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Latin America: Update From the Industry

By Alice Botis, Sebastian Rey Ortega

1. Where is electronic trading in Mexico/Brazil/Chile now? Do you see a role for increased use of electronic trading in Mexico/Brazil/Chile?

Increasing political stability, greater levels of consumer affluence and international interest in the potential value of its natural resources and commodities are placing the countries of Latin America (LATAM) on the trading map. As a result of this, electronic trading is rapidly establishing itself in the LATAM region. Brazil is currently leading the way, followed by Mexico and then Chile. In Brazil, it is possible to route orders directly to the exchange using FIX, and algo trading and High frequency trading (HFT) are already extensively used. Buy-side firms are also able to make use of Direct Market Access (DMA). In Mexico many brokers as well as the exchange make use of FIX and algo use is prevalent too. DMA is also available but this goes via member brokers rather than directly to the market. In Chile it is still early days, but the recent launch of FIX access by the exchange is expected to act as a catalyst for growth. Also, as part of an alliance that is expected to come in to force later this year, people will be able to route between the Chilean, Peruvian and Colombian markets from any individual connection.

With all this investment in technology and the rapid uptake of the services that have become available, it is clear that as far as electronic trading in the region goes, the only way is up. We can expect to see volumes from this style of trading access continue to increase going forward.