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 Business News | November 2006 
Better Foreign Access Down Mexico Way
 Adam Thomson - Financial Times
The Mexican Derivatives Exchange, one of the world’s fastest-growing derivatives exchanges, is due on Tuesday to announce an alliance with BT Radianz, a network provider for the financial services industry, as part of a drive to increase the participation of foreign investors.
The alliance will allow foreign participants to access MexDer’s trading applications and market data services over BT Radianz’s shared market infrastructure, potentially cutting the time and cost of trading.
BT Radianz, a subsidiary of BT, the UK telecommunications group, has a network linking 10,000 financial sites and more than 40 leading exchanges around the world.
Its clients include Nasdaq, the London Stock Exchange and the Tokyo Stock Exchange.
Jorge Alegría, MexDer’s chief executive, said that by providing foreign traders with a quick and secure way of accessing the exchange, BT Radianz’s network would solve one of foreign investors’ concerns when looking at a country such as Mexico.
“This alliance makes all the technical issues an investor has to consider much easier,” he told the Financial Times.
“You no longer have to worry about a carrier into Mexico, how you are going to be connected or the cost of putting in a local line. All the technical aspects of connectivity will be solved.”
Tuesday’s announcement is the latest strategy by MexDer to establish a presence in the increasingly competitive world of global financial trading as exchanges from developing countries adapt rules to make trading easier.
“We are looking to expand the number of trading members in the exchange and clearly these are not necessarily located in Mexico,” said Mr Alegría.
Several rule changes MexDer introduced this year have made it easier for foreigners to trade on the exchange. Until recently, foreign traders could participate only as clients acting through one of the exchange’s 28 almost exclusively Mexican members.
That made carrying out trades both slow and expensive. On Tuesday, by contrast, they can connect directly.
Mr Alegría said: “There is now no distinction, generally speaking, between a Mexican member trading from Reforma Avenue in Mexico City and someone trading from Greenwich, Connecticut or Moorgate in London.”
Mr Alegría said that he expected the alliance to boost trading volumes on the exchange significantly.
According to the Futures Industry Association, MexDer is among the world’s leading 10 derivatives exchanges by volume, and has the fourth most-popular single futures contract.
According to MexDer, 255m contracts were traded in the first 10 months of this year compared with 92m during the same period last year. Short-term interest-rate futures contracts accounted for about 94 per cent of that volume. |
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