Juan Flames (CEO of BME): "I want to make the stock market fashionable again, and that requires education and tax incentives."

For several five-year periods, a rumor circulated on the Madrid stock market that the long-time president of the Spanish Stock Exchange, Antonio Zoido, had been keeping a locked-up offer from Deutsche Börse to acquire BME in his desk drawer, but it never materialized. But at the end of 2019, SIX, the Swiss stock market operator, arrived with a takeover bid for 100% of the company. In September, it will be five years since the closing of the transaction, and during this time, Bolsas y Mercados Españoles (BME) has not lost its essence , although it is now part of the third-largest stock market group in Europe, behind EuroNext and FTSE. This shift toward a new cycle saw the appointment of Juan Flames as BME's new CEO. A seasoned profile in major international investment banking, with 25 years under his belt leading teams in Madrid and, above all, in London, heading up capital markets at institutions such as Goldman Sachs, first, and then Barclays.

Question: It's been six months since you joined BME. What has the change been like?

Answer: I'm delighted. My entire career has been in investment banking; I've been there for more than 25 years, always working in capital markets, where I've dealt with everything: debt, equities, cash, derivatives, structured finance... Which means that, as a capital markets user, I have experience, and this is good because you can provide the perspective of the other side, the client. As an infrastructure manager, the work is fascinating and has a very distinct social function. You're doing your part to help strengthen this country's capital markets, so that companies can finance themselves, so that individuals can invest and generate wealth, and, in that sense, the job is very nice.

Q. Unlike the US, where investing in or listing on the stock market is much more widespread, in Europe we are short on companies turning to the markets for financing. Is changing this model a feasible challenge?

A. Yes, the time is very opportune. Not just Spain anymore. Europe faces very significant challenges: financing needs, energy transition, defense, sustainability of the pension framework, and the solution necessarily involves attracting private savings in the capital markets. All the reports say so, including the BME White Paper we published in early 2024 with 56 measures to strengthen capital markets, the Draghi report, the OECD report, the Letta report... The time is ripe to make changes that strengthen capital markets. More than a challenge, I see it as a tremendous opportunity.

Q. It seems that the European Union is this time looking for real ways to boost the stock markets, which have lost a lot of ground to the US. The new legislation, the Listing Act 2026, will come into force next year, but what exactly will it mean?

A. I'll start with what we do. The Ministry of Economy is part of the Competitiveness Laboratory, formed by certain countries that want to strengthen the capital markets. Initiatives are being promoted to boost both the demand and supply of capital. Regarding the latter, at BME we've done several things, starting with the pre-market environment, which is companies that want to do the work prior to going public (a laboratory for preparation), where we've incorporated 11 companies so far this year. In our growth markets, BME Growth and Scaleup, we took 23 companies public last year and another 5 this year. Three companies were listed on the main market in 2024 in Spain: Puig, one of the largest IPOs in Europe, and Cox [formerly Abengoa] and Inmocemento. This year, Hotelbeds was listed, which is the largest debut in Europe in the first quarter of 2025. And what was announced last week, the BME Easy Access initiative, which will change the way companies go public. But we're doing even more. We're participating in the EsTech Forum, where many of the future unicorns [startups valued at more than €1 billion] emerging from technology firms meet; and just this week, the Medcap Forum was held, where we brought together 150 investors (a quarter of them international) with more than 100 companies, and organized more than 1,000 meetings. We're doing things on our side to facilitate the capital offering.

Q. And how many of those "unicorns" will choose to go public?

A. Our job is to facilitate the offering and help companies that were considering going private decide to go public. That's what we're working on. Going public, apart from the financial rigor it gives you, the visibility, and putting you in the top league, allows you to have independence and control over management.

Q. Do you estimate a specific number of "unicorns" that will go public in the coming years?

A. I would love for them all to go public on the Spanish stock exchange. I don't have a number. Many of these companies are in very early stages. It's predicting something that isn't easy to do.

Q. The truth is that many of the "unicorns" have chosen to make their debut on Wall Street in recent years...

A. We believe in the freedom of companies to do what they see fit, wherever they see fit. Our job is to work on the demand side so they don't have to go anywhere else to list, they can raise capital here, maintain employment here, etc.

Q. Last week, you celebrated the launch of "BME Easy Access," which will allow companies to begin trading with a 10% free float—compared to the current minimum of 25%—and, above all, will give them a year and a half to choose the window of opportunity that best suits them. With this, are you seeking to get ahead of other European countries in facilitating IPOs?

A. Spain is going to be a pioneer in this. It's been a months-long process, working jointly with the CNMV [National Securities Market Commission], and it basically consists of making the IPO process more flexible and easier, which hasn't changed in 40 years. Now, markets are much more volatile and depend more on macroeconomic or exogenous circumstances for the company. It's about separating the preparatory work for the project from the moment of going to market to raise capital. With the new EU Listing Act [European legislation that comes into force in 2026], the minimum required dissemination [ free float ] has been reduced from 25% to 10%. BME Easy Access allows you to do all the work, to be officially listed, but you choose a time within an 18-month window to achieve that minimum required dissemination of 10%. It's something new in Europe because it hasn't been done before. We know that other regulators are wondering if it makes sense and why they didn't think of it before. We must put capital markets at the epicenter of the Spanish economy because we have financing needs, and the solution lies there.

