CME Group, China Securities Index Co. Ltd agree to partner on index development


CME Group Inc (NASDAQ:CME), an international derivatives marketplace, and China Securities Index Co. Ltd, have announced the signing of an index development and product licensing agreement.

Under the agreement, CME Group will grant CSI a license to use certain CME Group market data in order to develop, calculate and disseminate commodity indexes. The agreement also envisages the listing, trading and clearing of derivatives products based on the commodity indexes to be developed by CSI and CME Group.

china_securities_indexThe first product to be developed by CME and CSI will be the CSI CME Group China Commodity Consumption Index. It will be based on end-of-day settlement prices for CME Group futures contracts on Soybeans and Corn, listed on and subject to the rules of CBOT; as well as Natural Gas, West Texas Intermediate Crude Oil, and Copper, listed on and subject to the rules of NYMEX; and Gold and Silver, listed on and subject to the rules of COMEX.

“We are pleased to enter into this strategic partnership with CSI,” said Terry Duffy, Executive Chairman and President of CME Group. “As Chinese futures markets internationalize, the new products that we develop with CSI will provide enhanced risk management opportunities to users in the global commodity markets.”

“China is a key market for us, and this agreement with CSI is another example of our commitment to serve the needs of market users based in China,” said Phupinder Gill, Chief Executive Officer of CME Group. “We look forward to working closely together with CSI in the development and innovation of new products.”

“As capital markets liberalize, the demand for overseas financial derivatives by Chinese investors will increase gradually,” said by Ma Zhigang, the Chief Executive Officer of CSI. “CSI has developed indexes based on multiple types of asset classes in different markets for over ten years. The cooperation with CME Group is an important component of the overseas development strategy of CSI. We look forward to working together with CME Group to provide diverse indexes and derivatives products to meet the needs of the markets.”

The announcement of the partnership between CME and CSI marks another step in CME Group’s efforts to boost its ties with Chinese companies. In August this year, CME Group and China Foreign Exchange Trade System (CFETS), a sub-institution of the People’s Bank of China, signed a Memorandum of Understanding (MoU), which paved the way for an establishment of a joint venture in the United States.

To view the official announcement on the latest partnership, click here.

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CME Group, China Securities Index Co. Ltd agree to partner on index development

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