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I. GENERAL PROVISIONS

NATIONAL SECURITIES MARKET COMMISSION

210 Resolution of 21 December 2010, of the National Securities Market Commission, publishing the Regulation of the Official Secondary Market for Futures and Options (MEFF).

In accordance with the provisions of the single transitional provision of Royal Decree 1282/2010, of 15 October, regulating the official secondary markets for futures, options, and other financial derivative instruments, the publication of the new MEFF Regulation is proceeded with. This Regulation is governed by MEFF, Sociedad Rectora de Productos Derivados, S.A.U., which appears as an annex to this resolution. Its approval, along with its developing regulations, was agreed upon by the Council of the National Securities Market Commission in its session held on 21 December 2010, to enter into force on 24 January 2011.

Madrid, 21 December 2010.–The President of the National Securities Market Commission, P.S. (Law 24/1988, of 28 July), the Vice President of the National Securities Market Commission, Fernando Restoy Lozano.

ANNEX

MEFF Regulation

INDEX

Chapter I. General Provisions.
Article 1. Scope of application.
Article 2. Functions of MEFF.

Chapter II. Members.
Article 3. Members.
Article 4. Classes of Members.
Article 5. Rights and obligations.
Article 6. Minimum content of contracts between MEFF and Members and between Members themselves.

Chapter III. Clients.
Article 7. Conditions for access to Client status.
Article 8. Rights and obligations.
Article 9. Minimum content of contracts between Members and Clients.

Chapter IV. Contracts.
Article 10. General rules.

Chapter V. Trading.
Article 11. Contracts admitted to trading.
Article 12. General trading criteria.
Article 13. Dissemination of information on trading.
Article 14. Suspension of Contract trading.

Chapter VI. Register.
Article 15. Suppression of Contract trading.
Article 16. Accounting Register.
Article 17. Admittance routes to the Accounting Register.
Article 18. General rules of the Accounting Register.
Article 19. Registering Members.

Chapter VII. Central Counterparty.
Article 20. Object of counterparty.
Article 21. Settlements.
Article 22. Guarantees required by MEFF.
Article 23. Guarantees required by Registering Members.
Article 24. General provisions applicable to Guarantees required by MEFF and by Registering Members.
Article 25. Guarantee provided by MEFF.
Article 26. Limits applicable to Clearing Members.

Chapter VIII. Default.
Article 27. Causes of Default.
Article 28. Measures to be adopted in case of Default.
Article 29. Temporary suspension of Member or Client.
Article 30. Declaration of Default of Member or Client.
Article 31. Measures to be adopted in case of declaration of Default of Member or Client.
Article 32. Closing of Positions and transfer of Accounts in case of declaration of Default.
Article 33. Transitional regime for Trading Members of a Defaulting General Clearing Member.
Article 34. Settlement of costs, expenses, and balances derived from Default.
Article 35. Loss of Member or Client status in case of declaration of Default.

Chapter IX. Supervision and claims.
Article 36. Supervision and Surveillance Commission.
Article 37. Market Supervision.
Article 38. Resolution of incidents with Members.
Article 39. Claims of Members against MEFF.
Article 40. Claims of Clients against Members and MEFF.

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Chapter I
General Provisions

Article 1. Scope of application.

This Regulation, under the auspices of Article 59 of Law 24/1988, of 28 July, on the Securities Market, and Royal Decree 1282/2010, of 15 October, regulating secondary markets for futures, options, and other financial derivative instruments, regulates the composition, functioning, operations, and rules of conduct of the Official Secondary Market for Futures and Options of the financial instruments provided for in paragraphs 2 to 8 of Article 2 of Law 24/1988, of 28 July, on the Securities Market. The General Conditions of the contracts shall develop this Regulation, forming an integral part of it.
The Market is governed and managed by MEFF Sociedad Rectora de Productos Derivados, S.A.U. (MEFF).
This Regulation also incorporates the particularities of the central counterparty activity that MEFF may carry out under the provisions of Article 44 ter of Law 24/1988, of 28 July, on the Securities Market. The Governing Company may, in the development of this activity, establish agreements with other resident and non-resident entities whose functions are analogous or that manage compensation and settlement systems for securities, participate in the shareholding of such entities, or admit them as shareholders. Such agreements will require approval by the National Securities Market Commission.
The complementary regulations of this Regulation, which shall be mandatory for the Market Members, Clients, and generally, users of the services provided by MEFF, shall be established in the Circulars and Instructions that MEFF approves in accordance with the Regulation.
The terms used in this Regulation and in its complementary regulations shall have the meaning attributed to them below, unless a different scope or meaning is expressly established in any of the cases in which they are used:

Underlying Asset: Asset or index that is the subject of a Contract.

