CBLC plans improvements to clearing and settlements in Brazil

The Brazilian Clearing and Depository Corporation (CBLC) has signed a memorandum of understanding (MoU) with Euroclear and has been in partnership talks with settlements provider Omgeo.

Both announcements were made with the aim of helping the CBLC improve securities clearing and settlements in Brazil for domestic and international participants.

The initiatives that will be discussed under the MoU with Euroclear include cross-entity training programmes, data exchange for the improvement of clearing and settlement systems, regular meetings between senior management to increase mutual understanding of business developments and joint studies on topics related to securities clearing and settlement operations.

Talks with Omgeo will focus on areas that both companies see for improvement in post-trade communications between participants who execute trades in the Brazilian marketplace.

Possible solutions from such a partnership will seek to further improve the level of automation and standardisation in the post-trade, pre-settlement processes by replacing fax and email communication with standard, automated workflow for communication between local Brazilian and international investors, brokers and custodians.

“From 2005 to 2007, the average daily number of trades settled in Brazil increased approximately 90%,” said Gilberto Mifano, CEO at CBLC, in a statement. “With such a rapid increase in volumes, it is critical for market infrastructures to evolve at the same pace to ensure stability in the marketplace. Further developments in the automation of the market will play an important role in enhancing foreign investments in the Brazilian market.”

On signing the MoU with Euroclear, he added, “We trust this agreement will play an important role in further developing operational efficiency in Brazil, particularly in view of the pending merger of Brazil’s BM&FSA, the local commodities and futures exchange, and Bovespa Holding.”