History of The Stock Exchange

1 History

History of The Stock Exchange CENTURY CENTURY CENTURY CENTURY CENTURY Date of the foun- dation of the Bolsa NINETEENTH

FOURTEENTH General de Comercio

SEVENTEENTH de Bilbao.

1890

1688 1809 /1831

This is the century in such as those in Palma The first “Juros Reales” In 1688, the first book and an erudite Spain’s first stock the Madrid Stock Spanish history that de Majorca, Zaragoza, also appeared in the describing stock tran- investor, describing exchange was Exchange drafted saw the construc- Valencia and Barcelona. same century. These sactions is published, the business of established in 1809. by Pedro Sáinz de tion of the Lonjas or are considered to be entitled “Confusión dealing in stocks, its Joseph Bonaparte I Andino. commodity exchanges, Historically, these the first securities. de Confusiones” origin, etimology, its created it in Madrid, which were meeting Lonjas are considered The “juros” were [Confusion of Confu- reality, its game and in the building of the The King Fernando places where markets to be the institutions government bonds sions], written by the its intricacy.” San Felipe El Real VII founded the for grain, wool and silk that most closely issued in guarantee Spaniard José de la Convent and Church in Madrid Stock were set up, a very resemble the Spanish of a debt or loan, Vega in Amsterdam. the Puerta del Sol. In Exchange in 1831. common practice in stock exchange, both and were usually spite of this, a stock Its first trading the Mediterranean in their essence and requested by the King. According to the exchange was not to session took place culture. in their operations, author, the book be set up at that time. on 20 October. although the stock is about “Curious Some of the buil- exchange, strictly spea- dialogues between a The stock exchange The first companies to dings housing these king, was born in Bruge shrewd philosopher, in Spain begins on 10 be listed were banks, markets have survived, and Amsterdam. a cautious merchant September 1831 railways and steel with the publication companies. of the Law Founding

2 History

History of The Stock Exchange

The accession of Spain to the European Economic Community in 1986 The Stabilisation Plan of and the massive flow 1959 causes a conside- In 1974, a new of foreign investment triggered an economic CENTURY CENTURY rable rise of the stock settlement system exchange that will last comes into operation boom that came to an end in October 1987, when the TWENTIETH until 1970. The boom in and will constitute tourism also provided a the basis of the book- Bolsa de Valencia is worldwide stock market new economic stimulus. entry system. founded. crash occurred.

1959 1974 1980 1986

1915 1953 1973 1978 1988

The Bolsa Oficial de In 1953, Spain began In 1973, the oil crisis In 1978, the approval In 1988, Spain enters Comercio de Barce- to open up its economy, erupted. of the Spanish the European Mone- lona is founded. producing high growth Constitution, and the tary System, thus rates that benefit the application of best making the country stock exchange. practices to the market even more attrac- helped boost foreign tive. The Securities investment. Market Act, which entered into force in that same year, defini- tively transforms the Spanish Stock Exchange.

3 History

History of The Stock Exchange

MEFF is created as an equity and fixed income derivatives market. The Fixed Income Electronic Trading The CATS share System was imple- trading system was

CENTURY CENTURY mented and the Inves- replaced, in 1995, by tor’s Ombudsman the SIBE. Spectacular The Latin American

TWENTIETH of the Madrid Stock growth is seen in Securities Market in Exchange was trading volumes and Euros (LATIBEX) was established. capitalisation. born in 1999.

