09.06.2011
By Terry Flanagan

Mexico Embraces Algorithmic Trading

BMV and brokers work to promote liquidity formation and dark pools.

Mexico is building out capabilities for algorithmic and high-speed trading at both the exchange and broker-dealer levels.

BMV’s (Bolsa Mexicana de Valores) RINO (Comprehensive Review of Standard Operations) project “pools together odd lot liquidity and program trading with all other trades,” Brian Ross, CEO of FIX Flyer, told Markets Media. “RINO also lets the BMV run a dark pool for helping reduce market impact of larger trades.”

Mexico’s Circular Única de Casas de Bolsa, which contains the Comprehensive Review of Standard Operations (RINO), will significantly improve trading operations in line with international practices, according to Alice Botis, head of business development for Latin America at Fidessa.

“It introduces new commands, agility in price formation, and faster insertion and removal from positions to create an environment that is more conducive to program trading and algorithm-based operations,” said Botis. “It will adopt standards for DMA trading and enable brokers to adopt multiple pipes to the exchange.”

Actinver Grupo Financiero, one of the leading brokers in Mexico, has implemented technology from FIX Flyer for its FIX messaging infrastructure in order to provide advanced electronic trading services to their clients worldwide.

Actinver uses Flyer’s FIX Engine for routing client orders to the BMV, and uses Daytona to support and monitor FIX sessions with all of their counterparties.

The technology has enabled Actinver “to aggressively expand our algorithmic and low-latency trading programs for the direct benefit of our institutional clients around the globe, according to Gerardo Roman, head of electronic trading.

“We have embraced the vision of electronic trading in order to provide the very best execution for our increasingly sophisticated clients,” he said.

Using FIX Flyer’s tools, Actinver is in a strong position to attract electronic order flow from markets all over the world by embracing global trading standards like FIX, said Ross.

“The regulators and the BMV are working closely together to make the Bolsa competitive with the world’s exchanges and ECNs,” said Ross. “Mexican brokerage houses design their own operating manuals, according to their customers’ needs, and then get approval to the banking and securities regulator CNBV.”

The Flyer Engine is designed to manage high volume, ultra-low-latency trading networks and ECNs, easily scaling to thousands of connections, the company said.

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