The Chicago Board Options Exchange (CBOE) and the Dalian Commodity Exchange (DCE), the largest futures exchange in China, have signed a Memorandum of Understanding (MoU). DCE President and CEO Dr. Yuchen Zhu, CBOE Chairman and CEO William Brodsky, and other Exchange officials finalized the MoU in a signing ceremony on Wednesday.
“The Dalian Commodity Exchange has seen explosive growth over the past several years and we are very happy to have the opportunity to cooperate with DCE to find potential ways to develop options business and facilitate communication between our exchanges,” says CBOE Chairman and CEO William J. Brodsky. “We congratulate DCE on their development of China’s futures market and we look forward to building a relationship with them that can lead to the development of new products, the expansion of markets and opportunities that may be mutually beneficial.”
The plan is for the two exchanges to share information with a view developing options and other derivatives. The MoU also provides for educational initiatives designed to enhance mutual understanding of their respective products, markets, technologies and regulations. CBOE says such collaborative efforts are laying the groundwork for future business relationships, including joint marketing efforts and potential product offerings.
Dr. Yuchen Zhu, DCE President and CEO says that, although there are no options trading in China yet, he is “optimistic” about the development of derivative markets. “Signing the MOU will provide us with a good opportunity to learn from CBOE’s successful experience of options development, trading and management, and to further solidify our friendly relationship,” he says. “We do believe that not only our exchanges, but also the establishment of China’s options market will benefit from our further cooperation on options with CBOE.”
The Dalian Commodity Exchange, established on 18 November 1993, has been the largest futures exchange in China since 2000. In 2004, with a total volume of more than 88 million contracts, DCE held 58% of China’s market share.