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 Page Page
Foreword Futures and Options Contracts Listed
---------------------------------------------------------------- 02 (4) Fixed Income
Equity Contracts
MEFF Option Premiums
---------------------------------------------------------------- 02 ---------------------------------------------------------------- 14
(5)
(1) Membership Structure: Access to the Market
Membership Requirements
Information Services
Internet: www.meff.com
Access to the Market ---------------------------------------------------------------- 15
Exchange Fees
---------------------------------------------------------------- 03 (6) Market Support Services
MEFF Trading Support Terminal (TST)
(2) MEFF: The Trading System Mibos: MEFF Integrated Back Office System
The Electronic Trading and Clearing System Operating Features of Mibos
Telephone-based Options Trading ---------------------------------------------------------------- 16
Behind the MEFF System
---------------------------------------------------------------- 07 (7) Legal and Supervisory Framework
Exchange Supervisory Authorities
(3) MEFF: The Clearing House ---------------------------------------------------------------- 18
Margin Requirements and Risk Management
Mark-to-Market Appendix: Delivery Procedures Bond
Clearing House Guarantee Futures Contracts
Default of a Clearing Member List of Deliverable Bonds
Closing Prices for Regular Trading Sessions (Deliverable Basket)
Margin Calculation System ---------------------------------------------------------------- 19
Financial Integrity of MEFF
Principles
---------------------------------------------------------------- 09
 -FOREWORD-
MEFF is the Spanish Financial Futures and Options Exchange.
The Equity Derivatives Exchange (MEFF Renta Variable) commenced activities in 1989 and the Fixed Income Exchange
(MEFF Renta Fija) shortly after in 1990. From 1991 the two exchanges were run independently under the control of
a single Holding Company, until the Board of Directors decided in October 1999 to integrate the management of the
two exchanges. The Derivatives Markets have developed considerably in the past decade, due both to the growing
participation of domestic institutions and clients on the one hand, and the increasing interest of international
investors seeking exposure to the Spanish market.
This manual is intended to present international clients with the information they need to invest in MEFF’s interest
rate futures, equity index contracts and stock options.
Should you need any further information, please contact our Marketing services at MEFF.
June 2001
----------------------------------------------------------------------------
This document has been published for information purposes only
and under no circumstances represents investment advice. No
liability is accepted by MEFF for the use of information contained
herein. MEFF reserves the right to alter any of its rules or regulations
without prior notification that may affect the validity of the
information contained in this document.
----------------------------------------------------------------------------

-MEFF-
MEFF Sociedad Holding was incorporated in December 1991 to combine the operations of the two existing Spanish
Derivatives Exchanges in the same organisation. In October 1999 it was decided to integrate the management of the
two exchanges, with offices in Madrid and Barcelona.
MEFF’s shareholders include the major Spanish Banks, Savings Banks and the four Spanish Stock Exchanges.
Both Exchanges have been granted Designated Investment Exchange status by the Securities and Investments
Board (SIB) and are classified as Recognised Overseas Investment Exchanges by the British Treasury. The CFTC has
authorised the sale of MEFF products in the USA and granted CFTC Part 30 Relief for Exchange Members.
Both fixed income and equity futures and options contracts are traded on a single electronic platform for the two
separate markets. The electronic system fully integrates trading, clearing and settlement, providing members with
back office and front office functionality for efficient management. In 1998 MEFF became a member of the Euro-
Globex alliance and linked its electronic platform to MATIF and MONEP in France the following year. Through MEFF
Euroservices, a registered European brokerage, MEFF became a non clearing member of EUREX and now offers
Members of the Fixed Income Exchange direct access to the Bund, Bobl and Schatz bond contracts traded on the
German based market.
MEFF has consolidated its position as a leading European futures and options market, actively competing and
innovating to provide better trading opportunities for its members and clients.

2
(1)
-MEMBERSHIP·STRUCTURE:·
ACCESS·TO·THE·MARKET-
Membership and the ownership of the Exchange are separate. Members of the Exchange need not be stockholders.
Unlike the stock, Exchange membership is not tradable, nor transferable.
According to Market Regulations, all members of MEFF must be classed as at least one of the following:
> Trading Member
A Trading Member can trade directly on the market for its own account and on behalf of clients. An agreement
should be established with one or more Clearing Members through whom trades will be cleared and settled.
A trading Member has direct access to the market and can trade for its own account and on behalf of clients.
> Clearing Member
In addition to the functions of a Trading Member, a Clearing Member must settle daily profits and losses and
post margins for open positions for all transactions executed for house account, client accounts and other
Member accounts which it handles.
A Clearing Member must also have a contract with one or more Custodian Clearing Members with which
margins will be posted and adjusted.
> Custodian Clearing Member
In addition to the functions Clearing Member, a Custodian Clearing Member holds all margins posted by
Clearing Members.
Some Custodian Clearing Members specialise in performing only clearing and custody services and therefore
exclude themselves from trading activities. (Non-Trading Custodian Clearing Members) According to Exchange
Rules and Regulations there is a fourth complementary category which may be held in addition to any of the
above three: that of the Market Maker.
Market Makers exist for a number of contracts designated by the Exchange. All Members can apply for this status. In
addition, professional market makers outside of Spain can now apply to become Specialised Clients, accessing the
market directly, and participating in incentives for market makers.

