The Mexican Stock Exchange (BMV) and S&P Dow Jones Indices (S&P DJI) have signed an agreement to license all of the BMV indices including their flagship index, IPC (Índice de Precios y Cotizaciones) - the broadest indicator of the BMV's overall performance.
According to the agreement, the BMV will transition the index calculation of its indices to S&P DJI over time. S&P DJI will be responsible for the commercial licensing of the indices and the end-of-day data while the BMV will continue to commercialize real-time index data. As part of the agreement, all current BMV indices will be co-branded S&P/BMV.
The Mexican Bolsa IPC index is one of the most popular equity-based underlying assets for structured products in Mexico and features in more than 390 retail products; while S&P Dow Jones Indices are also widely used in the domestic structured products market with the S&P500 appearing in more than 70 products.
Year to date, the IPC index has been featured in 17 products worth MXN754m (US$49.8m) compared to the 43 products worth MXN3.5bn (US$231m) featuring this index in 2014. The S&P500, on the other hand, has has not been deployed so far this year in any products sold in the Mexican market compared to 16 products marketed in 2014 worth MXN1.9bn (US$125m).
BMV already has a similar agreement for fixed income indices through Valmer, and its hoping to leverage the distribution, capacity, and reach of S&P Dow Jones Indices, as well as its indexing capabilities.
Under the agreement, the two firms will work on the integration of operational processes to reach clients globally, including the development and licensing, distribution and administration of new indices. In addition, the indices will be governed by an index committee composed of employees from both S&P DJI and BMV, which will sponsor the adoption of international practices.
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