Cetip scraps plan to create Brazil bourse -newspaper

SAO PAULO Fri Jan 31, 2014 2:47pm EST

SAO PAULO Jan 31 (Reuters) - Cetip SA Mercados Organizados , Brazil's largest securities clearinghouse, dropped plans to create a local bourse or help ATS Brasil clear and settle cash equities trades when it sets up an exchange in coming months, newspaper Valor Econômico reported on Friday.

The newspaper cited Chief Executive Gilson Finkelsztain as saying such moves would keep the company's focus away from other, more important goals.

Cetip's media office and its external public relations company did not immediately confirm Finkelsztain's comments for Reuters.

His remarks in the report helped spark the biggest gain in shares of BM&FBovespa SA, Brazil's sole financial exchange company, in more than three weeks. BM&FBovespa rallied 2.1 percent to 9.6 reais on Friday, the biggest intraday gain since Jan. 8.

Cetip shares rose 1.4 percent to 22.96 reais.

Analysts had speculated that ATS Brasil, a company seeking to open a cash equities exchange in Brazil before the end of this year, could team up with Cetip to create a company to clear trades, avoiding the need to rent BM&FBovespa's clearing facility.

This week, three senior executives at Cetip announced their departures, a sign that a number of projects, many aimed at developing products to compete directly with BM&FBovespa, could be shelved.

Finkelsztain told Valor that Cetip would focus on its current business segments, registration, custody and clearing of fixed-income and over-the counter derivatives transactions and the sale of liens for auto and mortgage loans.

"I'd rather do two things I do well than focus on ten different initiatives," the newspaper quoted him as saying.

ATS Brasil will be the first competitor of BM&FBovespa, and aims to secure a 15 percent market share in Brazilian equities trading within two years of operating. The launch of the exchange is planned for November, and could coincide with the opening of a new Brazil-based clearinghouse.

In 2012, ATS Brasil executives said the new exchange would rent BM&FBovespa's clearinghouse, even though BM&FBovespa is unlikely to share its facilities until at least the start of next year. (Reporting by Guillermo Parra-Bernal and Aluísio Alves)

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