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Chicago plans new contracts on RMB

By Lillian Liu (China Daily)
Updated: 2006-06-21 09:17

The Chicago Mercantile Exchange (CME), the world's largest and most diverse financial exchange, said yesterday it plans to list new futures contracts and options on renminbi against the US dollar, the euro and the Japanese yen.

The new contracts, which are scheduled to begin trading on August 27 this year, will trade exclusively on the CME's electronic trading platform, the company said at the opening ceremony of a regional headquarters office in Hong Kong yesterday.

The CME has established and operated offices in Tokyo and Sydney and provides a telecommunications hub in Singapore.

The ever-increasing market potential on the Chinese mainland has spurred the company to set up a strategic presence in Hong Kong, an entrance to the mainland.

"Asia is an increasingly important market of potential growth. While we have had a presence in the Asia-Pacific region for some time, we felt now was the right time to expand our reach by establishing a new regional headquarters in Hong Kong to facilitate further expansion of our product offerings and increased levels of service to our Asian-based customers," said CF Wong, the CME's managing director for products and services Asia, at the opening ceremony.

"Since 2004, CME has significantly increased its global reach through electronic trading and new products, and with trading programmes designed to attract broader participation from non-US market users," said CME Chairman Terry Duffy in a statement.

"Earlier this year, we entered into a multi-year agreement with China's inter-bank foreign exchange and bond market, under which Chinese financial institutions and investors will gain access to electronic trading of CME foreign exchange and interest rate products," said Duffy.

"The launch of these new contracts, the opening of our new Hong Kong office and the upcoming launch of futures and options on futures on the Korean won, as well as other new products, demonstrate CME's ongoing commitment to the entire Asia-Pacific region."

As a growing number of investors trade foreign exchange, the CME recorded in May a rise in its average daily volume to 69 per cent in foreign exchange business.

"Our foreign exchange markets reflect notional value of more than US$60 million a day, making CME the largest global foreign exchange marketplace outside the inter-bank market," said Craig Donohue, CME's chief executive officer.

"We believe these new Chinese renminbi contracts will lead to increased market participation by current CME foreign exchange customers as well as introduce CME foreign exchange markets to new market participants," he said.