Bolsa Mexicana de Valores SAB de CV

BMV:BOLSAA

Earnings Call Transcript 2021-Q1

[Operator]

Good day, and thank you for standing by. Welcome to the Q1 2021 Bolsa Mexicana de Valores, S.A.B. de C.V. Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ramón Güémez. Please go ahead.

[Ramón Sarre, executive]

Thank you. Good morning, and welcome to Bolsa Mexicana de Valores First Quarter 2021 Earnings Conference Call.

Before proceeding, I'd like to provide a brief safe harbor statement. This presentation contains forward-looking statements and information related to Bolsa that are based on the analysis and expectations of its management as well as assumptions made and information currently available at Bolsa. Such statements reflect the current views of Bolsa related to future events and are subject to risks, uncertainties and assumptions.

Many factors could cause the current results, performance or achievements of Bolsa to be somewhat different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental and business conditions, both in the global scale and individual countries in which Bolsa does business, such as changes in monetary policies and inflation rates in prices, in business strategy and various other factors.

Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary considerably from those described herein as anticipated, believed, estimated, expected or targeted. Bolsa does not intend and does not assume any obligation to update these forward-looking statements.

I would also like to remind participants that today's call is being recorded, and a replay of this call will be available online on April 22 at the Bolsa's corporate website, www.bmv.com.mx. During this call, all figures are in Mexican pesos and compared to the first quarter of 2020 unless stated otherwise. This call is intended for the financial community only, and the floor will be opened at the end to address any questions you may have.

Joining us for today's call are José-Oriol Bosch, CEO, Catalina Clavé, SVP, Clearinghouses; José Manuel Allende, SVP, Capital Formation & Information Services; Roberto González, SVP, Central Securities Deposit; Claudio Vivian, SVP, Technology; Hugo Contreras, SVP, Compliance and Regulations; Gabriel Rodríguez, SIF ICAP CEO; Alfredo Guillén, COO of the Cash Equities; Jose Miguel de Dios, MexDer CEO; Rosa Crespo, HR Director; Luis Rene Ramon, Director of Investor Relations; and myself, Ramón Güémez.

I would now like to turn the call over to our CEO, Oriol Bosch.

[José-Oriol Par, executive]

Thank you, Ramón, and good morning, everyone. Thank you for joining us for the first quarter 2021 earnings conference call.

Today, I will go over the financials of each business line, and I will give you some color about how each business is developing. And all in all, a good set of numbers as we execute on our technological transformation strategy and focus on achieving our internal target for a stronger shareholder value over the next year. So I hope you all have the slides that we already shared with you in order to make this call easier to follow. That was the idea. And if any of you had any suggestion to improve this call, please let us know.

So after the disclaimer, if you go please to Slide 3 on the key financial highlights. The revenue for the first quarter was MXN 983 million, that was down 1% compared to the first quarter of 2020, explained by the typical volatility in the financial markets, especially in March 2020 due to the COVID-19 as well as lower listings in 2020, that generated fewer maintenance fees in 2021, the reduction of listing and maintenance fees in Capital Formation and the retroactive tax benefit in SIF ICAP Chile in the first quarter 2020 for the months of November and December 2019.

On a positive note, the results showed higher value traded in equity trading and clearing, greater value of assets under custody and new products in Information Services. The expenses were MXN 456 million, up 4% and well under control. The increment is the result of BMV's migration towards a hybrid infrastructure, acquisition of new software and extension of hardware lease contracts.

The EBITDA for this period was registered at MXN 582 million with an EBITDA margin of 59%. And the net income reached MXN 379 million, down 17%. The dollars in BMV's treasury in the first quarter of 2020 and the depreciation of the peso against the dollar generated a typical financial income last year.

On the next slide, on Slide #4, on the revenue by business line in 2021. BMV has a very well-diversified business model with transactional business lines, equities, derivatives and OTC weighting 36% of the first quarter 2021 revenue. The Central Securities Deposit, 32%; Information Services, 16%; Capital Formation, 13%; and others, which consists of co-location, infrastructure and BMV's core, that was 3%.

