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ARCO System

ARCO System

IBERCLEAR, as the legal entity managing the ARCO Securities Settlement System, settles trades executed in markets and multilateral trading facilities, and also trades performed outside those systems. IBERCLEAR often settles trades after the involvement of a central counterparty (CCP) that manages the counterparty risk.

To perform its functions, Iberclear counts on a group of participant entities which directly form part of the registry system and assume certain rights and obligations related to the settlement of trades with which they are concerned. These participants, which are always financial institutions -investment services companies and credit institutions-, hold a legal and commercial relationship with the non-participant investors. Similarly, other central securities depositories and central counterparties have an access to the ARCO System.

Iberclear has signed an agreement with the European Central Bank and the group of Central Banks that form the Eurozone (jointly, the Eurosystem) for the provision of technical services for the settlement of securities which facilitates central bank cash settlements through the TARGET2-Securities (T2S) technical support managed by the aforementioned Central Banks.

In addition to their connection with Iberclear, participants can opt to establish a direct connection to T2S to exchange settlement information, provided they have the technical means to comply with and maintain up to date their technical and security requirements applicable at any time in the T2S framework.

Connectivity with T2S

The following entities can access the ARCO System:

  • Trading venues
  • Central counterparties
  • Participants
  • Other Central Securities Depositories (CSDs)

These entities can connect to IBERCLEAR either directly or via a delegated entity. Messages exchanged between Iberclear and entities shall conform to the guidelines of ISO 15022. These are the so-called Indirectly Connected Parties (ICP). Entities may also directly connect with T2S and exchange information using the ISO 20022 standard. Entities that choose this connection option are called Directly Connected Parties (DCP).

There are a variety of possibilities for the delegation of their resources for each one of the connections in a participant entity authorised by IBERCLEAR.

Types of connectivity for IBERCLEAR participant entities with T2S are:

  • Direct connectivity with T2S in DCP mode: Connectivity with T2S.
  • Indirect connectivity with T2S in ICP mode: Connectivity with IBERCLEAR.

Types of connectivity for IBERCLEAR participant entities with T2S




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