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North to South Market Maker Program. Agenda Introduction Benefits How to participate? Products overview.

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Presentation on theme: "North to South Market Maker Program. Agenda Introduction Benefits How to participate? Products overview."— Presentation transcript:

1 North to South Market Maker Program

2 Agenda Introduction Benefits How to participate? Products overview

3 Agenda Introduction Benefits How to participate? Products overview

4 Introduction MexDer is the derivatives subsidiary of BMV Group the financial exchange operator in Mexico. Fully electronic market place, as a self-regulated exchange it has a flexible legal framework. CME Group and MexDer joined forces to link the trading platforms, a world of opportunities is brought closer to you. MexDer is the leading market place for trading derivatives on Mexican benchmarks.

5 Agenda Introduction Benefits How to participate? Products overview

6 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

7 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products.  Co-location.  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

8 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location.  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

9 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) S EGREGATION  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

10 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

11 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

12 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location.  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

13 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

14 Benefits  With the CME Group – MexDer order routing agreement MexDer products will be available in more than 100,000 CME Globex ® screens.  No Withholding Taxes when trading in MexDer.  No local presence required in Mexico.  Omnibus Accounts: Rule 30.7 (CFTC) segregation  One for Proprietary trading.  One for Customer trading.  Remote Membership.  CFTC approved products  Co-location  DMA  Collaterals accepted in the US.  Give Ups.  FIA standard agreement.

15 Agenda Introduction Benefits How to participate? Products overview

16 How to participate? 1.As a Client of an MCM 2. As an Omnibus Account in MexDer 3. As a Client of a MexDer Omnibus Account 4. As a Remote Member http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

17 How to participate? 1.As a Client of an MCM.  Fastest and easiest way to take advantage of the CME Group – MexDer order routing agreement (ORA).  Have access to CME Globex  Direct execution in MexDer, Co-location available.  Clears through a MexDer Clearing Member (MCM), the only paperwork required. 2. As a MexDer Omnibus Account. 3. As a client of a MexDer Omnibus account. 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system clearing through a local Clearing Member http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

18 Mexico GLOBEX Hub Match Engine 40 Mbps line Prop Trader : As a Client of an MCM Lines to GLOBEX GLOBEX Infrastructure US MEXICO MCM (Asigna Clearing Member) (Paperwork required) Account with MCM required (1) As a Client of an MCM Co-location available

19 How to participate? 1.As a Client of an MCM  Executing as a customer of a Trading Member or even through an Omnibus Account. 2. As a MexDer Omnibus Account.  The CME member that qualifies as an omnibus account executes directly in MexDer and clears through a MexDer Clearing Member.  Minimum legal paperwork required with MexDer.  The omnibus clients identity is not disclosed. 3. As a client of a MexDer Omnibus account 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system clearing through a local Clearing Member http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

20 (2) As a MexDer Omnibus Account Mexico GLOBEX Hub Match Engine 40 Mbps line CMEG Member : As a MexDer Omnibus Account Lines to GLOBEX GLOBEX Infrastructure US MEXICO MCM (Asigna Clearing Member) (Paperwork required) Account with MCM required

21 How to participate? 1.As a Client of an MCM.  Executing as a customer of a Trading Member or even through an Omnibus Account. 2. As a MexDer Omnibus Account.  The CME member that qualifies as an omnibus account executes directly in MexDer and clears through a MexDer Clearing Member.  The omnibus clients identity is not disclosed. 3. As a client of a MexDer Omnibus account  When executing through an Omnibus Account, you don’t need legal paperwork with MexDer.  Trade through your existing agreement with the CME Member (registered omnibus in MexDer) 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system and clearing through a local Clearing Member http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

22 Mexico GLOBEX Hub Match Engine 40 Mbps line Customer: As a Client of a MexDer Omnibus Account Lines to GLOBEX GLOBEX Infrastructure US MEXICO (3) As a Client of a MexDer Omnibus account MCM (Asigna Clearing Member) CMEG Member : Omnibus Account (NO additional paperwork required)

23 How to participate? 1.As a Client of an MCM.  Executing as a customer of a Trading Member or even through an Omnibus Account. 2. As a MexDer Omnibus Account.  The CME member that qualifies as an omnibus account executes directly in MexDer and clears through a MexDer Clearing Member.  The omnibus clients identity is not disclosed. 3. As a client of a MexDer Omnibus account 4. As a Remote Member.  Non-Clearing Remote Membership with direct access to the trading system.  Legal paperwork required with the Exchange.  Clear through a MexDer Clearing Member. http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html

24 (4) As a Remote Member Mexico GLOBEX Hub Match Engine 40 Mbps line Lines to GLOBEX GLOBEX Infrastructure US MEXICO (Paperwork required) Account with MexDer Clearing Member required MCM (Asigna Clearing Member) (Paperwork required) Co-location available CMEG Member : MexDer member & Omnibus Account

