While Brazil continues to be the hottest emerging market in Latin America for high-frequency trading, the Mexican Exchange (BMV Group), is taking huge steps to boost its growth in the high-speed marketplace.
The Mexican Exchange, which is the second largest exchange in Latin America, announced a number of strategic and technology initiatives designed to promote foreign investment in the Mexican financial markets and its position as a Latin American leader in high-frequency trading.
Mexico now provides worldwide participants with seamless, high-speed and efficient access through low touch direct market access (DMA), high speed co-location services, and FIX standard protocol for order routing and market data Part of Mexico's success is down to its determination to improve its operative rules to better comply with international market standards, as well as adopting new technology.
In 2012, the Mexican Exchange will announce the launch of a new trading engine, internally developed. This multi-market, multi-asset, flexible and scalable trading engine has throughput of more than 200,000 messages per second. The trading engine will be ultra low latency, executing trades in 100 microseconds roundtrip (improvement over 25 milliseconds on legacy trading system). Full deployment is planned for Q2 2012. Further in 2012, The Mexican Exchange will introduce several new initiatives including midpoint hidden order book trading, aimed at institutional investors looking to trade large blocks anonymously with reduced execution risk. Simpler cross order rules will also be implemented; all stocks, global market equity securities and debt instruments will be crossed within the best bid/ask spread with no intervention. And, VWAP executions for the day will be able to be entered from 8:00 AM CT to 2:40 PM CT.
Recently, the Mexican Exchange has established major alliances broadening investment opportunities in the Mexican market. The Mexican Derivatives Exchange (MexDer) and the Chicago Mercantile Exchange (CME) established phase one, "south-to-north," of its strategic order routing agreement, giving Mexican investors access to CME Group's benchmark derivatives contracts, including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities. Phase two of the partnership, "north-to-south," now in place provides CME Group customers with access to MexDer benchmark products, including Mexican Stock Exchange Index futures, bond futures and MXN Peso / US dollar futures contracts. In 2011, Latin American securities (representing 13% of the volume traded in the global market) hit five billion dollars in volume year-to-date with 29 stocks and 10 ETFs from Brazil, Chile, Colombia and Peru.