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Spanish stock exchange to start offering gas contracts May 24

London (Platts)--17 May 2018 657 am EDT/1057 GMT


The Spanish stock exchange operator Bolsas y Mercados Espanoles said it will start to offer a full range of natural gas contracts from May 24 following strong demand from market participants.

The operation will be conducted through BME Clearing, the central counterparty which it operates and that the contracts to be listed are day-ahead as well as a range of natural gas futures with weekly, monthly, quarterly, seasonal and annual maturities, BME said Wednesday.

These contracts will be incorporated into CCP's energy segment, and therefore current participants in that segment will be able to register for these products, BME said.

All contracts will be physically settled at the Spanish Punto Virtual de Balance (PVB).

BME Clearing will offer management services, manage the risk and the margins as well as register the positions, it said.

It will also notify to the Spanish transmission system operator, Enagas, while taking care of settlements and the corresponding invoices.

"This initiative is much demanded by current participants and other institutions interested in a CCP for natural gas products that allows them to manage counterparty risk and to negotiate with firms with which they do not have credit agreements," BME said.

The energy segment started its activities in March 2011, clearing power derivatives. Currently, it has 150 participants.

New contracts initially offered on the exchange will cover the following three working days -- balance of month, front month, front quarter, front season and front year, as well as balance of week and full week -- if requested, the BME said.

The availability of gas contracts on the exchange could facilitate increased liquidity in the PVB as new participants with different trading interests can utilize the exchange for hedging, speculation or arbitrage opportunities, BME added.

--Henry Edwardes-Evans, henry.edwardes-evans@spglobal.com

--Edited by Norazlina Jumaat, norazlina.jumaat@spglobal.com




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