2nd UPDATE: China Financial Futures Exchange Expands Collaboration Efforts
16 Maggio 2012 - 10:56PM
Dow Jones News
The China Financial Futures Exchange this week sealed agreements
with four Western exchange operators, aiming to tap the expertise
of established markets following a surge in trading volume.
CME Group Inc. (CME), Deutsche Boerse AG (DB1.XE, DBOEF), NYSE
Euronext (NYX) and CBOE Holdings Inc. (CBOE) signed so-called
memorandums of understanding with CFFEX, geared toward sharing data
and developing new derivatives markets.
The CFFEX is the youngest and smallest of the four Chinese
futures exchanges, but volume has soared in recent months. About
20.5 million contracts traded on its platform over the first three
months of 2012, up 74% from the prior-year level, according to
figures compiled by the Futures Industry Association, a U.S.-based
trade group.
The expansion at the CFFEX comes as Chinese government
authorities, who control the country's financial exchanges, have
implemented, over the past year and a half, rules designed to curb
derivatives trading activity in the country.
The all-electronic CFFEX was founded by the Shanghai Futures
Exchange, Zhengzhou Commodity Exchange, Dalian Commodity Exchange,
Shanghai Stock Exchange and Shenzhen Stock Exchange in 2006.
Trading didn't start until 2010 in the exchange's sole product,
futures on the benchmark CSI 300 stock index.
Overseas-based exchange operators long have sought closer ties
with mainland Chinese markets, particularly in the derivatives
sector.
Exchanges have touted such memorandums of understanding as a
means of spreading their influence to developing markets and a way
to develop deeper partnerships with local regulators and customers.
Such arrangements, however, have a mixed track record when it comes
to producing meaningful alliances or joint ventures, and some have
been allowed to expire.
NYSE Euronext and CBOE both announced MOUs with the CFFEX
Wednesday. CME and Deutsche Boerse have completed similar pacts,
according to persons familiar with the matter.
The agreements generally involve the exchanges exploring
opportunities for information sharing; cross-trainining of
employees and cooperation on joint research into developing
strategies for the derivatives market, according to announcements
Wednesday.
"This agreement deepens our long term commitment to the region,
and by sharing best practices and working collaboratively, CFFEX
and NYSE Euronext will further promote the development and
advancement of both the Asian and global financial markets," said
NYSE Euronext Chief Executive Duncan Niederauer.
The new pledges to collaborate follow an earlier memorandum
between the CFFEX and Hong Kong Exchanges and Clearing Ltd.
(0338.HK) signed in January, the first such bridge established by
the CFFEX.
-By Jacob Bunge and Melodie Warner, Dow Jones Newswires; 312 750
4117; jacob.bunge@dowjones.com; Twitter: @jacobbunge
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