14.03.2012 10:25

BRICS Exchanges to Cross-list Benchmark Equity Index Derivatives

Boca Raton, Florida, 13 March 2012 - The five founding members of the BRICS Exchanges Alliance will begin cross-listing benchmark equity index derivatives on each other"s trading platforms on 30 March (Friday).  The move was announced today (Tuesday) at the Futures Industry Association"s 37th International Futures Industry Conference in Boca Raton, Florida.

The five exchanges, BM&FBOVESPA from Brazil, Open Joint Stock Company MICEX-RTS from Russia, BSE Limited from India, Hong Kong Exchanges and Clearing Limited (HKEx) as the initial China representative, and JSE Limited from South Africa, announced the formation of the alliance on 12 October 2011 at a World Federation of Exchanges" conference in Johannesburg, South Africa.  In this initial stage of implementation, the exchanges aim to expand their product offerings beyond their home markets and give investors of each exchange exposure to the dynamic, emerging, and increasingly important BRICS economies.

The listing of benchmark equity index derivatives on the boards of each of the alliance members marks the implementation of the first phase of the alliance.

The derivatives to be cross-listed and offered in the local currency and local trading hours of each of the exchanges will include:

  • Brazil"s IBOVESPA futures;
  • Russia"s MICEX Index futures;
  • India"s Sensex Index futures;
  • Hong Kong"s Hang Seng Index futures and Hang Seng China Enterprises Index futures; and
  • South Africa"s FTSE/JSE Top40 futures. 

JSE will also list options on the benchmark futures of the other four member exchanges.

Edemir Pinto, BM&FBOVESPA CEO, said: "This successful BRICS alliance has a strong connection to the Brazilian exchange"s strategy of leading global partnerships aimed at offering a myriad of products to investors around the world”. Mr Pinto also emphasised this is the first initiative in the world in which five exchanges cross-list their most important equity indices.

Ruben Aganbegyan, CEO at MICEX-RTS, said the listing would boost growth and also encourage the emerging market investor bases. “This initiative gives a lot of opportunities for growth and development as it will allow local investors to diversify and gain exposure to other emerging markets through a locally listed product. Cross-listing of benchmark equity index derivatives will facilitate liquidity growth in the BRICS markets and will considerably strengthen the international position of the BRICS alliance in the global economy.”

"For India", said Madhu Kannan, CEO of BSE, "the first phase of the BRICS Exchange Alliance is an important step in the further internationalisation of our indices. Investors will have better access to member markets, helping them to diversify their portfolios. Most importantly, the alliance has helped all the exchanges to forge a productive working relationship, which we hope to leverage in the future as BRICS economies grow closer together."

HKEx Chief Executive Charles Li said: “These stock indices are excellent indicators of the stock market performance of each BRICS market and are recognised around the world.” Mr Li also said the introduction of the BRICS exchanges" benchmark index futures to Hong Kong will diversify HKEx"s product offerings, giving investors in Asian time zones easier access to the dynamic BRICS markets.

“Given the growing interest in BRICS markets, the JSE believes that the ability to offer investors exposure to these benchmark indices in local currency will enhance the offering of our exchange,” says Nicky Newton-King, CEO at the JSE.

Apart from the cross-listing of benchmark equity index derivatives, the member exchanges plan to work together to develop new equity index related products representing the BRICS economies for cross-listing of derivatives and cash market product offerings in the second phase of the alliance.  The third phase may include product development and cooperation in additional asset classes and services.

Please see more information about the project here

For reference

One of the four largest exchanges in the world by market capitalisation, BM&FBOVESPA offers trading of cash markets in equities, gold, US Dollar and fixed income securities, as well as of derivatives on indices, interest rates, foreign exchange, agricultural and energy commodities. With its fully integrated business model BM&FBOVESPA offers not only a state-of-the-art trading environment, but also registration, clearing, settlement, risk management, central counterparty and depository services.

MICEX-RTS Group is the Russian stock and derivatives exchange that came to existence in December 2011 after the merger of two main Russian exchanges, MICEX and RTS. The new exchange strives to achieve the status of an internationally competitive market through improved efficiency of the market infrastructure, product diversity and liquidity.

MICEX-RTS provides a wide range of opportunities to investors, professional institutions and their Russian and foreign clients for equities, bonds, currencies as well as derivatives trading. The Exchange provides a transparent process for determining fair market values of Russian assets with a full range of trading and post trading services.

MICEX-RTS offers accessible technology, sound clearing and guarantee functions and flexible operational structures. All innovations and new technologies and services are aimed at bringing reliability and safety to the market.

Trading on the securities market of MICEX-RTS Group is held in the following sectors:  Main market for equities & bonds (settled in RUB), Standard section for most liquid securities (settled in RUB), Classica sector for equities, bonds and fund shares (settled in USD). The Currency Market of MICEX-RTS is one of the key segments of the Russian financial market. Since 1992 the Bank of Russia has been determining the official exchange rate for the Russian ruble based on the results of currency trading on MICEX. FORTS is the Exchange"s derivatives market that trades  futures and options contracts on equities, bonds, indices, currency, interest rates, commodities. MICEX-RTS"s market data is accessible worldwide through a range of all major vendor distribution channels.

About JSE 
As South Africa"s only full service securities exchange, the JSE connects buyers and sellers in equity, equity derivatives, currency derivatives, commodities derivatives and interest rate instrument markets. The JSE Ltd offers the investor a first world trading environment, with world class technology, surveillance and settlement in an emerging market context. It is amongst the top 20 largest equities exchanges in terms of market capitalisation in the world. 
For further information, please visit www.jse.co.za

About BSE Ltd
Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange), is Asia"s first Stock Exchange and one of India"s leading exchange groups and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, derivatives and mutual funds. It also provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and training. It has a global reach with customers around the world and a nation-wide presence. BSE systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. It operates one of the most respected capital market training institutes in the country (the BSE Training Institute). 
Visit www.bseindia.com for more information

About National Stock Exchange of India 
National Stock Exchange of India was established by leading Indian financial institutions. It started operations in June 1994 and within a short span of 1 year became the largest stock exchange in India. NSE has been a change agent in the Indian markets and has catapulted India and its capital markets to amongst the top investment destinations in the world. NSE offers a wide array of asset classes to its investors, viz. government debt, corporate debt, equities, equity derivatives, currency derivatives, interest rate derivatives, commodity and its derivatives, mutual funds etc. either by itself or through its associate companies. NSE has leveraged information technology to provide access to the vast geography and investor population of India and at the same time provides sophisticated low latency, high throughput, and multi product platform to volume investors. Some of NSE"s global rankings are - 4th in equity shares (no. of transactions), 2nd in stock index options, 3rd in single stock futures and 3rd in stock index futures. NSE through its international collaboration and alliances makes available futures and options in S&P 500 and futures in DOW Jones Industrial average to Indian investors.

For further information, please contact the Public Relations Department at (495) 363-3232.