BNP Paribas Securities Services has launched local clearing and custody services in Peru.

It means the French bank can provide international and regional investors with access to the Peruvian market. 

Direct membership with Cavali, Peru’s clearing house, is part of the arrangement which gives clients direct access to the CSD.

“BNP Paribas Securities Services’ entry into Cavali represents an important milestone, which will contribute to the development of the Peruvian market," said Víctor Sánchez, the CSD's chief exec.

SMV is Peru's market regulator and Bolsa de Valores de Lima is the stock exchange.

The bourse forms part of the MILA exchanges (Chile, Colombia, Mexico, and Peru) which are all involved in an ongoing integration process to boost efficiency and create a level playing field for companies and investors.

Once complete domestic investors will more easily be able to buy and sell equities from other MILA countries.

There have been several initiatives aimed at expanding equity market liquidity in Peru.

A basic stock lending model was established in the last quarter of 2015 although it is only used to cover short sales and to avoid fail trades.

Limited availability of inventory and reduced operational capabilities of broker dealers are other reasons why it remains a nascent market.

Stock exchange officials even introduced a 100% fee waiver for stock lending in November to encourage trading.

Pension regulator SBS is due to decide if pension funds will be able to act as stock lenders this year.

BNP Paribas Securities Services launched local custody and clearing solutions in Brazil in 2010 followed by Colombia in 2013. 

Alvaro Camuñas, head of BNP Paribas Securities Services Spain and Latin America, added that the bank is committed to the Latin American region 

"We have been expanding our network and developing a strong local know-how. Peru is an exciting addition to our global network and we look forward to continuing to partner with our clients in the region.”