Bolsa Mexicana de Valores SAB de CV

BMV:BOLSAA

Earnings Call Transcript 2024-Q1

[Operator]

Greetings. Welcome to Bolsa Mexicana de Valores First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I would now like to turn the conference over to Guemez. Thank you. You may begin.

[Ramón Sarre, executive]

Thank you. Good morning, and welcome to Bolsa Mexicana de Valores First Quarter 2024 earnings conference call. Before proceeding, I would 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 at 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 the general economic, political, governmental and business conditions, both in a global scale and in the 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, anticipated, expected or targeted. Bolsa does not intend and does not assume any obligation to update these forward-looking statements.

I would also like to provide -- to remind participants that today's call is being recorded and a replay of this call will be available online on April 25 at Bolsa's corporate website www.bmv.com.mx. During this call, all figures are in Mexican pesos and compared to the first quarter of 2023, 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 Jose-Oriol Bosch, CEO, Claudio Vivian Gutierrez, Chief Information Officer; Hugo Contreras, Chief Compliance and Regulations; Jose Manuel Allende, Chief Capital Formation Markets and Information Services Officer; Roberto Gonzalez, Chief Postpaid Officer; Gabriel Rodriguez, [indiscernible] CEO; and [ Alfredo Digen ], Managing Director of Equity Markets; [indiscernible] Managing Director of Derivatives Market; Rosa Crespo,, Managing Director of Human Resources; Luis Rene Ramon, Director of Investor Relations; and myself, Ramon Guemez, CFO.

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

[José-Oriol Par, executive]

Thank you, Ramon, and thanks to all of you for joining us today to distort the 2024 first quarter results for BMV Group. As you know, we announced our results yesterday afternoon and copies of our press release and the slide deck are available at bmv.com.mx under Investor Relations.

To start, I would like to go over the foreign exchange fluctuations on our revenues, expenses and EBITDA, as [indiscernible] is important for a comprehensive year-over-year comparison. Then I will walk you through the different division results, and finally, open up to questions on the conference call line. FX had a double impact in the quarter, about 30% of PMC's revenue and 25% of its expenses are linked to the U.S. dollar. On one hand, the strength of the Mexican peso at MXN 28 million negative impact in revenue in the first quarter. mainly in information services and the central securities depository in the value. While on the other hand, expenses were MXN 13 million lower than expected mainly in technology and depository fees. The net negative impact on the EBITDA was MXN 15 million. With that in mind, let's review the quarter financial highlights in Slide #4.

In the first quarter of 2024 key financial pipelines. The revenue was MXN 967 million, down 7% because of lower trading in transactional businesses, fewer cross-border transactions and an unfavorable exchange rate. Expenses were MXN 477 million, up only 1%, mainly due to personnel expenses and the depreciation of lease hardwood. EBITDA was registered at MXN 552 million, down 11%. Net income was reported at MXN 375 million, 10% below the first quarter of 2023, but in line with the latest 3 quarters. The quarter was marked by a challenging environment defined by persistent high interest rates and a strong price. Despite this ongoing quarter, we have prudently controlled costs and make the strategic investments in technology to drive our progress forward. On the next slide, we will go over the revenue by business line.

In Slide #5, capital formation or the listing of equity, debt and alternatives as well as its annual maintenance contributed this quarter with 14% of BMV Group revenue. Transactional businesses, which consist of equity, trading and clearing, derivatives trading and clearing and OTC trading generated 37% of revenue. Information services made up of data, analytics, indices, valuation and financial risk management services had a 17% weight. This central securities depository Indeval which is responsible for the custody sentiment and global market services, mainly cross-border transactions, participated with 28% of revenue.

The soft performance came from information services and central securities depository because of FX. It not only affects our top line, but also influences investor behavior which is evident in the decline of [indiscernible] in equity trading, clearing and settlement in the global market of [ FIC ]. Nevertheless, we anticipate a more dynamic market in the upcoming months driven by the elections in Mexico and the U.S. as well as other growing geopolitical developments. Please turn to Slide #6 to go over equity trading and leading.

