Monday, June 23, 2014

Mexico Joins the Latin American Integrated Market (MILA)

Mexican Ministry of Foreign Affairs

Mexico announced at the Ninth Pacific Alliance Summit in Punta Mita, Nayarit that it is joining the Latin American Integrated Market (MILA), which will enable the Mexican Stock Exchange (BMV) to begin operations with the markets in Chile, Colombia and Peru.

BMV President Luis Téllez, at the Summit as a guest to discuss the process, said that Mexico is now taking the legal steps needed for its full incorporation into MILA, made possible by the reform of the Securities Market Act that was adopted in November 2013.

This announcement brings the Pacific Alliance even closer to deep integration in which the free movement of capital is a reality.

Téllez announced that with the recent adoption of the regulations issued by the National Banking and Securities Commission (CNBV) of Mexico, the BMV will be able to conduct business with the Pacific Alliance stock markets starting in the fourth quarter of this year.

The integration of the stock markets will take place in three phases:

1.    The routing of stock buy and sell orders (fourth quarter 2014) will enable Mexican investors to buy and sell stocks listed on the stock exchanges of Mexico and the other three countries through their local brokers. All transactions will be recorded at the Institute for the Deposit of Securities (INDEVAL), a private Mexican organization that operates as a central securities depository.

2.    Public offerings to finance companies beginning in the first half of 2015. Companies in Chile, Colombia and Peru will be able to launch initial public offerings (IPOs) on the BMV and vice versa.

3.    Bond purchases, beginning in the second half of 2015.  Mexico will launch a bond purchase mechanism for the first time in MILA, which will allow Mexican investors and, later, investors in the other member countries, to buy bonds from their home country.

Mexico's membership will make MILA into the largest stock exchange in Latin America both in terms of capitalization, with US$1.1 trillion, and in the number of companies listed, which will rise from 565 to 986, an increase of 43%.

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Press release, Jun. 19, 2014, Ministry of Foreign Affairs (SRE), Mexico, DF; translation by SRE