FiNETIK – Asia and Latin America – Market News Network

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, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

SunGard Opens Trading Network Hub in Chile

SunGard has established a SunGard Global Network (SGN) hub in Santiago, Chile. SGN provides global order routing, market data and associated services on 120 markets worldwide, linking 2000 asset managers and 500 broker dealers. The Santiago hub, SunGard’s third in Latin America after Mexico City and Sao Paulo, will provide international investors with access to Bolsa de Comercio de Santiago (BCS), Chile’s equity and derivatives exchange. In addition, financial institutions in Chile will be able to access the SGN brokerage community.

SunGard will also offer Valdi Market Access to Chile, which delivers Software-as-a-Service* (SaaS) based connectivity to markets worldwide through SGN. This direct market access service gives exchange members and their clients the ability to trade on electronic markets from any application connected to SGN. It is fully managed by SunGard, helping reduce their infrastructure and support costs. For Bolsa de Comercio de Santiago (BCS), the Valdi Market Access servers will be directly co-located at the exchange, offering low latency services.

Mr. Andres Araya Falcone, chief information officer of the Bolsa de Comercio de Santiago, said, “Chile continues to grow, and the region is focused on being an important player in the global economy. SunGard is supporting this growth by providing electronic trading solutions and global connectivity to market participants in Chile, which will help our exchange members find new investment opportunities. In facilitating exchange connectivity, this should also help attract new firms to the Bolsa de Comercio de Santiago.”

Danielle Tierney, an analyst at Aite Group, said “Opening a new hub in Santiago is a very strategic placement for SunGard. Santiago is the third largest individual exchange in Latin America by market capital and volume, in addition to being a part of the MILA integration of the Andean exchanges. By establishing this additional point of connectivity, SunGard has essentially made its SGN hub into a pan-LatAm offering.”

Philippe Carré, global head of connectivity of SunGard’s global trading business, said, “SunGard’s Valdi and SGN address the connectivity and execution challenges of trading multiple asset classes on multiple markets. SunGard already offers Valdi and SGN solutions in Argentina, Brazil, Chile, Colombia, Mexico and Peru, helping traders in Latin America access new markets and diverse liquidity, as well as helping international traders access Latin America markets.”

Source: A-TEAM Electronic Trading, 13.12.2011

Filed under: Argentina, Brazil, Chile, Colombia, Latin America, Mexico, News, Peru, Trading Technology, , , , , , , , , , , , , , , ,

Brazil: BM&FBOVESPA – News October 2011 – Nr.21

BRIC exchanges announce alliance

The exchanges of the BRIC emerging markets bloc announced a joint initiative on October 12, during the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg, to offer investors access to their dynamic economies. Initially the exchanges – which accounted for over 18% of all exchange-listed derivative contracts traded by volume worldwide as of June this year – will cross-list benchmark equity index derivatives on the boards of other alliance members. Following this, the alliance will develop innovative products to track the BRIC exchanges.

The seven exchanges are:

  • BM&FBOVESPA – Brazil
  • MICEX – Russia
  • RTS – Russia
  • Hong Kong Exchanges and Clearing Limited (HKEx) – China
  • Johannesburg Stock Exchange (JSE) – South Africa
  • The National Stock Exchange of India (NSE) – India
  • BSE Ltd (formerly known as Bombay Stock Exchange) – India

These seven exchanges represent a combined listed market capitalization of USD9.02 trillion, equitymarket trading value/month of USD422 billion and 9,481 companies listed.

BM&FBOVESPA new trading hours

In view of the start of daylight saving time on October 16, 2011, since October 17, 2011, the new trading hours (Brasília Time) for the BM&FBOVESPA markets – BOVESPA and BM&F segments – will be as follows:

Regular session: 11:00 a.m. – 6:00 p.m.

