Trading in the BM&F segment at BM&FBOVESPA to become fully electronic as of July 1

Trading in the BM&F segment at BM&FBOVESPA to become fully electronic as of July 1

Open outcry trading floor will undergo redesign and be open for public visitation

Sao Paulo, June 30 – As of July 1, 2009, all BM&FBOVESPA transactions involving derivatives contracts based on financial assets and commodities in the BM&F segment will be carried out exclusively in the Exchange´s electronic trading system, which already accounted for over 98% of the 22 million contracts traded in that segment in June. The last open outcry floor session will close today at 5:15 p.m., followed by a ceremony to honor the professionals who worked at the floor. 

Over the next few months, the area where the open outcry trading floor is located will be totally redesigned and included in the Exchange´s regular public visitation schedule, which currently utilizes the BM&FBOVESPA Space, where visitors receive information about financial market activities and instruction on how the stock and derivatives markets work. This new area will also be used to centralize the Exchange’s self-regulation activities.

Acknowledging the relevant roles performed by floor traders and runners in the development of the markets, BM&FBOVESPA has established two programs geared to the professionals who carried out these activities during the year of 2009.

The Professional Development Program will provide professionals with the opportunity of further improving their knowledge of capital markets, allowing them to participate free of charge in the presential, semi-presential and distance learning courses offered by the BM&FBOVESPA Institute of Education. The Incentive Program will provide professionals with a discount on the Exchange fee for transactions executed at the Exchange, in both of its segments, over a period of 24 months, as of January 7, 2009.

Technological evolution

The complete migration from the open outcry system to the electronic trading system is a response to market demand which mirrors the international trend towards the evolution of technological trading processes that has been taking place over the last two decades. The electronic trading system provides domestic and international investors with additional channels of higher quality access to the products offered by the Brazilian Exchange and stimulates greater market liquidity.

Pursuant to this improvement plan for the BM&FBOVESPA trading environment, up to the end of 2009, investors will be offered three differentiated levels of direct access to the market (DMA), including the co-location service, which will allow investors to place their own computer equipment inside the Exchange facilities. In addition, a single trading interface will be implemented, allowing end customers to execute transactions in both the BM&F and BOVESPA segments on a single screen.

The electronic trading system was implemented in the BM&F segment in 2000, when it accounted for just a little over 3% of the total number of contracts traded. By 2006 it had surpassed the open outcry system, ending the year with 57.59% of the total number of contracts traded. In 2007 side-by-side trading was implemented, allowing products to be traded simultaneously in the electronic trading system and on the floor. As a result the participation of the electronic trading system in the total trading volume reached 72.95%. That same year the Exchange reached the mark of 2 billion contracts traded.

The following chart tracks the evolution of trading in the BM&F segment since the implementation of the electronic trading system:

Period             % Floor Contracts       % Electronic Contracts 
Dez/00            96.39%                        3.61%  
Dez/01            87.93%                        12.07% 
Dez/02            86.01%                        13.99% 
Dez/03            72.91%                        27.09% 
Dez/04            66.43%                        33.57% 
Dez/05            55.61%                        44.39% 
Dez/06            42.41%                        57.59% 
Dez/07            27.05%                        72.95% 
Dez/08            7.38%                          92.62% 
Jun/09             1.70%                          98.30%