BRAZIL: BM&FBOVESPA PUMA Trading System – Programmed Exercise Function for Equity Options and Options on ETF Shares

Monday October 5 2015

BM&FBOVESPA has announced that as of October 19, 2015 it will provide a new function for the programmed exercise of equity options and options on Exchange –Traded Fund (ETF) shares (Options).

This functionality will be optional and will allow participants to register, on the Options’ expiration date, exercise requests that will only be triggered at a time determined by BM&FBOVESPA, conditional on reaching the reference price that the participant has defined for the Options’ underlying security.

Below are other characteristics of this functionality:

• Qualification will only occur on the Option’s expiration date;
• It will be possible to enter up to 500 exercise requests by trading screen;
• The validation rules are those that already exist for the manual exercise of Options;
• Registered exercise requests will not prevent the manual exercise of Options;
• Manual exercises executed before the time determined by BM&FBOVESPA and which individually or combined are equivalent to the investor’s total position will result in the request’s immediate expiration. An execution report will inform the participant that the investor does not have a position to exercise.
• If manual exercises at the time defined by BM&FBOVESPA mean that the registered quantity is greater than the investor’s position, the exercise will be executed solely for the outstanding amount;
• Any request may be cancelled before the time determined for exercise.

Click on the link above for further details.