– After-Market: 6:30 p.m. – 7:30 p.m. (pre-opening phase to trading phase);

– Blocking / Exercise on the stock options market
Days prior to expiration: 11:00 a.m. – 5:00 p.m. (exercise of holder position).
Expiration date: 11:00a.m. – 12:30 p.m. – trading of the expired series to the offset of the position, that is, the sale for the holder of the position and purchase for blocking for the writer of the position / 12:30 p.m. – 2:00 p.m.: exercise of the holder position;

– Blocking / Exercise on the Index Options Market:
Days prior to expiration: 11:00 a.m. – 2:00 p.m. (exercise of holder position).
Expiration date: 11:00 a.m. – 2:00 p.m. – trading of the expired series to the offset of the position, that is sale for the holder of the position and purchase for blocking for the writer of the position / After 6:00 p.m. – automatic exercise of the expired series which fit the following situations: call option (settlement index higher than the exercise price; and put option (settlement index lower than the exercise price).

– Over-the-Counter Market: 11:00 a.m. – 6:00 p.m.

> Complete information of the new trading hours (Circular Letters 009-2011-DO-Ofício Circular)

The trading hours for the BOVESPA and BM&F segments are available at this link

Market Makers for Options on the Stock of Banco Bradesco, Gerdau and Banco do Brasil

BM&FBOVESPA announced on August 3rd the start of the bidding process to select up to three market makers for options on stock of Banco Bradesco S.A. (BBDC4), Gerdau S.A. (GGBR4) and Banco do Brasil S.A. (BBAS3). This is the third stage of the Competitive Bidding Process to select market makers in equity options and BOVESPA Index (Ibovespa) options, developed by BM&FBOVESPA. The institutions (including nonresident) that wish to participate have until November 29, 2011 to deliver proposals and the winners will be announced on December 14, 2011.

> More info

Market Makers for Options on Ibovespa and on Stocks of BM&FBOVESPA and Usiminas

BM&FBOVESPA announced on October 11 the winning institutions in the second selection process for market makers for options on stocks and on the BOVESPA Index (Ibovespa). The market maker obligation shall last twelve (12) months as of December 12, 2011. Banco Citigroup Global Markets Limited, Banco Itaú BBA S.A. and Timber Hill LLC shall be market makers for options on the BOVESPA Index (IBOV), complying with a maximum volatility spread of half a percentage point (0.5%). The institutions selected for options on stocks in BM&FBOVESPA S.A. (BVMF3) were Citadel Securities LLC, Citigroup Global Markets Limited and Morgan Stanley Uruguay Ltda, which shall be market makers complying with a maximum volatility spread of four percent (4%). Meanwhile, the institutions selected for options on stocks in Usinas Siderúrgicas de Minas Gerais S.A. (USIM5) were Banco BTG Pactual S.A. and Morgan Stanley Uruguay Ltda, which shall be market makers complying with a maximum volatility spread of twenty percent (20%).

> More info

Options on OGX Petróleo and Itaú Unibanco rise with Market Maker activity

The trading volume for options on the stocks of OGX Petróleo and Itaú Unibanco rose significantly in September, strongly influenced by the fact that they have had Market Makers since September 9. The Exchange launched the Market Maker program for stocks this year in order to encourage trading in options and increase their liquidity, as well as to stimulate longer expiries on these contracts. Options on the stocks of OGX Petróleo and Itaú Unibanco now have three Market Makers.

Comparing the average daily volume in September to that of January to August, there were the following increases: OGX Petróleo ON 51.9% (BRL 13.7 million against BRL 20.8 million) and Itaú Unibanco PN 205.6% (BRL 1.7 million against BRL 5.1 million).

ETF financial volume more than doubles in the past two months

BM&FBOVESPA Exchange Traded Funds (ETFs) reached BRL 1.4 billion financial volume in August and September, at 78,809 and 75,740 trades respectively. This is more than double the BRL 668 million financial volume and 31,997 trades in July.

Common Shares in Desenvix Energias Renováveis start trading on BOVESPA MAIS

The shares of electricity company Desenvix Energias Renováveis S.A. begin to be traded on October 3 on the BOVESPA MAIS segment of the BM&FBOVESPA Organized OTC Market, under the DVIX3M ticker symbol.

USD11 billion in public offerings and follow-ons in 2011

In the year to October, 15, BM&FBOVESPA registered USD11 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).

