BRICS Exchanges Alliance Announced

October 13, 2011

JOHANNESBURG, 12 October 2011 – The exchanges of the BRICS emerging market bloc have announced a joint initiative to expose investors to these dynamic economies. Initially the exchanges, which accounted for over 18%1 of all exchange-listed derivative contractstraded by volume worldwide as of June this year, will cross-list benchmark equity index derivatives on the boards of each of the other alliance members. Following that, the alliance will develop innovative products to track the BRICS exchanges. The initiative was announced at the 51st AGM of the World Federation of Exchanges (WFE) in Johannesburg.

The initiative brings together the BM&FBOVESPA from Brazil, MICEX from Russia (currently merging with RTS Exchange), Hong Kong Exchanges and Clearing Limited (HKEx) as the initial China representative and the Johannesburg Stock Exchange (JSE) from South Africa. The National Stock Exchange of India (NSE) and the BSE Ltd (formerly known as Bombay Stock Exchange) have signed letters of support and will join the alliance after finalizing outstanding requirements. These seven exchanges represent a combined listed market capitalisation of US$ 9.02 trillion2, equity market trading value/month of US$ 422 billion3 and 9,481 companies listed.

“Global investors are increasingly seeking exposure to leading developing markets,” says Ronald Arculli, chairman of HKEx and of the WFE. “The close relationship of the BRICS stock exchanges is behind this initiative, through which investors worldwide will gain easier access to benchmark equity index derivatives which will now be offered in local currency on these exchanges. These cross-listings are planned to take place by June 2012.”

This is an important moment in the history of developing countries, continues Mr Arculli. “The alliance enables more investors to gain exposure to the BRICS bloc of emerging economies, with its increasing economic power. From a global perspective this alliance points to the growing relevance of the BRICS economies and financial markets in the coming decade and further underlines the reason for the BRICS relationship.”

As well as being barometers of market performance, indices also form the basis of other tradable products including exchange traded funds. “As a logical second phase in the alliance, the exchanges have agreed to work together todevelop new products for cross-listing on the respective exchanges,” says Russell Loubser, CEO of the JSE.

The second phase will also include the development of products combining exposures to equity indices of all alliance partner exchanges. “These products would then be cross listed and traded in local currencies,” says Edemir Pinto, CEO of BM&F BOVESPA. “They will also allow investors to gain exposure to other emerging markets through a locally listed product.”

“Apart from cross-listing products, there are other opportunities which can be exploredwhich have great potential and will promote greater development and understanding of the respective markets,” says Ruben Aganbegyan, President of MICEX.

“The BRICS exchanges alliance holds great promise, as it will create avenues for Indian investors to diversify and expand into other emerging markets. It will also provide unique opportunities to investors in other BRICS nations to participate and contribute in India’s growth. BSE will actively work towards bringing world-class products to India as well as developing new products for other BRICS markets,” says Madhu Kannan, CEO of BSE Ltd.

Interest in the BRICS economies is prompted by above-average growth predicted for these regions, as well as the rising consumer power generated by growing middle classes in each nation. “The growth of this consumer class implies that demand will accelerate within these countries,” says Ravi Narain, MD of the National Stock Exchange of India.

The third phase may include product developments and cooperation in additional asset classes and services.

1 As of June 30, 2011 Total, (Source: Futures Industry Association)
2 As at end-August 2011 (Source: World Federation of Exchanges and RTS websites)
3 Monthly total for August 2011 (Source: World Federation of Exchanges statistics and RTS websites)

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For any questions, please contact

Communications Office
Gustavo Farinelli Ferreira
+55 (11) 2565-7865  

Andrei Tsivarev
Head of International Relations

Hong Kong Exchanges and Clearing Limited
Henry Law, Head of Corporate Communications
+852 2840 3862  
Lorraine Chan, Senior Vice President, Corporate Communications
+852 2840 3842  

Johannesburg Stock Exchange
Michelle Joubert, Head of Investor Relations
+27 11 5207080 or +27 83 3950350  

BSE Ltd.
Rohit Khatua, Head - Marketing Communications & Office of the CEO
+91 - 22 – 22728516  OR  

National Stock Exchange of India
R Nanda Kumar
Sr Vice President

About the BRICS Exchanges

One of the four largest exchanges in the world by market capitalisation, BM&FBOVESPA offers trading of cash markets in equities, gold, US Dollar and fixed income securities, as well as of derivatives on indices, interest rates, foreign exchange, agricultural and energy commodities. With its fully integrated business model BM&FBOVESPA offers not only a state-of-the-art trading environment, but also registration, clearing, settlement, risk management, central counterparty and depository services.

MICEX Group is an integrated exchange complex that renders a full range of competitive services to the financial market participants, including organization of trading, clearing and settlement of trades as well as depository and information services meeting the best global practices. MICEX Group offers to its local and foreign customers trading in currencies, stocks, government and corporate bonds, equity and financial derivatives, and in commodities. MICEX is ranked among top 20 global exchanges in terms of stocks turnover and is the largest stock exchange in the CIS, Central and Eastern Europe in terms of on-exchange trading volume. Currently MICEX is in the process of merger with RTS, the other major Russian exchange.

RTS Group is an integrated trading and settlement infrastructure that provides an extensive set of reliable high-quality services. RTS is a major derivativesmarket operator. Its derivatives market FORTS is rated among the top 10 global derivatives exchanges. RTS also operates RTS Standard, a cash equities market where trades are executed with partial advance collateral depositing and are settled on T+4.

Hong Kong Exchanges and Clearing Limited, or HKEx, operates a securities market and aderivatives market in Hong Kong and the clearing houses for those markets. HKEx was listed in Hong Kong in 2000 and is now one of the world’s largest exchange owners based on the market capitalisation of its shares.

As South Africa’s only full service securities exchange, the JSE connects buyers and sellers in equity, equity derivatives, currency derivatives, commodities derivatives and interest rate instrument markets. The JSE Ltd offers the investor a first world trading environment, with world class technology, surveillance and settlement in an emerging market context. It is amongst the top 20 largest equities exchanges in terms of market capitalisation in the world.
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Established in 1875, BSE Ltd. (formerly known as Bombay Stock Exchange), is Asia’s first Stock Exchange and one of India’s leading exchange groups and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, derivatives and mutual funds. It also provides a host of otherservices to capital market participants including risk management, clearing, settlement, market data services and training. It has a global reach with customers around the world and a nation-wide presence. BSE systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments. It operates one of the most respected capital market training institutes in the country (the BSE Training Institute).
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National Stock Exchange of India
National Stock Exchange of India was established by leading Indian financial institutions. It started operations in June 1994 and within a short span of 1 year became the largest stock exchange in India. NSE has been a change agent in the Indian markets and has catapulted India and its capital markets to amongst the top investment destinations in the world. NSE offers a wide array of asset classes to its investors, viz. government debt, corporate debt, equities, equity derivatives, currency derivatives, interest rate derivatives, commodity and its derivatives, mutual funds etc. either by itself or through its associate companies. NSE has leveraged information technology to provide access to the vast geography and investor population of India and at the same time provides sophisticated low latency, high throughput, and multi product platform to volume investors. Some of NSE’s global rankings are - 4th in equity shares (no. of transactions), 2nd in stock index options, 3rd in single stock futures and 3rd in stock index futures. NSE through its international collaboration and alliances makes available futures and options in S&P 500 and futures in DOW Jones Industrial average to Indian investors.