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Exchange Sector

Exchanges are organized physical or virtual environments for the trading of securities. An entire chain of trading and post-trading (after-hours) services must function harmoniously for transactions to be satisfactorily completed:

  • Trading platform: a system that enables buyers and sellers to meet and transact.
  • Clearinghouse: responsible for calculating long and short exposures and for controlling market risk. A Clearinghouse may also act as central counterparty (CCP) to all buyers and sellers, assuming the responsibility of honoring every trade.
  • Settlement system: controls and processes the exchange of money between buyers and sellers of securities traded.
  • Central depository: responsible for bookkeeping and custody.

In Brazil the exchange industry is vertically integrated. BM&FBOVESPA performs all trading and post-trading activities for equities, derivatives and other securities. This means the exchange provides all the services required by market participants (investors, brokerage houses etc.), from registration of trades to clearing and risk control, settlement, and complete custody of the securities traded.
Key characteristics of the exchange industry vary from one country to another, as shown in the table below.

Differences between securities exchanges by country or continent:



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