And for the -- as for the difference between first quarter '21 and '20, we mentioned the most important, Information Services was up 7%; Equity Trading & Clearing up 4%; Central Securities Depository up 3%. And on the other side, Capital Formation was 14% down and OTC trading 11% down.

If you go please to next Slide, #5, from operating expenses. The operating expenses were up 4% in the first quarter of 2021 compared to the same months of 2020. Personnel expenses were in line with last year's figures. Technology was up MXN 13 million, MXN 8 million explained by the extension of hardware leases to maximize the useful life of the equipment and migrate to a hybrid infrastructure, on-site and cloud, both. And MXN 5 million in licenses, explained by the following projects, disaster recovery plan, reinforcement for equity and derivatives trading infrastructure, robotic process automation and electronic securities in Indeval.

On the depreciation, the depreciation showed an increase of MXN 5 million due to the acquisition of hardware in the third quarter of 2020 for post-trade disaster recovery plan, the DRP, and additionally MXN 1 million for the amortization of completed projects.

On the rent and maintenance was down MXN 2 million due to lower maintenance and electricity consumption at BMV's building. And on the consulting fees, were up MXN 2 million because of legal and information securities consulting. And the other decreased MXN 1 million, MXN 4 million less due to savings from cancellation of promotional activities, business trips and events, and MXN 3 million for the option to purchase the remaining shares of SIF ICAP Chile.

In the next slide, Slide #6, equity trading and clearing. Cash equities trading revenue was 4% higher than the first quarter of 2020 due to higher value traded. The average daily traded value, the ADTV, for the first quarter of 2021 was MXN 19.3 billion, that was up 7%. And the -- and both increased, the domestic market increased 3%, represented 47% of total ADTV, and BMV had in the domestic market a 97% market share. And the global market increased 12%. Global market amounted to 53% of total ADTV. And on the global market, the BMV had an 89% market share. This result is proof of BMV's expertise and continuous high level of service. And for the CCV clearing, revenues increased MXN 2 million because of greater activity in both local and international markets, which in turn increased total ADTV.

On next slide, #7, the operational highlights in the first quarter of 2021, the average daily trading value was MXN 19.3 billion with a range of MXN 16 billion to MXN 21 billion compared to -- with 2020 range, that was MXN 13 billion to MXN 24 billion. And for the uncertainty and volatility showed in March due to COVID-19 pandemic was the main reason for the trading value. As you all know, in June 2021, Mexico has midterm elections, which could create volatility in the following months.

On next, Slide #8, derivatives trading and clearing. The revenue in MexDer and Asigna showed a similar figure that for -- to that of first quarter 2020. In TIIE Swaps, there was a lower volume at 40% lower with a notional value of MXN 132 billion. However, the dollar futures increased 18% versus 2020. Today, in Mexico, there are a few institutional clients, and we are working closely with pension and mutual funds to help them in the authorization process to trade derivatives. An example of that is Wedbush Futures, whose clients now have access to product from Mexican Derivatives Exchange, powered by CMA markets.

Furthermore, on March 26, the reference rate for discount changed from TIIE to TIIE de Fondeo rate. And the average margin deposits were MXN 38 billion in the first quarter that was up 23%.

On Slide 9, on the OTC trading, SIF ICAP revenue was down MXN 21 million or 11%. SIF ICAP Mexico was down MXN 5 million or 8%, and SIF ICAP Chile decreased MXN 16 million or 12%. This behavior is explained by lower operational figures and retroactive tax benefits in SIF ICAP Chile for November and December 2019, which recorded MXN 10 million in the first quarter of 2020.

