Brazil’s BM&F Bovespa adopts Nasdaq surveillance tools
Brazilian exchange BM&F Bovespa has installed a new market surveillance system from Nasdaq OMX, which it says will help ensure the safety of all market participants on the Brazilian market.
The new Smarts Integrity tools will cover Brazil’s equities, commodities and futures markets. It is an automated tool that detects sophisticated trading abuse and alerts both the exchange and BSM, the Brazilian self-regulatory organisation in charge of market surveillance and supervision.
“This go live is a milestone for both BM&F Bovespa and the Brazil financial industry as a whole,” said Cicero Vieira, chief operating officer of BM&F Bovespa. “Since Brazilian trading activity has grown in importance in the portfolio strategies of investors worldwide, it is crucial to provide local and international players with market surveillance tools that are aligned with the fully transparent and centralised order driven price discovery across all products in our marketplace. We aim to proactively enforce regulation and safety addressed by our regulators and reign in market abuse activities.”
Market abuse was a recurring theme at the TradeTech conference in London this week, with several senior industry executives calling for more surveillance and better protection against market abuse. Speakers including Christian Katz, chief executive at SIX Swiss Exchange, pointed to widespread fears that sophisticated high-frequency trading strategies may be taking advantage of high-technology and market complexity to commit market abuse.
Meanwhile, according to recent research by Aite Group, the removal of a tax on equities in Brazil late last year has prompted a significant uptick in liquidity in a country that has already become a byword for growth. Last year for the first time Europe surpassed the US as a driver of foreign trading volumes in Brazil.
“Market transparency is key to a healthy global marketplace,” said Paul McKeown, vice president of market technology at Nasdaq OMX. “We are committed to building market surveillance technologies to combat market abuse, especially as we continue to face a constantly changing regulatory landscape. We are very proud of our partnership with BM&F Bovespa and BSM to detect irregularities and market abuse in the Brazilian marketplace, and look forward to growing this partnership in the future.”