Option the Dragon: Stock Options set for launch in China

On August 6, 2013, Chinese securities companies received ‘the notice of preparing the initiating stock options full simulating trading works’ sent by the Shanghai Stock Exchange. This information implies that SHSE is already fully prepared for the launching of stock options. Although there is no clear timetable for launching the stock options, it is likely that they will appear in Chinese capital markets in 2013 or 2014.

Exchange traded stock options are new to Chinese capital markets and these derivatives provide a number of benefits. For one, both long and short-term trading are accessible and, similar to other derivatives such as futures, t+0 is allowed. Another benefit, which is an advantage over futures, is that leverage is provided but buyers can only lose the amount that they paid for the option. Options traders can also execute more complicated strategies through the combination of buying and selling call and put options, including straddles and spreads. Moreover, stock options are perfect hedging tools for individual stocks. Currently, Chinese stock index futures can only hedge the risks of the CSI 300 index and can not directly hedge non-systematic risks from individual stock options. And, despite providing leverage, security companies charge high transaction fees and interest rates for customers interested in selling short and buying long. Furthermore, the introduction of stock options comes with a high minimum threshold, which may largely change the structure of investors in the stock market by increasing the proportion of institutional investors. Thus the introduction of stock options may largely change the landscape of Chinese stock markets and may stimulate trading volumes.

However, there are also potential problems and doubts from the public that my come with the introduction of Chinese stock options. One issue regards the minimum threshold for investors of stock options. Some market analysts estimate that this threshold could be as high as one million yuan, which is higher than thresholds for index futures and securities lending services from securities companies. Currently, only 1% of accounts in the stock market can meet this requirement. Critics argue that stock options may serve as a tool to short the market by institutional investors and rich individuals, who may be in a disadvantaged position. But there are also analysts stating that the threshold may be lower, which would give normal individual investors a better opportunity to participate. The minimum threshold will depend on the final decision from CSRC.

Another problem has to do with the underlying stock that stock options are based upon. Currently, it seems as though only very large blue chip listed companies can enjoy stock options, so not all stocks can be optioned. Because large-cap stocks fluctuate less dramatically than small-cap and medium-cap stocks, the meaning of stock options may not be as transparent as in the fully opened western markets. But for institutional investors like mutual funds, as large-cap stocks take larger proportions of their shares, stock options may be an ideal hedging tool for stabilizing the performance of their portfolios. As current stock markets have adopted t+0 and t+1 trading, short-term day trade for hedging is not feasible. Thus traders may either choose longer-term hedging strategies or speculate through high-frequency intra-day trading.

Furthermore, large amounts of speculation in stock options may lead to dramatic fluctuations in stock prices. Similar to trades within A-share markets, the cost of short-selling is much higher than longing the stocks. So under the current unbalanced system, both hedgers and speculators may choose short in the stock options and the performance of A-share markets in the future may weaken. This has already been proven from the stock index future’s impact on A-share stock markets.

In conclusion, despite the risks, the launching of stock options is important for the development of Chinese capital markets.

Source: KapronAsia, 20.08.2013

Filed under: Asia, China, Exchanges, News, Risk Management, China 中国, CSI China Securities Index, CSRC China Securities Regulatory Commision, Derivatives, Exchange, Futures and Options, KapronAsia, SSE Shanghai Stock Exchange

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, Asia, ASX Australian Stock Exchange, Bankruptcies, Basel III, BM&FBOVESPA, Brazil, CESR Committe of European Securities Regulators, CFFEX China Financia Futures Exchange, CFTC Commodity Futures Trading Commission, Clearing and Settlement, CME, Credit Default Swaps, Currency Futures, Derivatives, Derivativos, Equity, ETF, Europe, Exchanges, financial futures, Futures and Options, HKEx Hong Kong Stock Exchange, Hong Kong, Index, Korea, KRX Kores Stock Exchange, Merger, Nick Ronalds, OSE Osaka Stock Exchange, Regulation, Risk Management, SGX Singapore Stock Exchange, Singapore, Tax Exemption, TSE Tokyo Stock Exchange, WEF World Exchange Federation

ICE to acquire NYSE Euronext for 8.2 billion USD – Back Ground and Analysis

The overall mix of the $8.2 billion of merger consideration being paid by ICE is approximately 67% shares and 33% cash. The transaction value of $33.12 represents a 37.7% premium over NYSE Euronext’s closing share price on Wednesday.  The transaction is expected to close in the second half of 2013, subject to regulatory approvals.

Investors see plenty of upsides in a takeover by ICE, which would create a powerhouse in cross-asset trading and reduce Nyse Euronext’s reliance on stagnating, hyper-competitive equity markets. Nyse’s share of trading on stocks listed on the Big Board has shrunk from 82% to just 21% in a fiercely competitive market.  For ICE, a tie-up with Nyse Euronext will give the energy trading bourse a leg-up into the expanding market for over-the-counter derivatives contracts and the geographical outreach to take on the Chicago Mercantile Exchange.

The two companies have already inked an agreement for Nyse Liffe to move its clearing operations to ICE Clear Europe. The implications of the deal for Nyse Liffe’s plans to move its clearing from LCH.Clearnet to a newly-constructed inhouse CCP by June 2013 have not been spelled out.

The combined company is expected to save up to $450 million through cost synergies in the second full year post closing. ICE has successfully integrated more than a dozen acquisitions in the last decade.  An earlier bid by ICE to take over Nyse Euronext in tandem with Nasdaq OMX was nixed by the US Justice Department on anti-competitive grounds. Observers see no similar objections being raised to a straight merger, with Nasdaq OMX removed from the equation. FinExtra 20.12.2012

NYSE and ICE: Not So Nice for European Equities

Given the sweeping changes hitting exchanges on the back of growing regulation and falling equity volumes in Europe, the combined entity would increase its chance of success, dominating European energy, commodity and short-dated fixed income trading, as well as OTC credit clearing; and leap-frogging Deutsche Boerse to become the world’s third-largest exchange group, with a combined market value of $15.2 billion.

