Brazil Builds Out High-Speed Connections
Brazil continues to build out infrastructure for enabling high-speed traders around the world to connect to its trading platforms.
Bolstered by its partnership with CME Group, with which it is building a state-of-the-art trading platform, BM&F Bovespa is forming relationships with trading systems and network providers to enable high-frequency and algorithmic traders overseas to connect directly to the platform.
“By partnering with CME Group, the world’s largest exchange, BM&F Bovespa has opened the door to new opportunities for cross-border trading,” Jock Percy, CEO of Perseus Telecom, told Markets Media. “Latin America is quickly becoming an international hub and trading desks, whether at a large bank or a hedge fund, are racing to discover the arbitrage and hedging opportunities available through exchanges like Bovespa.”
Perseus Telecom has rolled out a low-latency trading connection to Bovespa, via a partnership with GlobeNet, an international wholesale provider of submarine capacity, and a wholly owned subsidiary of Oi, Brazil’s national telecom provider.
The route directly links Sao Paulo’s Bovespa to New York’s Nasdaq OMX, and in turn, routes to major global exchanges such as the CME, NYSE, BATS, LSE, Deutsche Börse and Eurex.
By establishing a direct connection to BM&F Bovespa, Perseus Telecom is enabling trading firms to develop innovative high frequency trading strategies, products and services incorporating securities traded through Bovespa.
The partnership between CME and Bovespa stipulates that distribution of Bovespa products through CME Globex will be carried out via direct market access or DMA, by which investors place their orders directly to BM&FBOVESPA electronic trading system. “Demands for DMA connectivity Bovespa connectivity have increases as a result,” said Percy.
The high capacity route will avoid the highly congested NYC metro area and connect directly to the New Jersey Nasdaq facility, thereby creating express connectivity with Chicago, Toronto, London and Tokyo financial exchanges without having to traverse traditional carrier networks.
Perseus Telecom has built the U.S. part of the network, which connects to the underwater cables built by GlobeNet.
“GlobeNet owns the submarine cable system from North America to Brazil, which comes ashore in New Jersey,” said Percy. “We linked into that at the cable landing station and constructed our own fiber back Nasdaq’s New Jersey site, and from there we can get to Chicago, London, and other locations.”