First time that Offshore Chinese Renminbi Futures contracts will be physically deliverable into London
CME Group, the world’s leading and most diverse derivatives marketplace, and China Construction Bank, a leading commercial bank in China, announced today that they have signed a Memorandum of Understanding (MOU) to support the further strengthening of their business relationship.
CME Group is now able to offer Offshore Chinese Renminbi (CNH) Futures Contracts with physical delivery in London for the first time, which will be offered via CME Europe, CME Group’s European exchange. They will be supported by China Construction Bank (CCB), the sole-People’s Bank of China-designated clearing bank of RMB in London.
Under the MOU, CCB also intends to participate in the London Silver Pricing, as administered by CME Benchmark Europe Limited, as well as to facilitate the trading of CME Group products for CCB’s customers in China.
“As the largest exchange-traded FX marketplace, we are pleased to partner with CCB which is one of the leading Chinese commercial banks and the official clearing bank of Chinese Renminbi in London,” said Terry Duffy, Executive Chairman and President of CME Group. “We believe this relationship will generate multiple benefits for the marketplace and drive innovation across a range of asset classes.”
Physically deliverable futures contracts for USD/CNH and EUR/CNH have been available on CME Europe since the European exchange launched in April 2014, delivering into Hong Kong. Now that CME Clearing Europe, which provides clearing services for CME Europe, intends to work with CCB, CME Europe plans to amend these contracts so that physical delivery will take place in London, bringing cost and time-saving advantages to market users.
“The ability to transact during London hours is of paramount importance to those institutions who value flexibility in managing their positions in markets where prices can move sharply in short periods of time,” said William Knottenbelt, Senior Managing Director and Head of International, CME Group. “CME Group and CCB have shared a strong desire to promote RMB liquidity in London. We are committed to building out the necessary infrastructure and RMB products for a thriving marketplace as well as extending our partnership into other areas.”
“CCB wants to support the development of the offshore RMB market in London through our engagement with an innovative financial institution such as CME Group,” said CCB’s Chairman, Mr. Hongzhang Wang.
CME Group and CCB intend to engage with the Chinese and UK authorities on the benefits of the development of RMB products across a range of asset classes as well as improving access for Chinese companies and financial institutions to international capital and the London markets.
A complete list of products, members and product specifications can be found at http://www.cmegroup.com/europe/. Clearing services for CME Europe are provided by CME Clearing Europe.