BM&FBOVESPA on Twitter

BM&FBOVESPA launched its Twitter account in English last week. Please access this link


 The World Cup of ETFs and Indexing Latin America

BM&FBOVESPA is lending its support to the World Research Group’s “World Cup of ETFs and Indexing Latin America.” The event aims at providing attendees with the best practices for ETF use, as well as a comprehensive analysis of market structure, regulations and current and future opportunities. The expected audience includes pension funds, hedge fund managers and investors, investment advisors, financial consultants, and other market participants. A BM&FBOVESPA representative will talk about the Exchange’s ETF products.

Location: São Paulo (TBC)
Date: October 17-18, 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

2nd Brazil–China Capital Markets Forum

BM&FBOVESPA and the Shanghai Stock Exchange are coordinating the Second Brazil–China Capital Markets Forum. This event follows the First Brazil–China Capital Markets Forum, which occurred in February in São Paulo, Brazil. At the event, the Shanghai Stock Exchange shall bring 300 to 500 Chinese asset and insurance managers and representatives of listed companies.

Location: Xijiao State Guest House Shanghai, China
Date: October 27, 2011.

Volumes and trades by Direct Market Access (DMA)

BM&F Segment
In September, BM&F* market segment transactions carried out through order routing via Direct Market Access (DMA) registered 35,144,357 contracts traded and 4,311,865 trades. In August, the volume reached 41,417,494 contracts traded and 4,431,750 trades.

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

  • Traditional DMA – 12,583,334 contracts traded, in 1,366,264 trades, in comparison to 17,540,231 contracts and 1,306,241 trades in August;
  • Via DMA provider (including orders routed via the Globex System) – 13,976,949 contracts traded, in 374,992 trades, compared to 14,088,756 contracts and 435,281 trades in August;
  • DMA via direct connection – 2,636 contracts traded in 447 trades, against 4,210 contracts and 830 trades in August;
  • DMA via co-location – 8,581,438 contracts traded, in 2,570,162 trades, compared to 9,784,297 contracts and 2,689,398 trades in August.

In September, 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 4,685,186 contracts traded, in 1,164,510 trades, compared to 5,308,308 contracts and 1,235,349 trades in August.

In September, order routing via DMA in the BOVESPA* segment totaled BRL 111.41 billion and 14,298,483 trades, from BRL 138.52 billion and 17,021,408 trades the previous month.

Trading volumes per type of DMA in the BOVESPA segment:

  • Traditional DMA – Volume of BRL 95.77 billion and 11,763,618 trades from BRL 120.45 billion and 14,098,638 in August;
  • DMA via co-location – Volume of BRL 14.29 billion and 2,357,270 trades from BRL 16.69 billion and 2,755,498 in August;
  • DMA via provider – Volume of BRL 1.34 billion and 177,044 trades from BRL 1.37 billion and 167,272 in August.

* 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 September 2011

Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 59,365,524 contracts and BRL 4.35 trillion in volume in September, compared to 78,606,873 contracts and BRL 5.23 trillion in August. The daily average of contracts traded in the derivatives markets in September was 2,826,930, in contrast to 3,417,690 in August. Open interest contracts ended the last trading day of September with 36,620,797 positions, compared to 37,821,302 in August.

BOVESPA Segment September 2011

In September 2011, the equity markets (BOVESPA segment) financial volume totaled BRL 131.437 billion, in 13,551,487 trades, with daily averages of BRL 6.25 billion and 645,309 trades. In August, financial volume totaled BRL 177.906 billion, the total number of trades 16,234,673, and the daily averages BRL 7.73 billion and 705,855 trades respectively.

Source: BM&FBOVESPA, 18.10.2011

Filed under: BM&FBOVESPA, Brazil, China, Events, Exchanges, Hong Kong, India, Risk Management, , , , , , , , , , , , , , , , , , , , , , , , , ,

Brazil: BRIC exchanges form alliance

The exchanges of the Brics emerging markets bloc have announced plans to form an alliance in cross-listing and to expose foreign investors to their dynamic economies and to increase the liquidity of their trading venues (Brazil, Russia, India, Hong Kong (China), South Africa)

This initiative was announced at the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg.

