New exchange moves LatAm towards complex products

Author: | Published: 14 Dec 2010

Stock exchanges in Chile, Colombia and Peru have taken the first step toward a unified platform. If successful, the Integrated Latin American Markets (Mila) could eventually trade sophisticated financial instruments like derivatives and exchange-traded funds, practitioners say.

Michael Fitzgerald, chairman of the Latin American practice group at Milbank Tweed Hadley and McCloy, said the boost in liquidity provided by the pooled investor base is crucial to reaching the goal of having more complex products to offer.

“That is clearly the ultimate end game here,” he said. “Not just to have the individual stocks traded but to allow derivative products that would ultimately make these markets more efficient.”

During the two-month trial period that began last month, just 46 companies are allowed to trade...