On Slide 10, on Capital Formation. The Capital Formation dropped MXN 19 million or 14% compared to the first quarter of 2020. And the listing revenue was similar to that of last year due to higher number of warrants and the recovery of short-term debt to pre-COVID levels, even though we are witnessing a recovery listings in equity, long-term debt and alternative securities are still facing some headwinds.

On the top right of the slide, the 8% in equity listings, that corresponds to Quanta shares technology. It's an ETF, which was listed in the local market. And shadow-listed securities in the global market. 22% in alternative listings belong to warrants and [indiscernible] and 70% in corporate debt [indiscernible], Invex and Naturgy issued long-term debt for a total of MXN 8.5 billion. Maintenance fees were down MXN 19 million, MXN 10 million due to the new fee schedule announced in January 2021 and MXN 9 million as a result of early debt amortization, which no longer generate maintenance fee and lower listings in 2020.

On Slide 11, the Central Securities Depository in the bulk revenue was up MXN 10 million compared to the first quarter of 2020, explained by the growth in the value of assets under custody, which increased 8% and 33% in the local and global markets, respectively.

Services related to the global markets such as conversion, dividends and tax formats as well as transactions or settlement showed a similar revenue to that of first quarter 2020. As mentioned before, the volatility in March 2020 was the main contributor to last year's global market services revenue compared to a higher and constant growth month-over-month in 2021.

In Slide 12, in Information Services. Information Services was up MXN 10 million or 7% compared to first quarter 2020. Market data revenue was up 6% because of data and analytics as well as the consolidated feed for Latin American exchange from LED Mexico to LED Miami. Furthermore, yesterday, we announced a nonexclusive agreement with Deutsche Board to distribute real-time and deferred data for Mexican equity and derivatives market. Our distribution footprint is growing beyond North America, and we expect to reach new regions in the future.

In Valmer, revenue increased 8% due to new valuation product for target dated funds in the ForEx. Regarding LED, we continue doing trials with major global vendors and potential clients.

And on the next slide, on Slide #13. BMV is delivering good results despite the challenging environment that we have seen. We have a well-diversified business model, which contributed to solid organic revenue in several of our core businesses. Additionally, we are slowly starting to see a recovery in the business lines which are facing headwinds as Capital Formation and Derivatives.

And let me give you some examples to share some color with you. In Capital Formation, short-term debt listings recovered to pre-COVID levels. The continued growth in the global market over 130 securities were listed in the quarter -- in the first quarter of 2021, which is more than 2016 full year. Third, Grupo Hycsa issued a bond for MXN 200 million. This was the first company to issue debt through the stock exchange after receiving the PRIME certification. This certification is a comprehensive support from Bancomext in collaboration with BMV, that includes financing, consultancy and training for companies to adopt corporate governance, best practices, improve their financial profile and take decisive steps in their aspiration to go public. So hopefully, we'll continue to see more companies coming from this program.

Also, Valmer listed green bond for MXN 1 billion. And we have several in the pipeline as BMV continues developing a green financial market in Mexico as part of our year ESG strategy. And the last one was Quanta shares that listed the local ETF, the ticker is Genius. And furthermore, in the second quarter, we expect follow-on in the next day from Vesta and also from Vasconia.

And in Derivatives, as mentioned, Wedbush Futures clients now have access to product from the Mexican Derivatives Exchange as we work towards increasing the client base.

On the expense side, the expenses were under control. We continue to invest in resiliency, efficiency, technology and new services. And the operating income was down 5%, and EBITDA margin was registered at 59%. The net income was MXN 379 million, down 17%. The unusual financial income registered last year because of the depreciation of the peso against the dollar due to the COVID-19.

And following up with BMV's ESG initiative, starting 2021, each Board member will be voted individually in their slate. And 1 Board member is leaving in 2021, and 2 other Board members who have been part of the Board of Directors, the longest will be leaving in 2022, as the company is focused on overboarding and independent. Furthermore, Claudia Jañez and Lourdes Melgar are being proposed to join the Board as alternate members. And BMV is strengthening its governance in all levels and enhancing diversity.

