Wednesday April 20 2016
News Source: Global Exchanges
Focus: Other
Type: General
Country: Brazil
Link: http://www.bmfbovespa.com.br/en_us/news/press-conference.htm
BM&FBOVESPA and Cetip have presented a proposal to merge the operations of the two companies. The agreement, to be submitted to shareholders’ meetings at both companies, still requires approval by the regulatory bodies the Central Bank of Brazil, the Securities and Exchange Commission of Brazil and Brazil’s Council for Economic Defence.
Integrating activities will significantly strengthen the resultant company’s business model, as it will increase revenue diversification; grant financial institutions, custodians, bookkeepers, asset managers and brokerage houses consolidation of their back office and treasury systems and processes, significantly reducing operating costs and risks for the entire financial system; and as it will provide efficiency gains in interactions with financial and capital market surveillance bodies.
Bearing in mind the complementary nature of the two companies, combining their forces will entail gains for customers, market participants, investors and companies that require resources to invest or financial instruments to manage their risk. In addition to cost efficiencies, one of the main gains from the new deal will be greater capital efficiency through customers being able to use OTC or exchange-traded derivatives with the same central counterparty.
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