The initiative brings together BM&FBOVESPA from Brazil, MICEX from Russia (currently merging with RTS Stock Exchange), Hong Kong Exchanges and Clearing Limited (HKEx, China) and Johannesburg Stock Exchange (JSE) from South Africa. The National Stock Exchange of India (NSE) and the BSE Ltd (India) have signed letters of support and will join the alliance after finalizing outstanding requirements.

At the first stage of this project the exchanges will begin cross-listing of financial derivatives on their benchmark equity indices. It is planned to launch cross-listed products by June 2012.

“Global investors are increasingly seeking exposure to leading developing markets,” says Ronald Arculli, chairman of HKEx and of the WFE. “Thanks to this alliance, investors will gain easier access to major equity index derivatives of the BRICS markets which will now be offered in local currency on the alliance exchanges”.

This is an important milestone in the history of developing countries, continues Mr Arculli. “The alliance enables more investors to gain exposure to the emerging economies of the BRICS group whose economic power is on the rise. From a global perspective this alliance highlights the growing significance of the BRICS economies and financial markets for the coming decade, and further underlines the importance of enhancing cooperation between the BRICS members”.

At the second stage of the project members of the alliance plan to jointly develop new products for cross-listing on their exchanges. “In addition to measuring market performance, equity indices may be used as underlying assets to create new products, which can be the next step in the alliance development”, says Russell Loubser, CEO of the JSE.

“The products designed at the second stage would then be cross listed and traded in local currencies,” says Edemir Pinto, CEO of BM&F BOVESPA. “They will also ensure easy access for investors to other emerging markets through locally listed products.”

The third stage may include further cooperation in joint products design and new services development.

“Apart from cross-listing products, there are other opportunities for growth and development within this alliance. For example, creation of joint products combining various underliers which will facilitate liquidity growth in the BRICS markets and improve the understanding of other developing markets by local investors,” says Ruben Aganbegyan, President of MICEX.

All the partnering exchanges estimate the potential for cooperation created by this alliance very positively.

“The BRICS exchanges alliance has a great potential as it will create avenues for Indian investors to diversify their portfolios and expand into other emerging markets. It will also provide unique opportunities to investors in other BRICS nations to participate and contribute in India’s growth. BSE will actively work towards bringing world-class products to India as well as developing new products for other BRICS markets.” says Madhu Kannan, CEO of BSE Ltd.

Interest towards the BRICS markets is supported by the above-average growth forecast for these regions, as well as the rising consumer power generated by growing middle classes in each of the participating economies” says Ravi Narain, MD of the National Stock Exchange of India.

According to the WFE these six exchanges represent a combined market capitalization of USD 9.02 trillion, the number of their ussuer companies totals 9.5 thousand.

As per the research by the Futures Industry Association these six exchanges accounted for 18% of the global turnover in financial derivatives in H1 of 2011.

Source: BM&FBOVESPA, FinExtra, 12.10.2011

Filed under: BM&FBOVESPA, Brazil, China, Exchanges, Hong Kong, India, News, , , , , , , , , , , , , , ,

Jim Rogers designated Senior Adviser to DCE Dalian Commodity Exchange

Mr. Jim Rogers, a globally well-known investor and financial professor, was designated the Senior Adviser to Dalian Commodity Exchange (DCE) on Oct. 21, 2009. During the grant ceremony presided by DCE Executive Vice President Mr. Li Jun, Professor Rogers accepted the letter of appointment from Mr. Liu Xinqiang, CEO and President of DCE and made a speech on “How I See The World Today” to over 700 ceremony participants who came from DCE member firms, students of Futures College and representatives from related industries.

“With his legendary investment experience and profound theory backgrounds, Mr. Rogers has his own unique insight and vision on global capital markets including but not limited to commodity futures. With Mr. Rogers as our Senior Advisor, we will be endowed with a more international vision on our strategic planning and market development; we will futher promote our undertakings of international cooperation and exchange, learn from the advanced experiences and ideas in the international community, keep up with the market trends, and maintain the vitality of the emerming market, so that the growth of DCE will be more internationally oriented and market oriented.” stated by Mr. Liu during the ceremony. He also expressed sincerest thanks to Mr. Rogers for his sustained support to the development of DCE over the years and expected that Mr. Rogers would work with DCE enthusiastically, share with DCE his unique wisdom and resourceful experiences, and contribute to the development of the exchange.