Lastly, on March 1, BMV activated a share buyback program considering the company's cash position and outlook. BMV's buyback fund currently has MXN 580 million and is seeking approval for another MXN 300 million in the shareholders assembly. In March, we bought back 500,000 shares worth MXN 21.4 million or roughly 24,000 shares every day.

And in the last slide, the summary solid financial results, strong equities, higher average value of assets under custody in the central securities depository, new products in information services and continued execution of strategy, focused on technological transformation and capabilities to size multiple growth opportunities and drive top line growth in all core businesses through constant improvement, operational excellence and project execution.

And with that, I thank you for the time. And together with my colleagues, we will gladly answer any questions you may have. And on Slide 15, you have all the contact information, whatever you need, please let us know. Thank you.

[Operator]

[Operator Instructions] Our first question comes from the line of Ernesto Gabilondo from Bank of America.

[Ernesto María Gabilondo Márquez, analyst]

My first question is on operating expenses. Do you think OpEx should continue to be under control considering your new improved technological platform? And are you evaluating older technological initiatives to improve even more the OpEx line?

And then my second question is on your strategy to improve maintenance fees. We have seen that they have been affected because of market conditions and likely competition. During your presentation, you were saying that short-term debt is already above the peak of it levels, and that probably we can start to see some longer -- long-term debt and equity capital formation. But do you have a strategy behind what could improve maintenance fees that, I think, have been like the last -- in the last quarters? And then my last question is, what do you think will be the potential drivers for this year?

[Ramón Sarre, executive]

Ernesto, thank you for your question. Regarding operating expenses, yes, we will continue to keep them under control. Mixing question 1 and question 2, do we have technological initiatives, which Claudio can comment on a little later. The journey to the cloud, which will help us to optimize some cost going forward, but this is not a short-term, it's a medium-term project. And at some point, it will involve -- or could involve having duplicate assets where we're still working through that. But we will continue to work to keep expenses under control and keep, as we've always said, try to grow margins even if it's by a little, but we always aspire to grow margins.

On the improvement on maintenance fees and initiatives, José Manuel or Oriol, would any one of you would like to take that question?

[José Allende Zubiri, executive]

Yes...

[José-Oriol Par, executive]

Yes, sure. And -- okay. No, go ahead, please, José Manuel.

[José Allende Zubiri, executive]

Well, a couple of comments. Regarding the listing strategy in order to keep on maintaining fees for the next years. First, for potential companies that may come first time to market, we have a list of potential companies. We keep close relationship with them. It takes many years for them to come to market. So it times -- it takes time to build up that relationship. For example was Hycsa that Oriol just mentioned, we list the short-term debt. But it took us 3 years. So we have to be in contact -- constant contact with companies to build up of companies that could eventually come and provide us with this maintenance fee flow.

The other one for actual companies, I would say, we have to be close to banks. And this COVID time, a lot of companies move to opening -- get the lines -- the credit lines that have opened with the banks. Otherwise, I think that eventually, those companies will come back to the market to diversify their funding lines. So we have an opportunity to bring back some of that amount.

And also, we have to get a closer relationship with the actual companies, the listed companies. Because once the activity -- the economic activity will move forward, they will need to be funding their projects and eventually will be coming to the market. So having a closer relationship with them through our representative, the MexDer servicios, that's okay. But we are focusing on getting some value-added services for those listed companies. Like how can we -- or they can get advantage of our social networks, the Facebook, Twitter, the 1 million users we have, in order to promote their services besides the listing itself.

The bulk is that we launched, the Escuela Bolsa courses for the company employees, some information services that we are providing to the companies, and some new development that we're working regarding investor relations and EH reports -- ESG reports in order to handle the data and make life easier for these companies. Oriol?

[José-Oriol Par, executive]

Ernesto, what was your last...

[Ernesto María Gabilondo Márquez, analyst]

The last one, I think that was the potential driver for this year.