-MEMBERSHIP·REQUIREMENTS-
Membership status can be achieved by any Bank, Savings Bank, Securities Broker-Dealer (“Sociedad de Valores”),
Securities Broker (“Agencia de Valores”) or any other class of institution listed in letters a), b) and c) of Article 76 of
the Spanish Securities Markets Act (“Ley del Mercado de Valores”).
Additionally a Custodian Clearing Member must be a Government Debt Book-Entry Management Institution with full
powers to hold accounts for third parties (“Gestoras de Deuda Pœblica con capacidad plena”) in order to be custodian
of margins (ORDER of 31 October, 1991 - State official register or “BOE” of 8th November, 1991).
A Clearing Member, whether or not a Custodian Member, must ensure that in order to make or receive payments to
or from MEFF, it has a Treasury Account with the Bank of Spain. Those Members who do not have such an account must
have an agreement to enable cash settlement with MEFF via a financial institution that possesses a Treasury Account.
This financial institution will not relieve the Clearing Member of any clearing responsibilities. Furthermore the Clearing
Member must enclose with their membership application a review of their risk control procedures. In addition MEFF
is able to request further information as considered necessary in order to evaluate the capacity, and resources of the
applicant firm to conduct business at MEFF.

3
 An institution wishing to become an Exchange Member has to hold a contract with MEFF, in which it accepts the Rules
& Regulations of the Exchange. Finally it has also to be specifically authorised by the CNMV (Spanish financial
regulatory body for financial intermediaries and exchanges).
Note that membership of MEFF Renta Variable (the equity derivatives Exchange) does not imply membership of MEFF
Renta Fija even though both memberships are granted by the same Board of Directors.
The above institutions are either under the supervision of the CNMV (“Comisión Nacional del Mercado de Valores”) or
the Central Bank of Spain depending on whether they are Broker- Dealers or Banks respectively.
The Spanish Securities Market Act states that a Securities Broker-Dealer (“Sociedad de Valores”) must have a minimum
capital base of PTAs. 750 million and may trade on their own account and on behalf of third parties. A Securities
Brokers (“Agencia de Valores”) has a minimum capital base of PTAs. 150 million and may only trade on behalf of third
parties.

-ACCESS·TO·THE·MARKET-
All Exchange Members have dealing terminals, connected to the central computers at the head offices of MEFF,
through which all orders are introduced Any Resident or Non-Resident company or individual may trade on the market
through any class of Member (see membership structure). There is no withholding tax for non-residents.
The client must be an Account Holder, having signed an agreement with one or various Exchange Members in which
accounts are opened at MEFF with each Member exclusively for the use of trading futures and options. A client can
hold several accounts by signing agreements with different Members.

MEFF will advise all Members of those clients who hold open accounts with multiple Members if their overall open
position exceeds a determined number of contracts.
Margins and mark-to-market settlements are made through Clearing Members, whether or not Custodians. Non-
Clearing Members are under obligation to clear accounts through Clearing or Custodian Clearing Members.

4
This structure can be represented as follows:

Thus the client settles and clears through each Clearing Member with which it holds an account. However if a client
trades through various brokers, and therefore holds open accounts with several Members, the client can vastly
simplify settlement procedures, payment of fees and posting of margins by the use of a Give Up Account. The
mechanics of the Give Up Account facility are explained below.
Members may act as executing brokers for their clients. Thus clients may give instructions to “give up” trades to a
central account cleared by an Exchange Clearing Member of their choice in order to centralise clearing and settlement
of positions. As a result margin requirements are reduced because margins are charged net on the client’s overall
position.

> Opening a give up account

1) The Client requests an Exchange Member to open a Give Up account and act as the central account Clearing
Member. The Client also requests Executing Brokers to open separate accounts in which registered trades
must be allocated to the central account.

5
 2) The central account Clearing Member gives a list to the Exchange of all Executing Brokers authorised by the
customer to allocate trades to the client’s Give Up account.
3) The central account Clearing Member assumes the responsibility for the positions registered in the Give Up
account as soon as they are allocated. The give up process is immediate and takes place in real-time
immediately as soon as the trade is executed.
Finally, Exchange Members must submit to MEFF a signed contractual agreement stating their relationship with
clients and other members (article 8 of the Exchange Rules and Regulations).
Moreover, MEFF has drawn up a standard framework contract for the give up agreement.

