CME Group Inc. (CME) said Friday that it would enhance its pact with Brazil's BM&FBovespa SA (BVMF3.BR) with a new joint trading platform that they may market to other financial exchanges.

The move pushes the Chicago exchange group and its partner into the highly competitive technology sector, alongside rivals such as NYSE Euronext (NYX) and Nasdaq OMX Group Inc. (NDAQ).

BM&FBovespa will also boost its stake in CME to 5% from 1.8%, in line with the cross-holding already held by the Chicago exchange operator, which announced a parallel share-buyback plan.

The Brazilian exchange said it will press ahead with a separate deal for Nasdaq OMX to provide it with a new order routing system.

CME and BM&F plan to develop a new trading system working across a range of asset classes, including cash equities and derivatives.

The Chicago exchange has eschewed a move into equities to focus on its core derivatives business, while BM&F offers securities and futures.

CME Chief Executive Craig Donohue said the agreement "will allow us to provide a range of services across a broad spectrum of products and asset classes."

He said: "BM&F is going to be implementing its system for both the cash and derivatives segments. We'll continue to use CME Globex platform but will look to use any enhancements beneficial to our customers and incorporate them into our platform."

As part of the agreement, BM&FBovespa will buy shares of CME at $275.12 each, a 3.5% discount to Thursday's closing price. The purchase represents a total investment of about $620 million and brings BM&FBovespa's total stake in CME to approximately $1 billion.

CME said it plans to buy back up to 2.35 million shares of its stock, offsetting the dilution from shares issued to BM&FBovespa, which will receive a seat on CME's board.

The new high-speed platform is expected to launch in early 2011, when it will replace BM&FBovespa's existing trading systems.

- Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com
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