[Ramón Sarre, executive]

Yes, correct.

[José-Oriol Par, executive]

Okay. I take this one, yes. I think that the potential drivers, and as already mentioned, we have a very good revenue diversification. And in summary, I think that the potential drivers are the big potential that we have in all businesses and in both sites on the offer and demand. We can -- and we are going to continue to work in increasing the number of companies that we have listed in the Bolsa in all different products that we have been creating. We're working on that with Casas de Bolsa, with financial institutions, with regulators. We have been and we'll continue actively promoting the de Bolsa -- Grupo Hycsa that has already been mentioned. I think that is a good example because Grupo Hycsa came from our promoting department at the Bolsa and not from Casas de Bolsa. And we work with this company, I think that for the past 2 years.

Yes. No, it's not big. It's a small amount, short-term debt. But I think that this is a good step. And coming from this program, the PRIME, and being the first company with the certificate, I think that is good. We have other companies, around 30 companies, that already got this certificate of PRIME. So hopefully, we'll continue to see more companies from this side.

And on the other side, I think that we have to also work with all the participants in order to increase the number of investors that we have at the Bolsa. And on this side, I think that we have seen good numbers in Mexico. The number of retail accounts in Mexico have been increasing in the past year or in the past year or 2 years. And we also continue promoting the Bolsa through social media, podcast, education, Bolsa School. And I think that the trend on that is quite good.

And we're also helping to increase the number of investors with the different products that we have. And I think that this is a good example. Because Mexican investors today, they can invest in any company or a stock out of Mexico that is listed in the global market. And I think that this has been positive. If we look at -- in terms of dollars, the return for the Bolsa -- for the Mexican Bolsa Index, the past 5 years, is still a bit negative. However, if we go to the Dow, I think that is close to 80% and the NASDAQ close to 300% in dollars in the past 5 years.

So we did not have the return. The Mexican economy was -- did not have the growth that we should in the past year. We did not have -- and we do not have companies in some technological sectors listed in the Bolsa in the local market, but we do have it in the global market. So I think that this is also a good opportunity to continue to increase the number of investors.

So I would say that we have opportunity on that. Because of that, we have good opportunity on equities. Once again, derivative market in Mexico is very small. Last year, the MexDer revenues were like 2% of the total revenues. So I think that we only have upside potential there. As happened in other countries, we need to work with the financial authorities, with their regulators if we want to increase and to grow this market.

And we also have good opportunity on the non-transactional revenues as it is the case of market data. As mentioned, an example that was announced this week on the Deutsche Börse. It's -- again, we are not going to change a lot the budget with this particular alliance with Deutsche Börse. But this is the first one. So what we are looking is to continue to increase our market data distribution beyond U.S. So we'll start now with Germany, and we'll continue with other countries. So we continue moving and looking for opportunities. And we have -- and I think that we have a lot.

[Operator]

Our next question comes from the line of Mohammed Ahmad from FGP.

[Mohammed Ahmad, analyst]

I hope you guys all having a good day. I have 2 quick questions. One, your transition to hybrid cloud, when is it expected to complete? And how should that impact your OpEx line when it is complete? And then the second question I have is on listing pricing changes that went into effect earlier this year. Do they impact debt listing only? Or is it broad-based, including equity in alternatives?

[Ramón Sarre, executive]

Sorry, Mohammed, could you repeat which projects you are referring to in the first question?

[Mohammed Ahmad, analyst]

In the first question, I'm talking about your switch to hybrid. In this quarter, for example, you extended some leases in anticipation of switching to hybrid down the line?

[Ramón Sarre, executive]

Okay. Yes.

[Mohammed Ahmad, analyst]

So I'm just wondering once it's done, what does it do to your cost line?

[Ramón Sarre, executive]

In the -- we don't have numbers yet to share with you. We would expect that in the short term, it should increase cost a bit as we switch from one to another one, we have to keep duplicate technology, so to speak. But then we would do it, obviously, to see a decrease in cost. But that's -- we don't have any number or estimates to share with you yet.