-EXCHANGE·FEES-
In order to oversee and manage the market, MEFF charges Exchange Members commissions.
These are paid through Clearing Members for all trades executed on the market.
Exchange fees for all futures and options contracts are set out in the relevant Exchange circular and take into account
the different types of possible trades (Market trades, ex-pit trades, expiration, exercise and spread or roll-over trades).
Exchange fees are sub-divided into trading and clearing fees to allow Members to differentiate between the trading
and clearing services provided to clients. On top of Exchange fees, Clients and Members agree their own fees.
The current fee schedule expressed in euros per contract is as follows:

(1) General fee applies when trading and clearing for customers.
(2) Own account fee applies when trading for members' own account.
(3) It applies only to the option holder.
(4) Rebates applicable based on volume.

6
(2)
-MEFF:·THE·TRADING·SYSTEM-
THE ELECTRONIC TRADING AND CLEARING SYSTEM
MEFF is a completely electronic exchange. In addition, one of the characteristics which differentiates MEFF from other
leading international derivatives exchanges is its joint trading, settlement and clearing system (MEFFTRACS). The
system has been continually updated over the past 10 years to incorporate the latest technology and improved
services.
All Members of the Exchange have MEFF trading terminals in their dealing rooms, which are connected by secure high-
speed telephone lines to the central computer. This central processing unit receives, matches and executes the
orders, or stores them for later execution. No matter where the Member is physically located, all traders receive
exactly the same service at the same speed.
MEFF's screen trading system allows counterparty anonymity. Only the Market administrator knows the origin of
price quotes displayed on the screen, and who are the counterparties to an executed trade.
MEFF screens show the three best bid and offer prices with their respective volumes enabling users to know at what
prices an order may be filled. Orders are matched strictly on the basis of price and time.
The system is designed for the following order types:
> Market Order
> Limit Order
> Immediate or Cancel
> Stop Limited Order
> Fill or Kill
The dealer terminals not only offer trading facilities but also offer real time risk assessment capabilities. For each
account traders are able to look up required margins, simulate the “next trade effect” to calculate new margin
requirements if a hypothetical trade were to be executed, calculate realised and non-realised profits and losses and
calculate commissions. These facilities therefore allow traders to be constantly aware of the risks of their portfolios.
Traders are able to configure their terminals and insert filters to avoid errors when introducing orders.
The full integration of the trading and the clearing systems allows the completion of the daily clearing process (daily
profit and loss settlements and new margins requirements) within a f ew minutes of the finish of the trading session.
The results are communicated via the trading terminals.
TELEPHONE-BASED OPTIONS TRADING
This system is used for trading specific strategies on IBEX-35 Options. During trading hours all the Market Makers and
the most active Members are permanently in touch with the market.
Once an order is sent to the Market it is logged in the order book.
MEFF's Options Trading Desk stimulates the market by working with member institutions to provide prices on
Combination Orders, matching orders from those entered in the order book to create the necessary combinations.

7
 BEHIND THE MEFF SYSTEM
The full integration of the trading and the clearing systems allows the completion of the daily clearing process (daily
profit and loss settlements and new margin requirements) within a f ew minutes of the finish of the trading session.
The results are communicated via the trading terminals.
The system is well protected from unauthorised access and uses data encryption algorithms to enhance security.
The live central computers are located in MEFF's offices together with an active backup system that comes on-line in
case of malfunction, switching over almost automatically. There is another backup system located off-site, which
guarantees the safety of all market data in case of a major system failure or upset during the trading session. A
complete Disaster Recovery facility provides a total backup of the market, which will allow trading to continue
“normally” at a different location within two hours, without loss of information.
If all of the above safety systems were to fail MEFF has an emergency technical services team that would immediately
go to the assistance of Members. Additionally MEFF provides a service to all Exchange Members designed to cope with
temporary problems associated with power-cuts, broken keyboards, etc. In this case MEFF support staff in the “Pool”
(Market surveillance and operations area) can enter member orders given over the phone into the system on their
behalf.
In this way members and their clients are guaranteed continuous access to the market under all circumstances.

