Date: 20 June Effective Date: 19 July This Circular develops the provisions of Article 24 of the MEFF Rule Book.

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Alfred Gilbert Moore
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1 Number: Contract Group: C-DF-25/2012 Financial Derivatives Circular Date: 20 June 2012 Effective Date: 19 July 2012 Replaces: C-DF-10/2011 Subject Summary Posting of Margins. This Circular establishes the forms of posting for the various margin types in the Financial Derivatives Contract Group, daily updating of cash margins and the procedures for investment of cash margins. This Circular develops the provisions of Article 24 of the MEFF Rule Book. 1. POSTING OF INITIAL MARGINS, INDIVIDUAL FUNDS AND DEFAULT FUND CONTRIBUTIONS They may be posted in the form of: a) Cash in euros deposited by the Clearing Member, or by its Payment Agent in MEFF account in the payments module of the Target2 system. Such amount will be invested in a sell-buyback registered in MEFF s securities account in Iberclear. b) Securities pledged, in accordance with the criteria set out in the Margin Collateral in the form of Securities in IBERCLEAR circular or the one replacing it. c) Simple Transfer of securities done by the Clearing Member to MEFF s securities account in Iberclear or in Clearstream, in accordance with the criteria set out in Margin Collateral in the form of Securities in IBERCLEAR and Margin Collateral in the form of Securities in CLEARSTREAM Circulars, respectively, or the ones replacing them. d) Bank Guarantee on first demand, exclusively under the conditions and for the types of margins as laid down in section 3 of this circular, and in accordance with the model in Appendix POSTING OF EXTRAORDINARY MARGINS The Extraordinary Margin to be deposited, in the event of a contract exceeding the maximum daily price fluctuation limit, or in the event of an isolated instance of the Intraday Risk Limit being exceeded, may be posted in the form of: a) An MT204 direct debit instruction to the Account on the TARGET2 platform system of each affected Member. 1/6

2 b) Demand for Payment (MT 202) to MEFF account in the payments module of the TARGET2 platform system. c) In the event of a technical malfunction of the TARGET2 platform system, MEFF may require Clearing Members to set up the Extraordinary Fund to be deposited by means of a transfer of securities free of payment in the MEFF securities account in Iberclear or may allow the TARGET2 contingency module to be used, as follows: MEFF informs the Bank of Spain of the institutions which have to make payments through the contingency module, and of the respective amounts. These institutions shall provide their Central Bank with the collateral needed to inject liquidity into the contingency module, and shall send a fax to their Central Bank ordering the processing of a direct participant critical payment to be credited to the MEFF s Account. d) In exceptional circumstances, any other form which MEFF deems to be sufficient and which MEFF expressly accepts, after prior communication to CNMV. 3. POSTING OF MARGINS BY BANK GUARANTEE Individual Funds and Default Fund Bank Guarantees must be approved by the Board of Directors of MEFF. Bank Guarantees may only be issued by Credit Institutions with a credit rating and for the amounts specified in the table below: RATING REQUIRED % OF INDIVIDUAL FUND OR DEFAULT FUND THAT THE BANK GUARANTEE MAY COVER % OF INDIVIDUAL FUND OR DEFAULT FUND TO BE COVERED WITH CASH OR COLLATERAL BBB or higher 100% 0% BBB- 67% 33% New issued Bank Guarantees from Credit Institutions with a credit rating of BBB- or lower shall not be accepted. Bank Guarantees already provided whose guarantor s credit rating is lowered to BBB-, may be maintained for a maximum period of 3 months and in the proportions described in the table above. The adjustment of the Bank Guarantee and the cash or collateral amounts must be made within 15 days. If a guarantor s credit rating falls below BBB-, the Bank Guarantee must be replaced either by a new one issued by another Credit Institution that meets the established criteria, or by cash or collateral, within 15 days. The total amount guaranteed by an Institution, for whatever purpose, including to different members, must not exceed 2% of its Shareholders' Equity, and in accordance with the following maximum amounts: CIRCULAR C-DF-25/2012 2/6

3 Maximum amount Guarantor Institution's Rating guaranteed (in Euros) AA- / Aa3 or higher 300 million A+ / A1 200 million A / A2 100 million A- / A3 50 million BBB+ / Baa1 35 million BBB / Baa2 25 million If the guarantor Institution is a Clearing Member of MEFF, the guaranteed amount shall not exceed the Solvency Limit granted by MEFF in the guarantor Clearing Member's Intraday Risk Limit and the said guaranteed amount will be deducted from its Solvency Limit. A Clearing Member may not guarantee any institution for which it provides settlement. If the guarantor institution loses its rating, reduces its Shareholders' Equity, is declared to be in a competitive situation or has lost its administrative license to operate, the guaranteed party must immediately communicate these facts to MEFF and provide a replacement for the guarantee by other accepted means in accordance with the provisions of this circular. Cancellation of the bank guarantee shall only take effect upon MEFF's receipt of the cancellation notice, provided that there are no outstanding obligations. If the bank guarantee has a stated expiry date, the bank guarantee must either be renewed or replaced by other margins of an equivalent value, no later than 10 business days prior to the said expiry date. Shareholders' Equity and the rating are calculated as stated in the Calculation of shareholders' equity and credit rating Circular or the one which replaces it. The contents of the bank guarantee shall be as set out in the Appendix. 4.- COLLATERAL PROVIDED BY MEANS OF SECURITIES: VALUATION For the purposes of this Circular, margins constituted via securities shall be valued in accordance with the criteria set out in Margin Collateral in the form of Securities in IBERCLEAR and Margin Collateral in the form of Securities in CLEARSTREAM Circulars, or the ones replacing them. 5.-DAILY UPDATING OF MARGINS AND PROCEDURE FOR POSTING CASH MARGINS At the end of the trading session, MEFF will inform Members of the Margin amount that is both required and already posted. The notice will provide a breakdown by Account, together with the details of the assets posted, using the procedures set out in this Circular, and valued as set out in Paragraph 6 of this Circular. CIRCULAR C-DF-25/2012 3/6

