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BME announces new tariffs

BME announces new tariffs

BME has announced its new tariff structure that will be applied from January 1st 2018. Approval from the CNMV is required. The tariffs breakdown as follows:

1. Stocks with a market cap above €10,000Mn. Tariff will be reduced to 0.30bp on traded volume.
2. Stocks with a market cap below €10,000Mn. Tariff is unchanged.
3. Block trading will pay 1.00bp on traded volume with a maximum of €13.40 per trade.
4. Restricted orders will pay 2.00bp on traded volume with a minimum of €0.50 and a maximum of €1.00 per order.
5. Auction trades will pay a €1.00 fee.

The new tariff for liquid asset is in line with alternative platforms

BME’s strategy is to reduce the tariff in stocks competing with alternative platforms, in order to provide the best execution according to MiFid II. The changes affect 10 stocks. The new tariff for the most liquid stocks is in line with Bats Chi-x’s tariff of 0.3 bp for active orders.

In contrast, the tariff will be maintained or even increased in those stock or type of orders not offered by its competitors, such as auctions that represent c.20% of the total traded volume.

We expect the changes to have a neutral impact on BME’s results

BME’s current average tariff is around 2.1bp on traded volume. We maintain our base case scenario of neutral impact on BME’s P&L. We expect the tariff reduction on the most liquid assets to be offset by the higher price of the block trading and the restricted orders that will be negative for algorithmic trading.

We maintain our Buy recommendation with a target price of €34.3/share