Company Presentation
www.himtf.com 2018 Hi-MTF Sim S.p.A. | P.IVA 05755500963 | All Rights Reserved Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 2 About Hi-MTF General overview and shareholders
▪ Hi-MTF is a Multilateral Trading Facility (MTF) – a MiFID compliant type of trading venue – oriented to retail clients ▪ Hi-MTF provides investors with the opportunity to trade a wide range of bonds: Overview government, corporate, banking, structured and others ▪ Hi-MTF’s Mission: efficiency and effectiveness in managing a trading platform oriented to non professional investors and centered on liquidity and transparency
Current shareholders, each holding 25% of capital, are:
www.himtf.com 3 About Hi-Mtf Key milestones
▪ A summary of Hi-MTF’s corporate history :
New Equity - Central Counterparty (CCP) Market model Luigi Luttazzi S.p.A. Quote-Driven Order-Driven project start-up with CC&G, RFQ and Issue becomes segment segment regarding clearing and settlement segment (Primary shareholder with start-up start-up related to bonds settled in ICSD’s start-up Makret) 25% of Hi-Mtf - Fineco Bank becomes Partecipant start-up
2009 2011 2014 2015 2017
2008 2010 2013 2016 2018
- Banca Akros Technological becomes Partecipant - Invest Banca - Banca IMI Equita Sim Platform upgrading and Market Maker - Banca Intermobiliare - MPS Capital Services become in line with growing - IW Bank becomes become Partecipant become partecipant partecipant trading volumes Partecipnat
www.himtf.com 4 About Hi-Mtf Market microstructure: description
QUOTE-DRIVEN SEGMENT ORDER-DRIVEN SEGMENT
■ The segment hosts Fixed-Income securities: ■ The segment is divided into two sub-segments: Government Bonds (Italian and foreign), Supranational – Fixed-Income Bonds, Corporate Bonds, Banking Bonds, Emerging Markets and Structured Bonds – Equity ■ A Market Maker (MM) exhibits continuously ■ Trades take place as a consequence of the compulsory bid-ask quotes Participants’ orders intersection ■ Specialized Operators exhibit bid-ask quotes on a ■ Liquidity can be sustained by Specialists exhibiting subset of bonds offering specialized liquidity bid-ask quotes on a predefined assets basket
RFQ SEGMENT
■ The segment hosts a selection of liquid securities on Quote Driven ■ «Request for Quote» Negotiation: a Proposal forwards an anonymous Purchase/Sales request to the Market and the Aggressor can respond to the request with a price and quantity ■ Minimum size € 1mln on Government Securities and € 200K on Eurobond ■ For «professional» (eg: asset management)
www.himtf.com 5 About Hi-Mtf Securities listed on the Market
ORDER-DRIVEN SEGMENT QUOTE-DRIVEN SEGMENT* Equities*
■ Corporate: 264 ■ Italian Government Bonds: 127 ■ Banca Sella ■ Credit Agricole Friuladria ■ Banking: 163 ■ Foreign Government Bonds : 129 ■ Banca Valsabbina ■ Banca Popolare di Fondi ■ Emerging Markets: 94 ■ Supranational Bonds: 100 ■ Cassa di Risparmio di Cento ■ Banca Popolare Sant’Angelo ■ Banca Macerata Total: 877 ■ Banca Apulia ■ Banca di Imola ■ Banca Popolare Frusinate ■ La cassa di Ravenna RFQ SEGMENT* ■ Banca Pop. Volksbank ■ Cassa di Risparmio Bolzano ■ Banca Popolare Lazio ■ Italian Government Bonds: 126 ■ Corporate: 45 ■ Foreign Government Bonds : 30 ■ Banking: 48 ■ Banca Regionale di Sviluppo ■ Supranational Bonds: 6 ■ Emerging Markets: 7 ■ Banca Popolare di Cividale ■ Banca Popolare di Lajatico Totale: 262 ■ Banca Popolare di Bari ■ Banca Popolare Pugliese ORDER-DRIVEN SEGMENT ■ Cassa di Risparmio Asti Fixed Income* ■ Banca Popolare Valconca ■ Banca Agricola di Ragusa ■ Banking Bonds Branded (in particular: Popolari, Casse di ■ Banca Popolare Puglia Basilicata Risparmio, BCC) ed Eurobond Totale: 1.440 Total: 24 Equities