8
(3)
-MEFF:·THE·CLEARING·HOUSE-
MEFF's purpose is to organise the trading, clearing and settlement of its contracts. As such, MEFF acts in a twofold
capacity, both as Exchange and Clearing House.
The basic functions of MEFF as Clearing House are:
1) The calculation and custody of margins
2) The settlement of profits and losses (realised profits and losses, non-realised profits and losses, option
premiums and fees)
3) Delivery arrangements
MARGIN REQUIREMENTS AND RISK MANAGEMENT
At MEFF 3 types of margin exist:
> General Guarantee or Basic Performance Bond
On becoming a Member of the Exchange, Clearing Members are required to post a permanent guarantee by
allocating book- entry Spanish Government Debt in MEFF's favour via the book-entry system of the Bank of
Spain. This General Guarantee covers overnight risk and set for each Exchange separately, as defined in the
corresponding circular.
A daily trading limit is established for each Exchange Member in function of its net worth and the general
guarantee held by the Exchange.
> Initial Margin (also called Daily Margin)
The initial margin is a daily cash deposit required for all open positions to cover the risk generated by adverse
price and volatility movements. Deposits are held as guarantee by Custodian Clearing Members on behalf of
the Clearing House and are returned on closing the position.
Initial margin rates for futures are set by MEFF according to analysis of historical price movements and
known forthcoming price sensitive events.
The margining system is analogous to those used by the major clearing houses around the world (e.g. SPAN).
MEFFCOM2 is MEFF's “Risk Based Margining System” that provides real-time cross margining system
between futures and options. It has been designed to guarantee the financial integrity of the Clearing House,
while also enabling.How to trade on MEFF 13 Members to closely monitor position risk and thus meet
financing requirements as efficiently as possible.
The rules and regulations of MEFF place no restrictions whatsoever on the type of collateral that Members
can accept from their clients. MEFF is not the beneficiary of returns that may be yielded by the margin
deposits.
> Extraordinary Margin
In addition to the daily margin requirement, extraordinary margins may be called under exceptional market
circumstances or as a result of positions held that MEFF believes to be high risk.
When a contract is close to exceeding its maximum daily fluctuation limits during a trading session, there
may be an intraday margin call calculated according to the following formula:
----------------------------------------------------------------------------
EXTRAORDINARY MARGIN = Realised futures losses + Non realised
futures losses + Options premiums due + fees + margins required
for current position - margins for previous trading sessions
----------------------------------------------------------------------------

9
 Shares pledged as Margin: Exchange Regulations now provide for the constitution of Margins by pledging Shares. This
measure, aimed at creating a more efficient market, is strictly controlled through a register at the SCLV (Servicio de
Compensación y Liquidación de Valores or Share Settlement and Clearing Service).
MARK-TO-MARKET
On a daily basis MEFF calculates both the profits and losses from futures and options trades undertaken during the
trading session (option premiums are paid or received when opening or closing a position).
The results of daily clearing are available on the trading terminals within a few minutes after the end of the trading
session.
Daily settlement is carried out by those clearing Members, whether or not Custodians, via their treasury accounts held
at the Bank of Spain taking the following day as the value date. Those clearing Members that do not hold a treasury
account at the Bank of Spain must designate an agent bank to handle their cash movements. Note that this case does
not imply any transfer of liability from the Clearing Member.
Should a clearing member not have sufficient funds in his treasury account, MEFF will then proceed to collect the
amount unpaid by liquidating the margins posted according to the procedures set out in the Rules and Regulations
of the Exchange. In this way MEFF guarantees all payments.

-CLEARING·HOUSE·GUARANTEE-
In its role as Clearing House MEFF has implemented and in many cases improved all the standard trading and clearing
safety mechanisms. For example MEFF has a robust margining system, flexible daily price fluctuation limits, real time
surveillance of open interest, etc.
However the most important feature of MEFF's risk management facility is that it allows monitoring of risk in real
time. At any moment during the trading session the Clearing House knows the margin requirements, and the profits
and losses of each Member or client. The real- time risk monitoring facility is also used by individual Members to follow
the risk positions of their own accounts and their clients' accounts.
A key characteristic of the guarantee provided by MEFF as Clearing House is that this guarantee not only covers the
Exchange Clearing Members but also extends to their clients (those clients holding accounts with the Member). The
Clearing House requires clearing members to post margins for each Account Holder separately. This means that
members cannot net margins posted by different Account Holders nor offset proprietary and customer positions.
Therefore margins are collected on a gross basis.
By having the Clearing House as counterparty to eliminate counterparty risk, this structure provides customers with
an extra degree of safety. Note that although Custodian Clearing Members make one block margin payment by
purchasing one-day repos using the Book Entry system of the Bank of Spain, MEFF as the Clearing House knows the
exact margin payments of each client that make up the block payment. This means that clients' funds can effectively
be considered as segregated. Despite this “segregation” clearing members are ultimately responsible for client
positions if a client fails to fulfil their obligations.
Exchange rules establish limits on Member and client positions. Clearing Members may not post margins totalling an
amount greater than 40% of shareholder equity. Similarly Custodian Clearing members may not accept custody of
margins totalling more than 40% of its shareholder equity.

