MexDer Mexican Derivatives Exchange Jorge Alegria CEO

1
MexDerMexican Derivatives ExchangeJorge
AlegriaCEO

• September, 2007

2
Evolution
3
Recent Achievements

• No Withholding Taxes for
• Capital gains in fixed income derivatives traded
  in MexDer. (2006)
• Options on Single Stocks.(2008)
• Give Ups.
• Adoption of the FIA standard agreement.
• Omnibus Accounts.
• In accordance to the CFTCs rule 30.7, two
  accounts are allowed
• One for Proprietary trading.
• One for Customer trading.
• Remote Membership.
• CFTC No-Action Letters (IPC futures screens).
• FIX Access.

4
2007 Outlook

• Local Side

• Mutual Funds.
• Now Mexican regulation allows Mutual Funds to
  trade derivatives.
• By January 2007, there were 451 Mutual Funds.
• Their assets value is around 66.6 billion USD.
• We expect them to be active traders within the
  next years.

• International Side

• Algo Traders.
• Hedge Funds.
• More International Participants.

• 2007 Top Products forecast.

• IPC Index Futures.
• Options on IPC futures.
• 10 year Bond.
• 28-day TIIE / TIIE Swaps.

5
IPC Index Futures Contracts
Monthly Average Traded Volume(thousands of
contracts)

• In 2006, the IPC returned 48.6 in MXP and 46.1
  in USD.
• One of the 10 most profitable markets worldwide.
• By August 2007, the IPC has returned 14.7 in MXP
  and 12.4 in USD.
• From January 2005 to August 2007 the Open
  Interest has increased in more than 1100.
• During 2007, the monthly average traded volume
  has increased in more than 45.

Foreign holdings in the cash equity market, as a
percentage of the Market Cap by December 2006.

• The IPC is a capitalization Index and the leading
  indicator of the Mexican Stock Exchange
  performance.
• The IPC indicates the market return based on
  price variations in a balanced, weighted and
  representative sample of the stocks listed on the
  Mexican Stock Exchange.
• The easiest and cheapest way to short the Mexican
  equity market.

Local Holdings in Equities 192.37 Billion USD.
Foreign Holdings in Equities 154.24 Billion USD.
5
5
6
Options on the IPC Future
Monthly Average Traded Volume

• Constant bids and asks in the front maturities
  and in a wide range of strike prices.
• From 2005 to August 2007 the monthly average
  volume has increased in more than 350, the Open
  Interest has increased nearly 330.
• The number of participants doubled last year.
• During 2007, volatility for the IPC Index has
  been around 23.

• IPC Options were launched on March 2004.
• On December 2006 we changed the underlying of
  this contract, from the spot IPC Index to the
  Future on the IPC Index.
• This contract gives access to volatility trading
  on the IPC and represents an efficient hedging
  tool for Mexican equities.

6
6
7
10-Year Bond Futures Contracts
Monthly Average Traded Volume(thousands of
contracts)

• Pension Funds actively trading this product.
• Most efficient way to short positions.
• From 2005 to August 2007

• The monthly average volume has
• increased in more than 375.

• The number of Participants has
• increased 40.

Foreign Investment in MXP Debt Government
Securities by December 2006.

• It is a 10 year fixed rate bond issued by the
  Mexican federal government.
• One of the most actively traded fixed income
  security in Mexico.
• It has become a benchmark for Mexican domestic
  interest rate.

7
8
New Product!
This new product allows
Contract specifications

• The underlying asset is the OTC One Month TIIE
  Swap of 2, 5 and 10 years (26x1, 65x1 and 130x1).
• Contract size 1,000,000 MXP.
• Tick size 0.005 bps.
• Quotation Future Swap rate.
• Monthly or Quarterly maturities for up to one
  year.

• Another hedging mechanism.
• Efficiency in initial Margins and trading costs.
• Reduced counterparty risk, Credit Lines.
• Anonymous and transparent market.
• Arbitrage opportunities.

9
Its easy to participate!

• As an Omnibus Account.
• Handling costumer accounts through a Local Member
  or a Clearing Member.

• As a Client.
• Proprietary Trader as a costumer of a Local
  Member.

• As a Remote Member.
• Non-Clearing Remote Membership with direct access
  to the trading system.

10
(No Transcript)
11
Contact Us!

• An invitation to be part of this exciting and
  growing market.

• New products
• new trading opportunities.

• MexDer, part of your global portfolio.

12
(No Transcript)