Source: CME
The Mexican Derivatives Exchange (MexDer), the derivatives subsidiary of the Mexican Exchange (Bolsa Mexicana BMV), the second largest exchange in Latin America, and CME Group, the world's leading and most diverse derivatives marketplace, today announced the successful launch of their south-to-north connection, giving Mexican investors access to CME Group's benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.
"The direct, seamless order routing connection will make it possible to trade and route electronic orders on MexDer and CME Group, opening both their contracts to a broader range of traders," said Luis Téllez, Chairman and CEO of BMV Group. "Our partnership with CME Group will strengthen CME Group's ties to the fast-growing Mexican market, and give Mexican market users access to the CME Group's suite of derivatives products."
"Partnering with BMV allows CME Group to continue to provide market participants with access to globally relevant and deeply liquid benchmark products," said Phupinder Gill, CME Group President. "Today's launch expands distribution of the CME Globex electronic trading platform to financial markets in Latin America, as well as provides CME Group customers with a means to manage their hedging strategies with direct exposure to Mexico's markets."
With this connection, market participants will have increased access to foreign markets and liquidity pools, which will allow traders to hedge risks across the multiple exchanges, arbitrage prices between markets and/or securities, as well as geographically diversify investment allocations.
With the establishment of a new CME Group international telecommunications hub in Mexico City, MexDer participants can seamlessly leverage their existing MexDer front-end trading platform or API to route and execute on the CME Globex electronic trading platform.
In this first stage of the Order Routing Agreement MexDer members and their customers will have access to CME Group products. The initial activity is expected to be performed by local members trading on a proprietary basis and they will be incorporating customers orders in the coming weeks.
In addition, CME Group is the exclusive exchange provider of derivatives order routing services to MexDer outside Latin America, and MexDer will be the exclusive exchange provider of derivatives order routing services to CME Group in Mexico.
The second phase of the partnership is ("north-to-south") scheduled for Q3 2011, and will give CME Group market participants access to MexDer's benchmark interest rate and equity index derivatives.
CME Group contracts are listed with, and subject to the rules and regulations of its CME, CBOT and NYMEX exchanges.