China Foreign Exchange Trade System and Deutsche Borse sign cooperation agreement
Both partners agreed to establish a new joint venture in Germany in which each side will hold a 50 per cent ownership. The new company will pursue three main objectives: first, to enable and support China interbank market participants to trade Deutsche Börse’s cash and derivatives products; second, to enable and support Deutsche Börse market participants to trade China interbank market products; and third, to develop and offer RMB-denominated interest rate and exchange rate (FX) products outside mainland China. Based on the cooperation agreement, both parties will interact closely with each other and advance step by step, striving for the implementation of the cooperation objectives as soon as possible.
Pei Chuanzhi, President of CFETS, said: “Our cooperation will be mutually beneficial to both organisations and facilitate the opening-up of the financial markets of China and Europe. The joint venture will meet the demands of the Sino and European real economies to hedge their interest rate and foreign exchange risks, promote bilateral economic and trading activities, facilitate the development of the European offshore renminbi market, and help to further promote RMB internationalisation.”
Carsten Kengeter, CEO of Deutsche Börse AG, added: “We are very pleased to enter into this strategic partnership with CFETS. Based on the strength of both organisations, our joint venture will contribute to the continued growth of our markets and economies. Further, it will also strengthen the relevance of Europe as an offshore renminbi hub and be mutually beneficial for our organisations, and importantly, for our customers.”
About China Foreign Exchange Trade System
China Foreign Exchange Trade System and National Interbank Funding Center, also known as CFETS, was founded in 1994. Under the state’s strategic guidance to develop the interbank markets, CFETS follows the principles of “multiple technical approaches, various trading mechanisms and satisfying demands from multi-tiered markets”, and commits to infrastructure construction, product and mechanism innovation on China’s interbank markets, aiming to build itself as “a global major trading platform and pricing centre for RMB and related products”.
Through the use of advanced information technology, dedicated lines and the internet, CFETS provides a series of services covering issuance, trading, information and post-trade for cash and derivative RMB-denominated interest rate, exchange rate and related products. On every business day, it publishes market benchmarks including the central parity rate of RMB, Shanghai Interbank Offered Rate (Shibor), Loan Prime Rate (LPR), Repo fixing rates, bond indices and yield curves. Its customers include more than 10,000 market participants as well as over 33,000 information and surveillance service users. In 2015, the total trading volume is estimated to reach about RMB 600 trillion.
About Deutsche Börse Group
Deutsche Börse Group is one of the world’s leading service providers for securities and derivatives markets with a product and service offering for issuers, investors, intermediaries and data vendors. The Group covers the entire process chain from trading through clearing to settlement and securities custody. Furthermore, Deutsche Börse offers market data, indices and analyses and is a service provider for the development and operation of IT systems.