4 The formula used to calculate the Initial Margin variation to be posted in cash with MEFF on the following Business Day, is as follows: Initial Margin variation to be posted in cash on D+1 = Total Initial Margin to be posted on D+1 - Margins posted in Securities - Margins posted in Cash on D For a given Account, if the Initial Margin variation to be posted on D+1 is negative and the Account has Margins posted both in Securities and in Cash, the maximum amount that MEFF shall credit to the Member for the said Account, shall be the amount of Margins posted in Cash on D. The Initial Margin variation to be posted in Cash by the Clearing Member shall be the sum of the variation in respect of its own Accounts and that of its Non-Clearing Members, plus any adjustment to Individual funds and/or Extraordinary margins, where applicable, so as to obtain the cash Margins to be posted on D+1 by the Clearing Member. This amount shall be added to the settlement of the variation margin on futures, settlement of premiums, fees, interest and other concepts, and the total net amount shall be debited or credited to the treasury account in the TARGET2 system of the Clearing Member or the Payment Agent appointed by the said Clearing Member through the MEFF multilateral settlement. 6.- INVESTMENT OF CASH MARGINS MEFF shall invest the Cash Margins by means of re-purchase agreement transactions in Spanish Public Debt securities (hereafter sell-buyback transactions), for the balance existing in its treasury account. These sell-buyback transactions shall be recorded in the name of MEFF in MEFF's account in IBERCLEAR In the event of a negative interest rate or the occurrence of any other extraordinary situation, MEFF reserves the right not to perform the investment in a sell-buyback transaction. In this case, MEFF shall maintain the cash in its account in the TARGET2 system with no remuneration. At least on a monthly basis, MEFF shall credit the interests generated by the sell-buyback transactions (less costs associated) to the Clearing Member or to its Payment Agent. MEFF shall not make any withholding from its Members when crediting the amount of interests, due to its Members' financial intermediary condition. MEFF shall inform the tax authorities about these transactions as well as about the remuneration paid to the Member. If current tax legislation and tax regulations change or the authorities' interpretation thereof changes, MEFF shall act in accordance with any changes introduced. CIRCULAR C-DF-25/2012 4/6

5 APPENDIX MODEL: BANK GUARANTEE ON FIRST DEMAND 1 (on the headed paper of the Bank or Savings Bank issuing the guarantee) MEFF (full name of the governing body company) Plaza de la Lealtad, MADRID BANK GUARANTEE ON FIRST DEMAND Registration no. xxx of the Register of Guarantees xxxx of xxxx,, with address at xxx (number and street) of xxx (city), and in its name and on its behalf, Mr/Ms xxx and Mr/Ms xxx, with sufficient powers to bind it herein, by deed executed before the Notary of xxx (city) Mr/Ms xxx, dated xxx, number xxx of his Official Records, a copy of which is attached hereto, by means of this document, RECITALS I. Whereas it is the intention of the undersigned credit institution to grant a guarantee in accordance with the provisions of the MEFF Rule Book and of Circular Posting of Margins, or the one replacing it., and which has laid down that posting of margins for Individual Funds and Default Fund Contributions may take place by means of a first demand bank guarantee. II. Whereas this mercantile document constitutes a first demand bank guarantee, and as such is an autonomous obligation, which is not accessory to the obligations the fulfilment of which it guarantees and it has an abstract function. For these purposes, the undersigned credit institution by this document of GUARANTEE on first demand, REPRESENTS FIRST. That at the request of (guarantee instructing entity), the guaranteed entity, domiciled in City, Street, No. the undersigned credit institution undertakes, as the primary obligor, to pay to (guarantee beneficiary), who shall benefit from the Guarantee the maximum amount of., to meet a breach by the guaranteed party of its obligations towards MEFF, as well as to pay any other expenses, charges, penalties or economic rights directly associated with the aforementioned breach. SECOND. That the cash payment shall be made to the beneficiary at first demand against presentation by (the guarantee beneficiary) of the declaration of breach of the instructing party, of the amount claimed and the current account to which the corresponding payment must be made. This Guarantee is granted with the credit institution expressly accepting personal, primary and several liability and with waiver of setting up any type of defence whatever the nature thereof. 1 The representative of the Guarantor Institution must be a duly authorized signatory. CIRCULAR C-DF-25/2012 5/6

6 THIRD.- The guarantor credit institution is obliged to pay this First Demand Guarantee for an indefinite period / until the of of , date from which it will remain without any effect [omit whatever is not relevant]. In witness whereof, and for all effects and purposes, this Guarantee at first demand is issued in xxx (city) on xxx (date). XXXXXXX (the guarantor credit institution) Per power of attorney, ONLY THE SPANISH VERSION IS BINDING CIRCULAR C-DF-25/2012 6/6

Circular n1 4/2017, of 4 September PROCEDURE FOR MEMBERSHIP OF ENTITIES OF THE SECURITIES SETTLEMENT SYSTEM MANAGED BY IBERCLEAR

Circular n1 4/2017, of 4 September PROCEDURE FOR MEMBERSHIP OF ENTITIES OF THE SECURITIES SETTLEMENT SYSTEM MANAGED BY IBERCLEAR MADRID COMPANIES REGISTER, VOLUME 15611, BOOK 0, SHEET 5, PAGE M-262.818,