Brazilian Mercantile & Futures Exchange
|Brazilian Mercantile & Futures Exchange|
|Key People||Chairman, Manoel Felix Cintra Neto|
|Products||Futures, options and swaps on interest-rate products, currencies, indexes and commodities|
The Brazilian Mercantile & Futures Exchange (BM&F) was formerly the largest derivatives exchange in Latin America.
Current exchange, BM&F Bovespa, was created in March 2008 with a merger between BM&F and Bovespa Holding SA, the publicly traded company that owns the Brazilian Stock Exchange.
BM&F ranked sixth globally in 2006, with volumes rising 37.6 percent to 258.5 million contracts. In 2007, it posted a 49-percent jump in net profits, and net income rose to 293.3 million reais ($174.5 million) from 197.2m reais in 2006.
The exchange converted into a for-profit company in September of 2007 and secured investment from the CME Group and a private equity firm ahead of an initial public offering on Nov. 30, 2007.
The stock opened at R$25 a share, with R$5.98 billion raised from the sale of a 33.2 percent stake by the existing shareholders.
Interest-rate and currency futures and options dominate trading, with compound annual growth in volumes of 24 percent since the launch of electronic trading in 2000. The exchange settles through three clearinghouses and also lists equity index and commodity contracts, as well as clearing over-the-counter products. In 2005 it launched a carbon-trading project.
History and Ownership
The Bolsa de Mercadorias & Futuros (BM&F) was founded in July 1985 by members of the Bovespa stock exchange, and trading started on Jan. 31, 1986. It merged on May 9, 1991 with the older São Paulo Commodities Exchange (founded in October 1917), and acquired Rio de Janeiro’s rival Brazilian Futures Exchange in 1997. It launched the Brazilian Commodities Exchange in August 2002, consolidating the country’s agricultural trading businesses from their regional centers.
The BM&F board agreed in December 2006 to convert to a for-profitcompany and seek a stock market listing by the end of 2007. The exchange owners agreed to convert to a for-profit organization on Sept. 20, 2007, and hired Rothschild to manage the process. Exchange officials expect to float a minority stake in the group on the Bovespa.
The stock was first priced on Nov. 8, 2007 at R$14.50-R$16.50 a share, with 28.8 percent slated for sale on Nov. 30, rising to 33.2 percent if a greenshoe was exercised.
General Atlantic, the U.S. private equity group, agreed on Sept. 23, 2007 to acquire a 10 percent stake in the exchange for R$1 billion, including a two-year lock-up.
The BM&F announced a cross-equity swap and marketing pact with the CME Group in October of 2007, with the U.S. exchange taking a proposed 10 percent stake in the Brazilian operator, which will in turn acquire 1.19 million CME shares, with a four-year lock-up. CME Group will distribute BM&F’s products through the Globex platform while and BM&F will connect its distribution network to CME Globex. In February of 2009, CME Group said it was taking a pre-tax charge of $275 million on a $700 million cross-equity deal it struck in 2007 with the Brazilian Mercantile and Futures Exchange.
BM&F agreed to merge with Bovespa Holding on March 25, 2008. BM&F went public in November 2007, raising BRL 5.98 billion in the initial public offering. Bovespa went public in October 2007, raising BRL 6.6 billion.
In 2011, BM&F announced that they had joined forces with the Shanghai Stock Exchange to explore cross-listing opportunities. 
Structure and Business Model
The BM&F combines open outcry and electronic trading and is one of only two exchanges launched since 1986 - alongside France’s Matif - to incorporate a pit.
The volume of screen-based business overtook the floor for the first time at the start of 2007. Around 54 percent of trades were transacted on their Global Trading System platform in January and February 2007, compared with 48.2 percent in calendar 2006. The exchange incorporates three clearinghouses covering financial and commodity derivatives, foreign exchange and securities.
Trading is conducted from Monday to Friday, from 0900 to 1700 with after-hours sessions from 1445 to 2000. After-hours transactions are cash settled on T+2.
- Chairman, Manoel Felix Cintra Neto
- CEO, Edemir Pinto
- CFO, Marco Aureilo Teixeira
- Chief Clearinghouse Officer, Cicero Vleira Neto
- Chief Market Development Officer, Ailton Coentro Filho
- Chief Corporate Officer, Renato Mercadante Morteri
Products and Services
Real-denominated interest rate contracts dominate trading at the BM&F, and accounted for 57 percent of volume in the 12 months to Aug. 31, 2007. Currency contracts ranked second at 27 percent, followed by indexes (10 percent), U.S. dollar-denominated interest rate products (5 percent) and commodities (1 percent).
- Brazilian Mercantile & Futures Exchange Crystal Sugar Futures
- Brazilian Mercantile & Futures Exchange Cotton Futures
- Brazilian Mercantile & Futures Exchange Arabica Coffee Futures
- Brazilian Mercantile & Futures Exchange Soybean Futures
- Brazilian Mercantile & Futures Exchange Alcohol Futures
- Brazilian Mercantile & Futures Exchange Feeder Cattle Futures
- Brazilian Mercantile & Futures Exchange Robusta Conillon Coffee Futures
- Brazilian Mercantile & Futures Exchange Ethanol Futures
- Brazilian Mercantile & Futures Exchange Live Cattle Futures
- Brazilian Mercantile & Futures Exchange Corn Futures
- Brazilian Mercantile & Futures Exchange Gold Futures
- Brazilian Mercantile & Futures Exchange Interest Rates Futures
- Brazilian Mercantile & Futures Exchange Index Futures
- Brazilian Mercantile & Futures Exchange Sovereign Debt Instruments Futures
- Brazilian Mercantile & Futures Exchange Exchange Rates Futures
São Paulo - Headquarters
Rio de Janeiro - Rio Office
- ↑ "Brazil's BM&F, Bovespa announce merger deal". MarketWatch.
- ↑ "Annual volume rankings". Futures Industry Association.
- ↑ "Brazil BM&F futures market's 2007 profit up 49 pct,” Feb. 27, 2008. Reuters.
- ↑ "Company report". BM&F.
- ↑ Press release. BM&F.
- ↑ "BM&F profile". Best Brazil.
- ↑ "BM&F listing set to raise R$4.6bn". Financial Times.
- ↑ CME Hit By Trading Slowdown. Financial Times.
- ↑ Brazil's BM&F Bovespa posts second-quarter net profit. Rueters.
- ↑ "Brazil's BM&F, Bovespa announce merger deal". MarketWatch.
- ↑ The Shanghai Stock Exchange and BM&F Join Forces. RapidSavr.
- ↑ "Stages In The Evolution of an Exchange". Leo Melamed.