JUNE 2, 2003
JOINT VENTURE BETWEEN MEXDER (MEXICAN DERIVATIVES EXCHANGE) AND THE SPANISH FUTURES AND OPTIONS EXCHANGE (MEFF)
THE MAIN PURPOSE OF THIS JOINT VENTURE
IS TO DEVELOP THE OPTIONS MARKET IN MEXICO
Mexico City, June 2, 2003. Today a joint venture agreement was signed between MexDer (the Mexican Derivatives Exchange) and the Spanish Futures and Options Exchange (MEFF), primarily for the purpose of developing an options market in Mexico. Under the terms of the agreement, the Spanish institution becomes a shareholder of MexDer, with a 7.5% stake in its capital stock.
The agreement includes the contribution, installation and application of MEFF’s trading system, for performing transactions in the Mexican options market through MexDer. In addition, the MEFF Institute will provide training courses for MexDer and Asigna staff, as well as for traders, promoters, brokers and investors.
The reasons MexDer sought out MEFF as a partner included its experience in trading and operating futures and options on the Spanish market, the proven efficiency and adaptability of its system, and its similarity with the Mexican market.
The agreement was signed by MEFF Chairman of the Board Josep Manual Basañez and MexDer Chairman Guillermo Prieto; and by the CEOs of MEFF and MexDer, José Massa and Jorge Alegría, respectively.
The witnesses of honor were the Spanish Ambassador to Mexico, Doña Cristina Barrios, and Spain’s trade consul in Mexico, Ramón Botas. Other witnesses included Jonathan Davis, Chairman of the National Banking and Securities Commission; Guillermo Güemes, Deputy Governor of Banco de México; and Alonso García Tamés, General Director of Public Credit for the Ministry of Finance and Public Credit.
MexDer began operations in December 1998, and today provides the venue for trading in futures on the U.S. dollar, the 28-day TIIE, 91-day Cetes, 3-year bonds (M3), the Mexican Stock Exchange IPC Index, and futures on the individual shares of Cemex CPO, Femsa UBD, GFBB O, Gcarso A1 and Telmex L.
Over the past two years, MexDer has seen an explosive growth in trading volume, and in 2002, it was the fastest-growing market in the world for interest-rate derivatives; it also ranked sixth in the world in terms of futures trading volume.
This trend has continued in 2003, with a total of 71,603,713 contracts traded between January and May, 143% higher than the volume in the same period of the preceding year, and equivalent to 85% of the volume traded in 2002 as a whole.
MEFF, which today is part of Grupo Bolsas y Mercados Españoles, began operations in November 1989 as the Exchange and Clearinghouse for derivative instruments in Spain. Today it lists contracts on government bonds, the IBEX-35 and S&P Europe 250 Indexes, and on individual stocks. MEFF also allows its members to trade directly on the German, Portuguese and French markets.
MEFF has become one of the largest and most successful derivatives and options markets in the world. In the year 2002, its total volume was 17.3 million futures contracts, 12.6 million of which were futures on individual shares, making it the worldwide leader in this product. In options trading, a total of 24.1 million contracts were transacted in the period, 78% of them on stocks; connections with other markets involved an additional volume of 8.4 million futures contracts.
MEFF TRADING SYSTEM
MEFF uses an advanced technological platform and structure called S/MART, which has been licensed for use and application by MexDer for trading in the Mexican options market. The same system is currently in use on the Portuguese futures and options exchange and the WTB in Hanover, Germany.
NEW MEXDER CONTRACTS
The instrumentation and application of systems for developing the options market in Mexico will take about six months. During that time, MexDer will work on setting up the proper interspaces and communication systems between MEFF, MexDer and Asigna (the clearinghouse for the Mexican Derivatives Market), which will provide the technological language elements necessary for industry-wide testing. The necessary adaptations to the system will be performed by MEFF and by Bursatec, which is the company that supplies the technology for companies that make up the Mexican Stock Exchange corporation.
For these reasons, the launch of the Mexican options market is planned for when the regulatory framework has been endorsed by all participants, and all the necessary testing and the technical and operating procedures have been carried out.
The contracts that will be listed initially on the Mexican options market will be on the Mexican Stock Exchange’s IPC Index and on some of the most marketable stocks.
MEFF Chairman Josep Manuel Basañez had the following remarks: “We at MEFF are very satisfied to have arrived at this important agreement with MexDer. Our association with the Mexican futures and options market is of great strategic importance to MEFF. First, because by becoming shareholders of MexDer we have assumed the challenge of collaborating intensively in the development of new products that MexDer will introduce for trading, and second because it opens a wide array of opportunities in the joint launch of products and in possible connections between both markets.
“Clearly, the steps taken by MexDer and MEFF will benefit investors around the world in both the short and medium terms.”
Guillermo Prieto added his own comments: “The alliance created today between MexDer and MEFF is undoubtedly a great step forward in the Mexican market’s inclusion in the international sphere.”
Mr. Prieto went on to say that “For Mexican securities institutions, and particularly for participants in the Mexican Derivatives Market, this event was especially relevant, since in the history of the Mexican securities market, this is the first partnership the organized Mexican exchange has undertaken not only with a peer in another country, but with one of the most successful and world-renowned futures and options markets in the world. Our combined experience, together with advanced technology used by our Spanish partner, are the factors that will guarantee a solid implementation of the options market in Mexico.”