Brazil opens antitrust probe into BM&FBovespa bourse

SAO PAULO, Sept 27 (Reuters) - Brazil’s antitrust regulator Cade has opened a probe into whether financial bourse BM&FBovespa SA engaged in anticompetitive behavior by making it tougher for rivals to enter the country’s financial trading and clearing markets.

According to a document published on Tuesday to Cade’s website, exchange operator ATS Brasil and parent company Americas Trading Group alleged that BM&FBovespa lowered fees on cash equities trading and raise them for clearing and settlement services to discourage newcomers.

As a result, Cade decided to open a so-called administrative process to investigate the claims, according to a separate document also available on the watchdog’s website.

BM&FBovespa declined to comment immediately on the Cade statements.

According to the first Cade document, ATS requested access to BM&FBovespa’s clearing and settlement platforms in December 2014. BM&FBovespa responded that it would only guarantee access once ATS won central bank approval to operate.

In the meantime, the central bank conditioned such approval to ATS securing a so-called post-trading platform to settle and clear equities trading

ATS’ claims could, “in theory, show signs of infractions to competition,” Cade said in the first document, adding that “the response from BM&FBovespa was insufficient to, at least on a preliminary basis, justify its actions.”

The opening of the CADE probe underscores regulatory risks facing BM&F Bovespa. Under current rules, it enjoys a near monopoly on all trading, clearing and settlement services for most locally traded shares.

Trading transactions in Brazil are settled through a central counterparty clearinghouse, a complex and capital-intensive venture that has for years helped drive potential newcomers away from BM&FBovespa’s turf.

Shares in BM&FBovespa fell 2 percent to 16.44 reais in midday São Paulo trading. The stock is up 53 percent this year.

The probe comes as BM&FBovespa works to finalize the acquisition of Cetip SA Mercados Organizados, Latin America’s largest securities clearinghouse, which has almost full control of Brazil’s market for registration and custody of local fixed-income instruments and over-the-counter derivatives.

ATS Brasil requested permission to open a financial exchange in the country in June 2013. ATS Brasil is controlled by Americas Trading Group, a Rio de Janeiro-based trading systems operator, and has NYSE Euronext as a technology partner. (Reporting by Guillermo Parra-Bernal and Alberto Alerigi Jr. Editing by W Simon)