Chicago-based derivatives exchange CME Group has signed an agreement on Friday with China Foreign Exchange Trade System (CFETS), a subsidiary of the People’s Bank of China (PBOC), which will enhance co-operation between the U.S. and China in financial markets.
Under the terms of the deal, CME Group and CFETS will commit to the joint development and innovation of offshore Chinese yen-denominated products. The exchanges also agreed to aid distribution of one another’s products, with CME Group helping its customers trade China interbank products and CFETS helping interbank market participants trade CME Group’s products.
“This collaboration between CFETS and CME Group is an important attempt by China and the U.S. to extend co-operation in the financial [services] sector and will combine complementary advantages as well as create mutual benefits,” says Pei Chuanzhi, president of CFETS, in a statement.
“The co-operation will promote the connectivity and mutual opening-up of both countries’ financial markets, further meet the demands of market participants for hedging against the risks of interest and foreign exchange rates, advance bilateral trade and economic development, and allow the financial markets to provide better support to the real economy,” Chuanzhi adds.
“This innovative agreement should increase distribution of our respective products and provide enhanced opportunities to users of our markets,” says Terry Duffy, executive chairman and president of CME Group.
“China is a very important market for us, and we are confident that our enhanced co-operation with CFETS will further strengthen the relationship and better serve the needs of our respective markets,” adds Phupinder Gill, CME Group’s CEO.