1991 1995 1999

1989 1992 1998

In 1989, the conti- Commission, better The new Clearing Nearly 8 million nuous market known by its Spanish and Settlement Spaniards invested in commences opera- acronym: CNMV, Service commences the Stock Exchange tions. It is based as the supervisory operations in 1992. in 1998. The Stock on that of Toronto, body of markets, the The new book-entry Exchange becomes a which is called “CATS” Sociedad de Bolsas, settlement system social phenomenon (Toronto Computer which is responsible is instituted. driven by economic Assisted Trading for the technical growth, the process of System). It started by management of the privatisations, initial trading seven major electronic trading public offerings and stocks and ended system. The dealers the modernisation of the year with 51. and broker-dealers are the market. The following insti- replaced by Governing tutions were also Companies that are established in that incorporated as public year: the Spanish limited companies. Securities Market

4 History

History of The Stock Exchange

In July 2003, the On its 175th anni- corporate operations special treatment as Transparency law was versary, the Spanish of expansion, mergers small caps, SICAVs, approved. Aimed at stren- stock exchange and acquisitions, venture capital firms gthening the transpa- closed 2006 with the takeovers, and with and hedge funds. rency of listed companies, best and most outs- 10 IPOs of new it sets out new reporting tanding year of its companies.

CENTURY requirements and the history. The IBEX 35® obligation of adopting beats its historic high The MAB market is a set of mechanisms and breaks the barrier created by BME to relating to corporate of 14,000 points. It provide a response for securities that require TWENTY-FIRST governance. also set a record in

2003 2006

2001 2004 JULIO/ 2006

Began tragically. The The same year In 2004, and in spite exchanges. The IBEX In July, the first In the same month of terrorist attacks of of 2001 saw the of uncertainty about 35 went above 9,000 Exchange-Traded 2006, BME attained 11 September 2011 creation of “Bolsas y the world economic points. The Spanish Funds (ETFs) begin one of the most put to the test stock Mercados Españoles”, recovery, the upward stock exchange to be listed in the important objec- exchanges’ strength. a company that swing in oil prices becomes a European Spanish stock tives set out in its Following the shock combines in a single and the weakness leader in terms of exchange with the incorporation as an and initial uncertainty, group secondary of the dollar against financing. The new addition of the first integrated group of the recovery reveals markets and systems the euro, the stock investment flows chan- products on the IBEX all Spanish markets: the maturity and of registration, clea- exchanges regained neled by the Spanish 35, followed a few its IPO on the stock liquidity of the market ring and settlement the levels seen prior stock exchange months later by ETFs exchange. and the confidence of of securities. Its size to the attacks of 11 amounted to 39.5 on the EuroStoxx 50. investors. enables it to play a key September 2001. By billion dollars, becoming role in the configura- the end of the year, the second ranked in tion of the European the Spanish stock the world, behind only stock exchange map. exchange trebles the the New York Stock rise of European stock Exchange.

5 History

History of The Stock Exchange

2008 is the year of Falling share prices the crisis. The stock were supplemented exchanges began by a massive increase to be affected ever in the volatility of more intensely by the world stock exchanges

CENTURY effects of the finan- to the highest levels cial crisis on world in twenty years. economic activity and on listed companies,

TWENTY-FIRST in particular.

2008

2007 2009

In 2007, the MiFID, associated to each of In 2009, BME which include the the transfer of equities all based on the IBEX or the Markets in the actors involved commenced secu- most highly liquid that were being traded 35®. The indices, Financial Instruments in the value chain of rities trading with shares in Europe, and in open outcry pits on called IBEX 35® net Directive, entered into the stock exchanges more than two with the intention of the trading floor to a return, IBEX 35® force. For the Spanish and financial markets decimals with the strengthening the new electronic trading double short, IBEX securities market, in general. The main shares of Jazztel, Spanish stock market. floor, with the aim of 35® triple short, IBEX the transposition of objectives of the new which becomes the strengthening their 35® double leverage the EU Directive to law were as follows: first company listed BME carries out the liquidity, increasing their and IBEX 35® triple Spanish law took the modernisation of the in the Spanish stock operating initiatives transparency and impro- leverage, began to be form of the Securi- securities market, exchange that is in order to boost ving their accessibility. calculated and disse- ties Market Reform strengthening of traded under this the solvency and minated in real time. Law, which contains investor protection modality. The reasons efficiency of its In April of the same significant changes in and the improve- are based on the large trading platforms. In year, BME expanded the organisation and ment of supervisory number of buy and this regard, one of the series of the IBEX execution of tasks powers. sell orders in listed the most significant 35® indices and created Spanish securities, actions in 2009 was new tradable indices,