However, not all divisions would benefit. Whilst a tie up with ICE would enable London-based Liffe to compete more effectively with CME Group in both trading and clearing of OTC products, for Euronext the future looks less certain. According to NYSE’s investor presentation explaining the deal, ICE “intends to explore an IPO of Euronext if market conditions allow and if European policy makers are supportive.” See full article at TABB Forum 20.12.2012.

ICE and NYSE Euronext Enter Clearing Services Agreement; ICE Clear Europe to Clear NYSE Liffe’s Derivatives Markets

ICE and NYSE Euronext agree that their wholly owned subsidiaries, ICE Clear Europe Limited and LIFFE Administration and Management have entered into a clearing services agreement pursuant to which ICE Clear Europe will provide clearing services to the London market of NYSE Liffe (“NYSE Liffe”). The clearing services agreement will allow NYSE Liffe to transition seamlessly from their current clearing arrangements. See full article at Bob´s Guide 20.12.2012

Inside ICE takeover of NYSE Euronext ( Tabb Forum Video Interview)

Exchange Consolidation: Getting Over Merger Mania

At this time last year, NYSE Euronext and Deutsche Bourse were more than midway through a year-long merger push that would have resulted in an exchange operator with an estimated $16 billion in combined market capital and a near monopoly on the European exchange-traded derivatives business. Consolidation, it seemed, was the key to competing in the global exchange landscape.

But dreams of consolidation, synergies and economies of scale were quickly dashed. The two biggest cross-border exchange deals — NYSE/DB merger and the proposed merger of the Singapore Exchange (SGX) and the Australian Securities Exchange (ASX) — were blocked by regulators, and the LSE’s attempt to buy the Toronto Stock Exchange (TMX), which also failed initially due to reluctant regulators, eventually lost out to a domestic bid from Maple Group Acquisition Corp. earlier this year. see full article at TABB Forum 12.12.2012.

Filed under: Exchanges, News, Clearing and Settlement, Consolidation, Exchanges, financial futures, Futures and Options, ICE Intercontiental Exchange, Merger, NYSE Euronext

Brazils BM&FBOVESPA to aid Chiles Santiago SE (BCS) with Derivatives Knowledge Transfer exchange

BM&FBOVESPA and the Santiago Stock Exchange (BCS) signed an agreement today (April 12, 2012) that sets out the implementation of the Chilean derivatives market at the Santiago Stock Exchange. The agreement provides for the transfer of derivatives market knowledge from BM&FBOVESPA to the Chilean Exchange, encompassing products such as equity, interest rate and FX options and futures.

The alliance between the two exchanges began in December 2010 and other strategic projects are in the pipeline, such as connectivity and order routing and market data distribution in particular.

Source:MondoVisione, 12.04.2012

Filed under: BM&FBOVESPA, Brazil, Chile, Exchanges, Latin America, BCS Bolsa de Comercio de Santiago, BM&FBOVESPA, Brazil, Chile, Derivatives, Exchanges, Futures and Options, FX Foreign Exchange, Market Data, MILA Mercado Integrado LatinoAmericano, Order Routing

Argentina and Uruguay to build new Derivatives Market

Mercado a Término de Buenos Aires – MATba (Buenos Aires  Futures and Options Exchange) and Bolsa de Valores de Montevideo- BVM (Uruguay’s Stock Exchange) announced that they will create a Futures and Options Exchange in Uruguay.

The new exchange will operate under the name “MATba Rio de la Plata Bolsa de Valores S. A.” and will be the first derivatives market in Uruguay. The two exchanges are waiting for Uruguay’s Central Bank approval to start working on the first contracts, which will probably be cattle and agricultural commodities, leaving currencies and other financial products for a second stage. All contracts will be cash settled and traded electronically.

The new Exchange will be located in Uruguay. MATba will manage the electronic platform and it will provide technical assistance in registration and clearing. Both Uruguayan and Argentine members of the two markets will be able to trade in MAtba Rio de la Plata Bolsa de Valores, which will open new business opportunities for traders as well as investment and arbitrage opportunities.

Source: MondoVisione, 23.03.2012

Filed under: Argentina, Exchanges, Latin America, Agriculture, Argentina, BVM Bolsa de Valores Montevideo, Commodities, Derivatives, Exchanges, Futures and Options, Latin America, MATba - Mercado a Término de Buenos Aires, Uruguay

Innovations in Accessing Asia: Listed Equity Derivatives and Delta One Products.

Institutional investors seeking exposure to emerging Asian equity markets face challenges in accessing many of the region’s closed markets and are turning to exchange-traded derivatives markets, as well as over-the-counter (OTC) instruments that can provide the exposure they need, says TABB Group in new research published today, “Innovations in Accessing Asia: Listed Equity Derivatives and Delta One Products.”

Investment managers are active users of OTC equity derivatives, including contracts for differences (CFDs), equity swaps, participation notes and other structured products, says Andy Nybo, a TABB principal, head of derivatives research and the report’s author. “However, global regulatory efforts to reduce concentration of counterparty risk have driven investment managers to explore alternatives for exposure, leading them to centrally-cleared, exchange-traded products that can lower overall levels of risk.”

