Brazilian exchange BM&F Bovespa has said plans to integrate its clearing and settlement platforms and upgrade securities trading onto its new Puma platform have gained "strong momentum", as its Q4 results show little change to revenues.
The bourse's results revealed that net revenues in Q4 remained flat compared to 12 months ago, registering US$274.5 million in Q4 2011 compared with US$275.7 million a year earlier.
The exchange singled out securities lending, exchange-traded funds (ETFs) and high-frequency trading (HFT) as sectors that performed well in the last quarter. The figures revealed a 55.7% rise in securities lending revenues; while HFTs increased their share of market activity from 4.3% to 10.3% of total volume on the Bovespa equities segment, and from 5% to 7.2% on the BM&F derivatives segment. Meanwhile, there was a 107% increase in the average daily trading value of ETFs over the last 12 months, as well as a 79.8% increase in the average daily trading volume of stock indices contracts.
Ongoing projects featured heavily in the results statement. The new Puma trading system, which was developed in conjunction with US derivatives exchange CME Group, will gradually replace BM&F Bovespa's four existing trading engines: Global Trading System (GTS), a derivatives and spot FX trading platform; equity and equity derivatives engine Mega Bolsa; and BOVESPA FIX and SISBEX, used for corporate and government fixed income securities respectively. The first module of the project, involving derivatives and spot foreign exchange in the BM&F segment, was completed in the second half of 2011 and is currently in operation. The testing phase for the other modules is already underway.
BM&F Bovespa is also working on consolidating its four clearing houses into a single post-trade system. In October, the exchange signed an agreement with Swedish technology firm Cinnober for a perpetual licence of the TRADExpress Real Time Clearing system, which will be used to provide the technology platform for the new system. Development is due to continue through 2012, with integrated market testing and the start of implementation slated for 2013.
The exchange is developing an OTC trading platform, together with US-based technology provider Calypso Technology. The project is divided into three modules, the first of which is expected for delivery in the second half of 2012.
“Our investment program to strengthen our IT infrastructure and the launching and development of products and markets such as ETFs, HFTs and options on single stocks are aligned with our goal to capture the growth opportunities offered by the Brazilian market,” said BM&F Bovespa CEO Edemir Pinto. “We are also taking actions to strengthen market supervision, which will help make the Brazilian market more attractive to investors."
The Brazilian government repealed a tax placed on foreign investors trading equities in December 2011, a move which BM&F Bovespa believes is sure to stimulate trading activity in the country. The tax was also removed for debt instruments that have a tenor of four years or longer.