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Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

Derivatives: Struggling Into the New Era – Outlook 2013/14

The past few years have been challenging for the global economy but it seems as though the derivatives industry sustained more than its share of insults and injuries over the past year or so. Still reeling from the trauma of MF Global in October of 2011, exchange-traded volume went into its first nosedive in decades.

Urgent regulatory requirements added intense cost and time pressures to company staffs that were already stretched. A non-clearing FCM, Peregrine Financial, collapsed in scandal. OTC derivatives struggled with complex regulatory mandates and weak volume.

Perhaps the only positive for the year was that mergers and acquisitions at both the macro and micro level imply that innovation and creativity are still powerful industry drivers. That in turn suggests that the creative dynamism that has characterized the derivatives industry for so many years still has some innings to go.

Read the detailed report about Derivatives market outlook, challenges and issue of big deals, exchange mergers and new start ups, customer protection, Regulatory,Extraterritorial and Tax problems  and more. 

Source: WEF 25.04.2013 by Nicolas Ronalds

Filed under: Asia, Brazil, Exchanges, Risk Management, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Brazil: BM&FBOVESPA News August 2011 Nr 29

BM&FBOVESPA International Financial and Capital Markets Conference features Robert Skidelsky and Michael Pettis

The biennial meeting held as of Thursday (August 25) in the town of Campos do Jordão in the state of São Paulo will host debates on current economic and global financial market issues, including challenges for the derivatives and capital markets, the future of financial intermediation, and algorithmic trading strategies. BM&FBOVESPA Chief Executive Officer Edemir Pinto and Chairman of the Board of Directors Arminio Fraga will receive, for lectures and debates, some of the world’s most influential experts about the matters on the agenda. Among their number are Robert Skidelsky, Emeritus Professor of Political Economy at the University of Warwick, and a specialist on the work of the economist John Maynard Keynes. Michael Pettis, a professor at Peking University’s Guanghua School of Management and expert on the Asian markets will take part in a discussion about the challenges that the Brazil-China relationship will face over the coming years.

> Full agenda of the event

BM&FBOVESPA launches eight new currency derivatives

BM&FBOVESPA launched eight new currency futures contracts this week (August, 15). They are six futures contracts and two mini futures contracts. The regular futures contracts are for the Brazilian Real against the South African Rand (ZAR), Turkish Lira (TRY), New Zealand Dollar (NZD), Chilean Peso (CLP), Chinese Yuan (CNY) and Swiss Franc (CHF). The contracts will be authorized for trading as of the September 2011 maturity, between 9:00 a.m. and 6:00 p.m. Each futures contract is sized and formatted so that it is equivalent to the USD 50,000 size of U.S. Dollar futures contract. The sizes of the respective contracts are 350,000 South African Rands; 350,000 Chinese Yuan; 75,000 Turkish Lira; 75,000 New Zealand Dollars; 50,000 Swiss Francs; and 25 million Chilean Pesos. The Mini U.S. Dollar Futures Contract (WDO) is sized USD 10,000, which represents 20% of the size of the regular U.S. Dollar Futures Contract. The Mini Euro Futures Contract (WEU) is sized €10,000, representing 20% of the size of the regular Euro Futures Contract .

> More info

International partnerships mark the expansion of the BM&FBOVESPA Institute of Education

The BM&FBOVESPA Institute of Education has been known as the “Escola para os Mercados Financeiro, de Capitais e de Derivativos” (Financial, Capital and Derivatives Markets School) since its foundation in 1986. Growing demand for professional training, however, means it has broadened its scope since 2010 and it has also begun operating as the “Escola do Investidor” (School of the Investor) and the “Escola de Empresas e Empreendedores” (Enterprises and Entrepreneurs’ School). In the first half of 2011 the Institute of Education signed cooperation agreements with internationally renowned business schools, among which the Endeavor Institute, Babson College and Chicago Booth:

  • Endeavor Institute – the “Bota pra fazer” (Sow to Reap) program of courses aimed at startup companies, in business incubators. This methodology was developed by Endeavor Brazil in partnership with the Kauffman Foundation. The Institute of Education was the first institution in Brazil to apply this methodology for qualifying entrepreneurs.
  • Babson College – Through this partnership, the BM&FBOVESPA Institute of Education offers the “Gestão e Crescimento Empresarial de Alto Impacto” (High Impact Business Management and Growth) program of courses, hand-tailored to enable Brazilian entrepreneurs to lead their companies’ growth. The second group begins in October this year.
  • Chicago Booth – The business school of the University of Chicago. This partnership has resulted in the development of a three-module academic program, focused on the capital and derivatives markets and with an international approach.  Next course in December.

