The BM&F Bovespa (IPA: [bo.'ves.pa]; Portuguese: Bolsa de Valores de São Paulo) is a São Paulo-basedstock exchange. It is the fourth largest stock exchange in the The Americas in terms of market capitalization, behind NYSE, Nasdaq, and Toronto Stock exchange. It is also the thirteenth largest in theworld in terms of market capitalization (see list of stock exchanges). On May 8, 2008, the São Paulo Stock Exchange (Bovespa) and the Brazilian Mercantile and Futures Exchange (BM&F) merged, creating the new BM&F Bovespa.[1] The BM&F Bovespa is linked to all Brazilian stock exchanges, including Rio de Janeiro's Boverj (BVRJ), where only government bonds are traded. The benchmark indicator of Bovespa is the 50-stock Índice Bovespa. There were 450 companies traded at Bovespa as of April 30, 2008[2].
On May 20, 2008 the iBovespa index reached its 10th consecutive record mark closing at 73,516 points, with a traded volume of USD 4.2 billion or BRL 7.4 billion.
History
Founded on August 23, 1890 by Emilio Rangel Pestana, the "Bolsa de Valores de São Paulo" (São Paulo Stock Exchange, in English) has had a long history of services provided to the stock market and the Brazilian economy. Until the mid-1960s, Bovespa and the other Brazilian stock markets were state-owned companies, tied with the Secretary of Finances of the states they belonged to, and brokers were appointed by the government.
After the reforms of the national financial system and the stock market implemented in 1965/1966, the Brazilian stock markets had assumed the institutional role that it keeps until today, changing to a non-profit civil association, with administrative, financial and patrimonial autonomy. The old individual figure of the broker of government securities was substituted by the commercial broker.
Through self-regulation, Bovespa operates under the supervision of the "Comissão de Valores Mobiliários" (CVM or Commission of Movable Assets, in English), analogous to the American SEC. Since the 1960s, it has constantly evolved with the help of technology such as the introduction of computer-based systems, mobile phones and the internet. In 1972, Bovespa was the first Brazilian stock market to implement an automated system for the dissemination of information on-line and in real time, through an ample network of computer terminals.
At the end of the 1970s, Bovespa also introduced a telephone trading system in Brazil; the "Sistema Privado de Operações por Telefone" or "SPOT" (Private System of Telephone Trading, in English). At the same time, Bovespa developed a system of fungible safekeeping and online services for brokerage firms.
In 1990, the negotiations through the Sistema de Negociação Electrônica - CATS (Computer Assisted Trading System) was simultaneously operated with the traditional system of "Pregão Viva Voz" (open outcry). Currently, the Bovespa is a completely electronic market, as all trades are performed via the electronic system.
In 1997, a new system of electronic negotiation of the Bovespa, the Mega, was implemented successfully. The Mega extends the potential volume of processing of information and allows that Bovespa to increase its overall volume of activities.
With the goal to increase popular access to the stock markets, Bovespa introduced in 1999 the "Home Broker" and "After-Market", both electronic trading systems allowing small and medium-size investors to participate in trading. The Home Broker system allows users to immediately execute sell and buy orders inside the stock exchange remotely using the internet. The "After-Market" is an evening trading service, where trades are performed even after the market has closed.
On May 8, 2008, Bovespa Holding announced the merger of the São Paulo Stock Exchange (Bovespa) and the Brazilian Mercantile and Futures Exchange(BM&F), creating the world's third largest stock exchange.[4]
As a result of an early 2008 stock swap, Chicago's CME Group owns an approximate 5% stake in BM&F Bovespa, and in turn, BM&F owns a 1.7% stake in CME Group.
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