The Mexican Stock Exchange (BMV) is a public institution that operates under a concession granted by the Ministry of Finance (SHCP), observing the Mexican Securities Law.
As a result of the latest world trends and regulatory changes, the Mexican Exchange finalized with its demutualization process, becoming a company whose equities are traded within the stock market. On June 13th 2008, The Exchange conducted an Initial Public Offering of the shares representing its capital stock.
The Mexican Stock Exchange (BMV) is a forum where the organized securities market transactions are held, as its main objective is to facilitate the securities transaction process as well as the market development, fostering its expansion and competitiveness through the following functions:
- Establish the facilities and mechanisms as an aid in the relationship of the securities supply and demand, credit certificates and other documents registered at the National Securities Registry (RNV), as well as providing the necessary services for underwriting, offering and the exchange of the aforementioned securities.
- Publish, provide and maintain available to the general public the pertinent information of the securities listed at the Mexican Excnahge and at the International Quotations System (SIC), about its issuers as well as of the executed transactions.
- Establish the necessary means to oversee that the transactions held at the BMV by the Brokerage Firms comply with the applicable legislation.
- Issue regulation that sets standards, operative and conduct guidelines to promote fair and equitable market practices at the securities market; guard its observation and impose disciplinary and corrective measures in case of lack of fulfillment, that are mandatory for Brokerage firms and the issuers with listed securities at the Mexican Exchange.
The companies that require monetary resources (money) to finance its operations or expansion projects, might find it at the securities market, by issuing securities (stocks, bonds, commercial paper, etc.) which are offered to the investors (issued) and traded (bought and sold) at the Mexican Exchange, in a transparent and free competitive market with equal opportunities for all participants.
To underwrite initial public offering, the company turns to a brokerage firm which offers them (primary market) to the investors through the BMV. By this means, issuers receive the corresponding monetary resources of the securities acquired by the investors.
Once the securities are placed among investors, they can be bought and sold (secondary market) at the exchange, through a brokerage firm.
The Mexican Exchange is the physical place where the trades made by the brokerage firms are executed and registered. Investors buy and sell stocks and debt securities through intermediaries, called brokerage firms. It is very important to state that the Bolsa Mexicana does not buy or sell securities directly.
The investors send their orders through an account executive employed by a brokerage firm.
These account executives are registered specialists that have received training and are authorized by the CNBV. The buy and sell orders are transmitted from the brokerage firm to the market through a sophisticated Negotiation, Transaction, Registry and Allocation Electronic System (MONET) where they will wait to find and equal but opposite order and thus perfect the operation.
Once that shares or debt securities have been acquired, its performance can be monitored in specialized newspapers, or through printed and the electronic information system of the Mexican Exchange.
What is the importance of a Stock Exchange for a country?
The stock exchanges world-wide are established institutions by the society for its own benefit. Investors go to them as an option to protect and increase their monetary savings, supplying monetary resources that in turn allow Corporations and Governments to finance productive and development projects that in turn generate jobs and wealth.
The stock exchanges are organized markets that contribute to this financial channeling in a free, efficient, competitive, equal and transparent way, holding up previously agreed rules by all participant parties.
In this sense, the Mexican Exchange has encouraged the development of the country since, together with the financial sector institutions has helped to allocate savings into productive investments, source of growth and employment in Mexico.