Mexicans can only participate in foreign equities if they are listed as an SIC on the BMV or BIVA. Listing companies on the mexican exchange will find financial service surprisingly beneficial to their native market.
Securities listed on the International Quote System (SIC): The Mexican Stock Exchange’s (BMV & BIVA) Global Market is a mechanism designed for the listing and operating (through the Mexican Exchange) of securities which were not IPOs in Mexico nor subscribed to the Mexican National Securities Registration but listed on foreign securities exchange markets which are recognized by the National Banking and Securities Commission (CNBV) or whose emitters have been recognized by said Commission.
There are over 227 listed securities which represent 20 countries. 182 are stock of renowned companies such as: Coca-Cola, Nestle, Starbucks, Wal-Mart, Google, Yahoo, American Express, Deustche Bank, among others. 45 of the securities listed are ETFõs or iShares, bundles of stock that are bought and sold in Mexico as a single entity, with the objective being to mimic the movements of an index, industry, or commodity; debt instruments or a specified market in particular.
There are a variety of categories which represent an index’s content (for example, the Dow Jones or the Russell 2000) These securities can represent indexes that belong to a foreign country. They are similar to the QQQ (stock family that tries to imitate the NASDAQ 100) and they offer diversity similar to mutual funds. There are certain established financial service requirements established in the applying laws and regulations governing the Mexican Stock Exchange (BMV) Global Market for the acquisition of said titles: Institutional Investors (PM) and Qualified Investors (PF).
The Bolsa Mexicana de Valores (BMV) is based in Mexico City, Mexico.
Ranked 26th in Market Capitalization ($398.68 Billion)
Market Cap over Mexico GDP ratio is 30.04%
Ranked 14th in Gross Domestic Product ($1.33 Trillion)
Ranked 11th in Population (112.47 Million People)
Listing SIC's (International Quotation System) are best compared to an American Depository Receipt (ADR) but require 0 stock capitalization as Mexican exchange brokers fulfill Buy and Sell orders placed in Mexico directly on your native exchange. Its an intelligent financial service.
Mexican Brokers act as a Market Make
The process for listing on the mexican exchange is relatively simple and can be performed in a period of less than a month, provided the stock or bond meets the following characteristics:
It is worth mentioning that today 90% of SIC operations, particularly of the private banking segment, are carried out in the BMV’s secondary market, which means there is no extra cost for arbitration to bring the shares from abroad.
Amongst the benefits of operating in this market highlighted by the executives, are those of financial service diversification as well as those of taxation (as capital gains have a favorable and transparent treatment), being able to trade in Mexican pesos (limiting the risk of exchange rate fluctuations), liquidity (in the event of not sufficient market in Mexico may trade in the market of origin), as well as the possibility of transfer of securities for those investors who hold positions abroad and who, due to changes in regulations derived from the FATCA act, prefer to operate their portfolios from Mexico.
Looking ahead, executives expect “to see growth both on the side of investors as well as on product offering”, of a system which has already been imitated in other countries.
Contact a 'Mex-Trade' Mexican Exchange financial service Listing Consultant at LEJC, SA today to determine whether you qualify for the SIC listing on the Mexican Stock Market.