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®. All trades will be cleared by SGX’s derivatives clearing house. As a result of the CBOT's recent extension of their telecommunications network into Singapore, the new market will leverage the infrastructure and connectivity of the CBOT's global market participants in addition to those connected to SGX-DT.
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."