[Mohammed Ahmad, analyst]

Okay. Well...

[Ramón Sarre, executive]

On the second question, if I understood correct, you're asking the impact on the changes to listing fees?

[Mohammed Ahmad, analyst]

That is correct.

[José Allende Zubiri, executive]

Yes. It was not only on the debt side, but also on other products such as [securities], short-term debt, CERPIs, equities, warrants that's impacted the full range of products.

[Operator]

Our next question comes from the line of Jorge Henderson from Santander.

[Jorge Henderson Cubillas, analyst]

So my question is on regulatory risk. In February, there was an initiative sent by the regulator that's up to guarantee 30% of trading orders placed by brokerages. And you know the initiative was be drawn by the regulator in response to the brokerage concerns on elevated costs and this incentive to competition. So my question is, if you expect the regulator to come back with a new draft of this initiative? And if there are other potential initiatives in the pipeline that we think could come that could benefit BIVA because the norms from the government seems to benefit BIVA and also to us. I just wonder what are your thoughts here.

[Ramón Sarre, executive]

Oriol?

[José-Oriol Par, executive]

Okay. Yes. And -- okay, and if -- let me go back to how this started. Okay. At the end of March, the Ministry of Finance sent to CONAMER, CONAMER is a government entity that is dedicated to regulatory changes and improvement, in Spanish it is Comisión Nacional de Mejora Regulatoria. They sent The Ministry of Finance sent regulatory initiative to modify the Circular Unica de Casas de Bolsa, this is the regulation for the brokerage houses, not for the Bolsa. And according to the CONAMER procedures, anyone from the public, either individuals or companies, they can make comments to this initiative and they did. And they have -- the procedure is that they have 20 days to do that.

So -- and this particular initiative, as you mentioned, was looking to change the best execution regulation and imposing a force distribution of the passive orders. So with that, at least 30% of those passive orders should be sent to -- should be sent from the Casas de Bolsa to BIVA. And as per our adviser's recommendation, we did not send comments to CONAMER. But some important players like, [indiscernible], Banorte, Citibanamex, they did. And after that, the AMIB, that is Asociación Mexicana de Instituciones Bursátiles, the brokerage houses association, they also sent comments. And I think that the comment from the Casas de Bolsa, what we heard was that the comments were mostly. All of them wanted to -- or cut some comments and concerns.

And as a summary of all those, the main concerns were first that this new initiative was going to increase once again the expenses of the brokerage houses. And most of the brokerage houses in Mexico, we have around 30 Casas de Bolsa, but most of them are in red numbers, and they have cut a very difficult past years, not just the last year. They also mentioned that, that was not going to bring a benefit to the final client. That was not in -- also that was not in accordance with the principles and the best practices of a healthy competition, free market, et cetera. So those were their comment from the Casas de Bolsa and the AMIB financial institutions and the AMIB. So after that, the Ministry of Finance decided to withdraw the proposal. And at the same time, the regulators, the CNBV, the Comisión Nacional...

[Ramón Sarre, executive]

Hello? Hello?

[José Allende Zubiri, executive]

We can't hear at all.

[Ramón Sarre, executive]

Oriol?

[Operator]

You are also on the line. José Bosch disconnected.

[Ramón Sarre, executive]

Who disconnected, sorry?

[Operator]

José Bosch, you are still on the line.

[Ramón Sarre, executive]

And are the investors are still on the line?

[Operator]

Yes, you're still on the line. You're still live.

[Ramón Sarre, executive]

Okay. Could you pass on to the next to then, please?

[Operator]

Our next question comes from the line of [ Evison Murria ] from Suma Capital.