According to TABB, as the appeal of developed markets waned in recent years, investors began examining new markets, searching for investment opportunities offering higher alpha and greater returns, especially emerging markets in Asia. Hedge funds are focusing their attention on the APAC markets, with 33% of US and European funds targeting the region for new investments. However, Nybo explains, direct investment in the emerging equity markets of Asia has been hindered by low market capitalization, restrictive regulatory environments and capital constraints that prohibit direct access to cash markets.

“Asia’s relatively stable political and regulatory environment has done well to attract investor interest,” Nybo says, “but some of the region’s regulators seem to use regulation as a policy tool in an attempt to control market fluctuations.” He adds that markets with heavy-handed regulatory authorities face a backlash from investors seeking opportunities and provide an opening for regional exchanges to launch products designed to meet investor demand for exposure to more closed markets.

“Pent-up demand from investors will contribute to innovation and new product launches by these emerging Asian exchanges to capture investment flows from both international investors and Asian-domiciled hedge funds,” he adds. “Many of the region’s regulators are very keen to promote greater participation in the financial markets. They are eager to attract strong capital flows from investors all over the world.”

The 33-page report with 24 exhibits is available for download by TABB Research Alliance Derivatives clients and pre-qualified media at https://www.tabbgroup.com/Login.aspx. For an executive summary or to purchase the report, visit http://www.tabbgroup.com or write to info@tabbgroup.com.

Other recent TABB derivatives research includes: Accelerated Expirations: The Growing Relevance of Short-term Options; US Options Trading 2011: Finding the Other Side of the Trade; Feeding the Options Beast: Big Data in the US Options Space; EU Equity Options Market Structure: Opening The Door To High Frequency Flow; VIX Trading: The Structure of Uncertainty; and TABB Group Options LiquidityMatrix.

Innovations in Accessing Asia:Listed Equity Derivatives and Delta One Products – Executive Summary

Source: MondoVisione, Tabb Group, 15.03.2012

Filed under: Asia, News, Trading Technology, Algo Trading, Asia, Asia Strategy, Co-Location, Derivatives, DMA Direct Market Access, FIX, Futures and Options, HFT High Frequency Trader, Investment, Liquidity, MondoVisione, Regulation, Risk Management, TABB Group, Trade Connectivity

Mexico´s Exchanges take huge steps to boost High-Speed Trading.

The Mexican Exchange, which is the second largest exchange in Latin America, announced a number of strategic and technology initiatives designed to promote foreign investment in the Mexican financial markets and its position as a Latin American leader in high-frequency trading.

While Brazil continues to be the hottest emerging market in Latin America, the Mexican Exchange (BMV Group), is taking huge steps to boost its growth in the high-speed marketplace.

The Mexican Exchange, which is the second largest exchange in Latin America, announced a number of strategic and technology initiatives designed to promote foreign investment in the Mexican financial markets and its position as a Latin American leader in high-frequency trading.

Mexico now provides worldwide participants with seamless, high-speed and efficient access through low touch direct market access (DMA), high speed co-location services, and FIX standard protocol for order routing and market data Part of Mexico’s success is down to its determination to improve its operative rules to better comply with international market standards, as well as adopting new technology.

In 2012, the Mexican Exchange will announce the launch of a new trading engine, internally developed. This multi-market, multi-asset, flexible and scalable trading engine has throughput of more than 200,000 messages per second. The trading engine will be ultra low latency, executing trades in 100 microseconds roundtrip (improvement over 25 milliseconds on legacy trading system). Full deployment is planned for Q2 2012. Further in 2012, The Mexican Exchange will introduce several new initiatives including midpoint hidden order book trading, aimed at institutional investors looking to trade large blocks anonymously with reduced execution risk. Simpler cross order rules will also be implemented; all stocks, global market equity securities and debt instruments will be crossed within the best bid/ask spread with no intervention. And, VWAP executions for the day will be able to be entered from 8:00 AM CT to 2:40 PM CT.

Recently, the Mexican Exchange has established major alliances broadening investment opportunities in the Mexican market. The Mexican Derivatives Exchange (MexDer) and the Chicago Mercantile Exchange (CME) established phase one, “south-to-north,” of its strategic order routing agreement, giving Mexican investors access to CME Group’s benchmark derivatives contracts, including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.

Phase two of the partnership, “north-to-south,” now in place provides CME Group customers with access to MexDer benchmark products, including Mexican Stock Exchange Index futures, bond futures and MXN Peso / US dollar futures contracts.

Source: Wallstreet&Technology, Melanie Rodier, 18.11.2011

Filed under: BMV - Mexico, Exchanges, Latin America, Mexico, Agriculture, Algo Trading, BMV Bolsa Mexicana de Valores, Capital Markets, CME, Co-Location, Commodities, Currency, Derivatives, DMA Direct Market Access, Energy, ETF, Exchanges, financial futures, FIX, Fixed Income, Futures and Options, FX Foreign Exchange, Index, Latin America, Low Latency, Market Data, Metal, MexDer, Mexico, Risk Management, Trade Connectivity, Trading System

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

• Get to know the Market Maker service for options

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

2011 EVENTS

 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

2^nd 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

2^nd 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.

BOVESPA Segment
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.

Notes:

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.

