Secondary market trades are conducted through three systems (the first two reserved exclusively for market members):
- Through blind brokers (the blind market), also known as the "first tier" in which only Public Debt members can participate. Trading is electronically conducted without knowledge of the counterparty identity (hence the term "blind"). This is the core of the Public Debt market, as participating agents undertake to quote bid and offer prices at relatively narrow spreads (around 5 basis points in keenly traded issues), thereby guaranteeing the market's overall liquidity. Transaction size is a minimum of 5 million euros. Blind market trades may only be to maturity, whether in spot or forward transactions. Repos are not permitted. Profits and losses are settled daily by marking to market, and the corresponding adjustments made on the operations Value date.
- The bilateral trading system, direct or via broker, also known as the "second tier", channels all remaining operations between Account Holders. The support for this market is provided by the Bank of Spain Settlement Service. In this segment, participants can operate to maturity (in spot or forward, double or repo transactions). Operations can be entity-to-entity or through a broker. In the second case, the broker matches the operation and notifies each party of its counterparty -who is identified under this system. Both parties then notify the Bank of Spain Settlement Service of the terms of the transaction to enable its subsequent clearance and settlement.
- The third and last trading system comprises transactions between Management Institutions and their clients.