Mexico Extends Exchange Connectivity

Terry Flanagan

MexDer and CME Group providing cross-border trading.

Demand for low-latency connectivity into and out of Mexico is being spurred by cross-border initiatives launched by exchanges.

Mexican Derivatives Exchange (MexDer) has become a destination for North American market participants.

For example, Custom Connect, a global reseller of high-performance network solutions, has announced that a major worldwide financial trader selected Custom Connect to deliver connectivity between MexDer, and 111 8th Ave., New York City, a principal trading connectivity hub.

The 1G Ethernet connection offers the lowest possible latency between both markets with a round-trip time of below 55 milliseconds.

“We provided one of MexDer’s clients with the fastest connection between the financial exchanges in New York and MexDer,” Olav van Doorn, executive director at Custom Connect, told Markets Media.

“This low-latency solution enables the client to expand its business by enabling high frequency trading between the financial markets in Mexico City and New York City,” said van Doom.

With increasing levels of competition, delivering a service with the lowest latency was a key requirement in designing this connection between these financial markets. Custom Connect designed a bespoke solution with the lowest latency by optimizing the fiber distance and network technology, van Doom said.

MexDer, the derivatives subsidiary of the BMV Group, and CME Group in August launched a north-to-south order routing agreement, giving customers in the U.S. access to MexDer’s benchmark derivatives contracts, including Mexican Stock Exchange Index Futures, Bond Futures and MXN Peso / US Dollar Futures Contracts.

MexDer and CME previously had gone live with south-to-north order routing, which gave Mexican investors access to CME Group’s benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.

“With the successful launch of south-to-north order routing in April, 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,” Luis Téllez, Chairman and CEO of BMV Group, said in August. “Our goal moving forward is to focus on increasing our volumes together and working more closely with each other to learn how we can meet the needs of our customers.”

Related articles

  1. The blockchain-based platform is the first to connect metals and cash settlement networks.

  2. Morgan Stanley completed the acquisition of E*TRADE in 2020.

  3. Blackstone committed $400m to lead a strategic investment in Xpansiv in July.

  4. LME Looks to Chinese Growth

    The Managed Funds Association said LME has undermined confidence in its ability to oversee markets.

  5. CME Expands Metals Suite

    Lawsuits have been filed against the LME’s decision.