[Unknown Analyst]

I have 2 questions. The first one is related with new schedule fee maintenance repayment. If I understood correctly, do you establish a new schedule, if I understood correctly? So I was wondering if you can give us more color about it because it's regarding like on MXN 10 million on the revenue side. The second one is regarding to -- the buyback program. Given it is a common trend around the world, I was wondering what is the rationality to establish this buyback program instead of increasing the dividend?

[Ramón Sarre, executive]

Regarding the first question, I couldn't hear you very well, but if I understood correctly, you're referring to maintenance fees and the revenue is lower.

[Unknown Analyst]

No, the first one -- because on the press release, you mentioned that it was 15% below if you compare the first quarter of 2020. But this is always explained by those MXN 10 million. It's like -- I think my understood was it's a deferral program or something like that because you mentioned that it on regard -- on new fee schedule. I think it's a new program. But actually, I didn't get it. So I was wondering if you can give us more color about it.

[Ramón Sarre, executive]

José Manuel?

[José Allende Zubiri, executive]

Yes, it was a reduction on the fee and the pricing that we charge for the listing and basically maintenance fee for different products. It started this year in January. So the impact on this quarter was MXN 10 million. You are right. And the other MXN 9 million was due to the lower activity that we have in the previous years.

[Unknown Analyst]

Okay. Okay. Got it.

[Ramón Sarre, executive]

And regarding the buyback program, you just said that some companies use it as a complement to a dividend. When we looked -- the way we're looking at this is looking at the cash position we have in the company. And yes, we reduced the payout some years ago as we were paying back the Indeval fees. We have not increased the payback ratio back to the previous loan levels. So we are -- let's say, we're using this cash in this program. As we've said in the past, we have no need to hold more cash than we think necessary. So yes, it's a way...

[Operator]

[Operator Instructions]

[Catalina Almeida, executive]

Me, Catalina. Ramón, are you there?

I don't -- Oriol, I don't know what was the last question. I don't know if you want to recap with the lady that is helping us.

[Operator]

The last question was from [ Evison Murria ] from Suma Capital. Evison, you are still connected as well.

[Unknown Analyst]

Do you want me to repeat the question, the last one?

[Catalina Almeida, executive]

Yes, please.

[Unknown Analyst]

Okay. Yes. My last question was regarding to the buyback program. So the question is, what is the rationality to increase the buyback program instead of increasing the dividend payment?

[Catalina Almeida, executive]

I don't know if Oriol is over there. Oriol? I think we have a communication problem. Hold on 1 second. Is Roberto, Oriol or Ramón, are you there?

[Ramón Sarre, executive]

Yes, I'm here. Oriol?

[Catalina Almeida, executive]

Okay. They are asking about the rationale of the dividend. I don't know if you can answer that.

[Ramón Sarre, executive]

They are answering -- they're asking, what, sorry?

[Catalina Almeida, executive]

Again, if you can repeat the question, please?

[Unknown Analyst]

Yes. I think -- I'm going to reformulate the question. I think what is more important or why it's more important to establish a buyback program rather than increase the dividend?

[Ramón Sarre, executive]

Why not just increase the dividend instead of a share buyback program?

[Unknown Analyst]

Exactly.

[Ramón Sarre, executive]

I think there are 2 different ways to give money back to the investors. One is a distribution over time and increases -- and offer some liquidity to the stock. So just one choice over the other. I think that the benefit would be one is over time and increases liquidity a little bit.

[José-Oriol Par, executive]

Yes. Sorry, I'm back. I don't know what was the problem, but I got cut off when I was answering the best execution question. I don't know if at what point I got cut off.

[Ramón Sarre, executive]

Well, we passed to another question, Oriol. So I don't know if you need to go back to the best execution. If not, we can take the next question, please?

[José-Oriol Par, executive]

Yes, sure. No. Basically, I was giving a summary of the comment from -- I don't know if you already heard that about the comments that the Casas de Bolsa and the AMIB sent. Did you hear that? No?

[Ramón Sarre, executive]

Yes, yes.

