BM&FBovespa to Cut Stock Trading Fees in Push to Increase Volume

BM&FBovespa SA (BVMF3), the operator of Latin America’s biggest exchange, is lowering fees for stock transactions and will offer incentives to day traders to boost volumes, Chief Executive Officer Edemir Pinto said.

Equity trading fees will be cut by 28.5 percent starting April 1, Pinto told reporters in Sao Paulo today. The reduction will be extended to as much as 71 percent in December based on the average monthly volume of stock transactions. Day traders will get discounts similar to high-frequency traders starting at the end of this year, he said.

“These measures are intended to boost trading,” Pinto said. “We’re betting on volumes.”

Daily stock trading volume in Sao Paulo has averaged 7.56 billion reais ($3.84 billion) this year through March 1, according to data compiled by the exchange. Volumes climbed 12 percent last year after being unchanged in 2011, the data show.

The new charges are more in line with those in global capital markets and are intended to lure international investors, Pinto said. The exchange expects volumes to climb, offsetting the reduced revenue from lower fees. If trading volumes don’t increase, BM&FBovespa could lose between 18 million reais and 20 million reais in annual revenue, he said.

The company plans to review trading fees on derivatives by December, Pinto said.

BM&FBovespa’s shares jumped 3.3 percent to 13.62 reais at 2:50 p.m. in Sao Paulo, the biggest intraday jump since Feb. 15. The benchmark Bovespa index, third-worst performer this year among 94 major stock benchmarks, rose 0.1 percent.

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