The goal is to secure initial market turnover
11/12/2024
Brazil’s new stock exchange, now named BASE Exchange, has a logo and advanced technology and is actively seeking new partners to ensure an initial trading volume. Mubadala, the controlling shareholder, is supporting BASE in a roadshow across Brazil and the United States, working with Olimpia Partners to facilitate its liquidity partnership program.
“This is a ‘private placement’ where international and Brazilian strategic partners acquire a small percentage of the company, linked to a liquidity program. Over three years, the more trading volume partners bring to our exchange with accessible spreads, the more warrant they receive for future conversion,” explains BASE’s CEO, Cláudio Pracownik. “It’s not about raising capital. It’s about securing volume, governance, and fostering a long-term partnership.”
Although the details of the valuation and business plan have been discussed in meetings, BASE has yet to disclose the exact percentage of share capital that will be used for the program. This guaranteed volume is intended to attract other market players who will not join the shareholder base.
Mr. Pracownik, who recently held meetings in the U.S., will return in early December to continue discussions, aiming to confirm participants by early next year. Brazil’s competitor, B3, also originated from a partnership among market agents who initially held equity securities in BOVESPA, which were later converted into shares.
BASE Exchange, or BASE—an acronym for the Brazilian Stock Exchange—aims to establish itself as a national exchange, not just a local Rio institution. The name also signals a foundation of strength, as “base” in Brazilian Portuguese refers to a football club’s youth academy. “We joke about that here, too—BASE is here to play well with the home team,” says Mr. Pracownik.
The technology arm, previously known as ATG, has been rebranded as Flowa, which will serve as the exchange’s tech provider. Mr. Pracownik also chairs Flowa.
This week, BASE will publish connectivity specifications on its website, allowing participants to test connectivity and understand transaction characteristics. By December, BASE plans to release details on connecting to clearing services.
“We aim to be technologically ready by the end of this year. The regulatory processes with the Central Bank and [Brazil’s securities market authority] CVM have advanced significantly, and we hope to start regulatory testing early next year,” says Mr. Pracownik. Regulatory guidelines suggest a minimum of six months of rigorous testing, including market simulations in stress and typical scenarios with connected brokers and custodians.
Mr. Pracownik believes an in-house technology setup gives BASE the agility to respond to any adjustments requested by the Central Bank or the CVM during the testing phase.
The original story in Portuguese was first published on Valor’s business news website, Pipeline.
*By Maria Luíza Filgueiras — São Paulo
Source: Valor International