Revenue and cash equities trading and clearing was down 10% when compared to the first quarter of last year. It is important to highlight 2 things. First, in the first quarter, there were only 50 business days compared to 63 in the previous year and second, MXN 7 million correspond to nonrecovering revenue. And after excluding this item, the variation shows a decrease of 18%. This number is consistent with the average daily traded value, the at BMV, which was registered at MXN 14.6 billion, down 21%. The local market was up 6%, while the global market decreased 45%. As mentioned before, the investor behavior is influenced by the strength of the peso. On the positive side, during the first quarter of 2024, we regained 200 basis points in market share ending at 82%. As for revenue [ CCV ], revenue was down 10%, even though the total ACV for both Mexican exchanges was down 18%. This is explained by a lower number of gross rates in the quarter. Let's go to the next slide to review derivatives.

On derivatives, trading and [ clearing ], the revenue in derivatives was down MXN 3 million or 5% in the quarter due to lower trading of dollar future as well as fewer business base compared to the same quarter last year. The average daily notional value of dollar future reached $342 million, up 4%, while the open interest decreased 16% due to clients closing position in the period. As you all know, dollar futures are the main driver of [ mexder ]. Therefore, we are planning to lead mini dollar futures in the coming months. In Asigna, the average margin deposits were MXN 42 billion for the quarter, showing an increase of 11% due to excess deposits by clients. The net effect of lower trading and excess deposits showed a small gain of MXN 1 million in revenue.

On Slide #8 on the OTC trading, in SIF ICAP, OTC trading and value-added service revenue decreased MXN 11 million or 6%. SIF ICAP Mexico dropped MXN 9 million primarily due to lower CO2 emission compensation via carbon credit from Mexico CO2. Meanwhile, revenue at SIF ICAP [ Chile ] was down MXN 2 million due to FX. The Chilean peso depreciated 9% versus the Mexican peso in the quarter.

On Slide #9, we have the figures for capital formation. Listings performed strength in both short-term and long-term debt markets with revenue increasing 49%. In short term, 342 issuances were placed for a total amount of MXN 70 billion, while in long-term debt, '23 is [indiscernible] quarter registered for a total amount of MXN 99 billion. In the equity market, Fibra Prologis conducted the primary public and private offering of certificates, totaling MXN 9.6 billion while Fibra Monterrey also target out a primary public and private offering of certificate totaling MXN 7.8 billion.

In the first quarter, we continue witnessing a recovery fueled by growth projects, near shoring and [ in this ] system are favorable that encourages companies to opt for local debt over internationally options. I would also like to mention that the secondary lows today amendments to the securities market law continues on the review. BMV has started a program called the [ Teroa Bolsa ], which means from 0 to Bolsa with the goal of explaining companies the benefits of issuing debt or equity in the market and processed to get there. We will review the small print and work together with financial authorities and intermediaries to make this possible. Regarding maintenance, revenue was down 4% due to variations in the timing of revenue recognition last year. Given that the number of outstanding issues in 2023 was slightly above the previous year, you can anticipate a modest staminal growth in this line.

Moving on to the Central Securities Depository on Slide #10. In default revenue was down 5% or MXN 15 million in the first quarter or 5%, while our reduction in cross-border transactions and trades settled in the global market, along with the effect fluctuation had a MXN 26 million impact. The increase in assets under custody resulted in a gain of MXN 11 million. Assets under custody increased 12% in the local market to MXN 35 trillion and 11% in the global market to MXN 1.7 trillion. The pension market reform is beginning to show its effect in the numbers, and we foresee a gradual but sustained benefit from this initiative over the next 6 years.

As announced previously, we are currently working to accelerate the settlement cycle to [indiscernible] in May 2024 in line with the U.S.A. and Canada to better serve market participants by offering a more efficient transaction and mitigation risk. Moreover, we have started implementation with NASDAQ to modernized [ Cindifal ] and CCB infrastructure. This is a 3-year project that will replace our in-house development and opened a store to new services in the future. Finally, on Slide #11 on information services, the revenue registered MXN 169 million in the first quarter of 2024, down $31 million or 16%. It is relevant to mention that the appreciation of the Mexican peso against the dollar represented a negative impact of MXN 20 million.

Additionally, [ Valmer ] nonrecurring income of MXN 10 million in the first quarter of the previous year related to the implementation of our portfolio management system. Excluding these 2 items, revenue for the first quarter 2014 were in line with those of the previous year. In Valmer, we have decided to stop commercializing open finance as software for a portfolio management. In annual terms, the sales from this [ software ] represented MXN 16.4 million in revenue and MXN 15.7 million in expenses under consulting fees. As a result, we foresee no impact on our financial results. In the future, our focus remains on expanding our presence in North America and strengthening our alliance with the German Stock Exchange to distribute our data in Europe. We're also targeting new clients like digital banks and fintech companies, which combined with our transition to the cloud and the new distribution model. This initiative has the potential to drive significant progress. All in all, our diversified business model has played once again an important role in the results. Going forward, we anticipate a shift in monetary policy trend, a more stabilized foreign exchange landscape and increased activity across financial markets. we continue to hold a positive outlook for 2024. Now let's look at our operation operating expenses in Slide #12.

