09.19.2011
By Terry Flanagan

BM&F to Use Nasdaq Tech

The Brazilian exchange operator has reached a deal to use Nasdaq’s trade monitoring technology.

Nasdaq OMX has come to an agreement to lend its Smarts Integrity market surveillance platform to BM&F Bovespa, the largest stock exchange in Latin America, and Bovespa Market Supervision, its Brazilian self-regulatory organization.

“Smarts Integrity’s cross-market surveillance platform will allow us to monitor our markets effectively and efficiently, with the scalability to process increased volumes as we expand,” said Cicero Vieira, BM&F Bovespa chief operating officer in a release. “The combination of proven functionality, reliable performance and Nasdaq OMX’s global technology expertise make Smarts Integrity an optimal platform to help us achieve our goals.”

“We had systems internally in our exchange to survey our systems,” André Demarco, trading officer from BM&F, told Markets Media. “We had this, we were working with this for many years. But now, we need to upgrade. We decided to acquire the license for the Smarts system. We believe the Smarts system provided by Nasdaq will provide the tools and increase the capacity to monitor the market activity in Brazil, especially the high frequency traders.”

“Smarts will increase our capacity to analyze and identify certain behaviors, such as outliers on price, and price formations,” added Demarco. “These are our obligations, we are required to self-regulate, this will help us do this.”

This is the latest example of an exchange operator stepping outside its traditional core of business of matching trades and moving toward offering technology services.

BM&F reached a record high for equity volume traded during August, at 16.2 million trades valued at R$177.9 billion ($115.8 billion). Average daily volume was 705,855 trades and R$7.7 billion. The company also experienced substantial volume in its exchange-traded funds and derivatives segments. In total, it handled R$ 1.4 billion and 78,809 in ETF trades, up from R$667.8 million and 31,997 in July. Derivatives markets totaled 78.6 million contracts worth R$5.2 trillion, up from 44.2 million contracts and R$3.4 trillion the prior month.

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