Last update: 30/09/2018 www.himtf.com 6 About Hi-Mtf Brokers and Market Makers
BROKERS MARKET MAKERS
IVEN
DR
-
E
T
O
U
Q IVEN
Specialist on DR
- a subset of R
E tools
D
OR RFQ
7 Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 8 Market Structure Quote Driven and Order Driven
Bank 1 Market Maker 1 Quote-Driven Orders Participant 1 Orders Bid-Ask collection quotes Segment Bank 2 Participant 2 Hi-Mtf QD Market Maker 2
Bank n Participant n Market Maker n
Specialist 1 Bid-Ask Prop Orders Specialist 2
Specialist n Bank 1 Orders Participant 1 Orders Order- collection Driven Bank 2 Participant 2 Hi-Mtf OD Bank n Segment Participant n Participant 1
Participant 2
Bid-Ask Third-party Orders Participant n www.himtf.com Legend: Compulsory 9 Market Structure Transparency and liquidity
■ Hi-MTF provides investors with an Info Sheet for each financial instrument listed on the market, for free Info Sheet ■ Hi-MTF’s aim is promoting awareness on investment choices Transparency
■ Hi-MTF provides investors with a real-time 5-level-deep Rreal-time Book trading book, for free
■ Compulsory presence of a Market Maker for each security listed on the Quote-Driven segment of the market Market Makers
Liquidity ■ Market Makers are required to quote both pre-defined Check and minimum sizes and competitive prices (price limits, as defined by the Market Regulations, are in place) Monitoring systems ■ Hi-MTF assures Market Makers duties are met, via continuous monitoring www.himtf.com 10 Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 11 Quote-Driven segment Features
▪ High liquid securities Selection ▪ Bond, mostly investment grade Criteria ▪ Quality-oriented approach of prices
Asset Class Number % Credit Rating for Italian Government Bonds 127 14% the all listed Asset Foreign Government Bonds 129 15% Bonds Supranational Bonds 100 11% Class 877 Bonds (2018) Corporate Bonds 163 19% Banking Bonds 264 30% Emerging Markets Bonds 94 11%
MM and Participants can MM insert quotes and access the market Participants place orders
Market Phases Pre- Inizialization negotiation Negotiation Closing Mon-Fri 7:30 8:40 9:00 17:30
MM can insert quotes Last update: 30/09/2018 www.himtf.com 12 Quote-Driven segment Most traded Bonds Ist Sem 2018
1 Italian Government Bonds 2 Foreign Government Bonds
CTV CTV ISIN DESCRIPTION TRADES ISIN DESCRIPTION TRADES (€mln) (€mln) IT0005215246 BTP 15 OT 23 0,65% 1357 84,6 US912810RK60 T BOND 2,50% 15/2/45 USD 207 6,2 IT0005210650 BTP 1 DC 26 1,25% 1460 65,0 US912828H524 T BOND 1,25% 31/1/20 USD 43 4,4 ISIN IT0004594930 BTP 1 ST 20 4% 1446 55,6 US912810RB61 T BOND 2,875% 15/05/43 USD 90 3,8 IT0005142143 BTP 1 NV 20 0,65% 381 54,8 US912828VB32 T NOTE 1,75% 15/05/23 USD 59 3,6 IT0005323032 BTP 1 FB 28 2,00% 1146 54,3 US912828VZ00 T NOTE 2% 30/09/20 USD 96 3,5 IT0005170839 BTP 1 GN 26 1,60% 1557 54,0 PTOTEAOE0021 PORTUGAL 4,95% 25/10/2023 223 3,1 IT0005282527 BTP 15 NV 24 1,45% 898 52,9 US465410BG26 REP OF ITALY 5,375% 15/6/33 USD 39 1.8 IT0003493258 BTP 1 FB 19 4,25% 1358 51,2 US912828VS66 T NOTE 2,5% 15/08/23 USD 85 1.8
3 Financial Institutions Bonds 4 Corporate Bonds
CTV CTV ISIN DESCRIPTION TRADES ISIN DESCRIPTION TRADES (€mln) (€mln) IT0005108060 BCA POP EMILIA 4,25%SUB 15/6/25 637 15,9 XS1388625425 FIAT 3,75% 29/3/2024 73 8,2 XS0130717134 UGF ASS. TM SUB CALL 15/06/2021 470 13,6 XS1048568452 FIAT 4,75% 22/3/2021 34 4,2 IT0005136038 ICCREA BANCA TF/TV 30/09/2020 483 11,3 IT0005108490 AUTOSTRADE 1,625% 12/6/2023 126 3,9 IT0005240335 ICCREA BANCA TM 1/2/22 542 11,1 XS0953215349 FIAT 6 ,75% 14/10/2019 28 3,2 IT0005311706 ICCREA BANCA TM 15/11/2022 537 10,7 XS1088515207 FIAT 4,75% 15/07/22 27 3,1 XS0173649798 UGF ASS. TM SUB CALL 28/07/2023 458 10,1 IT0004869985 ATLANTIA 3,625% 30/11/2018 91 2,4 IT0005215550 ICCREA BANCA TM 14/10/21 199 6,9 FR0010014845 PEUGEOT 6% 19/09/33 54 1,9 XS1044894944 BANCO BPM 3,5% 14/3/2019 61 6,3 XS0170343247 ENEL 4,75% 12/06/2018 38 1,1