6 History

History of The Stock Exchange

In 2011, the stock birth was the prelude, and which lists more exchange turned some decades later, of than 3,000 securities, 180. On 20 October a majority of today’s with a capitalisation 1831, the first economic and finan- of nearly 1 trillion session of the stock cial institutions. Over euros. The Spanish exchange in Spain this long historical stock exchange had was held, making it period, a market has its fourth best year CENTURY one of the oldest and developed that today in 2011 in terms of most consolidated trades, on average, investment flows economic institutions more than 4 billion channeled by the in the country. Its euros per session, market. TWENTY-FIRST

2011

2010 2013 2014

The harshness of the initial public offerings in the BME became, in 2013, The Mercado Alter- The year 2014 marked crisis moved from the stock exchange amounted the fourth-ranked nativo de Renta a historic high in the financial sector to to 13.7 billion euros and stock exchange in Fija (MARF) starts number of trades, sovereign debt in 2010, listed companies increased the world in terms operations. It is an with the largest number and it concentrated their capital by 12.5 billion, of investment flows. initiative aimed at of initial offerings in mainly on countries with which was 27% more than The trading quality of the last four years. The channelling financial a more critical fiscal in 2009. Spanish securities once indicators confirmed the position, which desta- again received interna- resources to a large exit from the recession, bilised the value of the REGIS-TR, the European tional recognition, as number of solvent while the stock exchange euro. After Greece and Trade Repository owned Santander, Telefónica companies that can achieved records in a Ireland, the question of by BME and Clearstream and BBVA were the obtain financing using number of areas confidence in Spain and (Deutsche Börse Group) most highly liquid secu- this market on the of activity. The Spanish the risk premium took starts operations. It is rities on the EuroStoxx issuance of fixed-in- stock market ended centre stage. The stock the answer to demands 50 in 2013. come securities 2014 among the world’s exchange fulfilled its role largest, with a capitalisa- in valuating and chan- from the regulators for tion of 1.1 trillion euros. neling funds for business more transparency in the projects. During that year, OTC derivatives market.

7 History

History of The Stock Exchange

BME, 10 years as listed company. (14th. July The entry into force The celebration of the 2016) of the European MiFID 125th anniversary II directive marked of the Madrid Stock In September the three to two days the beginning of the Exchange Palace, Reform of Clearing and following the trade CENTURY markets’ fiscal year, as inaugurated on 7 Settlement concluded date (T+2), a cycle it involved an important May 1893 by Queen successfully with the that previously adaptation effort for Regent María Cristina. reduction in the equities applied only to Fixed BME and the interme- settlement cycle from Income instruments.

TWENTY-FIRST diaries.

2016 2018

2015 2017

In 2015 new flows The Ibex 35 turns 25 Developed by the channelled through The years since its debut. Eurosystem, its objective Exchange reached € 41.6 This index is weighted by is to provide basic services bn. , up 15.3 % year on capitalization and is made for the settlement of year. Capital increases up of the 35 most liquid securities transactions in reached € 33.5 bn. , up companies listed on the a harmonized and border- 9.3 % year on year. The Spanish Stock Exchange. less manner throughout biggest growth since In these years it has Europe. 2007. BME was the 3rd become the national and Exchange in international benchmark The Governing Council of the ranking of IPOs a of the Spanish stock the ECB has announced Europe with 7 IPOs market and has served as a migration in four waves in main Market and the basis for a multitude between 2015 and 2017. 16 new companies of product. Iberclear has successfully in MAB, the highest in migrated to T2S on 18 history. TARGET2-Securities September. (T2S) is the pan-European settlement platform.

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