MARKET RESULTS

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, BM&FBOVESPA, Brazil, BSE Bombay Stock Exchange, China, China 中国, cross-listing, Derivatives, Derivativos, DMA Direct Market Access, ETF, Exchanges, financial futures, Futures and Options, FX Foreign Exchange, HKEx Hong Kong Stock Exchange, Hong Kong, India, IPO, JSE Johannesburg Stock Exchange, Market Analysis, MICEX Moscow Interbank Currency Exchange, News, NSE National Stock Exchange India, Performance Report, Russia, Trading Hours

Asia Trader & Investor Conference, Singapore 07-08 May 2011

ATIC @Singapore 2011 will feature more than 40 seminars conducted by international and local gurus and experts.  The Asian Trader and Investment Convention – Singapore

Covering topics like:

Futures | Equities | Options | ETF | CFD | Commodities | FOREX | Warrants | Alternative Investment | Property | Insurance | Managed Funds

Event Highlights

• First in bringing breakthrough and new methods of trading
• Over 50 investment educational seminars
• A Specialised Panel of top analysts who will conduct real-time analyses of the same stock
• Special Trading Focus Workshops on Stocks, Futures, Commodities, Gold, ETFs, Options and Warrants
• Stock Analysis on Regional Markets by International Traders
• Investor Clinics that help them improve trading
• Investment Network Platform with different market segment experts
• Property Investment Showcase – with property investment education and special panel discussion on Property vs Stock Investments
• The largest Finance and Investment Book fair

First launched in 2006, Asia Trader and Investor Convention (ATIC) event has travelled to 7 Asian Cities, i.e., Singapore, Kuala Lumpur, Bangkok, Ho Chi Minh City, Mumbai, Shenzhen and Tokyo. With participation by over 300 financial services companies, including securities exchanges, retail and consumer banks, securities brokerage firms, asset/fund management firms, listed companies and other financial services providers, ATIC events have attracted over 100,000 active traders and serious investors across Asia.

Source: The ATIC, 05.05.2011

Filed under: Asia, China, Events, Exchanges, Indonesia, Japan, Malaysia, News, Singapore, Vietnam, Art Investment, Asia, ATIC, CFD Contracts For Difference, CME, Commodities, Currency, Derivatives, ETF, FOREX, Fund Distribution, Futures and Options, Insurance, NASDAQ, Property, Real Estate, SGX Singapore Stock Exchange, Singapore, Stephen Lai, The Red Cliff Group, TheNextView, Wine Investment

Brazil:BM&FBOVESPA joins TradingScreen’s TradeNet

São Paulo — May 05, 2011, TradingScreen, the premier provider of global execution management systems (EMS), announced today that it has completed certification by the BM&FBOVESPA to provide low latency multi-asset class direct market access (DMA) order flow through its trading platform from its local data center in São Paulo.

TradingScreen’s expansion of its Brazilian markets offering will bring the local and global Buy Side community full coverage of listed financial instruments supported by BM&FBOVESPA, including commodities and financia l derivatives. The creation of this local trading node is a milestone in market access efficiency and outlines the strong commitment of TradingScreen to continue to be the reference ASP trading system and the leader in presence and connectivity in all markets around the world.

TradingScreen brings its community of global sell side participants and leading regional brokers to a common environment. The benefit to clients is an exceptional reach across counterparties, products, geography and services ranging from execution to algorithmic trading services, prime brokerage and clearing. Its ASP (Application Service Provider) model enables a rapid deployment and activation of users into live trading through a flexible range of execution management interfaces screen, FIX or API based.

The new TradingScreen solution will allow International Institutional investors to access Brazilian markets through local Brazilian and international brokers connected to Trade Net, TradingScreen’s global proprietary multi-broker network using a broker intermediated or broker sponsored model. The integration will also provide the opportunity for the local Asset Manager community to avoid high latency linked to long round trip to foreign data centers.

TradingScreen supports its LATAM operations from local offices in São Paulo and provides 24×6 client support in Portuguese covering all the main financial centres across the globe.

Commenting on the agreement, Philippe Buhannic, CEO of TradingScreen said:

“Our buy side and sell side clients had long been requesting a low latency, local access to the BM&FBOVESPA infrastructure based on an ASP model. TradingScreen has made this possible while maintaining its proven simplicity of deployment. We are very happy to lead the markets once again to new levels of efficiency.  The client’s feedback on this implementation has been phenomenal.”

“Adva nced connectivity resources greatly facilitate cross-border communication and trading on a global scale within the current financial scenario. Creating a common and safe environment which connects investors to Brazilian markets is a step forward in positioning Brazil as an international financial hub for equities, commodities and other futures contracts,” added Cícero Vieira Neto, BM&FBOVESPA Chief Operating Officer.

Source: Trading Screen, 05.05.2011

Filed under: BM&FBOVESPA, Brazil, Exchanges, FIX Connectivity, Latin America, Trading Technology, BM&FBOVESPA, Brazil, Commodities, Derivatives, DMA Direct Market Access, Equity, Futures and Options, Latin America, Order Routing, Trade Connectivity, Trading Network, TradingScreen

ICE Futures Europe approved for Brazil screens

Intercontinental Exchange (NYSE: ICE), the operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, has announced the authorisation by Brazil’s financial regulator, the Comissao de Valores Mobiliarios (CVM), to provide access to ICE Futures Europe products via ICE’s trading screens in Brazil.

Direct access and Membership will be restricted to intermediary firms authorized by the CVM, and those accessing ICE Futures Europe’s electronic markets as clients may only do so if they are qualified investors and are executing via an approved Brazilian intermediary. ICE Futures U.S. has been approved to provide screen-based access to its markets in Brazil since October 2009.

Said David Peniket, President and COO of ICE Futures Europe: “We continue to pursue new jurisdictions to broaden our customer base and to access new markets. Brazil is one of the world’s most dynamic economies and an increasingly important producer of crude oil. We are delighted to be able to respond to demand for ICE products, particularly given the increased reliance on the benchmark ICE Brent Crude Oil futures contract.”