10
In order to prevent the concentration of risk in the market, no Member or client may hold a position such that their
margin requirement exceeds 25% of all margins posted at the Clearing House from all Members and clients of the
Exchange. However this limit may be exceeded with authorisation from MEFF.
Finally, one of the functions of the Exchange Risk Committee is to monitor Members and their internal control systems
with respect to their operations at MEFF. MEFF receives annually from Members an audited balance sheet and at any
given time may request any records or data necessary to evaluate their performance.
DEFAULT OF A CLEARING MEMBER
While the risk management techniques at MEFF are specifically designed to prevent a Clearing Member from
defaulting on its obligations, the Exchange is prepared to deal with such an event.
MEFF is the counterparty to all transactions on a principal to principal relationship. The protection of customer funds
at MEFF is guaranteed by its segregated account structure and by Spanish law which implements the EC Banking
Directive. The “Disposición adicional séptima” of 3/1994 Spanish Law of April 14 th , 1994, states that MEFF has
absolute segregation right over assets pledged as guarantee by Customers if a Clearing Members were to go
bankrupt. Spanish regulations and particularly bankruptcy regulations are designed to prevent customer funds held
as margin at MEFF from being used to meet the claims of general creditors. It is legally established that a transfer of
customer positions and margins cannot be declared void by bankruptcy administrators unless it was found to be
fraudulent.
Thus if a Clearing Member goes bankrupt the Clearing House will transfer customer positions and margins, to another
Clearing Member (subject to customer agreement) and in accordance with the Rules and Regulations of the Exchange.
Under no circumstances will other Clearing Members' funds be used to cover default of other customers or clearing
Members.

-CLOSING·PRICES·FOR·REGULAR·
TRADING·SESSIONS-
At the end of the trading session, MEFF Renta Fija will give a closing price in accordance with the following procedure:
The closing price for the nearby futures contracts will be the weighted average of the price of the last 12 trades by
their correspondence volumes.
The closing price for the other contracts months will be the average of the prices of the last 6 trades weighted by their
corresponding volumes.
If the number of trades during the session for a specific contract month is not greater than twice the amount stated
above, the closing price will be the average between the best ASK and BID prices remaining at the end of the session.
If one or both of these are not quoted MEFF Renta Fija will use the previous closing price.
Under exceptional conditions, MEFF's Market Surveillance Department will be able to set a closing price.
MARGIN CALCULATION SYSTEM
The margin calculation is based on a portfolio analysis, carried out daily. Equity and Fixed Income contracts are
treated separately, and no cross margining is carried out between positions in Fixed Income and Equity contracts.

11
 For Equity contracts the system is applied to each of the following clearing groups:
> IBEX-35 futures and options > Options on SANTANDER
> Options on ACERINOX > Options on SOGECABLE
> Options on AMADEUS > Options on TABACALERA
> Options on AUTOPISTAS C.E.S.A. > Options on TELEFONICA
> Options on BANCO POPULAR > Options on TERRA
> Options on BANCO BILBAO VIZCAYA (BBVA) > Options on TPI
> Options on BANKINTER > Options on UNION FENOSA
> Options on ENDESA > Futures on TELEFONICA
> Options on GAS NATURAL > Futures on ENDESA
> Options on IBERDROLA > Futures on Repsol YPF
> Options on INDRA > Futures on BSCH
> Options on REPSOL > Futures on BBVA
There is cross-margining only within the same group. The total margin to be posted is calculated at the end customer
level, considering the net position in every clearing group.
For every net open position, the system calculates an array of eleven columns with an increased volatility and eleven
columns with a reduced volatility, each of the eleven columns representing theoretical prices for the positions
corresponding to eleven possible values of the underlying; once the arrays have been calculated, the system adds by
columns, and the most negative value obtained for a column, (Min Sum), represents the maximum risk of the client's
net position. This value is the margin deposit to be posted, except for IBEX-35 group, where the total margin required
is the result of adding the margins due to futures (time-spreads) to the (Min Sum) amount. Once the (Min Sum) has
been obtained for every group, all the (Min Sum) are added and this amount is the margin to be posted for all the
positions.
For Fixed Income contracts the system is applied to the following groups:
> Bono 10
> Euribor
Margins are calculated separately for transactions in distinct markets.
For S&P products, the Clearing House at the Chicago Mercantile Exchange determines the Margin levels for each
contract. Margin requirements are calculated by the CME based upon Net Positions, taking into account any applicable
spread margin reductions.