Operating expenses in the first quarter were MXN 477 million, up only 1%. I will go over the main items on a year-to-date basis. Personnel expenses, up MXN 7 million or 3% due to the net effect of annual salary increments at the beginning of the year and lower variable compensation in SIF ICAP. Technology up MXN 1 million due to higher technology consultancies related to architecture and process management. IT expenses were MXN 7 million lower than expected due to a strong peso. Depreciation increased MXN 5 million because of the hardwood leases for the segregation of post-trade infrastructure and the amortization of completed projects such as the qualified intermediary at Indeval and investment to the financial risk management platform marketed by [ valmer ] Consulting fees down MXN 3 million, MXN 5 million less due to the cancellation of the portfolio management system that [ valmer ] use to sell and 2 million up in advisory services. Others decreased by MXN 5 million because of lower sales of CO2, offset in Mexico CO2, which is part of SIF ICAP.

In the last slide in the #13 as a summary, BNV Group delivered resilient recovering results in the first quarter of 2024 impacted by lower average daily traded value in the global market, fewer cross-border transaction and adverse exchange effect on dollar [ life ] services. Net income was recorded at MXN 375 million, in line with the previous 3 quarters. In that scenario where the exchange rate remains constant in the first quarter of 2023 and the first quarter of 2024, Group of BNV would have recorded an additional MXN 28 million in revenue and MXN 15 million in EBITDA. Despite raising a turbulent quarter marked by geopolitical conflict and restrictive monetary policy, we have made great progress in fulfilling our strategic objectives, maintaining a strong client focus, further develop in a sustainable business and evergreen technology platform.

Our capital expenditures in technology during the first quarter of 2024 were MXN 55 million, that is 131% higher than last year. but in line with our investment plan. The strategic steps we have taken to accelerate the technological evolution of BNV Group will enable us to better serve our clients in. We remain committed to collaborating with financial authorities to advance the approval of our strategic projects. notwithstanding the electoral cycle. Currently, our primary focus is the rollout of the central counter-party services for fixed income. Beginning with buy and sell transaction of Mexican government bonds. This initiative leverages our own [ CCB ] financial market infrastructure, which currently only supports equities. We anticipate securing authorization by the end of the second quarter of this year and aim to initiate operations in the fourth quarter of 2024.

A key prerequisite for initiating operations is ensuring that trading platforms and clearing members are fully authorized and prepared to settle bonds through [ CCB ]. On a different note, during the first quarter of the year, we popped back 350,000 common shares under our buyback program, and we intend to maintain this approach going forward. Furthermore, in the previous board meeting, it was approved to recommend today's shareholders assembly and annual dividend of MXN 2.12 per common share, or 80% payout. That concludes my formal remarks. I thank you for the time. And together with my colleagues, we will gladly answer any questions you may have. Thank you.

[Operator]

[Operator Instructions] Our first question is from Ernesto Gabilondo with Bank of America.

[Ernesto María Gabilondo Márquez, analyst]

I have 3 questions from my side. The first 1 is on the pipeline for long-term debt and equities listings. How do you see them ahead of the elections I was wondering if you're seeing companies like on whole or concern with a local and the U.S. elections. And historically, which has been demand with higher volatility ahead of the Mexico and U.S. elections. Then for my second question is in terms of regulation. So can you remind us how has been the implementation of these new securities law? And when should we start to see the discussions for the secondary law that could help the entrance of multi-asset funds and hedge funds in Mexico. And then my last question is on operating expenses. Just wondering how much room do you have to maintain the cost under control. You're having a lot of steel strategic projects. So while we wait for revenues to pick up on the lower rates and revenues in dollars benefiting from the peso depreciation against the dollar. How much room do you have to maintain OpEx under control.