Q. Do you think those windows of opportunity are closing much faster than before?

A: Yes, the market is more volatile than it used to be. Volatility isn't necessarily bad; it's inherent to the market. Our job is to ensure that markets are functioning in all volatile scenarios, as was the case in April with Trump's tariff announcement. But there's no doubt that the windows that previously existed for accessing markets are now smaller, shorter in duration, and, above all, it's more difficult to plan four months in advance (which is what happened with previous IPO processes) if there will be a market in the week or two in which the price is set. This initiative completely separates it; that's the great advantage.

Q. Did the windows of opportunity look different from the other side?

A. No, they've always been like that. One of the reasons there have been fewer IPOs is that the process was more rigid. According to the CNMV, 50% of companies that have attempted to go public in the last five years have failed.

Q. How many would you say are waiting?

A. The Ibex has surpassed the 14,000-point level, with a fantastic dividend yield of over 4%, and it seems the uncertainties generated by the tariffs haven't been enough to overcome this. Last year was already good; we'd like this year to be even better. There's a good list of companies, and after what happened in April, we hope they resume their plans to go public, and that some of them will use BME Easy Access to do so.

Q. Have any of those big companies already contacted you about this?

A. There are contacts with some companies. We hope the BME Easy Access segment will be well received. The only limitation is that during the initial 18-month period, the minimum sales amount is €100,000, and it excludes retail investors.

Q. Since the Aena merger, which took place a decade ago, the retailer hasn't participated in stock market debuts to avoid crises like the one with Bankia. Will it return at some point?

A. One of BME's priorities, and my own, is to bring retail investors back to the Spanish stock market. We need to make the stock market fashionable again, and that can be achieved by promoting financial education and also through tax incentives, such as the Pan-European Investment Account, which, we know, the Spanish government is working on together with other European governments. The idea is for this account to be similar to the Swedish ISK account. Sweden is a country with 7.5 million adults and has 4 million people invested in the equity market. In the last ten years, Sweden has had 500 companies listed on the stock market, and it has more than 1,000 listed companies, and it's basically thanks to this Swedish account. In the privatization process that took place in Spain in the 1990s, 38% of the capital was financed by retailers. By the end of 2023, only 16% of the capital is in the hands of retail investors.

Q. And what would these tax incentives consist of?

A. The Swedish account is taxed as if it were a fixed-income instrument. It's a fixed rate on outstanding balances. Investments in variable income within this account are exempt from capital gains tax.

Q. Over the last decade, trading on BME has dropped to a third of what it was in 2015, although volatility is clearly in their favor, and this year the trend has reversed, with a 12% increase through April.

A. The trading market already grew in 2024, and that increase will continue this year. We want more investors on the exchanges. Increasing market share is something that concerns me; it doesn't worry me. We're finalizing further fee changes to be more aggressive and better serve our clients, while improving volumes.

Q. Until now, many companies opted for private equity because public equity investors were driving down valuations, with very large write-downs. Do you think 'Easy Access' will prevent this from happening?

A. It certainly reduces the risk of executing an IPO. The process is much more precise. For the private equity world, BME Easy Access is also a good solution. They have many assets on their books with an average life of between 5 and 10 years, and private equity managers also want a viable public market because it allows them to take companies that have already passed the maturity stage off their balance sheets, take them public, recycle capital, raise new money, and invest in other companies. BME Easy Access has been very well received by the company, the banking sector, and the private equity world.

Q. Are there any existing operations that could be resolved in this way?

A. There certainly have been some [in relation to Hotelbeds]. It's going to be a very good alternative, but I can't give any figures.

Q. This year marks five years since SIX's takeover bid for BME was made effective. Is the bridge to listing in Switzerland still open?

A. Companies choose where they want to list. They tend to do so where their majority business mix is. We acquired Aquis [Europe's seventh largest market, in November 2024], although the transaction has not yet been closed. Looking ahead, we will be the only market infrastructure with a presence in the UK through Aquis, in Spain with BME, and in Switzerland with SIX.

Q. In 2024, SIX launched a series of "crypto indices" in Switzerland. Could they come to Spain?

A. The only thing I can tell you is that we don't operate like SIX or BME, but as a group. We're divided into business units. We have a very powerful market, like BME Growth, or a fixed-income market, like MARF, which we want to export. And, specifically, in blockchain, we have OpenBrick, which uses DLT technology for the real estate market. It's something very innovative (it's pending approval by the CNMV).

Q. With this return of money flows to Europe, will this help the stock market flourish?

A. Clearly, and within Europe, Spain in particular. The economy is doing well; it grew by 3.4% last year, and this year it's expected to grow above the European average.

Q. Is there a specific negotiation objective to achieve?

A. I don't think a specific figure has been set for how much capital markets financing needs to be provided. Draghi [in his report] talks about €800 billion in annual needs for defense, energy transition, and digitalization; that's many billions of euros. How much of this will be done through capital markets isn't fixed, but a significant portion must necessarily come from there.

Q. European stock markets have also been losing their influence on their own economies. Is it possible to return to a 100% GDP ratio? Right now, it's around 75%.

A. The measures of the pan-European investment account are aimed at this. There are 10 trillion euros in deposits in the Eurozone alone. If part of this money were channeled into the stock market, the GDP-to-capitalization ratio would skyrocket.

Q. To what extent is the Spanish stock market's "mix," with two-thirds divided between electricity companies and banks, a concern?

A. It's a reflection of the country's ecosystem. I'd love to have many more unicorns—that's what we're working on—and to incorporate many more companies into the stock market. Business financing initiatives are geared toward this goal, so there's greater representation across all sectors.