Brazil Exchange Silenced By Tech

Yesterday the BM&FBovespa held its last human-operated floor auction. Starting today, all trades on the exchange, from cash equities to commodities futures and derivatives, will be executed solely electronically. The change was long in the making but gained momentum in the past 2 years as the two exchanges demutualized, went public, merged with each other and linked up with the CME’s Globex platform. With the change, the image of floor traders dressed in yellow and red holding handsets and yelling their orders at an auctioneer – for years held up as a symbol of both the vibrant and the emerging nature Brazilian markets – passes into history. As has happened in most other marketplaces around the globe, explosions of shouting male voices and frenetic gesticulation on a floor littered with order slips are being replaced with the steady quiet hum of servers. Volumes on the BM&FBovespa, meanwhile, are expected to rise substantially in the coming year as overseas investors begin to employ high frequency algorithmic trading servers and interest in Brazilian securities broadens.