CBOT And SGX Establish JV To Launch Electronic Commodities Derivatives Exchange

The Chicago Board of Trade (CBOT) and the Singapore Exchange (SGX) today announced their agreement to form a 50 50 joint venture company called the Joint Asian Derivatives Pte. Ltd. The purpose of the joint venture is to establish a

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The Chicago Board of Trade (CBOT) and the Singapore Exchange (SGX) today announced their agreement to form a 50/50 joint venture company called the Joint Asian Derivatives Pte. Ltd.

The purpose of the joint venture is to establish a commodities derivatives market, to be known as the Joint Asian Derivatives Exchange (JADE). It is expected that JADE will commence operations by the end of the third quarter of 2006. In the initial phase, the new exchange will be operated by Singapore Exchange Derivatives Trading Limited (SGX-DT) under its existing license granted by the Monetary Authority of Singapore (MAS).

The joint venture will develop commodity contracts to be traded on JADE. The new products will be hosted on the CBOT’s electronic trading platform, powered by LIFFECONNECT(R). All trades will be cleared by SGX’s derivatives clearing house. The new marketplace will leverage the CBOT’s recent extension of its telecommunications network in Singapore.

CBOT President and CEO Bernard W. Dan said, “We are excited that our initial Memorandum of Understanding with SGX has evolved into a defined action plan to launch a new commodities exchange in Singapore. Our agreement with SGX to build a premier electronic marketplace in this growing economy demonstrates our commitment to meeting the growing demand for liquid risk management tools in the Asian-Pacific region.”

Mr. Hsieh Fu Hua, SGX CEO, said, “The joint venture is key to SGX’s strategic focus to be an Asian Gateway. It represents a further step in Singapore’s development as a leading derivatives trading and risk management centre in Asia. Just as we have pioneered successful partnerships with other leading exchanges, we are excited to collaborate with CBOT to establish an Asian commodities exchange that meets the increasing demand for hedging Asian product prices.”

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