Payment Agent: Entity that, having an account open in the payment system established by MEFF, has been designated by a member to carry out cash collections and payments with MEFF.

Competent Authority: Authority or Authorities that have legally assigned powers regarding the authorization and supervision of the conduct of Members, Clients, and MEFF.

Close a Contract: To carry out an Operation of opposite sign to another that has been previously registered.

Close a Position: To close all Contracts of a Position.

Class of Contracts: Futures and Options contracts and other contracts of financial derivative instruments related in paragraphs 2 to 8 of Article 2 of the Securities Market Law, referred to the same Underlying Asset.

Circular: Norm approved by MEFF, of a general nature and mandatory compliance, which develops the Regulation and the General Conditions.

Client: Natural or legal person holding an Account open in the Central Register or in the Detail Register.

General Conditions: Norms that describe the specific characteristics of each Contract, developing this Regulation and forming an integral part of it. The General Conditions may establish specific conditions regarding the activity of Members and Clients concerning the Contract to which they refer.

Contract: Generic term that includes all Futures and Options and other financial derivative instruments subject to this Regulation.

Futures Contract: Forward contract by which the buyer is obliged to buy the Underlying Asset and the seller to sell it at an agreed price (Futures Price) on a future date (Settlement Date). Since the settlement of the Contract may be made by differences, the obligation to buy and sell may be replaced in that case by the obligation to comply with Settlement by Differences.

Options Contract: Contract by which the buyer acquires the right, but not the obligation, to buy (CALL) or sell (PUT) the Underlying Asset at an agreed price (Exercise Price) on a future date (Settlement Date). Such contracts may be exercisable only on the Expiration Date (European Style Option) or at any time before the Expiration Date (American Style Option), or on various dates, as established by the General Conditions of each Contract. Since the settlement of the Contract may be made by differences, the obligation to buy and sell may be replaced in that case by the obligation to comply with Settlement by Differences.

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Account: Accounting record in which Operations related to the holder of the Account, the Positions, and the Guarantees resulting from them are noted. It is also a generic term that includes all Accounts of a Member or a Client, both in the Central Register and in the Detail Register, if applicable.

The Accounts of the Central Register may be of the following classes: Daily Account, Own Account, Individual Client Account, Aggregated Client Account, and Segregated Client Account. The Detail Register Accounts may be of the following classes: Aggregated Account and Segregated Account.

Business Day: That day established as such in the calendar that MEFF will publish before the start of each natural year for each Class of Contract.

Execution of a Buy or Sell Order: Act by which compliance is given to the Buy or Sell Order transmitted by a Member to the Market's trading system.

For a Buy or Sell Order to be executed, there must be another Buy or Sell Order in the opposite direction, referring to the same Series, that coincides in Premium or Price, as appropriate, or improves upon it.

The execution of a Buy or Sell Order gives rise to a Transaction that, once confirmed by MEFF, is noted in the Central Register, giving rise to the obligations arising for the parties.

Exercise: Act by which the buyer of an Option makes use of their right to buy or sell the Underlying Asset, or to obtain the amount resulting from Settlement by Differences.

Exercise Date: Day on which an Option may be exercised. The Exercise Date will be established in the General Conditions of each Contract.

Settlement Date: Day or days on which the settlement of a Contract becomes effective. The Settlement Date will be established in the General Conditions of each Contract.

Expiration Date: Day on which a Contract expires. The Expiration Date will be established in the General Conditions of each Contract.

Future: Futures Contract.

Guarantee: Amount constituted in favor of MEFF or Members, in accordance with the provisions of this Regulation and other applicable regulations to the Market, whose function is to cover the risks of Default of the obligations undertaken by Members and Clients.

Group of Contracts: Those Classes of Contracts considered jointly for the purposes of applicable regulations and Guarantees. The General Conditions of each Contract will establish the Group of Contracts to which each Class of Contract belongs.

Default: Situation in which a Member or Client fails to comply with the obligations stipulated in this Regulation and complementary regulations, incurring in any of the circumstances provided for in Chapter 8 of this Regulation.

