Mexico’s recent debate: a second Mexican Stock Exchange (BIVA)

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Mexico’s recent debate: a second Mexican Stock Exchange (BIVA)

New Mexican stock exchange market - BIVA

New Mexican stock exchange market - BIVA

The new stock exchange in Mexico would be named BIVA, which stands for Bolsa Institucional de Valores.

BIVA will not only run as an alternative trading market to the BMV, (Mexico’s current Stock Exchange) but it will be supported technologically by the American corporation NASDAQ, through the operation of SMARTS.

The initiative to create a second stock market in Mexico spawned in 2015 when CENCOR (Central de Corretajes, S.A. de C.V.) requested the financial authorities of the country the necessary permissions to run an alternative to BMV.

According to one of the supporters of the project, Santiago Urquiza, president of CENCOR, BIVA was to start operating by the end of 2016. However, the wait will be longer due waiting for the permissions to be granted.

BIVA’s business model

BIVA’s business model is already established. The launched is pending the final regulatory approval from the authorities. It is being presently estimated that such launch would come for the end of the current year.

Eduardo Flores Herrera, vice-president for Securities Market Supervision of the National Banking and Securities Commission, explained that CENCOR may provide any statistics they want. The National Banking and Securities Commission still must go over the business model and verify its viability. These supervisions tend to be very complex, for they must be sure that the new stock exchange will not stop operating upon a market crash.

For those who consider the prospect of having BMV and BIVA as two stock exchanges in the country as a real possibility, it is very beneficial from the supporting point. The fact of having two stock exchanges allows them to keep the trading operations going in case one exchange crashes.

Mexico has a very attractive economy, with growth prospects that are fitting to a much more complex global environment. With a GDP prediction of US$624 billion, Mexico will be the sixth ranked economy worldwide.

Other multi-exchanges countries

Mexico would not be the only country in the region to host more than one stock exchange, not to mention the American and European markets, where USA hosts 12 exchanges; Canada has 5; UK and Spain, 4; lastly, Italy and France with 2 each one.

Moreover, Brazil is on the verge of launching ATS Brasil (Americas Trading System Brasil), its second stock exchange hoping to trade not only the stocks of Rio de Janeiro but other financial products important to Brazilian economy.

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