[Unknown Executive]

Okay. The first one on listing and pipeline. I would say on the listing segment, as Oriol mentioned, this quarter, we continued the good trend that we had had last year, especially on the debt segment in the long term. Listing revenues were up short-term placement increased 20%, long-term placements, more than 15% in the quarter, and the stunning outstanding number of long-term debt has also increased from the base numbers that we have had for the last 3 years, around 485 issuances. So in this quarter, companies from many sectors, FIBRAS have been active in the market.

So going forward, in the next quarter, I think it's going to be a little bit different. We still have some companies in the come to the market, but the pipeline is not as strong as it used to be in the last maybe 3 or 3, 4 quarters in the last year. We will have some placements in April and May, but not so many for June, July as far as we can see.

We think -- what we have talked with companies, it makes sense as some of them have anticipated the election process with the debt renewables and also for new placements that they were seeking. So the pipeline we usually have is diminishing for the following quarter. And we don't see also any IPO in this quarter. Maybe some follow-ons and some [indiscernible]

Regarding the second question, the security market law. Well, as it was approved last year in order to make easier, cheaper and faster the listing processes. Basically, through this concept of the Bolsa [indiscernible] But I want to mention there were some other changes in law, which are starting to be used, for instance, companies adopting equity structure with number of these shares and some other changes to speed up follow ons and subscription. This was already done by some companies in the process and it would make it faster the process. Regarding the furthest [ Simplifica ], which is the main topic of law. Last month, we were being working with authorities, they released to market participants project of potential changes to this secondary legislation for [ Oferta Simplifica ] and while, of course, it was a good start, we -- the market participants, including the exchange, and we make some comments and changes that we think it will make it simpler and easier and some criteria that may include a broader number of companies. And up to now, we are still waiting for response back for -- with the new project from the authorities. So that's the [indiscernible]

[Unknown Executive]

And lastly, Ernesto. Regarding expenses, we're keeping a close eye on them. And we'll continue to do our best to control expenses and to keep the margin. That's our goal. So if we see the revenues not picking up, we'll have to see what we can do for in expenses, but definitely, there's always some wide room to control.

[Ernesto María Gabilondo Márquez, analyst]

Perfect. Just a follow-up in terms of the regulation. So you were saying that you have been discussing the Oferta Simplifica, meaning to simplify requirements to get new equity listings and the listings into the stock exchange. But in terms of the hedge funds and multi-asset funds, when do you see this coming through? It will be discussed second half and probably introduce 2025? Just a little bit of color on that would be very helpful.

[Unknown Executive]

Regarding hedge funds, to be honest I think that for -- as far as I know, no big advance has been done on this regulation, all the efforts are focused so far on the [ Oferta Simplificada ]. I think this part of regulation for the hedge fund will come after for a discussion after the [ Oferta Simplificada ]. So I don't think it's going to be this month, at least.

[José-Oriol Par, executive]

And you were also asking about the election. All in all, we are expecting a positive year in Mexico and for the exchange Talking about the Mexican economy is doing well. and we think it will continue this year and at least in relative terms, better than other countries explained by all the opportunities that we all know on the near shoring, et cetera. But -- and we have seen that and we did see that in the financing last year, we did see that in the financing activity that we already mentioned at the -- during the first quarter, increasing short-term 25%, but also long-term debt compared to the first quarter of last year, 15% and last quarter and the first quarter of '23 was also a very good quarter.

We are also seeing that in FIBRAS, we are seeing a lot of activity in FIBRAS as mentioned in the first quarter, we had Fibra Prologis, Fibra Monterrey, but we are seeing much more activity with other FIBRAS, in particular, all the FIBRAS that are in -- on the industrial side. volatility with the elections, I don't know exactly the month and it will depend. But usually, when we have had the election, either Max or the U.S. election have been a positive year for us in the equity market. We see more volatility, a bit more of volatility also on the currency side. That is something that will help us on the global market activity. And we also positive from the other things that we are doing that have already been mentioned the opportunity that we have been working on expanding the services, the current services of our CCP beyond equities, including debt, the delectronification of the fixed income market. And also all the investments that we are doing on technology. So all in all, we think that it should be a positive 2024 for the Mexican Exchange.

[Operator]

Our next question is from Jorge Henderson with Santander.

[Jorge Henderson Cubillas, analyst]

I have a couple of questions regarding your market data business. You mentioned that you have some hard comes on your information services income because of some nonrecurring revenues in the first quarter of last year. But also on a sequential basis is [indiscernible] [ 6% ] quarter-over-quarter. I also understand that you attribute this partially to the peso strength that you mentioned in the conference call. But so my question would be if we remove this exchange rate effect out of the equation, how did you see the structural trend of the Information Services segment in the first quarter? And also, what should we expect going forward for this year and for 2025? That will be my first question.

