|MEFF (Mercado Español de Futuros Financieros)|
|Products||Futures and options in equity indexes and single stocks|
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The Mercado Español de Futuros Financieros, better known as MEFF, is a Spanish electronic trading exchange that offers futures and options in single stocks and equity indexes. Its primary activity is trading, clearing, and settling of futures and options contracts on the benchmark equity index IBEX 35.
MEFF acts as both the market and the clearing house for derivative products in Spain. It is wholly owned by the publicly listed Bolsas y Mercados Espanoles (BME) exchange holding group, formed in 2003 and has a strategic alliance with the Mexican Derivatives Exchange, in which it holds a 7.5 percent stake.
The MEFF was formed in 1989 by the Barcelona Stock Exchange, together with five savings banks and 10 commercial banks, as a platform to trade futures on Spanish government bonds. Spain’s derivatives sector was restructured in 1991, combining the MEFF in a single holding company, Mercado de Futuros Financieros, with the Madrid-based Mercado de Opciones Financiero Espanol (Mofex), which had been created to list stock futures and options.
The Barcelona operation, known as Meff Renta Fija, listed interest rate and currency products, while the Madrid-based Meff Renta Variable offered equity products. The partner exchanges were later folded into the new Bolsas y Mercados Españoles (BME), which combined into Spain's four stock exchanges in Madrid, Barcelona, Bilbao and Valencia, together with the AIAF fixed-income exchange and Senaf, a venue for public debt trading. The BME listed 30 percent of its shares on the Madrid Stock Exchange on July 14, 2006. The Spanish Central Bank retained a 5.3 percent stake, while Santander and BBVA, the country's two largest banks, hold a combined 14.1 percent.
Derivatives trading accounted for 8.5 percent of BME revenues in 2006 compared with 45.5 percent for cash equities. The derivatives trading business recoded an operating profit of E12.9 million in 2006 on revenues of E23.9 million.
Structure and Regulation
The enlarged MEFF unit includes: MEFF RF; MEFF RV, which is the counterparty for equity derivatives; MEFFCLEAR, the central counterparty for fixed income trading; the MEFF Services data processing business; AIAF and Senaf.
MEFF currently has 95 members, down from 114 in 2009, and is diversifying its base with a push into international markets, opening telecommunications hubs in London and Chicago and securing an exemption from the CFTC to offer products in the U.S. The MEFF is regulated by the Comisión Nacional del Mercado de Valores (CNMV).
The slide in government bond futures listed on MEFF following the creation of the euro currency zone in 2000 was alleviated by the creation of one of Europe’s most liquid markets for single-stock futures, and equities have been the focus of product development and volume growth. Futures on the Ibex 35 benchmark index remain the single largest contract, rising 40 percent year-on-year to 6.5 million in the nine months to September 2007, with mini futures up 134 percent to 2.1 million over the same period. Options on the Ibex climbed 12.5 percent to 4 million. SSFs on 40 European stocks were launched in September 2007, adding to the 36 domestic contracts. The new contracts included 22 stocks listed on Euronext, 11 on Deutsche Borse, six on the Borsa Italiana and one on the OMX.
As of January 27th, 2015, MEFF will list single stock dividend futures contracts with a larger contract size, following approval by the Spanish securities regulator, CNMV. The contract will be called “Single Stock Dividend Future Plus” and its notional size will be the dividends of 25,000 stocks.
Fernando Centelles was the Chief Executive Officer (CEO) of MEFF from 2006 until his death in 2013.
|Year||Total Annual Volume||Percent Change|
As of April 2010, MEFF had 95 members and ranked number 21 in 2009 in the global list of top 53 derivatives exchanges measured by volume in 2009, up 11.6% on 2008's, volume figure, according to the Futures Industry Association's latest volume rankings for 2009. The FIA list, published in early April 2010, reports that MEFF's total volume for 2009 hit $93.1 million.
In April 2010 MEFF announced it would launch a clearinghouse for Spain's OTC energy derivatives market, to be named MEFF Power, beginning in September 2010. MEFF Power will function as a central counterparty aimed at reducing risk and increasing liquidity and efficiency in Spain's electricity derivatives market. This market has expanded significantly over the past few years since government liberalizations in Spain's power market, according to an April 2010 MEFF release.
- FIA Report. Futures Industry Association.
- Company Structure. BME.
- The Art of Survival. FIA.
- Press Release. MEFF.
- MEFF launches new contract on stock dividend future. FTSE Global Markets.
- 2009 Annual Volume Survey. FIA magazine.
- Launch of MEFF Power, the clearing house for energy derivatives, in September. MEFF.