“As an adviser, I will do my best to help DCE to become one of biggest exchanges globally; and I firmly believe, as the world economic center is shifting from the West to the East, DCE could definitely lead the global derivatives markets in a certain time in the future.” said Mr. Rogers.

In recent years, DCE recorded a conspicuous progress in international cooperation and communication. Since 2003, DCE has signed Memorandum of Understanding (MOU) with 15 exchanges from United States, Canada, Brazil, Argentina, Japan, India, Malaysia, and Thailand. As a member of FIA and FOA, DCE is periodically invited to participate in important derivatives conferences in Asia, North America, Europe, and Latin America.

In the meantime, DCE receives an increasing number of visitors from international counterparts, government agencies, academic organizations, and relevant investment and financial institutions. DCE enjoys a growing influence and reputation in global futures industry.

Source: MondoVisione, 29.10.2009

Filed under: Asia, China, Energy & Environment, Exchanges, News, , , , , , ,

BM&FBOVESPA authorizes new DMA Modality for its Derivatives Segment – DMA Model 3 Allows Direct Access to the Exchange’s Electronic Derivatives Trading Platform without Technological Infrastructure of a Brokerage House or DMA Provider

The Brazilian Securities, Commodities and Futures Exchange – BM&FBOVESPA will offer, starting today, a new Direct Market Access (DMA) modality connection to its GTS (Global Trading System), the Exchange’s electronic derivatives trading platform. DMA model 3 allows clients to directly access the GTS trading platform without the technological infrastructure of a brokerage house or an authorized DMA provider. As with the other available DMA trading modalities, direct access to BM&FBOVESPA and its order flow will continue to be authorized and monitored by a brokerage house.

BM&FBOVESPA DMA modalities

Direct access to the Exchange’s derivatives market segment is carried out through DMA models 1, 2, 3, and 4. In model 1 or traditional, the client accesses the GTS through the technological infrastructure of the brokerage house. In model 2 or via DMA provider, the client does not use the previously mentioned structure and 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 4 or DMA via co-location, the clients install their own equipment inside the BMFBOVESPA facilities.

Equities segment DMA

Direct access to the BOVESPA market segment (equities) is carried out through DMA model 1. The Exchange is planning to launch the other DMA trading modalities for its equity segment by the end of 2009, after the authorization of the Brazilian Securities and Exchange Commission (CVM – Comissão de Valores Mobiliários).

DMA trading volumes

In September, Direct Market Access (DMA) trading of the derivatives market segment at BM&FBOVESPA represented 12.3% of the total 31,505,077 contracts traded. DMA trading of the equities market segment represented 56.1% of the total 7,143,911 trades

Source: BM&FBOVESPA, 19.10.2009

Filed under: BM&FBOVESPA, Brazil, Exchanges, FIX Connectivity, Latin America, News, Trading Technology, , , , , , ,

Brazil: Trader Futures on BM&FBOVESPA Webinar October 7th, 2009

Join BM&FBOVESPA, Patsystems and Flow Corretora on October 7th for an exciting webinar on the latest developments in the Brazilian market.

In light of the U.S. Commodity Futures Trading Commission “No Action Letter” allowing U.S. participants to trade BM&FBOVESPA Ibovespa futures contracts, the Brazilian market presents more opportunities than ever. Learn about these opportunities and more in a webinar presented by Patsystems and BM&FBOVESPA, along with Flow Corretora, one of the largest BM&FBOVESPA brokerage firms.

Space is limited, Register  your seat here

Event Details:

BM&FBOVESPA products, including Ibovespa
Regulatory requirements for foreign participants
Connectivity options for accessing the BM&FBOVESPA exchange
Trading Ibovespa futures on Patsystems Pro-Mark
Business opportunities in Brazil in partnership with Flow Corretora
Date: Wednesday, October 7, 2009
Time: 9:00am CDT/11:00am SP/15:00 GMT

Source: Pathsystems, 30.09.2009

Filed under: BM&FBOVESPA, Brazil, Events, Exchanges, Latin America, News, Trading Technology, , , , , , , , ,

Mexico: Accessing MexDer – What’s on the Horizon – Webinar October – presentation

Thank you for attending our recent webinar with MexDer. We hope you found it useful and educational.  Please let us know if you are interested in the PowerPoint slides as they are available.

