The Brazilian derivatives and stock exchange BM&F Bovespa has released volume figures for use of direct market access (DMA) to its equities market in October, the first month for which co-location-based DMA has been permitted.
The equities market traded a record B$154.5 billion in 10.2 million trades in October and achieved 9.8 million trades (worth B$105 billion) using DMA via a broker and 42,000 trades (worth B$367 million) via co-location.
Although levels are initially low they are expected to increase in November following the launch of a pricing policy for high-frequency traders that was introduced on 1 November and offers discounts based on volume.
A further plan that will let firms consolidate their volumes traded through multiple brokerage firms for the same account is expected to launch on 3 January and will lead to increased volumes of DMA via co-location.
Since 2008, the exchange has provided four methods for DMA trading into its derivatives market. Of these DMA 1 represents ”traditional’ market access through a broker infrastructure, DMA 2 allows access via an authorised access provider for example Bloomberg or Fidessa, DMA 3 offers direct access to the market with only pre-trade risk controls being imposed, and DMA 4 offers co-location, when the client installs its server inside the exchange’s data centre to allow high-frequency trading.
From October 2010 the exchange was permitted by the Brazilian securities regulator, Comissão de Valores Mobiliários to offer these options for its Bovespa equities segment.