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BME has introduced a new foreign exchange settlement system, FXS, designed to operate on a payment versus payment (PvP) basis and reduce the risks associated with bilateral FX transaction settlement. The launch event was held at the Madrid Stock Exchange Palace, following formal approval from the Bank of Spain.
The FXS platform is part of BME’s broader initiative to modernize foreign exchange infrastructure by offering secure, technology-driven solutions that span from trade execution to post-trade settlement. FX is the world’s most actively traded market, with daily volumes exceeding $7.5 trillion, and BME aims to provide an end-to-end service offering that enhances automation and reduces operational risk.
Digital trading platform for Spot FX and xRolling FX futures via MEFF
Xavier Aguilá, General Director of BME Clearing, opened the event by linking the new system’s development to specific demands from Spanish banks, which face new challenges as the FX market adapts to digitization, evolving counterparties, and standards such as the FX Global Code. Aguilá said the shift requires stronger risk controls and automated processes to address the inefficiencies of bilateral settlement.
José Parga, Head of BME FX, outlined the full scope of BME’s services for foreign exchange participants. These include a digital trading platform for Spot FX and xRolling FX futures via MEFF, along with the new FXS settlement system, which aims to eliminate principal risk by enabling PvP settlement between counterparties.
During a panel moderated by Paula Fernández, Head of FXS at BME, participants discussed the operational and technological hurdles that the FXS system seeks to overcome. Sergio Jiménez, Head of FX & STIR Trading at Bankinter, and Jeroni Alomar, Director of Control and Treasury at Banca March, both highlighted the growing importance of digitization and automated control systems in reducing settlement risks in a complex trading environment.
María José García, Head of the Surveillance Unit of the Payment Systems Department at the Bank of Spain, described how central banks are promoting safer settlement frameworks. García emphasized that PvP mechanisms are essential tools for mitigating systemic risk and align with regulatory expectations.
Jiménez noted that, beyond risk mitigation, these innovations have led to secondary benefits, such as enhanced transparency and more efficient price discovery. Alomar added that combining PvP with net settlement helps reduce liquidity pressures on treasury operations, improving overall risk control.
The discussion also focused on FXS’s compliance with the Principles for Financial Market Infrastructures (PFMI) issued by CPMI-IOSCO. As a supervised payment system under the Bank of Spain, FXS provides an added layer of regulatory assurance for participating institutions.
Bankinter and Banca March were the first institutions to adopt the system. Alomar described the integration process at Banca March as smooth and efficient, with notable improvements in liquidity management and operational security. Jiménez said that working with a neutral provider like BME enables Bankinter to scale its FX business while enhancing competitiveness and efficiency.
BME’s FXS launch marks a significant step forward for domestic FX market infrastructure, offering regulated, scalable, and digitized alternatives to traditional bilateral settlement practices.
