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CVM authorizes BM&FBOVESPA to implement new DMA modalities in the Bovespa segment
- Currently, Direct Market Access to the Bovespa segment is only available through model 1 or traditional DMA.
- Beginning in September, access will also be available through DMA provider, direct connection and co-location, just as it is now in the BM&F segment
On August 9th, BM&FBOVESPA received authorization from the Brazilian Securities and Exchange Commission (CVM) to implement three new DMA modalities in its Bovespa segment, making Direct Market Access available through models 2, 3 and 4 – DMA Provider, Direct Connection, and Co-location. With this authorization the Bovespa segment will be able, beginning on September 1st, to utilize all of the same direct market access modalities which are currently used in the BM&F segment.
BM&FBOVESPA understands that this is yet one more important step in its strategy for the development of its technological infrastructure and the expansion of its client base, especially for those clients who are known as High-Frequency Traders (HFTs).
New Fee Policy for High-Frequency Traders (HFT)
BM&FBOVESPA presented at beginning of August its new fee policy for the transactions carried out by High-Frequency Traders (HFTs) in the Bovespa and BM&F market segments. All investors will benefit from this policy by way of increased liquidity and tighter spreads which are a direct result of the increased participation of High-Frequency Traders. The new policy will be implemented in two stages, in accordance with the timetable described below:
Stage 1: November 2010: The Exchange will provide registered HFTs with a scaled fee structure based on volumes traded. |
All participants (HFTs) who desire to access the HFT policy discount entitlements by November 1, 2010 must submit the registration request by no later than August 31, 2010
For the complete information, access the Circular Letter and the Annex I with the registration request. Click here.
BM&FBOVESPA presents new financial education campaign
On August 17th, BM&FBOVESPA launched its new financial education campaign under the slogan “Quer ser sócio?” (“Wanna be a Partner?”). The campaign ads highlight the former soccer player’s sporting career to illustrate some of the key concepts of investing in the stock market. At this event which was headlined by Pelé himself, the advertising campaign, marketing channels and the first stage timeline were presented to the public. This initiative is part of BM&FBOVESPA’s strategy to increase its total number of investors to five million within the next five years.
Exchange Traded Funds
Itaú Unibanco S.A is selected to manage the Financial ETF
BM&FBOVESPA announced on August 4th, that Itaú Unibanco S.A. won the bidding process for the selection of a securities portfolio manager for the ETF based on the BM&FBOVESPA Financial Index (IFNC). Itaú Unibanco S.A. obtained a 3-year exclusive license for the use of the IFCN and for the creation of its ETF (ETF IFCN). Four institutions submitted their proposals, and BM&FBOVESPA carried out the official opening of those proposals. The Itaú Unibanco proposal contained the commitment to the highest financial volume and was, therefore, officially named as the ETF IFCN securities portfolio manager.
Reduction in the round lot for ETFs to facilitate the access of individual investors
On August 2, 2010 the round lot for index funds or ETFs (Exchange Traded Funds) was reduced from 100 units to 10 units. This means that the minimum value needed to invest in this product is now ten times less than it was. For example, a round lot for the ETF BOVA11, which mirrors the Bovespa Index, based on its closing price on July 19, was reduced from BRL6,280.00 to BRL628.00. The objective of this round lot reduction is to increase the trading potential of these funds, especially for individual investors.
BM&FBOVESPA sets new trading record for Exchange Traded Funds (ETFs)
On August 4th, BM&FBOVESPA hit a new historic high with a total of 2,247 ETF trades. In just one day the BOVA11 registered 2,134 trades (199,650 shares at the average price of BRL67.62), reaching BRL13.5 million in total financial volume. All of the other ETFs together registered a total of 113 trades. The previous record was set on February 22 of this year when a total of 1,714 ETF trades were registered, at that time 1,608 were from the BOVA11 and 97 were from all other ETFs. It should also be noted that on August 2nd the minimum lot for ETF trades was reduced from 100 units to 10 units.
