Bovespa

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São Paulo Stock Exchange
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Founded August 23 1890
Headquarters São Paulo
Key People Raymundo Magliano Filho, chairman; Gilberto Mifano, CEO
Products Cash equities, fixed-income instruments and equity derivatives, including stock and index options.
Website http://www.bovespa.com.br/indexi.asp


The São Paulo Stock Exchange, better known as Bovespa (Bolsa de Valores de São Paulo), was the largest cash equities exchange in Latin America by traded share value and market capitalization, with an equity derivatives business ranked as the world’s third-largest options exchange by contract number. Bovespa converted from a member-owned organization and floated its shares in October 2007 in an IPO valuing the company at R$16.2bn. In March 2008, it merged with the Brazilian Mercantile & Futures Exchange (BM&F) to become BM&FBOVESPA.

History and Ownership

The exchange started as a state-owned institution known as the Bolsa Livre on August 23, 1890, providing an open-outcry platform for securities trading directed by the federal and state governments until market reform in 1965 saw it renamed and transferred to the private sector as a member-owned entity the following year[1].

Automated trading was launched in 1972, and the options platform started in the late 1970s, with electronic trading launched alongside open outcry in 1990. A new electronic trading platform – known as Mega Bolsa – was licensed from Atos Euronext in 1997, the same year as the wholly-owned Brazilian Clearing and Depositary Corporation (CBLC) was launched.

Bovespa combined with eight regional exchanges in 2000 and acquired the CBLC, also launching the Novo Mercado.

The company converted from a non-profit organization owned by 103 member-brokers on August 28 2007 with the creation of Bovespa Holding – incorporating the exchange and CBLC - floating on its own Novo Mercado exchange on October, 26 2007[2].

Pricing for the flotation of a 40 percent stake was raised several times[3], and the shares climbed 52 per cent from their R$32-a-share final pricing on the first day of trade.

Itau is the largest shareholder, with 4.1 percent, followed by Santander Banespa, with 4.1 percent. The company's bylaws restrict the exercise of voting rights to no more than a 7 percent of the company's capital stock.

NYSE Euronext paid $90m for a 1 per cent stake in October 2007[4]

Structure and Regulation

Novo Mercado, tighter corporate governance

Level 1

Level 2 434 listed companies at September 30, 2007, with a capitalization of R$2,267bn

Nine directors with two-year terms, five of them independent http://www.bovespa.com.br/pdf/FactsFigures.pdf

Bovespa is a self-regulatory organization overseen by the National Monetary Council (CMN) and the Brazilian Securities Commission (CVM).

Product Development

Ibovespa

References

  1. "Company Report". Bovespa.
  2. "Company report". Bovespa.
  3. "Bovespa target IPO price raised sharply higher". Financial Times.
  4. " NYSE takes 1% stake in Bovespa". Financial Times.