Source: Automated Trade, 03.03.2011

Filed under: Brazil, Exchanges, Latin America, BM&FBOVESPA, Brazil, CVM, DMA Direct Market Access, Exchanges, financial futures, Futures and Options, ICE Intercontiental Exchange

SMX To List TOCOM Products

Singapore Mercantile Exchange (SMX), the first pan-Asian multi-product commodity and currency derivatives exchange, and the Tokyo Commodity Exchange, Inc. (TOCOM), Japan’s leading commodity futures exchange, today announced that they have signed a licensing agreement for SMX to list Contracts^* on TOCOM products.

Building upon the Memorandum of Understanding (MoU) signed on 23 April 2010 to explore mutually beneficial partnerships, senior officials from both exchanges signed a licensing agreement which would see the listing of several SMX TOCOM Contracts for products already being traded on TOCOM. These include crude oil, gasoline, kerosene and gas oil. The agreement does not rule out the possibility of cross-listing wherein TOCOM might also list SMX products.

Agreement terms include the license for SMX to use TOCOM prices as the last settlement price, delivery price, reference price and daily settlement price and/or final settlement price for SMX TOCOM Contracts.

Mr. Thomas McMahon, Chief Executive Officer of SMX, said: “This agreement is exciting for us for several reasons. Aside from augmenting our initial MoU and being able to roll-out contracts the markets are already familiar with, our foremost aim to develop a credible pan-Asian platform is being achieved at good speed. We are encouraged by TOCOM’s enthusiasm and foresight for a united Asian derivatives marketplace, and will be announcing more of such developments in the coming months. We must embrace exchange partnerships as crucial steps to reducing fragmentation of derivatives trading during Asian business hours.”

Mr. Tadashi Ezaki, President and Chief Executive Officer of TOCOM, said: “SMX is the up-and-coming derivatives exchange in Asia, which commenced trading in August this year and grows rapidly with an increasing range of listed products. We expect that licensing SMX to use TOCOM prices for their new products to be listed shall help increase arbitrage between TOCOM and SMX increase, and accordingly enhance the convenience of the markets. We continue to work together with SMX to further develop derivatives trading in Asia.”

The listed commodities currently trading on TOCOM include futures and options contracts for gold, and futures contracts for silver, platinum, palladium, gasoline, kerosene, gas oil, crude oil, rubber and Nikkei-TOCOM Commodity Index. SMX launched live trading on 31 August 2010 with four products consisting of Futures Contracts on crude oil benchmarks Brent Crude Oil priced in Euros and West Texas Intermediate Crude Oil, Gold with physical delivery-based settlement and Euro-US Dollar Currency Futures.

In August 2010, market leaders in low latency services in Japan and Singapore – KVH Co., Ltd. (KVH) and Singapore Telecommunications (SingTel) respectively announced provision of KVH-SingTel?s low latency network solutions to market participants, enabling both exchanges to facilitate an ultra low latency and fully redundant network service between Japan and Singapore.

^* Subject to regulatory approval by the Monetary Authority of Singapore (MAS)

Source:MondoVisione 15.10.2010

 

Filed under: Exchanges, Japan, News, Singapore, Commodities, Derivatives, Exchanges, Futures and Options, Gold, MAS Monetary Authority of Singapore, Metal, NIKKEI, Silver, Singapore, SMX Singapore Merchantile Exchange, TOCOM Tokyo Commodity Exchange

Brazil: BM&FBOVESPA Exchange news and events March 2010

SunGard Global Trading authorized as DMA provider

BM&FBOVESPA has authorized SunGard Global Trading to act as a provider of direct market access (DMA) for the BM&F segment (derivatives markets). SunGard offer brokerage houses and its clients an order routing system that allows direct trading of financial and agricultural derivatives traded at the Exchange. BVMF is also working with SunGard to develop a back-office solution for North American clients that trade agricultural and financial derivatives in Brazil.

Voluntary carbon credit market auction

BM&FBOVESPA will hold on 08 April 2010, a voluntary carbon credit market auction. A total amount of 180,000 voluntary carbon units from projects managed by the Social Carbon Company will be auctioned. The auction will be held in three sessions, with a lot traded per session. The initial bidding prices will be indicated by lots that vary in accordance to the vintages and are priced at BRL 10.00 to BRL 12.00 per unit. The first transaction will occur at 1:00 p.m. (Brazil Time) and will be carried out by BM&FBOVESPA’s Carbon Credit Trading System.

White paper on post-trade infra-structure

The Exchange divulged, on March 11th, a white paper entitled “BM&FBOVESPA’s Post-Trade Infra-Structure – Integration Challenges and Opportunities”. The document aims to stimulate debate among market participants, regulatory agents, and others interested in the integration of post-trade activities and systems (netting, settlement, central counterpart, and central depository). BVMF expects the participants to contribute to the consolidation of the path to be adopted in relation to integration opportunities. The white paper can be found at www.bmfbovespa.com.br, in Notices.

BM&FBOVESPA establishes new historic record in contracts traded and in ID futures

BM&FBOVESPA established on 18 March 2010 a new historic record in the total number of contracts traded in the derivatives segment, with 10,157,779 contracts. The previous record of 5,716,789 contracts was set on 17 March 2010. Trading of ID futures contracts also registered a historic record on 18 March 2010, reaching a mark of 6,093,795 contracts. The previous record of 4,544,750 contracts was also set on 17 March.

UN´s Principles for Responsible Investment

On March the 3rd, BM&FBOVESPA formalized its adherence to the Principles for Responsible Investment (PRI), a United Nations initiative developed by financial markets to promote responsible investment. The document was signed during the first international PRI meeting held in Brazil. BM&FBOVESPA intends to set an example for other investors to adhere to the principals and also stimulate listed companies to report their socio-environmental initiatives to the market.

