Brazilian equities and derivatives exchange BM&F Bovespa has signed a linkage agreement with Chile's stock exchange, the Bolsa de Comercio de Santiago (BCS), heralding the latest in a series of cooperative projects being run between Latin American bourses.
The agreement, signed on 13 December, will enable connectivity between both exchanges for order routing and market data dissemination.
It also includes separate initiatives for further development of the BCS derivatives market, the establishment of joint initiatives related to settlement, clearing and central counterparty services, as well as access to the BM&F Bovespa/CME trading platform from Chile.
Market participants in both countries will be able to route orders for stocks, stock options and related derivatives listed on the other's exchange. Both exchanges will also be able to receive and distribute each other's market data. Clearing and settlement of orders will be done according to local market rules of the listed instrument.
The order routing and market data connections will use the same model as the current agreement in place between Chile, Colombia and Peru that went live on 22 November 2010. The technology for the Chile, Colombia and Peru link is supplied by UK-based vendor Rapid Addition, which provided each exchange with a FIX-based order routing hub that has been customised to distribute low-latency market data.
A spokesperson for BM&F Bovespa confirmed that the exchange would seek similar agreements with the Colombian and Peruvian exchanges during 2011.
The linkage agreement is currently awaiting approval by the competent authorities of each country.