Shanghai Stock Exchange, China Financial Futures Exchange and Deutsche Börse Agree on Joint Venture

27/05/2015

Shanghai Stock Exchange, China Financial Futures Exchange and Deutsche Börse today agreed on a strategic cooperation to launch a joint venture. It has the objective to develop and to market financial instruments based on Chinese underlyings to international investors outside mainland China.

The venture is designed to support the internationalisation of the Chinese currency; therefore, products will be offered in Renminbi (RMB). The company will be named ‘China Europe International Exchange’ and will commence market operations in Q4 2015. The initial scope of product development will cover cash market products for market launch.


Shanghai Stock Exchange and Deutsche Börse will each own 40 percent and China Financial Futures Exchange the remaining 20 percent of the venture. The new company will be incorporated in Germany. Shanghai Stock Exchange is China’s leading stock market, while China Financial Futures Exchange is China’s only financial derivatives exchange.


Along with China’s integration in global economic activities, the cross-border use of RMB is increasing rapidly, and RMB internationalisation has become an important strategy in the process of the opening-up of China’s economy and financial industry. To promote such a strategy, a well-functioning market with offshore investment and trading opportunities is crucial.


“In the context of China’s capital market liberalisation, the offshore trading platform set up by the three exchanges will further promote the two-way opening up of China’s capital market, enrich the product line of the offshore RMB market and accelerate the pace of Renminbi internationalisation. The joint venture is a major step forward in the cooperation between our three exchanges, and I believe it will also be rewarding and fruitful,” said Dr. Gui Minjie, Chairman of Shanghai Stock Exchange.
“The establishment of the RMB asset trading platform in Frankfurt by Shanghai Stock Exchange, China Financial Futures Exchange and Deutsche Börse is a milestone for Chinese exchanges and capital market in general. It will help pave the way for further opening up of China’s capital market and contribute to RMB internationalisation,” added Zhang Shenfeng, Chairman of China Financial Futures Exchange.


“China has developed into an important player for the global economy. The joint venture is meant to support this role further by promoting the internationalisation of the RMB with capital market products. The joint venture is also a result of the excellent relationship amongst the three partners. We feel honoured to participate in this new venture,” said Andreas Preuss, Deputy CEO of Deutsche Börse AG in charge of cash and derivatives markets.
 

CEINEX – China Europe International Exchange AG – offers investment products based on Chinese underlyings to international investors, starting with cash market products. CEINEX is the first and only dedicated platform for authorized RMB-denominated trading outside mainland China – offering attractive new trading opportunities to trade China in a most efficient manner, supporting RMB internationalization effectively.

It is a joint venture by Shanghai Stock Exchange, Deutsche Börse and China Financial Futures Exchange. The new market place was launched in November 2015.

Founded on November 26th, 1990, Shanghai Stock Exchange (SSE) is the largest stock exchange in China and third largest in the world. In terms of total market capitalization, trade value and capital raised as of the date, SSE ranks No. 3, No. 2 and No.3 globally.

SSE is the first and the only exchange that offers both cash (equity) and derivative (stock option) products in mainland China. SSE is also the most international exchange in mainland China. Since the launch of Shanghai-Hong Kong Stock Connect in 2014, SSE is the only exchange that enjoys connectivity with overseas markets.

With a traditional focus on blue chip stocks with larger market capitalization, SSE has been enriching its listed companies' category so as to establish a multi-layer capital market. In 2014, Small and Medium Enterprises (SMEs) offering no more than 500 million shares were allowed to be listed in the SSE. Moreover, the “Strategic Emerging Industries Board” is now under preparation and will offer access to a larger number of innovative companies.

Deutsche Börse Group is one of the world’s leading service providers for securities and derivatives markets with products and services offered for issuers, investors, intermediaries and data vendors. The Group covers the entire process chain from trading through clearing to settlement and securities custody, as well as market data, indices and analytics.
Deutsche Börse Group is also a global innovator in financial markets technology, including the industry leading T7 trading platform and C7 clearing system.

With the approval of the State Council and the authorization of China Securities Regulatory Commission (CSRC), China Financial Futures Exchange (CFFEX) was jointly founded by Shanghai Futures Exchange, Zhengzhou Commodity Exchange, Dalian Commodity Exchange, Shanghai Stock Exchange and Shenzhen Stock Exchange on September 8, 2006 in Shanghai. Having successfully launched five products, i.e. CSI 300 stock index futures, SSE 50 stock index futures, CSI 500 stock index futures, 5 year government bond futures and 10 year government bond futures, CFFEX is now working to further expand its product portfolio to cover stock index options, foreign exchange futures and interest rate futures. In 2014, a total of 218 million contracts were traded at CFFEX. According to 2014 FIA Annual Volume Survey, CSI 300 stock index futures ranked the 4th most actively traded stock index futures worldwide.