BM&FBOVESPA announces earnings for fourth quarter of 2009

Net income of R$220.2 million increased 8.8% year-on-year, whereas adjusted net income of R$315.3 million. 4Q09 net revenues of R$424.8 million increased 19.5% from the same quarter one year ago (pro forma). In a comparison of the twelve months to December 2009, net revenues dropped 6.2% to R$1,502.5 million. 4Q09 operating expenses reached R$ 160.4 million, a 25.2% increase from 4Q081 (pro forma) and a 21.0% increase from 3Q09’s. In 2009, recurring expenses reached R$446.7 million, a 12.9% drop from 2008 (pro forma), as adjusted by expenses related to employee compensation in 1Q09 (R$ 18 million) and in line with the target of R$450.0 million for 2009. EBITDA totaled R$276.4 million for the fourth quarter, up 17.3% from 4Q08 (pro forma). Click here for full earnings release.

BM&FBOVESPA begins trading three new ETFs

As of 23 February 2010, BM&FBOVESPA began trading three new Exchange Traded Funds (ETFs): iShares Brazil Index IBrX-100 (BRAX11); iShares BM&FBOVESPA Consumption Index (CSMO11); and iShares BM&FBOVESPA Real Estate Index (MOBI11). The new ETFs are managed by BlackRock Brazil. The Exchange also offers four other ETFs, which track the Ibovespa, Small Cap, MidLarge Cap, and IBrX-50 indices. Click here for further information on BM&FBOVESPA’s ETFs.

Exchange’s new communication interface with Mega Bolsa

As of April 20, 2010, the Mega Direct, a new electronic communication interface, will become the only form of access for all automatic DMA connections to the Mega Bolsa, BVMF equities segment trading platform. The tool enables the insertion, modification, and cancelation of offers placed on the Mega Bolsa. The new interface performs up to tenfold faster than the current system.

Exchange’s meeting in São Paulo

BVMF hosted the Ibero-American Federation of Exchanges meeting in São Paulo on March 19. The objective of the event was to bring together member exchanges from Latin America, Portugal, and Spain to debate the latest market trends of the region. The themes discussed were the recent regional integration initiatives; regulation; and the development of the derivatives market in Latin America. The meeting also featured a presentation by BVMF on its current strategic partnerships with CME Group and Nasdaq OMX.

Carbon Efficient Index

BM&FBOVESPA will receive until March 31st comments and suggestions to improve the development of the calculation methodology of the new Carbon Efficient Index (ICO2). The creation of the new index was announced on December 15th, 2009, by the Exchange and the Brazilian Development Bank (BNDES), during the 15th United Nations Climate Change Conference (COP15), in Copenhagen.

Volumes and trades by Direct Market Access (DMA)

In February, derivatives market segment registered a total of 12,537,023 contracts traded via DMA*, with 1,485,032 trades carried out through the GTS trading platform. In January, the total was 9,917,768 contracts traded in 1,203,321 trades. In February, trading via DMA (including all DMA modalities) registered increases both in number of trades and contracts traded, establishing the following records: (1) a daily average of 696,501 contracts traded, compared to the previous record of 497,049 in October 2009; (2) the daily average of orders routed via the CME Globex – BM&FBOVESPA GTS reached 176,216 contracts, compared to the prior mark of 154,600 in October 2009.

Traditional DMA – 5,807,581 contracts traded, in 505,698 trades, in comparison to 4,590,025 contracts traded and 446,674 trades;

Via DMA Provider – 3,200,086 contracts traded, in 75,421 trades, in comparison to 2,723,958 contracts traded and 61,019 trades;

DMA via order routing with Globex (CME Group’s electronic trading platform) – 3,171,892 contracts traded, in 816,205 trades, in comparison to 2,284,904 contracts and 618,746 trades;

DMA via co-location – 357,464 contracts traded, in 87,708 trades, in comparison to 318,881 contracts traded, in 76,882 trades.

BM&FBOVESPA market performance – February 2010

BM&F Segment

Derivatives markets in the BM&F segment totaled 39,306,238 contracts and BRL 2.47 trillion in volume in February. That compares to 36,217,359 contracts and a volume of BRL 2.65 trillion in January. The daily average of contracts traded in the derivatives markets set a new record in February, with 2,183,679 contracts, in contrast to the previous record of 2,172,046 in March 2008.

Bovespa Segment

In February, equity markets (Bovespa segment) reached a total volume of BRL 118.06 billion, in 7,355,993 trades, with daily averages of BRL 6.55 billion and 408,666 trades, respectively. In January, total volume reached BRL 129.10 billion, 8,051,640 trades, with daily averages of BRL 6.79 billion and 423,771 trades, respectively.

Source: BM&FBOVESPA, 26.03.2010

Filed under: BM&FBOVESPA, Brazil, Chile, Colombia, Exchanges, Latin America, Mexico, News, Peru, Risk Management, Trading Technology, BM&FBOVESPA, Brazil, Carbon Market, Commodities, Derivatives, DMA Direct Market Access, ETF, Exchanges, financial futures, FIX, Futures and Options, Index, Order Routing, Performance Report, Regulation, Trade Connectivity

CSRC outlines how funds can invest in CSI 300 futures

The regulator releases an early draft of the proposed rules for Chinese mutual funds that want to invest in CSI 300 index futures.

s fund analysts and managers continue to attend futures training courses organised by the China Securities Regulatory Commission, a draft of the CSRC’s proposed rules on how Chinese mutual funds can invest in the upcoming CSI 300 index futures hit the industry’s email inboxes earlier this week.

The regulator is encouraging discussion in the industry; it wants the public to provide feedback on the rules by this coming Monday, March 22.

