A partnership between market operator Chi-X Global and BM&F Bovespa that simplifies foreign access to Brazilian equities is now certifying participants as the initiative moves closer to launch.
Chi-FX Brazil is scheduled to launch in Q4 this year. It will use a real-time foreign exchange data feed to let registered institutional and retail investors located outside of Brazil trade stocks on BM&F Bovespa in their local currency.
The foreign exchange leg of offshore transactions in Brazilian securities occurs at the end of the trading day. According to Chi-X Global and BM&F Bovespa, executing the equity leg of a trade together with the FX leg significantly reduced the intraday currency risk.
“This is an important milestone for Chi-FX and comes at a time when trading participants globally are looking for greater transparency and trading efficiencies,” said Tal Cohen, CEO of Chi-X Global. “We are pleased to be working with BM&F Bovespa and remain focused on bringing new investment opportunities to the region.”
“The Chi-FX Brazil platform is an important part of our strategy to create innovative ways to develop Brazil’s capital markets,” said André Demarco, operations officer for BM&F Bovespa.
Greater options for trading in Brazil are on the horizon after US market operators BATS Global Markets and Direct Edge signaled their intentions to launch venues that would compete with BM&F Bovespa for equity trading. However, new entrants may find its difficult to get a foothold in Brazil after BM&F Bovespa CEO Edemir Pinto said he would not allow competing providers to share his exchange’s clearing infrastructure.