DEFINITION of Madrid Stock Exchange (MAD) .MA

The Madrid Stock Exchange is the largest securities market in Spain, also known as the Bolsa de Madrid. In 1809, Jose I Bonaparte attempted to establish Spain's first stock exchange in Madrid, but it failed because Madrid was not a major business center at the time. It wasn't until 1831 when the law creating the Madrid Stock Exchange was enacted, with securities of banks, railways and iron and steel companies being the first traded.

BREAKING DOWN Madrid Stock Exchange (MAD) .MA

The Exchange remained open during WWI but closed during the Spanish Civil War from 1936 through early 1940. The Spanish Stock Exchange was transformed in 1988 with Spain's incorporation into the European Monetary System. In 1993, the Madrid Stock Exchange switched to all-electronic trading for fixed-income securities. In 1999 Spain's securities markets began trading in euros. Its regulatory body is the Spanish Stock Exchange Commission.

Madrid Exchange Operations

The exchange notes that over the past two decades, it has established a "new trading environment is characterized by it being opened up to increased competition, a backdrop in which regulated markets work alongside newly created entities, of which the Multilateral Trading Facilities (MTF´s) stands out." The exchange defines MTFs as "those systems which, operated by an investment firm or a managing entity of an official secondary market, have as their only social goal the managing of the system, that gathers, according to its non-discretionary rules, the various buy and sell interests on financial instruments of various third parties."

The Spanish equity market operates based on the SIBE electronic trading platform to connect the four Spanish stock exchanges, which also include Barcelona Stock Exchange (Bolsa de Barcelona), the Bilbao Stock Exchange (Bolsa de Bilbao), and the Valencia Stock Exchange (Bolsa de Valencia). Warrants, certificates and Exchange Traded Funds (ETFs) are traded, as well as futures and options, including the IBEX35 Index (which includes the 35 most-liquid shares traded) and various European stock indexes.

The exchange handles fixed income transactions to provide financing for the private sector, public and local bodies in Spain. "This market lists and trades a wide range of assets and products that meet the needs of issuers and investors in corporate debt, giving issuers the fullest possibilities as regards terms and fundraising strategies, and asset management in the case of investors," according to the exchange. According to the World Federation of Exchanges (WFE), the exchange ranks 8th in the world regarding investment flows with 40 billion euros to listed companies in 2017.