25 Agenda Introduction Benefits How to participate? Products overview

26

27 Let’s take a closer look: IPC Futures MXN/USD Futures Bond Futures

28 Let’s take a closer look: IPC Futures MXN/USD Futures Bond Futures

29 IPC Futures Ticker Symbol:IPC Quotation:Index Points Size:IPC x $ 10 MXN Tick:5 points Tick Size:$ 50 MXN // $ 4.16 USD * Notional Size:$370, 000 MXN ***// $30, 833 USD*** Maturity Months:Quarterly, up to one year Settlement:Cash Trading Hours:07:30 - 15:00 hrs. (GMT -06:00) Bloomberg ISA CT Reuters MXN/FUTEX10#IPC: *Exchange Rate : $ 12 MXN *** IPC @ 37000 points  Underlying, IPC - Mexican Exchange Index.  Capitalization Index

30 IPC Futures  Leading indicator of the Mexican Stock market.  Highly correlated with the S&P.  2010 return USD 26.83%

31 Options on the IPC Future Ticker Symbol:IP Quotation:Index Points Style:European Tick:1 point Size:IPC x $10 MXN Maturity Months:Quarterly, up to one year Settlement:Cash Trading Hours:07:30 - 15:00 hrs. (GMT -06:00) Bloomberg ISA OMON Reuters MXN/FUTEX10#IPC*.XD:  Underlying, IPC Future  2010 Implied Volatility: 20.8%

32 Options on the IPC Future VolumeOpen Interest

33 Volatility Index Mexico (VIMEX) vs VIX ® VIX ® is a registered trademark of Chicago Board of Options Exchange, Incorporated.  Arbitrage Opportunities

34 Let’s take a closer look: IPC Futures MXN/USD Futures Bond Futures

35 MXN/USD Futures Ticker Symbol:DA MR11 ** Quotation:Price Size:$ 10,000 USD Tick:$ 0.0001 MXN Tick Size:$ 1 MXN // $ 0.0833 USD * Notional Value:$10,000 USD Maturity Months:Quarterly, up to 3 years Settlement:Physical delivery Trading Hours:07:30 - 14:00 hrs. (GMT -06:00) Bloomberg DWA CT Reuters MXN/FUTEX10#B10:  Underlying, United States of America - Dollar.  Arbitrage opportunity with the MXN/USD Futures of the CME Group. ** DA + the month of the year of maturity *Exchange Rate : $ 12 MXN

36 MXN/USD Futures  Volume increased 255% in 2010 vs 2009.  Opportunities for HFT quoting on a screen ** DA + the month of the year of maturity *Exchange Rate : $ 12 MXN

37 Let’s take a closer look: IPC Futures MXN/USD Futures Bond Futures

38 Ticker Symbol:M3/ M10/ M20 Quotation:Price Size:$100,000 MXN Tick:$ 0.025 MXN // $ 0.00208 USD * Tick Size:$ 25 MXN // 2.08 USD * Notional Value:$100,000 MXN//$8,333 USD * Maturity Months:Quarterly, up to 3 years Settlement:Physical delivery Trading Hours:07:30 - 14:00 hrs. (GMT -06:00) Bloomberg DWA CT Reuters MXN/FUTEX10#B10:  Underlying, Bonds issued by the Mexican government (BBB+).  The most actively traded securities in Mexico  A benchmark for Mexican domestic interest rates. *Exchange Rate : $ 12 MXN

39 Bonds Futures The whole yield curve of the Mexican Sovereign is available:  3 Year Bond (M3)  10 Year Bond (M10)  20 Year Bond (M20) + 91 Day Treasury CETE. Source: Banxico Foreign Investment in MXN Debt Government Securities USD (MILLIONS)  M Bonds included in the WGBI Index.  Very important foreign participation  Most efficient way to hedge or short the Mexican yield curve.

40 Bonds Futures Contracts VOLUME OPEN INTEREST VOLUME OPEN INTEREST

41 Bond Futures: Arbitrage Opportunities 10 Year Bond Future (MXN) vs. 10 Year T-Note Future (USD)

42 Final remarks Opportunity to participate in a developing market. End customers, FCMs, prop traders, high frequency traders. Easy access Market Making incentive program. Liquidity and depth in the underlying securities; development in their derivatives contracts to follow. Be part of the development of this new and exciting market!

43 Key Contacts  BMV MexDer  P&S Berenice Corral VP Business Development bcorral@mexder.com +52 555342 9930  Operations Luis Acevedo Chief Operation Officer lacevedo@mexder.com +52 55 5342 9910  Clearing Member Firms: http://www.mexder.com/MEX/Open_an_Account_-_Trading_and_Clearing_Members.html  CME International P&S Charles Farra Director, Products and International Services Charles.Farra@cmegroup.com +1 312 930 2319  CME GAMs Jodi Abudarham Director, PE & Client Technology Mgmt. Jodi.Abudarham@cmegroup.com +1 312 930 1302

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