A first glance through the five-page draft seen by AsianInvestor suggests the rules look straightforward, and its broad strokes read largely the same — both in language and spirit — to the rules for futures investing by fund managers in Taiwan. (This doesn’t come as a surprise; the regulations governing mutual-fund investments in securities, which went into effect in China in 2004, were also modelled after those in Taiwan.)

In the draft, the CSRC does not go into detail on how managers will qualify for futures-investing status. Fund houses, instead, are advised to review their fund prospectuses and contracts agreed with investors back at the fundraising stage and decide for themselves whether futures investing would meet their initial investment objective and risk exposure level as promised to investors.

For the fund industry, use of futures for the purpose of return enhancement is not permitted. The CSRC says the purpose of any fund activities in the futures market should be risk management.

The futures instruments for fund investment must be approved by and listed on China’s securities exchanges, and based on indices tracking only equity prices. (So notions of funds participating in bond futures or pretty much any other type of derivative would be futile at this stage.)

There are 559 mutual funds known to exist in China, according to the latest fund-registrar data tracking numbers published at the end of January. A quick search using the word ‘futures’ in Chinese in a fund database yields only 29 hits, in which ‘futures’ are specifically mentioned in the fund contracts or prospectuses as acceptable instruments for use by these funds.

Should these managers be willing to take up the challenge, they will theoretically be the initial 29 participants able to actually short A-shares domestically in China. (And there are 11 onshore brokerages authorised to serve them.)

Equity funds, balanced funds and principal-protected funds appear largely free to allocate to the CSRC’s approved list of futures instruments. The regulator thus far has made no mention on what it intends to do about segregated accounts and multi-client segregated-accounts, which went live in 2008 and 2009 respectively.

There will be limits on the holdings of futures by close-ended funds, open-ended index funds and exchange-traded funds. At the end of any given trading day, total value of securities held plus futures may not exceed 100% of a fund’s NAV — in short, leverage will not be permitted for these funds.

For open-ended funds, managers will be allowed to hold futures with a total outstanding value that exceeds 10% of the fund’s daily AUM at market closing. Net turnover of equity futures trading in a fund cannot exceed 20% of a fund’s NAV.

At the end of any given trading day, the total value of futures positions plus the value of the securities held in an open-ended fund may not exceed 95% of the fund’s NAV — with ‘securities’ defined as equities, bonds, options, asset-backed securities and repo instruments. Five percent of the fund’s assets must be allocated to liquidity instruments with maturities no longer than the equivalent of one-year government bonds.

Mindful that the funds industry at large is still poring over lecture notes and textbooks this month and that most firms have not yet hired the required techies for back-end support, the CSRC is advising caution and proper understanding; all participants should be adequately prepared before they enter the futures market. The CSRC wants fund houses to set up specific departments covering futures strategies and investments.

Other stakeholders, including guarantors to the ‘principal-protected’ funds (China’s version of CPPIs), are advised to get actively involved and aware of the potential value-at-risk for the funds they have given guarantee to; and that there should be sufficient assets to cover the principal-protected funds promised to investors should any potential losses occur.

Custodian banks are advised to review their own adequacy and strategies accordingly and develop risk-management and technological teams and platforms to support this development.

In earlier interviews with AsianInvestor, fund-rating agencies, including Morningstar and Lipper, have already taken a dim view of the opening moves that mutual fund houses will be able to make. Aside from the anticipated volatility to come, both predict a conservative and difficult early period, in which fund houses will be constrained by a lack of experienced staff and technical knowledge to draw on — for what is supposedly one of the most important chapters in the recent history of capital-market developments in China.

Nonetheless, for now, unregulated private funds, foreign investors with access to A-share markets and high-net-worth clients, and the 11 brokerages authorised to trade futures, are expected to be the largest beneficiaries.

For foreign players, though, CSI 300 futures will just be something to add to the toolbox. Overseas funds have long been able to express their views on A-shares using FTSE Xinhua A50 futures available in Hong Kong or Singapore.

Source:AsianInvestor.net, 18.03.2010 by By Liz Mak

Filed under: China, Exchanges, News, CFFE China Financia Futures Exchange, China 中国, Compliance, CSI China Securities Index, CSRC China Securities Regulatory Commision, Derivatives, ETF, Exchanges, financial futures, Futures and Options, Hedge Fund, Index, Regulation, Risk Management, SSE Shanghai Stock Exchange

Brazil: BM&FBOVESPA Exchange news and events February 2010

BM&FBOVESPA launches foreign exchange non-deliverable forward contract

BM&FBOVESPA has authorized, as of January 18, the registration of dollar, euro, yen, and cross-rate non-deliverable forward contracts in its OTC market.

Initially, only foreign exchange transactions established by the Brazilian Central Bank can be registered. As of March 1, BM&FBOVESPA will also authorize the registration of transactions with exchange rates calculated by the following information sources: U.S. Dollar/Euro parity exchange rate calculated and published by the European Central Bank; U.S Dollar/Euro exchange rate fixed by WMR/Reuters; Japanese Yen/U.S. Dollar parity exchange rate calculated and published by the Central Bank of Japan; and Japanese Yen/U.S. Dollar exchange rate fixed by WMR/Reuters.

Click here for further details regarding the contract.

BM&FBOVESPA appoints executive for its London operations

The Exchange announces the appointment of Cathryn Lyall as Director of BM&FBOVESPA (UK) Ltd, a wholly-owned subsidiary of BM&FBOVESPA. Ms. Lyall will be responsible for the set up and expansion of the new BM&FBOVESPA European office located in London, including all product and sales related activities in EMEA.

Ms. Lyall will also be responsible for establishing regulatory relationships, education and training programs, speaking opportunities, and developing marketing, and business development related activities targeted at potential customers in the region. She will report to Joao Lauro Amaral, head of International Business for BM&FBOVESPA.