12
-FINANCIAL·INTEGRITY·OF·MEFF-
PRINCIPLES
The following principles are applied by the Exchanges to ensure their financial integrity:
1) PRINCIPLE: The level of settlement risk for Clearing Members is established on a case by case basis.
CONSEQUENCE: Every Clearing Member has its own daily trading limit established as a function of its own
net worth. Trading limit may be increased by posting additional guarantees to minimum.
2) PRINCIPLE: Every Customer has the right to open its own account at MEFF.
CONSEQUENCE: Proprietary accounts are absolutely separated from Customer accounts.
3) PRINCIPLE: MEFF is the counterparty to the Customer.
CONSEQUENCE: Legal relationship is established on a principal to principal basis with whomever is the
primary owner of an account.
4) PRINCIPLE: Clearing is performed at the end-Customer level and margins are calculated and required on a
gross basis.
CONSEQUENCE: Margins are required to the owner of the account. The Clearing Member is jointly liable with
the Customer.
All clearing statements are available to the Members broken down by Customer on the same trading day.
5) PRINCIPLE: Collateral is invested in assets with minimum risk and high liquidity.
CONSEQUENCE: Cash deposits can only be posted into MEFF accounts opened at Custodians (these entities
must be “Gestoras de Deuda” authorised by the Bank of Spain) and are invested in Spanish Government
Bonds.

13
 (4)
-FUTURES·AND·OPTIONS·CONTRACTS·LISTED-
MEFF lists both fixed income and equity futures and options contracts. The exchange also provides direct access to
members to trade contracts on markets, namely, the fixed income and equity futures exchanges in the Paris Bourse
Group and the Eurex Exchange in Germany.
FIXED INCOME
Following the introduction of the Euro in financial markets there has been a significant shift in trading activity. MEFF
provides direct access to following contracts:
> Euribor------- MATIF ------ short term interest rate contract fixed by European banks
> Bobl ----------- EUREX ----- short-medium term contract on German Govt. Debt
> Schatz ------- EUREX ----- medium term contract on German Govt. Debt
> Bono 10 ----- MEFF ------ long term interest rate contract on Spanish Govt. Debt
> Notionnel --- MATIF ------ long term interest rate contract on French Govt. Debt
> Bund --------- EUREX ----- long term interest rate contract on German Govt. Debt
By offering access to three distinct long term futures contracts, Members and clients are able to take advantage of
arbitrage opportunities that occur in the European interest rate market.
Furthermore, it provides the optimum instrument for hedging operations, avoiding any element of country risk.
EQUITY CONTRACTS
> IBEX 35 --------------------------- MEFF -------------- futures and options on IBEX 35 Spanish stock index
> Stock Futures------------------ MEFF -------------- stock futures on 5 companies in IBEX 35 index
> Stock Options ------------------ MEFF -------------- stock options on 18 companies in IBEX 35 index
> S&P Europe 350 -------------- MEFF/CME ------- futures and options on S&P European stock index
> S&P Europe 350 sectors -- MEFF/CME ------- futures and options on S&P European stock index
> DAX 30 --------------------------- EUREX ------------- futures on DAX 30 German stock index
> CAC 40 --------------------------- MATIF -------------- futures contract on leading French stock index
> DJ STOXX ------------------------- MATIF -------------- futures contracts on DJ STOXX and DJ EuroSTOXX
OPTION PREMIUMS
Settlement of option premiums is a joint liability of Member and Customer.
Therefore, the Member is responsible for both: if the trade is for its own account or for a Customer.
If the buyer of an option does not pay the premium, MEFF will close the whole buyer's account.
MEFF will obviously pay the seller of the option the agreed premium. The risk for MEFF is limited to the difference
between premiums.
Any Member who fails to meet its obligations as described above will be suspended, and such circumstance will be
reported to the CNMV. Legal proceedings will be initiated for any outstanding obligation in the case where execution
of guarantees might be insufficient.

14
(5)
-INFORMATION·SERVICES-
The main Spanish newspapers, both the financial and non-financial press, publish information about the market daily.
The Exchanges distribute information related to the Market in real-time to all Members through t wo different systems:
> MEFF TRADING TERMINALS provide information related to the contracts traded in this system.
> MEFFPOWER distributes information related to all contracts traded at the Exchange and the underlying
assets.
Information on MEFF contracts is also available through the services of most financial information vendors.
MEFF also provides price information in real time on its web site http://www.meff.com and closing prices can be
downloaded at the close of trading each day.
INTERNET: www.meff.com
MEFF first introduced its information service on the INTERNET in late 1995. It rapidly became a practical means of
communicating more information to Exchange members and clients. In March 2000, a new web site was launched
reflecting the new organisational structure, combining information on both the Fixed Income and Equity contracts.
Since June 2001 the web site provides price information in real time.
The contents are organised under four main headings:
1) INFORMATION provides a complete overview of MEFF (types of contracts, technology, members, regulations
and publications)
2) MARKET provides the latest news, all information on the last trading session (settlement, high, low, volume,
open interest, ...), and historical data. It is also possible to consult the contract prices with a delay of 10
minutes, and consult any trading session on MEFF. A database query facility is available, together with a
range of statistical and price files that can be downloaded.
3) TOOLS is a section designed to assist clients with margin calculations and option pricing. It includes an
options calculator, margin calculator and information on MEFF Pro, a program designed by the market to
assist traders in their trading activity.
4) MEFF INSTITUTE/TRAINING includes all relevant information regarding the educational courses organised by
MEFF, and other publications allowing you to become familiar with financial derivatives.
MEFF's web site is under constant development, enabling quick and easy access to the daily information provided by
the Exchange.