If you were unable to attend or would like to listen to the webinar again, please check out our website.

Join us for an interesting webinar  to learn more about MexDer  the Mexican Derivatives Exchange . John Dempsey of RTS interviews MexDer’s CEO, Jorge Alegria on the development and exciting future of  trading at MexDer.

Space is  limited. Reserve your Webinar seat’s here.

Key Points

– Hear about new products and the future of this exchange
– Understand what opportunities are available in this market
– Learn how you can access this market remotely and fast
– Hear about milestones achieved in order to make access easy
– Learn about the history and the exciting future of MexDer

Event Details

Title:                 Accessing MexDer – What’s on the Horizon
Date:                 Thursday, October 1, 2009
Time:                3:30 – 4:30 PM CDT (Chicago/Mexico City)

Organized by: RTS Real Time Systems and  Co-hosted with MexDer Mexican Derivatives Exchanges

Space is  limited. Reserve your Webinar seat’s here. After registering, you will receive a confirmation email with information about joining the webinar.

RTS Logo

Filed under: BMV - Mexico, Events, Exchanges, Latin America, Mexico, News, Trading Technology, , , , , , , , , , ,

CME Group and BM&FBOVESPA talk up order routing agreement results

CME Group, the world’s largest and most diverse derivatives exchange, and BM&FBOVESPA, the largest exchange in Latin America, announced that more than two million contracts have now traded as a result of their order routing agreement that was fully implemented on February 9, 2009.

The order routing linkage enables customers outside of Brazil for the first time to directly access BM&F segment products on CME Globex, and customers inside Brazil using GTS, one of BM&FBOVESPA’s electronic trading platforms, to directly access CME Group products.

“Facilitating CME Group customer access to BM&F segment products has opened up an entire new set of opportunities for customers outside of Brazil to gain exposure to the Brazilian marketplace,” said Rick Redding, CME Group Managing Director of Products and Services. “With one connection, our customers have an entree to products for one of the most closely followed economies in the world.”

“This new direct access to our markets has been very well received and we now look forward to expanding contract offerings to customers even further with new jointly developed products from CME Group and BM&FBOVESPA. Through this week, more than 2.2 million contracts were traded, representing more than 227,000 transactions, totaling over R$177.36 billion,” said Cicero Augusto Vieira Neto, BM&FBOVESPA Chief Operations Officer.

The order routing agreement includes access to some of the most liquid futures and options contracts in the world on interest rates, commodities such as grains and livestock, equity indexes and foreign exchange listed at CME Group, and One Day Inter-Bank Deposits, the Bovespa Stock Index, which is pending regulatory approval, and commodities such as Arabica coffee, live cattle and corn available at BM&FBOVESPA.

Also as part of the arrangement between the two exchanges, CME Group owns a 4.9 percent equity stake in BM&FBOVESPA, and BM&FBOVESPA owns a 1.7 percent equity stake in CME Group.

Source: CME Group, 09.07.2009

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, Trading Technology, , , , , , , , , ,

Tokyo Financial Exchange gets recognised market operator status in Singapore

Tokyo Financial Exchange (TFX) was granted recognised market operator status from the Monetary Authority of Singapore (MAS) on 22 June 2009.

This recognition allows investors in Singapore, who meet necessary requirements, to become a remote member of TFX and trade TFX’s Interest Rate Futures contracts directly.

TFX is the first exchange in Japan to receive recognised market operator status. TFX, as a comprehensive financial derivatives exchange, will continue to make efforts to provide a more convenient market place for all foreign and domestic market participants.

