Lending transactions rise for Brazil’s stock exchange
09 January 2013 São Paulo
Image: Shutterstock
In 2013, securities lending transactions at BM&FBOVESPA reached a new milestone with a financial volume of BRL 1 trillion with 1,693,151 trades.
This was a significant rise from the 2012 financial volume of BRL 785.9 billion and 1,313,365 trades.
In December 2013, the financial volume for securities lending transactions was BRL 92.93 billion, exceeding the BRL 70 billion seen in November 2013.
The number of transactions in December was 136,246, compared to 134,913 during the previous month.
Brazil’s securities lending industry has a centrally cleared design, by which the Brazilian Clearing and Depository Company (CBLC), the central counterparty (CCP) of stock exchange BM&FBovespa, accepts collateral from the borrower and holds it centrally.
The country has taken steps to open up its lending market to foreign participants. In a 2013 interview with SLT, Gregory Wagner, managing director and global head of prime services at Itaú BBA, said that although the exchange has been criticised in the past for not opening up to foreign participants, they have been extremely proactive in reaching out to the wider market as of late.
“As recently as last December (2012), representatives from the exchange went on a road show in Europe to educate and encourage foreign custodial banks (which represent pension funds and the like) and other institutions to work toward distributing their Brazil equity assets through the CBLC.”
“The BM&F Bovespa representatives are implementing a follow up/action plan to the meetings to further address the questions raised during their road show. It’s clear that the local exchange is serious about bridging the gap between home market policies and foreign participation in securities lending.”
This was a significant rise from the 2012 financial volume of BRL 785.9 billion and 1,313,365 trades.
In December 2013, the financial volume for securities lending transactions was BRL 92.93 billion, exceeding the BRL 70 billion seen in November 2013.
The number of transactions in December was 136,246, compared to 134,913 during the previous month.
Brazil’s securities lending industry has a centrally cleared design, by which the Brazilian Clearing and Depository Company (CBLC), the central counterparty (CCP) of stock exchange BM&FBovespa, accepts collateral from the borrower and holds it centrally.
The country has taken steps to open up its lending market to foreign participants. In a 2013 interview with SLT, Gregory Wagner, managing director and global head of prime services at Itaú BBA, said that although the exchange has been criticised in the past for not opening up to foreign participants, they have been extremely proactive in reaching out to the wider market as of late.
“As recently as last December (2012), representatives from the exchange went on a road show in Europe to educate and encourage foreign custodial banks (which represent pension funds and the like) and other institutions to work toward distributing their Brazil equity assets through the CBLC.”
“The BM&F Bovespa representatives are implementing a follow up/action plan to the meetings to further address the questions raised during their road show. It’s clear that the local exchange is serious about bridging the gap between home market policies and foreign participation in securities lending.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
