Chi-X Global Holdings LLC today announced that Chi-FX™ Brazil is now available for participant certification. The platform, which has been developed via an alliance between Chi-X Global and BM&FBOVESPA S.A., Bolsa de Valores, Mercadorias e Futuros (“BVMF”), is expected to launch in the fourth quarter.
By leveraging a real-time foreign exchange feed, Chi-FX Brazil will enable registered institutional and retail investors based outside Brazil to trade shares listed on BM&FBOVESPA in their local currency.
Traditionally, the foreign exchange leg of off-shore transactions occurred at the end of the trading day; by automating this process and executing it simultaneous to the equity transaction, intraday currency risk is significantly reduced.
“This is an important milestone for Chi-FX and comes at a time when trading participants globally are looking for greater transparency and trading efficiencies,” said Tal Cohen, CEO of Chi-X Global. “We are pleased to be working with BVMF and remain focused on bringing new investment opportunities to the region.”
The Brazilian Real is currently trading at 2.02 against the greenback.
“The Chi-FX Brazil platform is an important part of our strategy to create innovative ways to develop Brazil’s capital markets,” said André Demarco, Operations Officer for BM&FBOVESPA. “It has been a great opportunity to partner with Chi-X Global as part of our global initiative”
Brazil’s BM&FBOVESPA is one of the largest exchanges in the world, trading in spot FX is a grey area as the regulator does not permit on shore participants to promote the product however retail investors are allowed to open and deal in FX at their own discretion. The CVM issued a white paper on the dangers of FX trading.
The BM&FBOVESPA exchange had promising results for the month of June as volumes saw a slight increase:
Total of agribusiness securities registered with the Exchange rises from BRL 14.83 billion to BRL 19.79 billion.
Agribusiness derivatives total 194,465 contracts traded from 183,317. Corn derivatives total 81,139 contracts from 55,249 the previous month.
In June 2012, the equities market’s (BOVESPA segment) financial volume totaled BRL 16.21 billion in 16,113,514 trades, with a daily average of BRL 8.16 billion.
In May, financial volume totaled BRL 163.62 billion, the total number of trades 19,571,917, and the daily average BRL 7.43 billion.
Derivatives markets in the BM&F segment (including financial and commodities derivatives) totaled 51,759,338 contracts and BRL 3.55 trillion in volume in June, compared to 85,784,768 contracts and BRL 5.43 trillion in May.
Open interest contracts ended the last trading day of June 2012 with 40,682,007 positions, compared to 39,415,401 in May.