Source: Finextra, 03.07.2009

Filed under: Asia, Exchanges, Japan, News, Singapore, , , , , , ,

BM&FBovespa to go fully electronic; shutters open outcry floor

As of July 1, 2009, all BM&FBOVESPA transactions involving derivatives contracts based on financial assets and commodities in the BM&F segment will be carried out exclusively in the Exchange´s electronic trading system, which already accounted for over 98% of the 22 million contracts traded in that segment in June. The last open outcry floor session will close today at 5:15 p.m., followed by a ceremony to honor the professionals who worked at the floor.

Over the next few months, the area where the open outcry trading floor is located will be totally redesigned and included in the Exchange´s regular public visitation schedule, which currently utilizes the BM&FBOVESPA Space, where visitors receive information about financial market activities and instruction on how the stock and derivatives markets work. This new area will also be used to centralize the Exchange’s self-regulation activities.

Acknowledging the relevant roles performed by floor traders and runners in the development of the markets, BM&FBOVESPA has established two programs geared to the professionals who carried out these activities during the year of 2009.

The Professional Development Program will provide professionals with the opportunity of further improving their knowledge of capital markets, allowing them to participate free of charge in the presential, semi-presential and distance learning courses offered by the BM&FBOVESPA Institute of Education. The Incentive Program will provide professionals with a discount on the Exchange fee for transactions executed at the Exchange, in both of its segments, over a period of 24 months, as of January 7, 2009.

Technological evolution

The complete migration from the open outcry system to the electronic trading system is a response to market demand which mirrors the international trend towards the evolution of technological trading processes that has been taking place over the last two decades. The electronic trading system provides domestic and international investors with additional channels of higher quality access to the products offered by the Brazilian Exchange and stimulates greater market liquidity.

Pursuant to this improvement plan for the BM&FBOVESPA trading environment, up to the end of 2009, investors will be offered three differentiated levels of direct access to the market (DMA), including the co-location service, which will allow investors to place their own computer equipment inside the Exchange facilities. In addition, a single trading interface will be implemented, allowing end customers to execute transactions in both the BM&F and BOVESPA segments on a single screen.

The electronic trading system was implemented in the BM&F segment in 2000, when it accounted for just a little over 3% of the total number of contracts traded. By 2006 it had surpassed the open outcry system, ending the year with 57.59% of the total number of contracts traded. In 2007 side-by-side trading was implemented, allowing products to be traded simultaneously in the electronic trading system and on the floor. As a result the participation of the electronic trading system in the total trading volume reached 72.95%. That same year the Exchange reached the mark of 2 billion contracts traded.

Source: BM&FBOVESPA, 01.07.2009

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, Trading Technology, , , , , , , , ,

HKEx Publishes Consultation Paper On Certified Emission Reduction Futures

Hong Kong Exchanges and Clearing Limited (HKEx) today (Friday) published a consultation paper on certified emission reduction (CER) futures.

The consultation paper seeks views and comments from all individuals and organisations interested in emissions markets, including financial intermediaries, investors, Clean Development Mechanism project participants and public policy makers, on the business feasibility of developing an emissions trading platform in Hong Kong and CER futures as a product concept.

The consultation paper includes:

  • An overview of the development of carbon trading around the world;
  • A potential design for CER futures which may be suitable for exchange trading in Hong Kong;
  • Some comments and views shared by emission market players in Hong Kong, Singapore, Australia and the UK who met with HKEx executives for informal discussions of CER futures contract specifications; and
  • Six questions for potential respondents’ consideration.

Some of the questions cover specifics, while others are relatively broad.  For instance, Question 5 invites explanations of any issues related to the introduction of CER futures not mentioned in the consultation paper that HKEx ought to consider, and Question 6 seeks comments on the overall development of emissions or pollutants trading markets in Hong Kong.

“We encourage everyone interested in this topic to read our consultation paper and submit their views, and we welcome any information on the development of the carbon emissions markets that people think may be useful to us,” said Calvin Tai, Head of HKEx’s Derivatives Market.

“We hope our Exchange and Clearing Participants will share their insight on the likely demand for CER futures trading in our market at this time,” Mr Tai added.

The consultation paper and questionnaire are posted on the HKEx website.

The deadline for the submission of comments is 31 August 2009.

