Phupinder Gill, CEO, CME Group
The CME Group, a conglomerate of derivatives marketplaces, and China Securities Index Co. Ltd. (CSI), dubbed the “largest index provider in China,” have begun a strategic partnership that will lead to new commodity indexes, and will pave the way for the listing, trading and clearing of derivatives products based on the commodity indexes to be developed, officials say.
The two signed an index development and product licensing agreement that will give CSI a license to use certain CME Group market data for the purposes of developing, calculating and disseminating commodity indexes, officials say.
The first product to be jointly developed will be the CSI CME Group China Commodity Consumption Index, based on the end-of-day settlement prices for CME Group futures contracts on soybeans and corn, listed on and subject to the rules of CBOT.
The index to come will also cover contracts for natural gas, West Texas Intermediate crude oil, and copper, listed on and subject to the rules of NYMEX; and gold and silver, listed on and subject to the rules of COMEX.
The agreement also provides for the listing, trading and clearing of derivatives products based on the commodity indexes to be developed by CSI and CME Group, officials add.
Terrence A. Duffy, executive chairman and president, CME Group
“As Chinese futures markets internationalize, the new products that we develop with CSI will provide enhanced risk management opportunities to users in the global commodity markets,” says Terry Duffy, executive chairman and president of CME Group, in a prepared statement.
China is a key market for the CME Group, “and this agreement with CSI is another example of our commitment to serve the needs of market users based in China,” says Phupinder Gill, CEO of CME Group, also in a prepared statement.
The cooperation with CME Group is an important component of the overseas development strategy of CSI, says Ma Zhigang, the CEO of CSI, in a statement. “We look forward to working together with CME Group to provide diverse indexes and derivatives products to meet the needs of the markets.” The demand for overseas financial derivatives by Chinese investors will increase gradually as capital markets liberalize, Zhigang adds.
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