Mexican Derivatives Exchange

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Mexican Derivatives Exchange (MexDer)
Mexder bmv group.jpg
Founded 1998
Headquarters Mexico City, Mexico
Key People Jorge Alegria, CEO
Products listed derivatives contracts
Twitter @BMVMercados
LinkedIn Profile
Website www.mexder.com

The Mexican Derivatives Exchange (MexDer), known locally as the Mercado Mexicano de Derivados, launched in 1998, offers futures and options contracts on interest rates, stock indexs, currencies and single stock futures.[1] The exchange is owned by parent company Bolsa Mexicana de Valores S.A.B. (BMVSAB), which also owns the Mexican Stock Exchange (MSE) and the clearing house, ASIGNA.

The Mexican Derivatives Exchange was ranked as the world's 33rd-largest derivatives exchange by volume in 2012, according to the annual volume survey published by the Futures Industry Association (FIA).[2]The FIA report, published in March of 2013, notes that the exchange's total volume for 2012 declined by 8.8% from the previous year, falling to about 42.6 million contracts.

Background

The Mexican Derivatives Exchange was launched in December 1998 as a fully-automated electronic trading marketplace. [3] MexDer and its clearing house, ASIGNA, are regulated by the Mexican Department of Property and Public Credit (SCHP), Banco de México and the country's National Banking and Securities Commission (CNBV).

MexDer quickly grew the trading volume of its contracts in the first few years of its existence, culminating in a 154% increase from 2005 to 2006 to 274.5 million placing it number five on world rankings for futures exchange rankings that year.[4] [5]

But since then volume at MexDer slipped sharply, with a 30 percent drop in 2009 to 48.7 million contracts, from 70.1 million in 2008, according to FIA Magazine, March 2010 Volume Issue.[6]

John Lothian News Interviews

CEO Jorge Alegria on the Growth Potential for MexDer
Jorge Alegria, CEO of the Mexican Derivatives Exchange (MexDer), has seen his share of change since joining the exchange in 2003. The exchange has partnered with CME Group to offer its products on the CME Globex platform and vice versa. It also is set to launch its new derivatives trading platform in March. Alegria also sees an opportunity in its bond contract and the possible addition of commodities. In this interview with John Lothian, he also outlines the regulatory reforms in Mexico and their impact on the derivatives market.[7]

Key Contracts

Key People

MexDer CEO Jorge Alegria previously served the same role at the Mexican division of ABN AMRO Securities and was also executive vice president of Scotiabank Inverlat. Alegria has also served on the boards of the Mexican Stock Exchange, the Mexican Brokers Association (AMIB) and the ASIGNA clearing house.[8] Mr. Alegria is also a professor of derivatives at the Instituto Tecnológico Autónomo de México (ITAM), where he first earned his finance degree.

Annual Volumes

Year Total Annual Volume Percent Change World Ranking
2012 42,630,658 (-) 8.8% 33
2011 ~46,700,000 (est.) (+) 9.7% --
2010 42,595,575 (-) 12.7% 31
2009 48,780,699 -- --

2009

MexDer ranked number 28 in 2009 in the Futures Industry Association's global list of top 53 derivatives exchanges measured by volume but shed more than 30% on 2008's volume figure.[9] The FIA list, published in early April 2010, reports that that MexDer's total volume for 2009 dropped to 48.8 million, down from 70.1 million in 2008.

Recent News

In early August 2011, MexDer and the CME Group launched phase II of their north-to-south order routing agreement. The partnership enables customers in the US access to MexDer's benchmark derivatives contracts including the Mexican Stock Exchange Index Futures, bond futures and MXN Peso/US Dollar futures contracts. [10]

On May 17, 2011, MexDer launched two new futures contracts with underlying assets of 5 and 30 year Federal Government Development Bonds (M5 and M30).[11]

In April of 2011, the CME Group and MexDer announced the first phase of their strategic partnership. This gave Mexican investors access to the CME Group's benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.

On March 8, 2010, it was announced that the CME Group and MexDer's parent company, Bolsa Mexicana de Valores, signed an order routing agreement for derivatives. The deal gave the CME a 1.9% equity stake in BMV valued at $17 million as well as a seat on its board. The agreement also names the Chicago-based CME Group to be the exclusive provider of order routing to BMV outside of Latin America. [12]

On April 20, 2010, MexDer announced they would be providing clearing services for over-the-counter swap products based on interest rates to launch in early May 2010. [13]

The Mexican Derivatives Exchange (MexDer) added for the first time 20-year bond futures contracts denominated in Mexican pesos. The new contracts, which listed June 22 of 2009, allow investors to now hedge Mexican interest rates right across the whole yield curve. 10-year bond futures contracts, previously MexDer's longest denominated interest rate futures on offer, grew about 70% in the year until June 2009, MexDer recently reported.[14]

On December 8, 2009, Asigna and The Options Industry Council signed a licensing agreement to develop an educational program for Mexican investors and financial advisors.[15]

References

  1. MexDer, the Mexican Derivatives Exchange. MexDer.
  2. 2012 Annual Volume Survey. Futures Industry.org.
  3. MexDer, the Mexican Derivatives Exchange. MexDer.
  4. Derivatives Exchange Volume Accelerates in 2006. Futures Industry Association.
  5. FIA Top 30 Derivatives Exchanges. RTS Exchange.
  6. Futures Industry Volume Issue, March 2010. FIA.
  7. CEO Jorge Alegria on the Growth Potential for MexDer. MarketsWiki.tv.
  8. Jorge Alegría Formoso, Chief Executive Officer, Mexican Derivatives Exchange. Markets Media Online.
  9. 2009 Annual Volume Survey. FIA magazine.
  10. CME MexDer Launch North To South Order Routing Agreement. BBR Custody and Clearing.
  11. Press Release, MEXDER LAUNCHES NEW FUTURES CONTRACTS ON THE 5 AND 30 YEAR BOND (M5 AND M30). MexDer.
  12. MexDer hopes CME order routing deal will match BM&F's. FOW.
  13. Mexico's Bolsa Sees MXN624M In 2010 Net Income - CEO. B Share Breakroom.
  14. MexDer Introduces New 20 Year Bond Futures Contract. MexDer.
  15. Asigna, The Mexican Derivatives (Mexder) Clearing House, And The Options Industry Council Sign Licensing Agreement To Provide Options Education In Mexico. OIC.
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