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- About MTS
- What does MTS stand for?
- What is the added value of the MTS platform?
- What is the Telematico?
- What is the difference between domestic MTS, EuroMTS and EuroCreditMTS?
- What is the difference between the MTS markets and BondVision?
Answers
What does MTS stand for?
MTS is an abbreviation for Mercato dei Titoli di Stato, which
translates to "Market for Government Bonds".
What is the added value of the MTS platform?
The corporate governance set-up for all domestic MTS companies is relatively consistent - MTS S.p.A. maintains a minority stake and the major market making firms for each sovereign marketown the remainder of the share issue, each holding an agreed, capped percentage. In some cases, the issuing National Debt Agency also participates in the equity of the company. The shareholding market participants are responsible for establishing specific trading rules and market participation requirements to suit the needs of their domestic environment.
Importantly, each domestic MTS company benefits from the use of the common platform, Telematico.
The benefits to Participants and Issuers
- Completeness of the trading service
- Straight-through-processing capabilities, including the automatic transmission of settlement instructions to the relevant depositary or clearing house, allowing for a substantial reduction in the cost of back office operations
- Reduction of transaction costs
- Single market platform for accessing multiple bond markets thus reducing banks' technology expenses and resource allocation. Economies of scale for system development, maintenance and connection costs at the user location
- Flexibility in the selection of the most appropriate clearing institution for each market - MTS has established links with the key European fixed income clearers
- Involvement of Primary Dealers, through their share participation, in establishing market rules
Benefits to Issuers
- Secondary market transparency and liquidity
- Enhanced attractiveness of domestic markets thanks to direct access to over 400 connections in Europe
- Statistical feedback that can be used to tailor future borrowings to
the needs of the market
What is the Telematico?
The technology of the MTS platform. The Telematico system is sohisticated electronic platform specifically deisgned for the trading of fixed income instruments. It replaces the expensive and often time-consuming process of trading over-the-counter.
The major technology provider to MTS is SIA S.p.A. (Società Interbancaria per l'Automzione), a company with over 20 years experience providing electronic markets and telecommunication services to the financial markets.
What is the difference between domestic MTS, EuroMTS
and EuroCreditMTS?
Domestic MTS Markets
- Each domestic MTS market lists the entire curve of the national government fixed income securities.
- Each domestic MTS market is owned principally by the Primary Dealers as designated by the local Treasury/Debt Agency. MTS SpA holds a minority stake.
- MTS SpA provides the technology services to each domestic market.
EuroMTS
- EuroMTS lists euro-denominated government, supra-national and agency benchmark bonds with a minimum size of €5 billion.
- EuroMTS is owned 100% by MTS SpA
- MTS SpA provides the technology services to EuroMTS.
- Parallel quotation functionality allows price consolidated liquidity for instruments listed in both a domestic market and EuroMTS
EuroCredit MTS
- EuroCredit MTS lists "benchmark" covered bonds (Obligations Foncieres and Pfandbriefe) with a minimum size of €3 billion.
- EuroCredit MTS is a division of EuroMTS
Coredeal MTS
- Coredeal MTS lists "benchmark" corporate bonds of at least €3 billion size; "benchmark" financial corporate bonds of at least €1.5billion size; and "liquid" corporate bonds of at least €1.5 billion size.
As each market has a separate set of governing rules and membership criteria,
the application process for each market is independent from the others.
There are no restrictions on the number of markets a participant can join.
What is the difference between the MTS markets and BondVision
MTS markets are inter-dealer wholesale trading platforms (known as "B2B") and based on the Telematico system. Bids and offers on the MTS System are automatically matched.
BondVision is an on-line auction trading system targeted at institutional clients ("B2C") who request for quotes from up to four dealers. Clients manually accept the best bid/offer after receiving the competitive quotes.