[José-Oriol Par, executive]

Okay. Perfect. Well. And I don't know, going to the specific question that you think is over or not. I was saying that there is already an open dialogue with the regulators. They opened this window for 1 month, that is going to end at the end of April, in a couple of days. So -- and this dialogue is between the association, the AMIB, the Casas de Bolsa and Baltic Exchanges. So what is going to come out of here, and that sounds like Gladiator.

But -- I don't know. But in my personal opinion, I was saying that whatever comes out of this initiative, I think that we are going to be much better if we all work together, if we focus our efforts in having a bigger and better market in Mexico. I think that we are now focused and we have been focused in the past months and years, I would say, and spending a lot of time, resources and everything in how to divide, there's more cake that we have in Mexico instead of working together in having a much bigger cake.

And again, I'm a believer of the potential of this market. So we should be focused on that, what we have to do in Mexico, what kind of regulation we have to change in order to have more investors and more companies. And this would be the best for the exchanges, the best for the Casas de Bolsa that they are also, as I mentioned, having a hard time. And in the end, this would be the best for Mexico. So we are going to continue to work on that. And our goal is this -- one is to have a bigger and better market instead of looking at how we divide what we have to pay.

[Operator]

Our next question comes from the line of Rodolfo Ramos from Bradesco BBI.

[Rodolfo Ramos, analyst]

My question is on your personnel expenses, it's the biggest line in your expense items. I was wondering if you have any views of the potential impact of the outsourcing bill that would -- that is expected to prohibit in-sourcing by companies? I don't know if we could see an impact from this deal?

[Ramón Sarre, executive]

Thank you for your question. We could see some impact there, specifically to the new minimum they sent to -- increase they said to the profit-sharing tax to 3 months. So any difference you have between variable compensation and that could be some impact. Currently, we have at the exchange, there is a -- instead of this profit-sharing tax, we have a 1-month special payment. So the impact is reduced in there. And because there is a limit to the salary, there's a cap to the salary that is considered for this tax, the effect is also lower. So while we could see some, we don't expect it to be significant.

[Operator]

Our next question comes from the line of Carlos Gomez-Lopez from HSBC.

[Carlos Gomez-Lopez, analyst]

Two brief questions. The first one refers to your maintenance fees. We have seen the decline as a result of your discounts. But again, we have both decline in discounts and lower activity. And you have not really lost market share. So I wonder at what point you consider these discounts perhaps to be temporary rather than permanent? Could you review the pricing of your products going forward? Second, and I know that you're not giving precise guidance now, but how does the year look? What are your expectations for 2021 and 2022 with information that you have today?

[José-Oriol Par, executive]

Thank you, Carlos. José Manuel, could you answer the first question?

[José Allende Zubiri, executive]

Well, we just reduced prices this quarter. So I think they will be right for a good time, I think, many years. And as the fees are authorized by the commission, it will not be so simple to just get the idea of putting them or increasing them. It will pass them through a process to demonstrate the commission the reasons and why we'll eventually need to increase prices. So for the next 2 to 3 years, I don't think those prices will increase.

[Ramón Sarre, executive]

And on your second question, Carlos. As you said, we're not giving guidance. I think we're -- year looks challenging, but I think we're off to a good start. I don't want to give any specific numbers.

[Carlos Gomez-Lopez, analyst]

Do you expect this good start to continue at this level or should the next few quarters will be a bit better?

[Ramón Sarre, executive]

I think we've been positively surprised with market activity. And I think we do see events in the future that could bring volatility. So that's good.

[Operator]

Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to José Bosch for closing remarks.

[José-Oriol Par, executive]

Yes. Thank you. Thanks to all of you for joining another quarterly conference call. We appreciate your participation and the very good questions. Thank you very much. And apologies for the inconveniences because of the technical problems that we had. Thanks for your patience, and please take care and stay safe. Thank you very much.

[Operator]

This concludes today's conference call. Thanks for participating. You may now disconnect.