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On November 11, 2019, Dalian Commodity Exchange (“DCE”) is recognized by The Monetary Authority of Singapore (“MAS”) as a Recognised Market Operator (“RMO”), and thus is able to promote its iron ore futures trading among Singapore traders. This is DCE’s second license issued by an overseas regulatory body after DCE obtained the ATS license approved by the Hong Kong Securities and Futures Commission in May 2018. Market participants believe that this will help attract more overseas traders to understand and enter the iron ore futures market.
DCE has introduced overseas traders into its iron ore futures since May 2018. As the world’s largest and most liquid market of iron ore derivatives, DCE’s iron ore futures have been operating stably and attracted extensive attention and participation of overseas markets during the past year. As of the end of October, more than 170 overseas clients from 15 countries and regions including Singapore, Hong Kong, Australia and UK have opened accounts, of which more than 110 have participated in iron ore futures trading. The proportions of trading volume and open interest contributed by overseas clients have been increasing constantly while the market structure has been optimized simultaneously. The basis trading based on DCE’s iron ore futures price has been adopted by international mining companies and physical traders. Multinational firms including Vale and Cargill have already initiated iron ore basis trading with domestic steel mills.
A DCE official says that Singapore is a leading global center for finance, trade and shipping. Obtaining the RMO license marks an important step forward for DCE to provide a legitimate and convenient channel for Singapore traders to trade iron ore futures. It will help encourage the participation of overseas traders and extend the influence of DCE futures market in Singapore.
He also points out that DCE will continue to promote the internationalization of iron ore futures, improve overseas access routes and attract more overseas clients. Meanwhile, DCE is expected to open up more products, facilitate onshore and offshore business communication and market expansion, as well as further improve market structure, better reflecting the global demand-supply while providing effective pricing and risk management tools for global trades.
