CME Group, the world's leading and most diverse derivatives marketplace, and BM&FBovespa (BVMF), the largest equity and futures exchange in Latin America, today announced a cross-listing and cross-licensing agreement involving S&P 500 Index and Bovespa Index (IBOVESPA) futures.
BVMF will also license CME Group's Chicago Board of Trade (CBOT) Mini-sized Soybean and NYMEX Light Sweet Crude Oil (WTI) futures settlement prices. The agreement also provides the companies the opportunity to license additional products in the future.
Under the cross-listing arrangements, the IBOVESPA, the main indicator of the Brazilian stock market's average performance, will be listed on Chicago Mercantile Exchange (CME) and cleared through CME Clearing as U.S. dollar denominated Ibovespa futures. BVMF will launch U.S. dollar denominated S&P 500 Index futures to be settled in Brazilian real, the CBOT listed Mini-sized Soybean futures and the NYMEX listed Light Sweet Crude Oil (WTI) futures. The S&P 500 is being made available to BVMF via sublicense from CME Group and S&P Indices, one of the world's leading index providers, under CME Group's exclusive global license.
BVMF expects to launch the Mini-sized Soybean futures in the 2nd quarter of 2012, and the WTI futures in the 3rd quarter of 2012. Each exchange expects to launch its respective equity index futures in the second half of 2012.
"We continue to build on our relationship with BM&FBOVESPA, and are working together closely to provide more ways to manage risk for our global customers through technology and order routing," said Bryan Durkin, CME Group Chief Operating Officer and Managing Director, Products & Services. "These new cross-listing arrangements provide both CME Group's and BM&FBOVESPA's customers access to some of the key, globally-relevant benchmark products. This initiative will allow our clients to improve their ability to better manage market and credit risk exposure across various asset classes. As our relationship expands, we will continue to explore joint technology and product opportunities with BM&FBOVESPA to bring more innovative and new trading solutions to the global marketplace."
"Our long standing strategic partnership winership with CME Group continues to bring new benefits to both companies' customers. By providing order routing, joint trading technology development and now the cross-listing initiative, we reinforce our commitment to providing superior products and trading opportunities to our clients in Brazil and also offer the main Brazilian equity benchmark index in the U.S.," said Marcelo Maziero, BM&FBOVESPA Chief Product and Customer Officer. "The cross-listing arrangement will provide much easier local access to international flagship products with little or no extra technology investment, catering for better risk management with reduced costs."
"S&P Indices and the CME Group have an extensive, successful history of opening up news areas of investment to the world's financial markets," says Alexander Matturri, Executive Managing Director at S&P Indices. "Via our sublicensing agreement with BM&FBOVESPA and the CME Group, Brazilian investors will now be able to further diversify and strengthen their portfolio by taking a position in the U.S. equity markets as defined by the S&P 500."