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BM&FBOVESPA’s Market Maker program continues to expand. Accreditation processes are underway for Market Makers in 18 different products in the futures and option markets.
See all of these products and the time frames for accreditation:
| Ongoing accreditation processes for new market makers | ||
|---|---|---|
| Futures | ||
| Crystal Sugar | ACF | Accreditation until December 01, 2015 |
| Live Cattle | BGI | |
| Hydrous Ethanol | ETH | |
| Corn | CCM | |
| Brazil Index-50 | BRI | Accreditation until March 07, 2016 |
| Equity Options | ||
| Ambev S.A. | ABEV3 | Accreditation until November 03, 2015 |
| BRF S.A. | BRFS3 | |
| BM&FBOVESPA | BVMF3 | |
| Cielo S.A. | CIEL3 | Accreditation until November 16, 2015 |
| Usiminas S.A. | USIM5 | |
| BR Malls Participações S.A. | BRML3 | Accreditation until March 31, 2016 |
| Cosan S.A. Indústria e Comércio | CSAN3 | |
| JBS S.A. | JBSS3 | |
| CCR S.A. | CCRO3 | |
| Cia. Energética de Minas Gerais - Cemig | CMIG4 | |
| Qualicorp S.A. | QUAL3 | |
| TIM Participações S.A. | TIMP3 | |
| Telefônica Brasil S.A. | VIVT4 | |
| Ultrapar Participações S.A. | UGPA3 | |
| Lojas Renner S.A. | LREN3 | |
Soon new programs will be launched.
How the Market Maker program works
Cash Market: the issuer of the securities hires the market maker for the cash market. While the listed company is responsible for the hiring process, BM&FBOVESPA analyzes minimum obligations in regard to market making activity.
Derivatives: BM&FBOVESPA is now diversifying its market maker program into a range of securities such as Equity Options, Commodity Futures, Equity Index Futures and Currency Futures. Market makers are required to follow one of the two authorization processes below, established for specific securities:
| MAIN FEATURES | ||
|---|---|---|
| Mode | Competitive Bidding Process | Accreditation |
| Obligations | BM&FBOVESPA establishes minimum quantities and the required minimum trading session presence Those interested propose the spread (respecting the maximum established by BM&FBOVESPA) |
Minimum Obligations BM&FBOVESPA establishes ALL minimum obligations: maximum spread, minimum quantity and minimum trading session presence |
| The selection process | The best three bids(smallest spreads) will be selected. | If the interested institution agrees with the minimum obligations defined by BM&FBOVESPA it only needs to submit the Authorization for Accreditation |
| Number of MMs | Up to 3 MMs | Unlimited |
| Estimated time for the start of MMs’ activities | Up to 73 business days | This will depend on MM’s velocity. BM&FBOVESPA will be able to analyze and accredit the MM in up to 15 business days |
| Benefits | Benefits are the same in both cases | |
The advantages of being a market maker registered at BM&FBOVESPA
- Higher throttle level.
- Exemption from the orders-to-trades ratio policy.
- Exemption from payment of exchange fees and trading fees on the product for which market maker activity has been authorized, while respecting the specific rules for hedges.
Rules and minimum requirements for registration
- Corporate bodies duly registered at BM&FBOVESPA may nominate themselves for Market Maker activity whether or not they are domiciled in Brazil, but taking into consideration contracts not authorized for trading by investors who are United States residents.
- It is the Exchange’s responsibility to accredit the Market Maker and monitor its performance, imposing penalties where necessary.
- The necessary minimum obligations vary in accordance with the respective securities, but the main ones are: the obligation to enter firm bids and asks for a minimum quantity of contracts, respecting the maximum spread; and trading session presence determined by contract.
