What is the MTA International?

The market segment dedicated to shares of the Euro Zone

July 2006 saw the launch by Borsa Italiana SpA of a new trading segment, the MTA International (MTAi for short), which allows trading on the MTA of some of the most liquid shares of the Euro zone, whilst benefiting from the procedures and cost structure of the Italian market.

The service in question is basically aimed at private customers, although professional investors may also find interesting trading opportunities in this segment.

Italian traders on the domestic market have the possibility to directly access the order book and the high liquidity of the shares traded, and above all with limited fees.  Operating on the international markets is often more costly in terms of commission charged by the intermediaries and not all banks and stock brokerage firms offer buying and selling services on the international markets.

Ordinary shares pertaining to 23 major European (Eurozone) companies are currently traded on the MTAi.  Shares are quoted in the European currency and are the same as those traded on the issuer’s main market: it is therefore possible to buy a share on the foreign market and sell it on the MTAi and vice versa.

Admission to trading on the MTA International may be requested by the issuing company, or the request may be put forward by an intermediary or by Borsa Italiana itself.

The principal requirement is that the shares included in this segment must already have been listed in another regulated European market for at least 18 months: this means that there is no need to draw up a new listing prospectus (since one has already been submitted to the respective Stock Exchange on the primary market) but just a “summary document” which is published on the Borsa Italiana website.

Settlement of the contracts is carried out by the Borsa Italiana Group company Monte Titoli, working in coordination with the local settlement and custody institutions, while the Cassa di Compensazione e Garanzia, another Borsa Italiana Group company, handles the contract clearing and guarantee.  It should be emphasised that settlement of the securities takes place based on the same timing as the primary market: this means that there may be differences with respect to what is normally the case on the Italian market.  More specifically, while the standard Borsa Italiana settlement is T+3 (namely settlement three days after the transaction), on the German market – and therefore for securities relating to this market – settlement is T+2 (settlement after two days).

The trading procedures for instruments traded on the MTA International are the same as those provided for the blue-chip segment, namely the auction and continuous trading procedures.

Trading hours are: from 08.00 a.m. to 09.05 a.m. opening auction; from 09.05 a.m. to 5.25 p.m. continuous trading; from 5.25 p.m. to 5.35 p.m. closing auction. The only difference is that for the time being there is no after hours trading.

On the MTAi, there are a maximum of two specialists for each stock, to guarantee the liquidity of the instruments.  It should be noted that the spread at which the specialists operate is spontaneously much lower that the regulatory limit and the prices are normally in line with those recorded on the primary markets.

The spread compression, the alignment of prices, the absence of technical and regulatory restrictions, the speed of execution and the low transaction costs make trading on MTAi particularly attractive and may even give rise to arbitrage operations, in cases where the difference in value between the prices recorded on the MTAi and those on the primary markets outweigh the costs of trading.