Last update: 30/06/2018 www.himtf.com 13 Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 14 Order-Driven segment Features
Order Driven Segment hosts about 1.440 «branded» bonds and 24 Equities
Bonds Equities
■ The segment hotes more than 1.400 securities of Banche Popolari, Casse di Risparmio and BCC
■ Banca Aletti, Banca Akros ed Equita Features Sim contribute to liquidity as «Specialist» on a subset of tools
Some important Issuers
www.himtf.com 15 Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 16 Order-Driven segment - Fixed Income How it works
Specialists and Participants Specialist and Participants Participants can access the market insert orders place orders
Pre- Pre- Inizialization Negotiation Auction Closing Market negotiation auction Phases 7:30 8:40 9:00 17:00 17:05 17:20 17:30
Specialists can insert Technical negotiation stop orders preceding the auction phase
■ Only valid auction Execution ■ At a Limited Price (LMT) Mode ■ Fill and Kill (FAK) (both during the Negotiation ■ Good till cancel (GTDay) Orders and the Auction) ■ Good till date(GTDate) ■ Fill or Kill (FOK)
www.himtf.com 17 Order-Driven segment - Fixed Income Most traded Bonds in Ist Sem 2018
20 most tarded «branded» bonds on Hi-Mtf Order Driven
BCC / Bance Popolari / Casse di Risparmio
ISIN DESCRIPTION TRADES CTV (€uro)
IT0004975899 CRED.VALT. 3,75% 30/12/18 SUB 2a 2,898 38,870,138.41 IT0005139560 CREVAL 2,20% 30/11/2018 236a 768 18,609,193.77 IT0005177222 CREVAL 1,90% 13/05/19 240a 870 16,641,096.27 IT0005245995 CREVAL 1,00% 18/04/20 244a 991 13,546,204.80 IT0005135527 BCA POP SONDRIO 3% 23/10/22 SUB 983 12,896,336.38 IT0005092884 BCA POP SONDRIO 2,50% 30/3/22SUB 886 10,722,775.73 IT0004983695 CRED.VALT. 2,85% 30/12/18 220a 281 10,281,513.28 IT0005177891 BPC 2,00% 26/04/19 123a 4 9,081,239.71 IT0004778905 B.P SONDRIO S/UP 23/12/18SUBSINK 340 7,510,463.73 IT0005087454 CRED.VALT. S/UP 18/02/20 231a 198 6,497,886.92 IT0005002222 CRED.VALT. 2,50% 04/03/19 222a 234 6,287,086.38 IT0005217416 CREVAL 1,50% 14/11/19 241a 186 6,244,956.14 IT0004965684 CRED.VALT. 3,15% 07/10/18 217a 182 5,732,953.12 IT0005053845 CRED.VALT. S/UP 12/09/19 227a 234 5,109,871.81 IT0005245888 BCA POP SONDRIO 1,70% 21/04/2022 175 4,015,188.44 IT0005075913 CRED.VALT. S/UP 14/01/20 230 146 3,493,996.46 IT0004960990 BCA POP SONDRIO 3,15% 01/10/18 59 3,383,354.67 IT0004897200 ICCREA BANCA TM 20/03/2018 75 3,303,458.96 IT0004968522 BCA POP SONDRIO 3,10% 15/11/18 119 3,279,802.02 IT0005053837 CRED.VALT. TM 12/09/18 228a 134 3,041,611.55
Last update: 30/06/2018 www.himtf.com 18 Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 19 Order-Driven segment - Equity Goals
1 Ensure Transparency
2 Facilitate the marketability
3 Ensure «price discovery» more trusted
4 Empower the Issuer
5 Comply with the new laws
The proposed model Define a «market model» for less liquid securities aims to promote an 6 orderly process towards the market www.himtf.com 20 Order-Driven segment - Equity Qualitative descriptions of the operation
▪ Established an Observation Period dividied into 6 Intermediate Periods of observation of 2 months each
▪ The issuer provides the Market the initial trading price (Reference Price) and certifies that it is confirmed by at least one third indipendent expert; the issuer chooses order entry limits (within a range defined by Market)