15
 (6)
-MARKET·SUPPORT·SERVICES-
MEFF offers two optional services designed to support traders in the market and simplify procedures in the back-
office. These services are:
> TST (MEFF Trading Support Terminal)
> MIBOS (MEFF Integrated Back Office Service)

MEFF TRADING SUPPORT TERMINAL (TST)

The MEFF trading terminal can be complemented by the MEFF Trading Support Terminal (TST). This is a useful and
powerful analytical tool designed and developed in-house to help traders.
TST contains a series of spreadsheets connected to the central computers in order to allow real- time theoretical price
calculations for Bonds, Futures, Options, FRA's, etc... It also provides for charting facilities and access to historical
data.
TST offers the following services:
> Trading monitor > Options calculator
> Bond calculator > Options prices
> Theoretical price of futures and forward > Management indicators
> Forward bonds > Risk control
> Roll-over monitor > Real-time margining matrix calculation simulator
> MIBOR futures and FRA’s > Statistical programme
> Valuation of fixed income portfolios > Historical data
> Hedging and duration adjustments > Technical analysis
The complete TST package includes:
> Terminal installation
> Maintenance of hardware and software
> Software updates
> Market assistance
> User training

MIBOS: MEFF INTEGRATED BACK OFFICE SYSTEM

The objective of MIBOS is to meet MEFF members’ needs in the back-office area.
The Exchange's back office facility was designed with the following in mind:
1) User-friendly environment.
2) Up-to-date technology.
3) Easy and quick incorporation of new features.
4) Superior presentation of data.

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MIBOS offers the following technical features:
1) Access to MIBOS is available via Windows, thereby ensuring that the programme is both user-friendly and
easy to learn.
2) The use of Microsoft’s Windows-NT operating system. Provides PC users with a series of features previously
available only on mainframes: multi-area, multi-user and multi- process.
3) The SQL-Server relational database is backed up by Microsoft Corporation, which makes it easy to incorporate
new information and/or to change existing files.
4) Postscript printing language designed to ensure a high standard of presentation.
5) Client-server architecture. MIBOS makes its features available to users via a configuration made-up of two PC
terminals connected to an Ethernet network. There, one terminal is responsible for data management (the
server) while the other is dedicated to the presentation of this data (the client).
OPERATING FEATURES OF MIBOS
The Main functional features of Mibos (Meff Integrated Back Office System) are:
> Real time back-office management - An integrated accountancy structure that allows easy and efficient
management of account information (both client accounts and other member accounts) through the use of
powerful reporting tools.
> Provides detailed commissions information and facilitates their payment (with clients and other Members).
> Provide high quality printed information in order to offer clients a tailored service in a language of their
choice, based on carefully designed formats, and which provides the relevant documents that reflect the
management of their portfolios.
The following list sets out the main operating functions in MIBOS:
1) MASTERS: This facility allows users to update information that has been introduced into the system via
market feeds. It also allows the creation of instructions for handling the account holders in the Clearing
Houses along with generating and maintaining new information that the member might need for the proper
management of his back-office.
2) MANAGEMENT: This allows the management and organisation of the accounting information and the transfer
of information between different systems.
3) CONSULTATIONS: This feature allows users to view, on screen, a variety of consultations related to the basic
accounting system. As a result, it enables a quick follow-up and control of the obligations of each account
to the member and, also, in respect of him to other accounts.
4) REPORTS: This feature enables users to obtain printed copies of all the information contained in MIBOS and
has been designed with the purpose of meeting the needs of: clients, management of the entity and internal
administration.
5) SYSTEM: This system features all the required functions for the proper functioning of MIBOS.

