Peru’s stock exchange is pushing the government to allow it to take full control of the country’s post-trade services provider, the latest example of a global move towards “vertical integration” of bourses.
Bolsa de Valores de Lima (BVL), the Peruvian exchange, already owns 40 per cent of Cavali, a private group responsible for clearing and settlement of securities in Peru, but cannot raise its stake any higher because doing so is prohibited under law.
Frances Stenning, chief executive of BVL, told the Financial Times the bourse was pressing the Peruvian government to remove the ownership restrictions and was hopeful that this would happen within two years.
“That law could be changed and that’s where market trends are going – towards vertical integration of market infrastructure,” said Mr Stenning, who spent 10 years at Cavali as chairman and chief executive.
Like peers from London to New York, BVL wants to own the infrastructure for both trading and clearing so it can cut costs and improve efficiency and flexibility.
Mr Stenning, who was speaking in Hong Kong on the sidelines of an international roadshow promoting foreign investment in Peru, said he expected to see greater consolidation between Latin American bourses in the coming years.
The Peruvian stock exchange is already part of Mila, an alliance with its counterparts in Chile and Colombia. Mexico has signalled its intent to join Mila and is expected to make a final decision within the next month.
Trading through Mila has started slowly. In the year to May, total cross-border operations through the Mila infrastructure reached just $21m.
The Peruvian and Colombian bourses cancelled their plans to merge last year, in what would have been Latin America’s first full cross-border merger of stock markets.
Mr Stenning said he expected that cross-ownership of equity holdings between the Peruvian, Colombian and Chilean bourses would be a potential way to promote further consolidation in the coming decade, although he said full mergers were unlikely any time soon.