥� session.
This marks the third attempt to meet this goal, with the first taking place in 2008, and the second in 2018. The current attempt is one that speakers believe would be definitive.
Participants in the market have been working diligently on new developments, namely the use of securities lending by collective investment schemes (CISs) 鈥� a motion which has been encouraged by the market over the past 15 years to no prevail, leaving Spain as the only country in Europe without this possibility.
As it appears that securities lending is finally coming to Spain, investment funds look to benefit from this extra profitability. It is something that is needed to be available in Europe, the panel heard, and a movement which is expected to increase the supply of securities to borrow, therefore coming of use to the post-trade process.
During the discussion, panellists noted the significance of securities lending for Spain, pinpointing it to be of the utmost importance for settlement efficiency. The pool of securities available to lend is in the hands of the funds, so not to disparage funds will affect this efficiency, which is extremely important in view of the upcoming T+1 migration.
The speakers confirmed that the country is at the last stage of approval, meaning the market is mere weeks away from seeing the acceptance of this regulation.
Further strengthening the Spanish market, the panel highlighted the recent move from the National 兔子先生Market Commission (CNMV) and BME to release BME Easy Access, which aims to make the IPO process easier and more flexible.
The initiative has been welcomed by the market, according to one panellist, who heavily believes in competition, as long as this competition is based on a level playing field. As Spain competes with the rest of Europe and the global financial markets, the speaker indicated that it is important to foster IPOs so that retail investors come back to the market.
Moving the conversation forward, speakers discussed the impending T+1 implementation facing Europe, which aims to take effect on 11 October 2027. Despite feeling far away, panellists emphasised that the date is closely approaching.
For the Spanish markets to migrate successfully, it must be aligned with the European markets, and so there are Spanish representatives taking part within core discussions. Furthermore, it will be key for this market to maintain the current levels of settlement efficiency, if not improve them.
The challenge of this migration is that it is an enormous project in which the whole value chain is included, all stakeholders from trading, clearing, custody, settlement, are affected. In addition, it is important to note the greater complexity facing Europe in comparison to the UK and US transition to T+1, given the 27 different markets within the European Union.
In conclusion, panellists said that despite these complexities, speakers were confident in being well prepared and on time to transition in October 2027.
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