Payment for Order flow: an analysys of the quality of execution of a zero-commision broker on Spanish stocks

Recently, some European bodies have voiced concerns about the payment for order Flow practice (PFOF) and there is an ongoing debate on whether it should be banned for the sale of investor protection. The CNMV wants to contribute to this debate, in order to facilitate good policy marking, based on objective evidence using regulated and complete data sets. Accordingly, CNMV has carried out a study of the transactions executed in a particular trading venue (PFOF TV) on behalf of the clients of a single prominent broker (PFOF broker) with wich a payment for order flow agreement was in place. The study includes only Spanish shares and compares execution prices in PFOF TV against those observed in the most liquid trading venues for Spanish securities at each moment in time during 2021H1. The analisys shows that for the trades executed on behalf of the PFOF broker's clients, best execution was seldom achieved (only a 3,3% of the trades) and in most cases (86%)the prices obtained by clients were worse that the worse alternative in the group of comparable trading venues. However since other brokers apply explicit commissions, in order to determine how the PFOF practice affects the PFOF broker's clients in net terms (worse prices obtained but lower or zero commissions paid), the overall cost should include both implicit and explicit components (i.e. both quality of execution and commissions)

Status of interest rate benchmark reform. Presentations at the 3rd Conference organised by the CNMV on 15 June 2021

On 15 June 2021, the CNMV organized the III Conference on the "Status of interest rate benchmark reform" in which the challenges possed by the forthcoming disappearance of Libor, the most widely used benchmark in the world, and its replacement by risk-free rates were highlighted. In the euro zone, the Euribor modernization process is consolidating and the transition to the risk-free benchmark, the €STR, is progressing reasonably. All these issues were analysed by a prominent group of interveners whose contributions are compiled in this publication, thus helping to disseminate the reforms and promote the adaptation of markets and their participants in an orderly manner and without risks to financial stability.

Analysis of the effect of restrictions on short selling Spanish shares between March and May 2020

This paper analyses what may have been the cost, in terms of market efficiency, of the restrictions on creating or increasing net short positions in more liquid securities traded on Spanish markets, which entered into force, partially, on 13 March 2020, and on an ongoing basis from 17 March until 18 May. It analyses the impact of the ban on some liquidity measures, on the return and intraday volatility of prices and on the credit risk of financial and non-financial issuers whose shares are listed on equities markets. These measures for Ibex-35 securities are compared with those of the German Dax 30 (a market where bans were not imposed).

The participation of the CNMV in macro-prudential policy

This document describes the Powers and instruments available to the CNMV in relation to financial stability and macro-prudential policy, in the context of the widespread movement promoted by the authorities of the G20 as a result of the last major financial crisis in order to avoid or contain the repetition of systemic crises. It also describes the legislative proposals that have led to the creation of the Spanish Macro-prudential Authority, AMCESFI, and the role of the CNMV in this context, addresing the approach to be used in future exploration of new macro-prudential policy instruments in the framework of markets beyond banking.

The participation of the CNMV in macro-prudential policy

Securities clearing, settlement and registry systems in Europe. Current situation, ongoing initiatives, and recommendations

A discussion of the situation of securities clearing, settlement and registry in Spain, the scope of the Directive on Markets and Financial Instruments (MiFID) and the Target-2 project and how it is likely to impact the Spanish system.

Securities clearing, settlement and registry systems in Europe.