São Paulo, August 18, 2014 – As of today,BM&FBOVESPA begins operating the BM&FBOVESPA Clearinghouse, a new post-trade infrastructure which in a single platform will include exchange-traded and OTC derivatives; equities and corporate bonds; spot FX; and federal government bonds.
Previously all of these markets used separate clearinghouses. As well as unifying the four existing clearinghouses, there is the major development of introducing of one of the world’s most modern and secure risk management systems: Closeout Risk Evaluation (CORE) (Details below). The BM&FBOVESPA Clearinghouse will bring greater robustness and competitiveness to Brazil’s financial and capital markets, representing a milestone in their evolution and history.
“Sometimes the market goes for several years without any changes. In this case we’ll leap forward several years in a single day,” says BM&FBOVESPA CEO Edemir Pinto. “The Single Clearinghouse and CORE represent a revolution in modernity, security and efficiency in central counterparty and risk management services. As was the case with the Brazilian Payment System (SPB), the market will be divided into before and after the new clearinghouse and CORE,” adds Mr. Pinto.
The first phase of the Project for the Integration of the Clearinghouses (IPN) is migration of the financial and commodity derivatives markets to the new clearinghouse. After the migration of the other markets is concluded, the Exchange will have brought together into its new clearinghouse the registration, position control, settlement and risk management processes of the trades executed in its several market segments, with the generation of important benefits for all participants.
According to Cícero Vieira, BM&FBOVESPA’s Chief Operating Officer, “this pioneering project will result in one of the most secure and sophisticated clearing systems in the world. The new clearinghouse will reduce the market’s back-office costs and make trade settlement and the allocation of collateral more efficient. It will also bring greater flexibility and reduce time frames for the launch of new products. The new technological infrastructure that has been installed will support growing volumes in Brazil’s financial and capital markets for the next 20 years.”