[Unknown Executive]

Well, regarding this data segment and how to grow -- how will we grow in this year. As Oriol mentioned, Information Services was down 16% in the quarter. It was mainly due to 2 factors: first, exchange rate appreciation accounts for 10% of that 16%. And the second is nonrecurring extraordinary income of [ Valmer ] and the data services. These figures are obviously strange as the data segment has been growing for the last years over -- in the double-digit rate. But for the quarter, excluding all these revenues are close or in line to what we saw in the last year.

We have strategy that we set some years ago to focus on the international expansion. So at that time, we changed fully the technology platform. We open up the point of presence in New York, expand cloud services and reach Europe, and that allows also to catch up in pricing. All these and the stability at the time the peso, as I mentioned, allow us to grow over double digit. So going forward, we still see demand for our product regardless of what happened this quarter. we see demand for our products, especially on the pulp in New York and the international customers. The [indiscernible] where we are in the data center has close to 5,000 [ head on ] brokers, institutional investors, which are potential customers that we are targeting and focusing on. So there's a pipeline which we think will be coming eventually to connect into the -- for the data services.

We are also focused on other projects, penetration in Europe, as Tore mentioned, providing historical data, some projects for new infrastructure and connectivity to make it easier for international customers to connect locally on our facilities to pop the clouds and data analytics. So all those projects for the next quarters and years will provide us to keep on the growth. Maybe not as aggressive as this high double-digit that we have had in some previous years. But we're positive that we can keep growing on the high single digit, low double digit in the next quarters years regardless of the appreciation or not at the exchange rate.

[Jorge Henderson Cubillas, analyst]

That's very useful. Actually, I wanted to make a follow-up question on this topic. You have mentioned you have a potential of 5,000 brokers, right, in the pipeline. I think that also you mentioned that you see fintech as new clients. What would be like this, the addressable market going forward? And what kind of services are you offering to fintechs? Are these fintechs outside Mexico? I don't know any detail that you can share on that. And I don't know if you have like the current number of clients and how much can you expand the client base going forward?

[Unknown Executive]

Of course, this is different. For the local fintechs, we're offering data services to Balmer through [ Apis ] to provide them with the information and data that we have on the Grupo Bolsa as well as providing services for risk management purposes and also for regulatory compliance. And the 5,000 customers that I refer were in the data center that we -- where we are connected in the pulp in New point of presence. That's cyclically for the real-time data product for the equity and derivative segment on the market. I mean that's a huge amount of potential customers, not all of them, of course, are focused on LATAM or Mexico. So we are doing some for sure on targeting which brands had funds and institutional investors are focused on investing in LATAM or emerging markets, including Mexico, so we can better target them.

[Operator]

Our next question is from Kaio Prato with UBS.

[Kaio Penso Da Prato, analyst]

I have just one on my side, please. related to the trading in the global market. So we can see that volumes for Global Markets actually sharply reduced it like 50% year-on-year. So -- and this has an impact on cost and so on. So what do you think could be the main reasons behind that drug, especially on the global market? Because when do we think the change -- when I think about the change regarding the allocation of trading, it was more related to the local markets, right? So I just would like to get a sense from you about what is happening nowadays and what is the expectation of the company moving forward if that is an initiative that you are working here to increase volumes, please?

[Alfredo R. Lara, executive]

Yes, this is Guillen. What we've been observing in the market is that the lower trading volumes, obviously, affect the marketplace in general. So what we are seeing is that also the low volatility that we are experiencing, the low trading between the sick and the markets they refer to with these arbitrage operations have been lowering because of this FX, low volatility and appreciation of the peso. So this is more a response of low volatility in the peso dollar exchange rate, and that gives us less participation in the market in which we have been very active in the past -- so what are we expecting that, obviously, as we reach the elections in the U.S. and in Mexico, volatility will start to pick up -- interest rates will start to diminish by the end of this year. And therefore, our main competitor is the interest rate, not necessarily the other exchange. So at this point, what we're expecting is more volatility by second half of this year. Our market share is steady around 82%. And obviously, if we foresee more volatility participants, we'll choose the venue that has more debt and a better price formation.

