CME and BMV Advance Partnership

Terry Flanagan

Chicago derivatives exchange operator CME Group and Bolsa Mexicana de Valores’ Mexican Derivatives Exchange launched the next stage of their strategic partnership Monday, with the start of their ‘north-to-south’ order routing connection, which gives U.S. investors access to MexDer’s derivatives contracts.

“Mexico is the 13th-largest economy in the world and we continue to look for opportunities to provide our customers around the world with the broadest and most diverse range of globally relevant products to help them manage their risk,” said Phupinder Gill, CME president in a Monday release. “This next phase of the partnership demonstrates how we continue to build on our successful track record of growing our business internationally through strategic partnerships.”

“The second phase of the direct order routing connection now makes it possible for both of our customers to leverage access to both MexDer and CME Group, and take advantage of a modern market with a friendly regulatory framework in Mexico and a growing sophisticated local investor base,” said Luis Téllez, chairman and chief executive officer of BMV.

Neither CME nor BMV executives were immediately available for comment, according to spokespeople from each exchange.

The north-to-south connection will allow stateside investors to trade MexDer’s benchmark derivatives contracts, including Mexican Stock Exchange index futures, bond futures and Mexican peso/U.S. dollar futures contracts.

“This partnership illustrates our ongoing focus on global growth and builds upon our efforts to provide market participants with expanded access to globally relevant and liquid benchmark products,” said Michael Shore, a CME spokesman.

According to Shore, CME will continue to explore additional partnership opportunities going forward. “We know the importance of collaborating with other key exchanges and companies where we believe it will create significant value for all of our customers,” Shore said.

The first phase of the two bourse operators’ direct order routing connection launched April 4. The so-called south-to-north connection allowed Mexican investors access to CME’s benchmark derivatives contracts, including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities. Trading volume during this order routing connection has so far met company expectations, according to Shore.

The two parties originally announced the consummation of their strategic partnership in March 2010. In addition to the order routing connection, the agreement also allows for the pursuit of other joint initiatives, including product development, marketing and clearing opportunities. CME is the exclusive provider of derivatives order routing services to MexDer outside of Latin America, and MexDer is the exclusive provider of derivatives order routing services to CME in Mexico.

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