BM&FBOVESPA’s options and capital raising activity

According to the World Federation of Exchanges (WFE) BM&FBOVESPA is ranked as #1 in volume of Equity Option trades and #4 (Capital Raised) in terms of newly listed companies (IPOs). These and other regulated exchange industry numbers are available at:

Market Makers for Options on the Stock of BM&FBOVESPA, Usiminas and BOVESPA Index

BM&FBOVESPA announced on August 3 the start of the selection process for up to three market makers for options on the stock of BM&FBOVESPA S.A (BVMF3) and Usinas Siderúrgicas de Minas Gerais S.A. – Usiminas (USIM5) and for options on the BOVESPA Index (IBOV). This is the second stage of the Bidding Program to select market makers in equity options and BOVESPA Index options, developed by the Exchange. Institutions that are interested in taking part – including nonresidents – have until September 26, 2011 to deliver proposals. The winners will be announced on October 11, 2011.

> More information about the Market Makers for Options

Bradesco wins BM&FBOVESPA selection process as Depositary Institution for 10 Unsponsored Level I BDR Programs

Bradesco has won the sixth selection process for depositary institutions authorized to request registration for trading 10 Unsponsored Level I Brazilian Depository Receipt (BDR) programs, backed by shares issued by publicly traded companies with headquarters overseas. Bradesco should simultaneously present BM&FBOVESPA and the Brazilian Securities and Exchange Commission (CVM), within 60 calendar days, with the necessary documentation for submission to register the 10 Unsponsored Level 1 BDR programs. The programs should include foreign companies that do not yet have BDRs traded on BM&FBOVESPA and which are headquartered in the United States and listed on U.S. stock exchanges.

There are currently 30 Unsponsored Level 1 BDR programs available for trading on BM&FBOVESPA, which have Deutsche Bank S.A., Citibank DTVM S.A. and Itaú Unibanco S.A. as their depositary institutions. Another three lots of ten programs shall be presented to the market soon by Banco Bradesco S.A., Citibank DTVM S.A. and Deutsche Bank S.A.

> More info

Up to USD 10 billion in public offerings and follow-ons in 2011

In the year to August 15, BM&FBOVESPA registered USD 10.1 billion in public offerings and follow-ons. There were eleven Initial Public Offerings (IPOs) in 2011: AREZZO&CO (ARZZ3), SIERRA BRASIL (SSBR3), AUTOMETAL (AUTM3), QGEP PART (QGEP3), IMC HOLDING (IMCH3), TIME FOR FUN (SHOW3), MAGAZINE LUIZA (MGLU3), BR PHARMA (BPHA3), QUALICORP (QUAL3), TECHNOS (TECN3) and ABRIL EDUCAÇÃO (ABRE11). At the end of July, the 181 companies that are part of the BM&FBOVESPA’s special corporate governance levels represented 64.96% of market capitalization, 79.04% of financial volume, and 76.84% of trades in the spot market. At the end of June, there were 177 companies, representing 65.56% of market capitalization, 75.42% of financial volume, and 77.57% of spot market trades.

Number of ETF trades grows 25% from June

The financial volume registered in July by the eight BM&FBOVESPA Exchange-Traded Funds (ETFs) reached BRL 667.75 million in 31,997 trades, from BRL 598.43 million and 25,701 the previous month. In July the ETF with the highest financial volume was BOVA11 with BRL 573.83 million and 26,915 transactions.


BM&FBOVESPA 5th International Financial and Capital Markets Conference

The city of Campos do Jordão will once again be the site of one of the year’s most important financial market events, hosted by BM&FBOVESPA. The 5th edition of the International Financial and Capital Markets Conference will have national and international guest speakers, round-table discussions, social activities and an exhibition area providing an excellent venue for participants to debate some of the most significant financial topics. Speakers include: Maria Helena Santana (Securities and Exchanges Commission of Brazil – CVM), Robert Engle (2003 Nobel Prize), Joe Gawronski (COO of Rosenblatt Securities) and Ilan Goldfajn (Chief Economist, Itau Unibanco).

Location: Campos do Jordão, SP, Brazil
Date: August 25-27, 2011

> Full agenda of the event

*Nonresident investors can apply for an exclusive 50% discount for registration at the event. Please contact the International Business Development team to request your coupon, by email to or


BM&FBOVESPA will exhibit at FIA EXPO 2011. The event attracts approximately 5,000 people from more than 30 countries, from senior staff at brokerage firms and exchanges, to floor traders, pension fund managers, corporate treasurers, CTAs and CPOs, and individual investors. BM&FBOVESPA staff will present the Exchange’s products, connectivity, DMA access via Globlex, etc.