[Kaio Penso Da Prato, analyst]

Okay. And just a follow-up, as you mentioned about the market share trends -- after the recent regulatory change, the last one that we had, we saw that you lost some additional market share, but seeing that it is stabilizing nowadays. So just to like to have a sense from you if you are originally seeing any potential new change in the regulatory framework regarding the competition with [ BIVA ]? Or if you are seeing any aggressive movement from Viva today in any specific revenue line. So a quick overview would be good here.

[Alfredo R. Lara, executive]

At this point, we are dealing with the August 22 regulation of year 2022. This point, probably the authorities are revising to improve that regulation, which is not necessarily very competitive for all the marketplace in general. So at this point, we believe that there could be improvements that could benefit the whole marketplace and in order to drag more participants from abroad because obviously, if you have a not very clear regulation in terms of trading participants, we step out from Mexico on to Brazil. So at this point, what we are expecting is a better regulation. Probably it will be hard to see this regulation come out before the elections. But at this point, we are not depending on that to be competitive. We have been very active in providing the marketplace a good service, liquidity and obviously, opportunities in several trading features that we have in place.

[Unknown Executive]

And the competition, the local competition we have is not just in the cash equity trading. It is also on the financing side. And here, we also have very good news. We have been gaining back market share. And just to give you 2 numbers. On debt on short-term loss long term in number of issuances we had, in the first quarter, 96% of the issuances -- local issuances in the market. In terms of amount, it was a bit lower, but a very good number. The financing amount at the Bolsa was during the first quarter, 93%. So 96% and 93%. So I think that's a very good number, and we continue to gain back market share.

[Operator]

Our next question is from Carlos Gomez with HSBC.

[Carlos Gomez-Lopez, analyst]

So I have 2 questions. The first one refers to the proposed pension reform and whether you think that, that could have any impact in the company in the short but also in the medium and long term? Second, I mean, we keep talking about the influence of foreign exchange on your business, would you consider at some point any type of hedging measure? Or do you prefer to have the natural exposure that you already have to the [indiscernible]

[Unknown Executive]

Okay. So on the pension reform, it started at the beginning of 2023, and we're already starting to see the benefits of that. You can see that on the Indeval under the assets under custody. That number is up not only because of this also because of a bit more securities on the global market as well as on the local market. But the number is up 12% year-over-year. And we will continue to see this behavior going forward. We expect this to continue over the next 6 years. The pension funds [indiscernible] will double in size. And well, they will have the need to invest those assets through the exchange. So first is an opportunity on the securities depository on Indeval, but it's also an opportunity that we have on the other divisions, some capital formation to get more products listed or to get a bit more traction on the trading clearing and the full stock cycle. So it's a gradual improvement, but you'll continue to see this under Indeval under the custody.

[Unknown Executive]

And Carlos, on your second question, whether we're considering an FX hedge. Yes, we begin to think about it or we're not -- we have a natural long position. We generate dollars I think what we're seeing is rather an extraordinary behavior of the peso. We've never seen the peso always strong for such a long time. Oriol here likes to make fun of people who have bought dollars yes, we're thinking about it, but we haven't made a decision on that yet.

[Carlos Gomez-Lopez, analyst]

Okay. That's clear. And on the pension reform, I was actually thinking -- I mean, it's clear the positive impact of the pension reform that came into effect last year. But also, you had this minor one this year with the pension [indiscernible] called. I know it's minor, but do you see that with some concern? Or does it have any impact flows going forward.

[Unknown Executive]

I think this -- we have to see how that place out at court. It's a -- it's something that's more of a banking regulation, what you do with dormant accounts. So we're not expecting any specific impact to our market, to our market to the Bolsa. But we have to see how that plays out in the end. There is some understanding as to what's the best use of dormant accounts, but we have to decide what's the best use of the proceeds and who is the owner of those projects. But we'll have to wait and see how that plays out in the cohorts. But no specific direct impact on us, I think.

[Operator]

Our next question is from Edson Murguia [ Summa Capital ]

[Edson Murguia, analyst]

The first one is a follow-up on global market. ADTV because if you compare with the other banks or even other financial institution during this first quarter, trading revenue actually increased. And the big at volatility indicator was up during the quarter. So I was wondering if there is another reason that in the global market, we saw a decrease in the EV TV because I'm not following or perhaps it's something related to more customers are trading in the U.S. rather than Mexico or there is -- it has to be another reason not only the FX. That will be my first question. My second question is regarding on the project that Oriol mentioned about this 3G project in service. And if I got it correctly, the CCV. So could you explain a little bit more what efforts are you following or trying to do for the next couple of years? Trying to understand the stage of this project.

