BM&F Takes Nasdaq Monitoring Software to Police Markets

BM&FBovespa SA, the operator of Latin America’s biggest securities exchange, started using Nasdaq OMX Group Inc. software to police trading of Brazil’s stocks, commodities and futures.

Nasdaq’s Smarts surveillance platform, used to detect insider trading and market manipulation, will sweep the Brazilian exchange’s Puma trading system, the exchanges said in a joint e-mailed statement today. BM&F has used Smarts for equities since 2011.

“Since Brazilian trading activity has grown in importance in the portfolio strategies of investors worldwide, it is crucial to provide local and international players with market surveillance tools,” Cicero Vieira, chief operating officer of BM&FBovespa, said in the statement. “We aim to pro-actively enforce regulation and safety addressed by our regulators and rein in market-abuse activities.”

The Brazilian exchange was previously the nation’s only equities bourse and is confronting increasing competition. Americas Trading Group, a provider of financial technology, plans to create a platform for buying and selling Brazilian stocks with NYSE Euronext, Nasdaq’s rival. Direct Edge Inc. is also seeking to enter Brazil.

Nasdaq, which owns the second-largest U.S. stock market and runs seven Nordic and Baltic bourses, agreed to buy Smarts Group in 2010 to diversify into market surveillance. Users of Smarts include the European Agency for the Cooperation of Energy Regulators and the London Metal Exchange.

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