Location: Hilton Chicago, USA
Date: October 10-12, 2011

> More info

Family Office Summit – Latin America

BM&FBOVESPA is currently sending invitations for this event promoted by the World Research Group and which will be held in São Paulo September 26-28. A BM&FBOVESPA representative is scheduled to talk about alternative investments. The summit will present current Trends for Optimizing Effective Strategies and Alternative Methods to Produce Investments for Single and Multi Family Offices in the Brazilian capital market. There will be a special networking session bringing together managers, single and multi family offices, advisors and consultants.

Location: Intercontinental São Paulo – Alameda Santos, 1123, São Paulo , SP.
Date: September 26-28, 2011.

> Full Agenda and Registration

2nd FX Growth Markets Series: Brazil – Profit & Loss

BM&FBOVESPA will join the Profit & Loss FX Growth Markets conference on October 20, 2011 at the Tivoli Hotel in São Paulo. Profit & Loss has been operating its highly successful series of Forex Network and FX Growth Markets conferences for more than 10 years, with regular annual events held in London, New York, Chicago, Singapore, Brazil, Mexico, Colombia, Chile, Shanghai and Toronto, and comes to Brazil for the second time. A BM&FBOVESPA representative will talk at the event.

Location: Tivoli Hotel São Paulo, São Paulo, Brazil
Date: October 20, 2011.

> Full Agenda

Volumes and trades by Direct Market Access (DMA)

BM&F Segment
In July, BM&F* market segment transactions carried out through order routing via Direct Market Access (DMA) registered 20,009,841 contracts traded and 2,417,398 trades. In June, the volume reached 20,409,252 contracts traded and 2,105,981 trades.

The volumes registered by each access modality in the BM&F segment were as follows:

  • Traditional DMA – 7,440,774 contracts traded, in 797,002 trades, in comparison to 8,168,492 contracts and 775,388 trades in June;
  • Via DMA provider (including orders routed via the Globex System) – 7,040,432 contracts traded, in 258,881 trades, compared to 7,365,306 contracts and 260,441 trades in June;
  • DMA via direct connection – 3,691 contracts traded in 977 trades, against 8,995 contracts and 1,376 trades in June;
  • DMA via co-location – 5,524,944 contracts traded, in 1,360,538 trades, compared to 4,866,459 contracts and 1,068,766 trades in June.

In July, transactions carried out by foreign investors presented by CME to BVMF (who use the Globex-GTS order routing system or access BVMF markets via co-location) totaled 2,897,744 contracts traded, in 688,862 trades, compared to 2,658,361 contracts and 623,653 trades in June.

In July, order routing via DMA in the BOVESPA* segment totaled BRL 95,030,778,000.00 and 11,225,193 trades, from BRL 88,977,494,000.00 and 10,244,578 trades the previous month.

Trading volumes per type of DMA in the BOVESPA segment:

  • Traditional DMA – Volume of BRL 87,674,861,000.00 and 10,091,956 trades from BRL 82,843,187,000.00 and 9,287,652 in June;
  • DMA via co-location – Volume of BRL 6,381,361,000.00 and 1,007,081 trades from BRL 5,206,388,000.00 and 856,246 in June;
  • DMA via provider – Volume of BRL 974,556,000.00 and 126,156 trades from BRL 927,919,000.00 and 100,680 in June.

* Direct access to the BM&FBOVESPA market segments is carried out through DMA models 1, 2, 3 and 4. In model 1 or traditional DMA, the client accesses the GTS or Mega Bolsa through technological intermediation of a brokerage house. In model 2 or via DMA provider, the client does not use the technological intermediation of a brokerage house, but rather connects to the system through an authorized access provider. DMA via order routing with CME Globex is also a form of DMA model 2. In model 3, the client connects to the system through a direct connection. In model 4 or via co-location, the client installs its own computer within the Exchange’s facilities. 


The volumes registered by access modality include both buy and sell sides of a trade.

The volumes by access modality for both the BM&F and the BOVESPA market segments have been reported in a consolidated manner in the BM&FBOVESPA statements since May 2009.


BM&F Segment July 2011

In July, derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 44,199,125 contracts and BRL 3.35 trillion in volume, compared to 51,023,956 contracts and BRL 3.25 trillion in June. The daily average of contracts traded in the derivatives markets in July was 2,104,720, in contrast to 2,429,712 in June.

BOVESPA Segment July 2011

In July 2011, equity markets (BOVESPA segment) traded BRL 119.63 billion, in 11,016,993 trades, with daily averages of BRL 5.69 billion and 524,619 trades, in comparison to June when total volume reached BRL 124.19 billion, in 10,187,883 trades, with daily averages of BRL 5.91 billion and 485,137 trades.

Filed under: BM&FBOVESPA, Brazil, China, Events, Exchanges, News, Risk Management, Trading Technology, , , , , , , , , , , , , , , , , , , , ,