Source: MondoVisione, 26.06.2009

Filed under: Asia, Energy & Environment, Exchanges, Hong Kong, Library, News, , , , , , , , , , , , ,

Reference Data Review Special Report: Impact of Derivatives on Reference Data Management

They may be complex and burdened with a bad reputation at the moment, but derivatives are here to stay. Although Bank for International Settlements figures indicate that derivatives trading is down for the first time in 10 years, the asset class has been strongly defended by the banking and brokerage community over the last few months.

The industry is, however, on course for a significant overhaul of the regulatory regime governing the OTC derivatives market, both in Europe and the US. This, of course, means that the post-trade processing of these instruments is set for big changes. Credit default swaps (CDSs) are the first of the credit derivatives to be ushered onto clearing counterparties in a bid to reduce counterparty risk, but they will likely not be the last.

Moreover, the market is also awaiting the introduction of an alternative standard to the current five character Options Price Reporting Authority (Opra) codes next year. Earlier this year, the Options Clearing Corporation (OCC) was named as the operator of the new options symbology system, which has been estimated to cost the industry around US$250 million to introduce.

All of these changes are likely to have a significant impact on the data management systems for these complex instruments, requiring the introduction of new processes and procedures. A challenge indeed for the vendor community.

Download: Referene Data Impact of Derivatives RDR Special Report June 2009

Source: A-Team, 09.06.2009

Filed under: Data Management, Exchanges, Library, News, Reference Data, Risk Management, Standards, , , , , , , , , , , , , , ,

SGX initiatives to develop options market

Singapore Exchange Limited (SGX) announced today that it is embarking on three initiatives to develop its options market. These are:

1) enhancing the existing SGX Nikkei 225 Index Options and SGX MSCI Taiwan Index Options contracts;

2) launching the SGX MSCI Singapore Index Options contract; and

3) introducing a web-based electronic trade registration system named “eNLT” (Electronic Negotiated Large Trades). These initiatives will be implemented on 6 April 2009.

In today’s volatile market environment, options contracts are essential tools for market participants to express a view on, or hedge their exposure to, the underlying markets. In response to feedback from customers, the Exchange is enhancing the contract specifications of the SGX Nikkei 225 Index Options and the SGX MSCI Taiwan Index Options by increasing the number of tradable strikes and contract months to cover a tenure of up to three years.

The Exchange will also launch the SGX MSCI Singapore Index Options to complement the MSCI Singapore Index Futures, which was launched in September 1998. With current average daily trading volume above 15,000 contracts, the MSCI Singapore Index Futures is a liquid contract traded by the professional investment community. The introduction of the SGX MSCI Singapore Index Options contract will further enhance its market depth. To support the registration of negotiated large trades including options, SGX is introducing the web-based eNLT system for members and customers.

The new system will allow contracts with finer tick sizes to be registered and cleared. This offers market participants, including over-the-counter (OTC) players, greater flexibility to register trades on SGX and to take advantage of the regulated central counterparty clearing platform. “Our enhanced options suite and eNLT facility are part of our longer term efforts to develop the options market.

We believe that the options contracts will complement our current futures offerings, and can eventually become a major growth driver of our derivatives market,” said Ms Janice Kan, SGX Vice President & Head of Product Development.

Source:SGX, 31.03.2009

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China Investment Corp (CIC) cautious about financial derivatives

China Investment Corp. (CIC), the country’s sovereign wealth fund, was taking a cautious stance toward investments and would not invest in financial derivatives that had no obvious relationship with the real economy, CIC chairman Lou Jiwei said here Saturday at the China Development Forum 2009.

These derivative financial products should be phased out of the financial market, Lou said.

The CIC suffered big loss from its two major investments in the U.S. private equity firm Blackstone and investment bank Morgan Stanley during the global financial crisis.

The CIC has invested 3 billion U.S. dollars in the Blackstone and 5 billion U.S. dollars in the Morgan Stanley.

The CIC was set up in September, 2007, with an initial capital of 200 billion U.S. dollars from the country’s massive foreign exchange reserves, which stood at 1.95 trillion U.S. dollars by the end of 2008.

Source:, CITI Liang Haisan, 21.03.2009

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