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BM&FBovespa and CETIP: A Clearinghouse of Clearinghouses?


Source: BM&FBovespa and global custody and market maker Cetip discuss potential merger, and share prices soar | Valor Econômico

Reuters adds:

The announcement comes after years of speculation that BM&FBovespa could bid for Cetip to grow in registration and custody of fixed-income and credit market instruments — segments in which the bourse has failed to gain market share. Cetip is Latin America’s largest securities clearinghouse.


A tie-up would make it harder for foreign rivals to expand in Brazil, which is the world’s No. 2 emerging market economy, while helping the combined firm cope better with deteriorating perceptions about market risks in Brazil. The country’s economy could shrink the most in a quarter century this year.

In September, Standard & Poor’s stripped Brazil of its investment-grade credit rating, increasing concern a second such move could soon follow as the country wrestles with a swelling budget gap and political turmoil.

Read more at Reuters.

CETIP has since released the following clarification over the [suddenly much more awkward to use] CVM Material Events service.
Rio de Janeiro, November 3, 2015 – Cetip S.A. Organized Markets
(“Cetip” or “the Company”) (BM&FBOVESPA: CTIP3) — a major custodian of Latin American private fixed income shares, a major Brazil private equity house and the leader in electronic delivery of information needed to register contracts and lien notices required by the transit agencies — arises to address the queries raised by Correspondence n. 441/2015/CVM/SEP/GEA-1, received today, as follows:

  1. As disclosed by the Material Event issued on this date, Cetip was approached by
    BM&FBOVESPA S.A. – “the stock, commodities and futures market”  (“BM&FBOVESPA”) — in order to initate discussions of some sort of negotiation between the companies. In this same vein, the press reported additional information, as, for example, did the Blog do Lauro Jardim, on November 2, and today, the Economy and Businesses section of the Estado de S. Paulo, with the headline “Bovespa negotiating merger with Cetip.”  These reports are imprecise, given that there is as yet no fait accompli.  Statements that “the negotiations are underway at an accelerated pace” ad that “the union of the companies should be announced shortly” are especially inaccurate.
  2. As Cetip sees the situation, these preliminaries did not justify the publication of a Material Event, given that no such fact exists at the moment: No proposal on the terms and conditions of an eventual merger, much less the existence of binding negotiations.   mantera o mercado informado caso venha a
    existir Fato Relevante sobre este assunto. mantera o mercado informado caso venha a
    existir Fato Relevante sobre este assunto.
  3. Even so, considering the Material Event published today by the BM&FBOVESPA, Cetip has decided to issue a statement of its own for the sole purpose of guaranteeing symmetry and equal access to information by shareholders and other market participants.
  4. Finally, it should be emphasized that Cetip will advise the market as soon as the need for a Material Event arises.