[Unknown Executive]

Yes. At this point, what investors are looking is buy and hold. Obviously, this is a complex year in terms of elections. And obviously, the [ wars ] have been a major player in decision-making. There has been flight to quality. And obviously, all emerging markets are suffering from the same situation. Mexico is not the only marketplace in which volumes have gone down. And the FX obviously has other implications. Valuations also are affected by a lower -- by a stronger peso. And there are a lot of alternatives. As I said before, our main competitor is not the other exchange, is Brazil, when regulation is not in place in Mexico and high interest rates. So when the marketplace starts to suffer from not a good regulation in terms of best execution. And obviously, we are facing this low volatility in the market. We are expecting these lower [ val ].

[Unknown Executive]

And I think, Edson in addition to the FX, it is also the performance. If you look at the SIC, the most active ETFs that are traded in the global market that are highly related to the FX or more FX rate than an equity trade as are the case of the short-term U.S. treasuries that have ETFs and are used as as an exchange rate place. However, on the performance side, I think that this is also having an impact. It has an impact on the positive side that most of the companies that are technology disruptive companies had a very good performance, but have been having some corrections. I think that this has also been reducing the traded volume in addition to the strong peso stability on the lower volatility on the exchange rate.

[Edson Murguia, analyst]

Okay. Okay. And regarding to my second question.

[Unknown Executive]

On the central counterparty, what we've been working on is as Oriol mentioned, is on developing this capacity for bond trading. So what we will be expecting to get the approval from authorities just for direct transactions by and sell by this quarter, that does -- that means that we will be ready to provide the service, but we still need to continue working with the clean members and with brokers voice brokers and electronic trading brokers so that they can -- we can connect and we can create and make this new service to work in the market. In addition, the plan is also to add clearing for repos and one that we just saw just that would be critical and relevant to the market regarding efficiencies for back office and also the capital, they will have relevant savings by not having the need to issue capital because 1 of the benefits of central [ clinic of repos ] is that this reduces some of these requirements. And we just saw that the U.S. will make the central treating mandatory for next year. So that is something also that will help, I believe, in the coming months. to get this new service up and running and getting more traction by next year.

[Edson Murguia, analyst]

Okay. So just joining the dots -- by the second quarter, 2024, you might get the approval from the Mexican authorities. And operational it will start in the fourth quarter, but it's only the fixed income, right, bonds and so on. But for those parts of [ reborn ] technology it's going to be another stage looking ahead for this mandatory equation for the next year. Am I getting right?

[Unknown Executive]

Yes. The approval should be this quarter operationally third, fourth quarter this year and [indiscernible] to develop in this year and be ready for next year, and we will certainly follow what it will be implemented in the U.S. and -- and with the impact -- the positive impact that they will have mostly the 7 largest banks in the country, I think that they would be more than glad to participate in this.

[Operator]

Our final question is from Yuri Fernandez with JPMorgan.

[Yuri Fernandes, analyst]

I had a quick one regarding the one-off trading gains you had. Like if you can provide some more color on the trading like the MXN 7 million report in the release. And the second one, also quick on pricing in '19 with -- and in the past year, we saw some changes on listing maintenance like there were pricing changes of orbo -- my understanding is that you need approval for price changes like approving those changes. But just checking the box, like anything that you can do on price to kind of help on revenues. I understand volumes are challenging. I understand you are doing -- you have a good cost control that we're trying to create a new product on data services and others. But what about pricing? What can you tell us here what can you do or maybe the -- is not something a [indiscernible] at.

[Unknown Executive]

Yuri, regarding the the one-offs in revenues we had for MXN 7 million. There in 2023 revenues that were built in 2024 related to services for the -- for some brokers. So it's -- it just has to do with the tax effect and some brokers ask for the delayed billing of some services. And regarding the listing and maintenance fees, we were not currently looking at changes in pricing. It's a process that's done with the authorities. But we're not analyzing that yet.

[Operator]

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

[José-Oriol Par, executive]

Yes. Thank you very much, once again, for attending our quarterly conference call. Thank you very much for the interest and your questions. And if you need something else, you have our contact information. Have a great day. Thank you.

[Operator]

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.