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Madrid Stock Exchange Computer Assisted Trading System MSE CATS

Madrid Stock Exchange Computer Assisted Trading System MSE CATS

Madrid Stock Exchange Computer Assisted Trading System (MSE CATS)

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What Is the Madrid Stock Exchange Computer Assisted Trading System (MSE CATS)?

The Madrid Stock Exchange Computer Assisted Trading System (MSE CATS) is an electronic trading platform used by the Madrid Stock Exchange. Adopted in 1989, it was the world’s first fully electronic trading system, allowing Spanish markets to operate continuously. MSE CATS was phased out in 1995 and replaced by a more modern system, the Sistema de Interconexión Bursátil Español.

Key Takeaways

– The Madrid Stock Exchange Computer Assisted Trading System operated in Madrid from 1989 to 1995.

– It was based on the CATS system developed by the Toronto Stock Exchange.

– MSE CATS increased market efficiency and transparency.

– Traders had access to order fulfillment, price quotation, trade confirmations, and record-keeping.

– The system was replaced by the Sistema de Interconexión Bursátil Español.

Understanding the Madrid Stock Exchange Computer Assisted Trading System (MSE CATS)

The Madrid Stock Exchange, also known as Bolsa de Madrid, was established in 1809. In 1831, it became an official exchange, initially trading securities in banks, railways, iron, and steel companies. The exchange played a significant role in shaping the country’s economy and achieved milestones like implementing a new settlement system in 1974 and introducing a fully electronic system in 1989.

The Madrid Stock Exchange Computer Assisted Trading System (MES CATS) was developed by the Toronto Stock Exchange. Launched in 1977, it was the first fully automated exchange system and adopted by major stock exchanges, including Madrid, throughout the 1980s.

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The Spanish market implemented CATS in 1989, leading to significant restructuring. The system increased efficiency and transparency by allowing participants to view order details, including size, price, and broker identity. It facilitated rapid, transparent, and efficient trade executions.

In 1995, the system was replaced by the Sistema de Interconexión Bursátil Español, developed by the Madrid Stock Exchange.

Special Considerations

CATS greatly improved efficiency compared to the traditional open outcry system. It provided superior speed, accuracy, trade confirmations, and record-keeping functionalities. The transaction records stored in CATS became a valuable source of market data.

History of the Madrid Stock Exchange Computer Assisted Trading System (MSE CATS)

MSE CATS initially facilitated trading in seven large-cap stocks, which quickly expanded to 51 stocks by the end of 1989. It revolutionized the price-setting process in a centralized, order-driven stock market, similar to its impact in Toronto.

By 1995, the MSE decided to invest further in automation technology, replacing CATS with the Sistema de Interconexión Bursátil Español. This new system successfully connected four Spanish stock exchanges—Madrid, Valencia, Bilbao, and Barcelona—forming a unified, continuous market. It provided order fulfillment, price information, and real-time market data.

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