▪ At the end of every Intermediate Periods of observation in case of failure to reach the Minimun Threshold limits have been increased by +/- 4%; instead in case the Minimun Threshold is reached limits could be reduced to the previous range in accordance with Article 71, of the Regulation as the definition of Cumulative Threshold
▪ The Reference Price changes only when is reached the Reference Threshold or at the end of the Observation Period (12 months) with the exceeding of the Liquidity Threshold
▪ If at the end of Observation Period has not reached a minimum level of trading (Liquidity Threshold):
‒ Begins a 6 months Control Period divided into 3 intermediate periods of control, lasting 2 moths each, during which the threshold are halved of their original value
‒ In case of failure to reach the minimum threshold, at the end of a intermediate period of controls, limits are doubled progressively
www.himtf.com 21 Order-Driven segment - Equity Characteristics of the Model (1/3)
Feature Description
▪ Weekly Auction Auction Model ▪ Formation of the auction price according to current market rules (aimed at maximizing the quantity tradable)
Types of orders ▪ Price limit orders Orders good till Date (maximum duration 60 days) Orders auction only
Period of ▪ It is a period of 12 months in which is measured the consinstency of trade in order to determinate the Observation Reference Price
▪ Whitin the observation period, there are 6 intermediate periods lasting 2 months, after which it will be Intermediate measured the cumulative trade consistency. In case they have not reached a minimum amount periods of Observation («Minimum Threshold») the limits for the order entry are automatically expanded. Even if the Horizon of «Minimum threshold» was reached, the Issuer will have the right to request the extension observation ▪ The Control Period follows the Period of observation if at the end of the year the «Liquidity Periodo of Threshold» has not been reached. The Control Period has a duration of 6 months and during this Control period is measured the consinstency of trade in order to determinate the new Reference Price
Intermediate ▪ The control Period is divided into 6 intermediate periods of control of 2 months each, during which periods of the threshold are halved of their original value and limits in case of failure to reach the minimum Control threshold, at the end of an intermediate period of controls, are doubled progressively www.himtf.com 22 Order-Driven segment - Equity Characteristics of the Model (2/3)
Feature Description
▪ The Issuer provides the market the Starting Price of the trading (Reference Price) and attests to Reference the market that is confirmed by the assessment of at least one third indipendent expert (the Price “Evaluator”) ▪ This is the Price at which the order entry limit +/- 8% («swing band») is applied Reference ▪ It changes only in case of significant trades (reacing the «reference threshold» at the end of the and Auction «observation period») Price ▪ It must be updated if the Liquidity Threshold is not reached at the end of the Observation Period
Auction ▪ Is the price at which the auction take place and may deviate from the reference price within the Price order entry limit and price variation
▪ Identifies a consinstency of significant exchange values, which once achieved is calculated a new reference Price as the weighted average of prices found during the observation period
Reference ▪ It can be defined by the Issuer, at the beggining of each observation period and changed once a Threshold year
▪ Calculated on the market capitalization of the Issuer