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 (7)
-LEGAL·AND·SUPERVISORY·FRAMEWORK-
Royal Decree number 1814/1991 defines and directly regulates the futures and options exchanges in Spain. This
decree has its origin in articles 31 (part c) and 59 of the Spanish Securities Markets Law.
The Spanish Securities and Exchange Commission or CNMV (“Comisión Nacional del Mercado de Valores”) is the
government body responsible for regulating secondary markets. MEFF is an integrated Exchange and Clearing House,
self regulated via its rules and regulations under the supervision of the CNMV, and shall immediately inform the CNMV
of any matters or actions which may imply the violation of the regulations.
The following contractual relationships exist on the Market:
> The relationship between the Client and MEFF is principal to principal. The Official Customer agreement
establishes that “the Client appoints the Member as Commission agent”.
> Furthermore, “the Client is aware that (the Clearing House) is the counterparty on a transaction”.
> The relationship between the Member when trading for Clients and the Exchange is that of an agency nature,
although Client and Member are jointly liable for Client positions.
> The relationship between the Member when trading proprietary and the Exchange is principal to principal.
EXCHANGE SUPERVISORY AUTHORITIES
MEFF has a Market Surveillance Committee charged with supervising the Exchange and ensuring it operates correctly.
The trading supervisor, whose job is to ensure smooth trading, reports any incidents in the market to this committee.
The supervisory structure is as follows:
> Ministry of Economy and Finance
> Spanish Securities and Exchange Commission (CNMV)
> Surveillance Committee
> Trading Supervisor

Comisión Nacional del Mercado de Valores (CNMV).

Paseo de la Castellana, 19. 28046 MADRID. Tel. +34 91 585 15 00
Banco de España.
c/ Alcalá, 50. 28014 MADRID. Tel.+34 91 338 50 00

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-APPENDIX:·
DELIVERY·PROCEDURES·BOND·FUTURES·CONTRACTS-
The delivery procedure is set out in the relevant circular and follows this general structure:

> The delivery price is fixed by the Exchange, as stated in the General Conditions of the contract.
> Each account holder will either have a net long or short position.
> Before 18:15h Members must notify the Clearing House of those bonds that will be delivered from the list of
deliverable bonds published by the Exchange. If MEFF does not receive any notification, it is empowered to
determine a default bond for delivery, which is generally the most delivered security from the basket.
> On receiving the Delivery Notice, the Clearing House allocates the delivered securities to the long side,
following the FIFO (First In First Out) criteria. Thus the oldest short positions are matched with the oldest long
positions.

> MEFF notifies the outcome of delivery procedure to Clearing Member no later than 10:00 a.m. on the first
business day following the delivery notice date.
> The Reception Notice advises the Clearing Member of details of the bonds to be received by each client
(holder’s account). Moreover the Clearing House confirms the deliveries to the short side.

> The settlement day is the third Wednesday of the contract month. If it coincides with a holiday the expiration
date will be the following business day.
> The invoicing amount that the long side pays for the bond delivered is calculated as follows:
----------------------------------------------------------------------------
INVOICE AMOUNT = settlement price x 100.000 x conversion factor
+ accrued interest.
----------------------------------------------------------------------------

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 > Deliveries and payments are made by the Clearing Members to their clients or to their non- Clearing Members
before 12:00 p.m. (at noon) following the regulations of the book-entry office of the Bank of Spain. Should a
Clearing Member not have direct access to the Government book-entry market it must designate an agent
bank with such access to carry out these operations.
LIST OF DELIVERABLE BONDS (DELIVERABLE BASKET)
For the 10-year Government Bond future, the list of deliverable securities includes all Government securities originally
issued for ten years up until the last Spanish Treasury auction corresponding to the month in which the futures
contract becomes the front month contract. All those bonds that were issued previously must have a remaining life
of not less than 7.5 years on the delivery date.
In addition, Spanish Treasury Bonds (“Obligaciones”) with an original maturity of more than 10 years are included,
provided that:
> the remaining maturity of the bond is between 7.5 and 10.5 years at expiration of the futures contract.
> the size of the issue still outstanding is at least 1,800 million.
> the bond’s monthly trading volume is not below 600 million during the four months preceding its inclusion
in the list of deliverable issues.
For 10-year future the list of deliverable securities for the front month contract may be changed when there are no
open positions for that contract month or when exceptional circumstances prevail.
The conversion factor for each bond shall be calculated as follows:

where:
f = conversion factor;
r = interest rate (i.e. 0.04 for the 10-year Bono);
n = number of coupons due;
ts = number of days between the delivery date and the due date of the coupons expressed in years and fraction
thereof, in accordance with the convention applied to the deliverable securities;
Fs =cash flows; s = 1, 2, ..., n; (Fn = coupon plus redemption)
N = face value of the deliverable security;
CC = accrued interest of the deliverable security.
Face value Spanish Government Debt = 1.000

ACTUAL/ACTUAL CONVENTION
The convention for the computational base of days used to calculate the Government Debt yields is Actual/Actual.

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 Fu
Spanish tures
and·Options
Exchange
Torre Picasso, Planta 26
28020 Madrid (Spain)
Tel. +34 91 585 08 00
Fax +34 91 571 95 42

w.meff.com
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