Valuation Interval: Maximum and minimum price of the Underlying Asset used for the calculation of Guarantees.

Instruction: Norm approved by MEFF, of a concrete nature and mandatory compliance, which develops or applies the General Conditions and the Circulars.

Settlements: Generic term that includes all Settlements mentioned in Article 21 of this Regulation.

Settlement of Losses and Gains: Periodic cash settlement of the differences between the Contract Price and the Settlement Price, or between the last Settlement Price and the price of the calculation day for Contracts that were already open at the start of the calculation day. After this process, all affected Contracts are considered agreed at the Settlement Price. The General Conditions of the Contracts may establish that the Settlement of Losses and Gains is incorporated into the Position Guarantees.

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The Settlement of Losses and Gains shall be carried out with the periodicity established by the General Conditions. In the absence of express stipulation, the Settlement of Losses and Gains shall be carried out daily.

Settlement of Premiums: Procedure by which buyers of Options pay MEFF the Premiums corresponding to such purchases and sellers receive such Premiums from MEFF.

Settlement by Differences: Procedure by which the fulfillment of the Contract on the Settlement Dates occurs solely through the cash transmission of the difference between the price or prices agreed in the Contract and the Settlement Price.

Delivery Settlement: Procedure by which the fulfillment of the Contract on the Settlement Dates occurs through the delivery of the Underlying Asset by the party that must sell to the party that must buy, in exchange for the Delivery Price.

MEFF: MEFF Sociedad Rectora de Productos Derivados, S.A.U.

Market: Official Secondary Market for Futures and Options in which all or some of the trading, Registering, and central counterparty functions are carried out, in relation to the Contracts subject to this Regulation, as specified in Chapters 5, 6, and 7 of the Regulation.

Member: Generic denomination that includes any type of Member of the Market defined in Chapter 2 of this Regulation: Trading Member, Proprietary Trading Member, Individual Clearing Member, and General Clearing Member.

Registering Member: Trading or Clearing Member, Individual or General, authorized by MEFF to manage a Detail Register.

Defaulting Member/Client: Member or Client that incur in the Default regime collected in Chapter 8 of this Regulation.

Option: Options Contract.

Call Option: Also known as CALL Option. The buyer of this Option has the right, but not the obligation, to buy the Underlying Asset subject to the Contract at the Exercise Price. The seller of the Option has the obligation to sell said Underlying Asset if the buyer exercises their right. Since settlement may be made by differences, in that case no purchase and sale would occur, but only a cash transmission.

Put Option: Also known as PUT Option. The buyer has the right to sell the Underlying Asset subject to the Contract at the Exercise Price. The seller has the obligation to buy said Underlying Asset if the buyer exercises their right. Since settlement may be made by differences, in that case no purchase and sale would occur, but only a cash transmission.

Operation: Generic term that encompasses any trading, registering, and compensation or settlement activity, carried out in accordance with the provisions of this Regulation and its complementary regulations, which determines the production of notes in the Accounts.

Order: Generic term that encompasses Buy or Sell Orders for Contracts and Exercise Orders for Options.

Reaction Period: Time period estimated as necessary for MEFF to Close all Contracts registered in an Account, for the purposes of calculating Guarantees.

Position: The set of live Operations registered in an Account at any moment.

Exercise Price: Price agreed in the Options Contract at which the buyer of an Option may buy (in the case of having acquired a CALL Option) or sell (if they had acquired a PUT Option) the Underlying Asset. The seller of the Option is obliged, respectively, to sell or buy the Underlying Asset, in case that the buyer exercises the right. In the case that the Options Contract admits a Settlement by Differences, the Exercise Price serves to determine the amount to be paid by the seller of the Option.

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Delivery Price: The price paid for the Underlying Asset in Contracts with Delivery Settlement.

Futures Price: Price agreed in a Futures Contract. The agreed price is adjusted according to the Settlement of Losses and Gains process.

Settlement Price: Price on which a Settlement by Differences is calculated, either on the Expiration Date or in advance.

Expiration Settlement Price: Price on which a Settlement by Differences is calculated on the Expiration Date.

Periodic Settlement Price: Price on which the Settlement of Losses and Gains is calculated and the calculation of Guarantees is carried out, with the periodicity determined in the General Conditions of the Contracts.

Daily Settlement Price: Price on which the Settlement of Losses and Gains is calculated and the calculation of Guarantees is carried out, daily.