Significance ▪ Identifies a consistency of minimum exchange values, for which, at the end of the mid-term observation period, the order entry limit («swing band») is automatically and compulsorily extended Thresholds Minimum Threshold ▪ It may be defined by the Issuer, at the beginnig of each observation period, and changed once a year
▪ Calculated on the market capitalization of the Issuer
▪ Identifies a consistency of exchange values, measured during the entire observation period, the Liquidity failure of which will start the period of control Threshold www.himtf.com ▪ Consist of 6 times the value of the minimum threshold (ex. 0,6% if the minimum threshold is 0,1%) 23 Order-Driven segment - Equity Characteristics of the Model (3/3)
Feature Description
During the first ▪ Identifies the range, around the Reference price, in which it’s possible to place buy / sell orders intermediate ( +/- 8% ) Order entry period of Limit observation
(«band if swing») ▪ They will automatically be expanded, to the failure to achieve the minimum volumes of exchanged values defined by the «minimum threshold» Then ▪ In case of failure to reach the minimum threshold at the end of the intermediate control periods the limits will be doubled
www.himtf.com 24 Order-Driven segment - Equity Limits and Thresholds Values
Parameter Observation Period Control Period
Equivalent to the limit for the last Initial value +/- 8% auction of the Period of Observation
Limits
Equal to twice the limit valid in the Increases +/- 4% previous auction
Between 1,0% and 3,0% Between 0,5% and 1,5% Reference of the market cap. of the market cap. (increase: 0,50%)
Thresholds
Between 0,1% and 0,5% Between 0,05% and 0,25% Minimum of the market cap. of the market cap. (increase: 0,1%)
www.himtf.com 25 Order-Driven segment - Equity Example Info Sheet - Equity 1/2
The information that Hi-Mtf shows for equities has been updated in order to be more transparent and clear for retail investors. Next to the symbol that identifies the Bank that owns the Share there are some information that briefly describe the latter, with an indication of the Partecipant (Aderente Diretto) who has proposed the listing of the Equity. The "Informazioni" section includes, among others, the Minimum and Reference Threshold levels chosen by the Issuer at the time of listing, the Reference Price with the range between place orders both in percentage and in numerical value. The section «Valori attuali relativi al periodo di osservazione» shows the start date of the Period, the average price and the percentage of achievement of the significance thresholds.
www.himtf.com 26 Order-Driven segment - Equity Example Info Sheet - Equity 2/2
The second part of the data sheet of the Equity shows the first 5 levels of the Market Depth with the total quantities in buy and sell and the theoretical auction price. The section «Periodo Intermedio in corso» shows the start and end date of the two-month period with the price, quantity, countervalue and progressive countervalue generated in all the auctions of this intermediate period. Furthermore, all auction dates included in the two months are presented in order to give clearer information and allow investors to have a more detailed investment time horizon.
www.himtf.com 27 Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 28 RFQ segment Goals and features of the RFQ segment
Market segment, working as a RFQ system, for no-retail orders in size terms
Goals Featurs Description ▪ The trades are guaranteed by 1 CC&G (Cassa di Compensazione
high CC&G Warranty - e Garanzia) that eliminates the
counterparty risk.
ium
i d ▪ Potential aggressors can discover the Offer liquidity to «buy-side» and to clients Me price coming from other aggressors Competition with no-retail quantities who responded to the enquiry and this is aimed to improve competition.
