BM&FBOVESPA is overhauling the post-trade landscape in Brazil by integrating its four clearing houses and using a single multi-asset clearing system based on Cinnobers TRADExpress RealTime Clearing for clearing of equities, derivatives, government bonds and spot FX.
Existing systems will be replaced by the new multi-asset class system, which has real-time risk calculation capabilities. The new unified risk management processes will contain a multi-asset and multi-market risk management framework, utilizing multiple simultaneous risk methods in real time.
TRADExpress RealTime Clearing will be an important instrument for the integration and modernization of our post-trade environments, says Edemir Pinto, CEO of BM&FBOVESPA. Were looking forward to building a business and service center with state-of-the art technology for the Brazilian and international markets.
The new Brazilian clearing system will also introduce efficient collateral pools as well as netting of positions and settlement instructions based on asset class. The accounts will be kept at final beneficial owner level thus climbing from 600,000 accounts to more than 10 million, making it one of the largest if not the largest clearing solutions in the world, according to Cinnober.
This is the most comprehensive clearing project in the world to date, and Ive been in this industry since the 80s, says Nils-Robert Persson, Executive Chairman of Cinnober. Were of course extremely proud to have been chosen by BM&FBOVESPA for this task. Brazil is a forerunner in our industry in many ways. While looking for improvements, the European Union is looking deeply into Brazilian regulation, so to be appointed as BM&FBOVESPAs technical partner for this clearing project is one of the most important steps weve taken as a company.
The project for the integration and modernization of BM&FBOVESPAs post-trade environments will continue to be developed in 2012, with integrated market testing and the start of implementation expected in 2013.
Ive said it before and will say it again: Legacy clearing systems are clearly not able to match the flexibility and functionality required in a modern marketplace, so other actors are sure to follow this Brazilian initiative, Persson says.
(CG)