The connectivity will enable the Mexican investors access to CME Group’s benchmark derivatives contracts including interest rates, foreign currencies, equity indexes, energy, metals and agricultural commodities.
With this connection, market participants will have enhanced access to foreign markets and liquidity pools, which will allow traders to hedge risks across the multiple exchanges, arbitrage prices between markets and/or securities, as well as geographically diversify investment allocations.
In this first stage of the order routing agreement MexDer members and their customers will have access to CME Group products.
In addition, CME Group will be the exclusive exchange provider of derivatives order routing services to MexDer outside Latin America, and MexDer will be the exclusive exchange provider of derivatives order routing services to CME Group in Mexico.
BMV Group chairman and CEO Luis Tellez said that the direct, seamless order routing connection will make it possible to trade and route electronic orders on MexDer and CME Group, opening both their contracts to a broader range of traders.
"Our partnership with CME Group will strengthen CME Group’s ties to the fast-growing Mexican market, and give Mexican market users access to the CME Group’s suite of derivatives products," Tellez said.
CME Group president Phupinder Gill said that the today’s launch expands distribution of the CME Globex electronic trading platform to financial markets in Latin America, as well as provides CME Group customers with a means to manage their hedging strategies with direct exposure to Mexico’s markets.
MexDer said that with the establishment of a new CME Group international telecommunications hub in Mexico City, its participants can leverage their existing MexDer front-end trading platform or API to route and execute on the CME Globex electronic trading platform.
The second phase of the partnership, the north-to-south connectivity, is scheduled for third quarter of 2011, and will give CME Group market participants access to MexDer’s benchmark interest rate and equity index derivatives.