Premium: Amount that the buyer of an Option pays to the seller thereof.

Register: Act by which MEFF, for the purposes of providing counterparty, notes the data of an Operation in the corresponding Accounts of the Central Register and, where applicable, by which Registering Members simultaneously note the data of the Operation in their Accounts in the Detail Register.

Central Register: Accounting register system, managed by MEFF, of Contracts registered in the Accounts opened by Members in MEFF.

Accounting Register: Term that encompasses the accounting register system formed by the Central Register and the Detail Register.

Detail Register: Accounting register system, managed by each Registering Member, of Contracts registered in the Accounts opened by Clients in said Members.

Regulation: This Regulation, which constitutes the norm of order and discipline of the Securities Market, being mandatory for all participants in the Market.

Series: Within each Class of Contracts, those Options that, being of the same Type, have the same style, the same form of settlement, the same Exercise Price, the same size, and the same Expiration Date, and those Futures that have the same form of settlement, the same size, and the same Expiration Date.

Registration Request: Act by which a Member requests MEFF to Register an Operation.

General Market Supervisor: Person appointed by MEFF who performs the function of supervising the orderly development of the Market's activities, applying the Regulation and other applicable norms.

Market Supervisor: Person who performs the function of supervising the orderly development of the Market's activities, applying the Regulation and other applicable norms, by delegation of the General Market Supervisor.

Types of Options: Call Options (CALL) and Put Options (PUT).

Transaction: Act of matching two Buy or Sell Orders in the Market's trading system.

Transfer: Note by which the Register of an Operation or the entirety or part of a Position is changed from one Account to another.

Article 2. Functions of MEFF.

In its capacity as the Governing Company of the Market, it corresponds to MEFF to organize and manage the trading that takes place in the Market, as well as the central counterparty services it offers.
Regarding the organization and management of trading in the Market, MEFF's functions shall be:

a) Define the specific characteristics of each Contract admitted to trading in the General Conditions of the Contract in question.

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b) Organize, direct, order, manage, and supervise trading, seeking maximum efficiency in its functioning.

c) Take all those decisions that lead to an improvement in the functioning of trading.

d) Disseminate information related to trading.

e) Celebrate, where appropriate, the necessary agreements, which must be approved by the National Securities Market Commission, with central counterparty entities in which Operations are cleared and settled in relation to Contracts that are only subject to trading in MEFF, in which case the counterparty regime of Article 20.1 of this Regulation shall not apply. The General Conditions of these Contracts shall regulate the terms and conditions that, where applicable, would be applicable to the noting, clearing, settlement, and counterparty of these Operations related to Contracts that are only subject to trading in MEFF.

MEFF's functions regarding the organization and management of its central counterparty services comprise:

a) Define the specific characteristics of each Contract admitted for counterparty purposes in the General Conditions of the Contract in question.

b) Organize, direct, order, manage, and supervise the clearing and settlement of Contracts, seeking maximum efficiency in the development of the counterparty function.

c) Organize, direct, order, and manage the keeping of the Central Register.

d) Order and supervise, under the terms established in this Regulation, the keeping of the Detail Register by Registering Members.

e) Provide counterparty to the corresponding Contracts. In the development of this function, MEFF shall be the buyer for the selling party and the seller for the buying party.

f) Celebrate, where appropriate, the necessary agreements, which must be submitted for approval by the National Securities Market Commission, with markets or trading systems from which Operations derive in relation to Contracts that are subject to Registration Request in MEFF and for which MEFF performs certain central counterparty functions, as well as with other entities that manage compensation and settlement systems in which such contracts are cleared or settled. In these cases, the trading regime provided for in Chapter 5 of this Regulation shall not apply. The General Conditions of these Contracts shall regulate the terms and conditions that, where applicable, would be applicable to the Registering, clearing, settlement, and counterparty of these Operations related to Contracts that are only subject to Registering for counterparty purposes in MEFF.

g) Calculate, require, and, where appropriate, custodian the amount of Guarantees in accordance with the provisions of the Regulation, the General Conditions, the Circulars, and the Instructions.

In exercising the functions corresponding to it regarding the organization and management, both of trading and central counterparty, MEFF may approve Circulars and Instructions, which shall be mandatory for the Market Members, Clients, and generally, users of the services provided by MEFF.

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Resolution of 21 December 2010 of the National Securities Market Commission Publishing the Regulation of the Official Secondary Market for Futures and Options (MEFF)