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No liquidity segregation
The solution prevents liquidity segregation, creating orders in one of the books from two other books.
Implied Project
New functionality will connect the strategy and outright order books.
New functionality will connect the strategy and outright order books.
B3 is developing a new functionality named Implied, which will connect the strategy and the outright order books. The chief goal of the Implied Project is to increase market liquidity.
The new functionality will generate orders in the strategy book based on outright orders (Implied In) and also orders generated in the books of one of the outrights based on orders from the strategy book and from the other outright book (Implied Out).
The initiative gains even more relevance due to the recent increase in strategy trading, such as rollover, EDS (Exchange Defined Strategy) and UDS (User Defined Strategy).
Therefore, besides the books gaining more quality, new trading opportunities will be created. The new functionality will also improve product execution costs. Another benefit for the market is that the fee structure for structured products, such as EDS, will be more efficient and this can lead to a reduction in fees.
Note: Pending regulatory approval
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Product benefits
More liquid and deeper order books
Trades being generated from orders based on other books mean more trades and greater product liquidity.
Lower execution cost
While more orders and trades are generated on the books, spreads will become narrower over time as there will be more investors participating in the market.
Efficient fee structure + Liquidity
When trading some strategies, such as EDS, costs are lower than trading via outrights. This, combined with high liquidity, enhances gains.
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The Implied Project will bolster the strategy market, enabling greater operational efficiency and better total operating costs.
In the first phase of the project, which will cover the DI and DAP market, the gain in operational efficiency will be quite relevant. Today, market participants build their strategies mainly via EDS, due to greater operational and cost efficiency. However, in the case of the DI1 Futures Contract, mainly due to its high liquidity, clients end up having to choose between one of the order books. The Implied Project will put an end to this dichotomy.
Timeline
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11/25/2024
Go-live
PENDING REGULATORY APPROVAL
Technical details
Catalog changes
Technical specifications for FIX and Binary EntryPoint, UMDF FIX/FAST, UMDF Conflated and UMDF Binary protocols and their dictionary/template files
Main systems
Trading Engine, ePuma
Main related functions
To be defined
Certification roadmap
In definition
What is the Sinacor version?
No impact