▪ Potential aggressors can not Anonymity recognize the identity of the proposal and vice versa.
2 ▪ For the same enquiry there could be Multiple multiple partial executions with Executions different counterparties.
▪ If the conditions in the relevant order Offer a regulated venue and execute RFQs Binding RFQ are satisfied, the execution of the trade
in trasparency as Regulations require Low is automatic («automatch») -
ium ▪ Italian Government Bonds: 1.000.000 i d Minimum Size ▪ Eurobond: 200.000 Me ▪ It applies to enquiries and executed trades. www.himtf.com 29 RFQ segment Trading mechanism
In the Rfq model below a «Proposal» forwards an anonymous purchase/sale request (RFQ) to the Market and one or more «Aggressor» can respond anonymously with price and quantity
Operator who can Operator who can Proposal forward an enquiry Aggressor respond to the (RFQ) enquiry RFQ
«Buy-side» «buy-side» 1
«buy-side» 2 Anonymity Request to buy «buy-side» n 3 milion of corporate Hi-MtfRFQ Bond «sell-side»1
«sell-side»2 «sell-side»
«sell-side»n
▪ The request submitted by the Proposal (who can be Quantity Bid Price Quantity Ask Price a "buy-side" or a "sell-side") and the related Timeout: 500.000 100 responses from the Aggressors create a real-time 120 sec (*) 3.000.000 book and this mechanism stimulates competition 500.000 101 among participants in the segment. 2.000.000 102 www.himtf.com 29 it is possible for the Proposal to forward an enquiry without timeouts, which will be cancelled from the Market at the end of the trading day if the RFQ is not executed. Agenda
■ About Hi-MTF
■ Market Structure
■ Quote - Driven segment
■ Order - Driven segment
■ Fixed-Income
■ Equity
■ RFQ segment
■ Primary Market - Issue
www.himtf.com 31 Primary Market - Issue Primary Market on Hi-MTF
How it works Features
▪ The distribution activity on Primary Market Segment (ISSUE) of Hi-MTF is carried Trading ways out in a countinous trading period possibly followed by an auction period. ▪ The auction period is optional.
▪ At the opening stages of the distribution period, the offer price of the financial Offer Price instrument is fixed and it is communicated to the Market by the Intermediary responsible for the placement.
▪The Intermediary or Intermediaries responsible for the placement are the only partecipants who are enabled to enter Sale proposals at the fixed price. ▪Each Intermediary can enter only one Sale proposal; the sum of the quantities on sale Trading model by all the Intermediaries can not exceed the total amount offered by the Issuer. ▪Brokers can only enter Purchase proposals at a Limited Price (LMT) equal to the fixed price or Without Limit proposals and their proposals can not be modified.
▪ Hi-MTF Website ensures wide visibility and transparency to placements and its features Transparency and in the section «ISSUE». secondary market ▪ The issuer may require, following the successful placement, the listing of the Bond on the secondary market of Hi-MTF.
www.himtf.com 32 Contacts
Website: www.himtf.com
CEO Giovanni Roversi Tel. 02 89283354 E-mail [email protected]
Head of Operations Alessandro Rigamonti Tel. 02 89283355 E-mail [email protected]
Head of Market Supervision Andrea Braga Tel. 02 89283352 E-mail [email protected]
www.himtf.com 33 September 2018 Hi-Mtf SIM S.p.A. La pubblicazione del presente documento non costituisce attività di sollecitazione del pubblico risparmio da parte di Hi-Mtf SIM S.p.A. e non costituisce alcun giudizio, da parte della stessa, sull’opportunità dell’eventuale investimento descritto. Il presente documento non è da considerarsi esaustivo ma ha solo scopi informativi. I dati in esso contenuti possono essere utilizzati per soli fini personali. Hi-Mtf SIM S.p.A. non deve essere ritenuta responsabile per eventuali danni, derivanti anche da imprecisioni e/o errori, che possano derivare all’utentewww.himtf.com e/o a terzi dall’uso dei dati contenuti nel presente documento.