Grupo Bolsa Mexicana de Valores (Grupo BMV), the Mexican stock exchange group, has recently signed an agreement with Euroclear, an international central securities depository based in Brussels to create a joint venture BMV Fondos.
Its aim is to accelerate and deepen the liquidity of the Mexican mutual funds market by implementing more automatised and electronic processing.
BMV Fondos seeks to reshape the industry by connecting the 28 active fund managers with the current 70 distributors using standardised messaging for order routing, unit settlement and related cash movements.
The creation of the joint venture is subject to several conditions, including regulatory approvals.
The Mexican investment fund market currently weighs MXN2trn (€100 bn) and “is opening up to third party distribution, raising new challenges in terms of existing inefficiencies, costs and risks associated with the high levels of manual processing and the reliance on phones and faxes,” Euroclear pointed out.
Distributors will then have a single point of contact to access all funds for their clients.
José Oriol Bosch, BMV chief executive officer, said : “Greater distribution capabilities are a key part of our strategy to attract more investors.Allowing Mexican investors easier access into investment funds will improve liquidity and develop the local market.
“At the same time, this agreement will provide Mexican fund managers and distributors with more tools to manage their portfolios. Close to 600 funds in Mexico will be supported by tried and trusted electronic messaging.
“As part of a phased approach with our partners Euroclear, this new fund processing venture will capitalise on automation of fund orders through a single interface in the first quarter of next year, followed by integrated cash settlement.”