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BM&F and CME to develop joint trading platform
15 February 2010
BM&FBovespa and the Chicago Mercantile Exchange Group have signed a memorandum of understanding to jointly develop a multi-asset class trading platform.
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BM&FBovespa
CME Group
CME
Chicago Mercantile Exchange
Globex
Brazil
China
Bric
The agreement was announced to BM&F shareholders on February 12. The Brazilian exchange group's investment in the project is estimated at $175m over ten years.
The new electronic platform, to be based on CME's Globex technology, will have the capacity to process transactions in less than one millisecond, the bourses said. Both exchanges will have the right to make commercial use of the new system, with BM&F free to market it in South America, Central America, Mexico and China. They will share all revenues.
Under the terms of the deal, BM&F will increase its shareholding in CME to 5%, the equivalent of a $1bn equity stake. It previously held 1.2m CME Group shares. It will also receive a seat on CME's board. CME Group presently holds a 10% stake in BM&F.
The two exchanges have also agreed to jointly pursue strategic investments and commercial opportunities with other international exchanges.
Under the terms of the existing agreement, the two exchanges have a commercial agreement based on order routing between their derivatives marketplaces, as well as cross investment through an exchange of shares.
Tom Osborn +44 207 779 8361 tosborn@fow.com