Deadline extended for approval of amendments to the listing rules for the BM&FBOVESPA special listing segments
BM&FBOVESPA extended the deadline to September 8th, for the review by the listed issuers of proposed amendments to the listing rules for its special listing segments (Novo Mercado and Corporate Governance Levels 1 and 2). These revised listing rules are expected to be implemented after a closed hearing and final approval by the BM&FBOVESPA Board of Directors and by the Brazilian Securities and Exchange Commission (CVM). During the month of August, BM&FBOVESPA will clarify the many important topics surrounding these amendments in order to make the best possible decisions.
On August 13th BM&BOVESPA announced its 2010 second quarter earnings
The Financial Highlights were as follows:
- Net income of BRL$305.7 million, an increase of 62.5% over the same period last year;- Net revenues of BRL$473.6 million, an increase of 25.2% year-on-year. This was driven by a growth in volume of 54.2% in the BM&F Segment and of 28.2% in the Bovespa Segment;
- Adjusted operating expenses totaled BRL$145.4 million, up 13.4% year-on-year and 6.4% quarter‐on‐quarter;
- EBITDA reached R$341.7 million, an increase of 31.4% over the previous year;
- EBITDA margin rose from 68.7% in 2Q09 to 72.1% in 2Q10.
Volumes and Trades by Direct Market Access (DMA)
In July the BM&F* segment transactions carried out through order routing via Direct Market Access (DMA) registered 17,219,831 contracts traded and 2,120,874 trades. In June, the volume reached 14,628,823 contracts traded and 2,208,050 trades.
The volumes registered by each access modality in the BM&F segment were as follows:
Traditional DMA - 7,716,142 contracts traded, in 721,072 trades, in comparison to 5,790,709 contracts and 689,995 trades in June;Via DMA provider (including orders routed via the Globex System) - 6,337,897 contracts traded, in 388,950 trades, compared to 5,439,977 contracts and 497,134 trades in June;
DMA via co-location - 3,165,792 contracts traded, in 1,010,852 trades, compared to 3,398,137 contracts and 1,020,921 trades in June.
In July transactions carried out by foreign investors presented by CME to BVMF (who use the Globex-GTS order routing system or access BVMF markets via co-location) totaled 3,530,368 contracts traded, in 1,004,407 trades, compared to 4,181,789 contracts and 1,141,890 trades in June.
* Direct market access to the Derivatives segment is performed under DMA in four models: traditional sponsored DMA (1): the client accesses the trading system GTS through a broker’s technology framework; DMA via provider (2): the client connects to the system through an authorized access provider and does not use a broker’s technology framework (for example Globex-GTS order routing); DMA with direct connection (3): the client accesses the Exchange’s trading platform via direct connection; DMA via co-location (4): the client installs its own computer inside the BM&FBOVESPA facilities. Direct market access to the equity segment is performed available under traditional sponsored DMA (1). The other models of DMA will be available to the equities segment starting on September 1st, 2010.MARKET RESULTS
BM&F Segment July 2010
In July the derivatives market segment totaled 60,110,831 contracts and BRL4.60 trillion in financial volume. That compares to 43,313,807 contracts and a financial volume of BRL2.87 trillion in June. The average daily trading volume in the derivatives markets in July was 2,862,421, in comparison to 2,062,562 in June.
BOVESPA Segment July 2010
In July the equities market segment traded BRL113.0 billion in 8,299,960 trades, with daily averages of BRL5.38 billion and 395,236 trades. In June the total volume reached BRL122.6 billion, in 8,371,028 trades, with daily averages of BRL5.84 billion and 398,620 trades.
BM&FBOVESPA international representative offices
The content of this publication is provided merely for informational and promotional purposes. It is not a recommendation for investment in any specific financial product. Please contact a brokerage house for additional information on how to evaluate the potential risks and benefits of securities and derivatives trading.
Membership of BM&FBOVESPA is available only to persons in Brazil. Connectivity to BM&FBOVESPA is available in the United Kingdom only to persons that are either authorised persons or exempt persons (in each case as defined in the Financial Services and Markets Act 2000).
This information is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the exchange and clearing services provided by BM&FBOVESPA may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This information is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this relates is available only to relevant persons and will be engaged in only with relevant persons.