Exchange hosts event to seal partnership between Brazil and the International Accounting Standards Board (IASB) on convergence to IFRS

BM&FBOVESPA hosted, on 28 January 2010, the signing of a Memorandum of Understanding between the International Accounting Standards Board (IASB), the Brazilian Federal Council of Accounting (CFC) and, the Brazilian Accounting Pronouncements Committee (CPC).

The partnership is an important step towards the insertion of Brazil in the international forum on the establishment and adoption of a set of accounting standards known as the IFRS (International Financial Reporting Standards).

Since only a handful of countries have signed memorandums with the IASB, such partnership demonstrates Brazil’s commitment towards global regulatory issues. The agreement’s objective is to expand the convergence to IFRS norms in Brazil and to also guarantee a greater participation of Brazilian companies in regulatory discussions.

Exchange registers record fourth quarter trading

The average daily financial volume traded at the Brazilian Securities, Commodities and Futures Exchange equity markets reached a record BRL 6.840 billion during the fourth quarter of 2009. The amount surpasses in 3.34% the previous record, of BRL 6.618 billion, set during the fourth quarter of 2007. It is also 31.19% greater than the average daily volume traded in the third quarter of 2009, of BRL 5.214 billion.

Due to this historic record, the average daily volume registered during the second semester of 2009 reached BRL 6.001 billion; 32% superior to the average daily volume of BRL 4.560 billion, registered in the first six months of last year. During the fourth quarter, foreign investor participation in the traded volume was 31.7%, followed by individual investors (29.1%), institutional investors (27.1%), financial institutions (9.8%), and others (0.06%).

BM&FBOVESPA is the third most important market in terms of IPO operations in 2009

The Brazilian Exchange was the backstage for US$ 12.5 billion in capital raised through IPOs operations in 2009, ranking it in 3rd place as the most important IPO market in the world, only behind the Hong Kong and Shanghai Exchanges.

The total capital raised by shares issues accounted for US$ 41.7 billion in 2009, placing BM&FBOVESPA among the top 10 global markets, according to the World Federation of Exchanges.

Exchange ranks as the second largest equity options market and the sixth largest derivatives market in the world

According to the Futures Industry Association, BM&FBOVESPA has the second largest equity options market in the world. It registered a total of 369 million contracts traded from January to September 2009. The ranking is calculated based on the number of single stock options contracts and/or cleared.

Also, according to the same institution, BM&FBOVESPA was the 6th largest exchange in the world in terms of number of futures and options contracts traded from January to September 2009. That period registered a total trading volume of 649,203,768 contracts, which represents an increase of 12.6% over the same period in 2008.

Exchange sets DMA trading records

On 28 January 2010, the Exchange set a new DMA trading record (derivatives segment), reaching 836,153 contracts traded. The previous record was 773,396 contracts traded (on 21/01/2010). DMA trading via order routing with CME Group also set a record, on the same date, reaching 52,053 trades. The previous record of 51,422 was set on 21/01/2010.

In December, Direct Market Access (DMA) trading of the derivatives market segment registered a total of 8,238,292 contracts traded via DMA*, with 998,834 trades carried out through the GTS trading platform. In November, the total was 8,350,565 contracts traded in 1,103,437 trades. The volumes registered by access modality in December in comparison to the previous month are as follows:

Traditional DMA – 3,546,606 contracts traded, in 385,040 trades, in comparison to 3,838,053 contracts traded and 444,987 trades;

DMA via order routing with CME Globex (CME Group’s electronic trading platform) – 2,144,247 contracts traded, in 506,991 trades, in comparison to 2,321,877 contracts and 557,088 trades.

Via DMA Provider – 2,277,446 contracts traded, in 57,677 trades, in comparison to 1,900,815 contracts traded and 43,486 trades;

DMA via co – location – 269,993 contracts traded, in 49,126 trades, in comparison to 289,820 contracts traded, in 57,876 trades.

BM&FBOVESPA 2009 market performance

BM&F segments
Derivatives markets in the BM&F segment (including financial and agricultural derivatives) totaled 373.41 million contracts and a financial volume of BRL 26.78 trillion in 2009, compared to 391.62 million contracts and BRL 28.01 trillion in financial volume in 2008. The daily average of contracts, in 2009, was 1,517,941, as opposed to 1,572,783 in 2008. Mini contracts traded reached 12.95 million in 2009, in contrast 10.08 million in 2008.

Bovespa Segments
The equity markets (Bovespa segment) reached a total volume of BRL 1.3 trillion in 2009, compared to BRL 1.37 trillion in 2008. The average daily financial volume was BRL 5.28 billion, in contrast to BRL 5.52 billion in the previous year. During 2009, 81.75 million trades were carried out, as opposed to 61.02 million in 2008. In 2009, the daily average of trades reached, 332,349, surpassing the average of 245,071 trades in 2008.

Exchange Holidays for 2010

For the list of Exchange Holidays for 2010, click here. There will be no trading activities in either of the equities market (Mega Bolsa), or the corporate fixed-income securities markets (Bovespa Fix and Soma Fix), or the derivatives market (GTS), and BM&FBOVESPA will be closed for business on these holidays.

Source: BM&FBOVESPA, 02.02.2010

Filed under: BM&FBOVESPA, Brazil, Energy & Environment, Exchanges, Latin America, News, Risk Management, Trading Technology, Algo Trading, BM&FBOVESPA, Brazil, Capital Markets, Co-Location, Commodities, Currency, Derivatives, DMA Direct Market Access, ETF, Exchanges, Futures and Options, Index, IPO, Latin America, Order Routing, Performance Report, Regulation, Trading Network