Trading
Project to review trading costs in the Global Market
In a joint effort with the BMV, AMIB analyzed the cost of trading in the Global market, and agreed that an industry-wide meeting would not be appropriate. Instead, each brokerage firm should hold an individual meeting with the market sponsor in question in order to reach an agreement, given that commissions are charged based on the volume traded in that market.
Methodology for calculating and assigning marketability ratings to BMV-listed stocks
Due to the proposed changes to the Unified Brokerage Firms Bulletin--including introducing the concept of Market Maker, proprietary trades, short sales and securities lending--which directly affect the regulation of trading activity in low and minimum-marketability stocks, the Executive Commission of the Equity Market Committee agreed to go over the methodology and the bases applied to assign marketability levels, because currently 60% of the issues may not be used in securities lending, as guarantees, in short sales, purchased or sold on a same-day basis for proprietary accounts, marginable, etc., all of which limits market activity.
The goal would be to propose, jointly with the BMV, that the CNBV modify the Bulletin in order to expand the base of securities that make up the high- and medium-marketability levels, improving the liquidity and depth of the overall market.
In determining the new levels for assigning marketability ratings to listed stocks, two schemes have been analyzed: the first would strengthen the middle range of ratings (low and medium) based, as in the current scheme, on percentages. The second is based on the use of statistical quartiles in the marketability index, which would considerably reduce the number of zero-marketability stocks and strengthen the other categories. In 2008, a new methodology is expected to be defined for application in determining the marketability levels of companies listed on the Mexican Stock Exchange.
Request to include stocks not part of the IPC index in cross trades within the Spread and Tick Table for foreign stocks listed in the RNV
The Equity Market Committee developed various proposals that would make more stocks eligible for use in cross transactions within the spread. After a series of exercises on stock market trading, it was finally agreed that general criteria would be established, and submitted for approval by the CNBV through authorization of the BMV's Operating Manual. The criteria would be as follows:
- When the percentage is 3% or less of daily average trading volume in the series in the last 6 months per event,
- The percentage will be calculated on a daily basis by the system; and
- The amount must be more than 350,000 UDIs.
- A Tick Table will be included for foreign stocks listed in the RNV.
On the subject of the Tick Table for foreign stocks, because they do not come up to a sufficient volume of trades, and therefore are not subject to that criteria, AMIB members agreed that the authorities should be urged to allow the inclusion of a Tick Table for this segment of the market, because they are liquid in markets outside of the BMV, like the stocks in the SIC that are authorized for this table.
Accordingly, the BMV will be asked to incorporate these changes, which will be presented jointly to the CNBV as part of its authorization of the BMV Operating Manual. This is expected to take place in 2008.