The Singapore Exchange and the Chicago Board of Trade have signed a memorandum of understanding that allows the two exchanges to develop futures and options-on-futures contracts on Asian-based commodities. The contracts can be traded on Chicago's electronic trading platform and cleared by the Singapore Exchange's derivatives clearing house.
A Singapore Exchange spokesperson said the exchanges hope to launch the initiative in the first half of 2006, and while they haven't yet set a definitive list of proposed products, it is likely to include agricultural commodities.
"We are excited about the opportunity to be a partner with the Chicago Board of Trade who brings with them a global network of international market participants in commodities," says Hsieh Fu Hua, the Singapore Exchange's chief executive officer.
"This collaboration with Chicago Board of Trade is timely with the strong demand for commodities. As a leading derivatives trading and risk-management centre in Asia, the development of Asian commodities business is strategically important for the Singapore Exchange," he added.
Chicago Board of Trade's president and chief executive Bernard Dan added that working with the Singapore Exchange would "enable us together to deliver innovative products and services to meet the expanding demand for liquid risk management tools in Asia".
