IPE and SIMEX agree on New Arrangement for Brent Crude Futures

The IPE and Singapore International Monetary Exchange Limited ("SIMEX") are pleased to announce a new agreement in principle that will replace the existing mutual offset agreement between the two exchanges. The new agreement will allow for the Brent Crude futures contract to be traded electronically during the existing trading hours of the SIMEX Brent contract. SIMEX Clearing Members will retain the right to clear the Brent contract as in the existing agreement when the contract is traded electronically. Under the new agreement, SIMEX will cease trading the Brent contract on its trading floor when the IPE has made its Brent contract available electronically to SIMEX Clearing Members in Singapore. The new agreement will also enable the IPE to open trading of its Brent Crude futures contract from 08:00 London time which is two hours earlier than at present. The existing agreement gives SIMEX the exclusive right to trade Brent Crude futures between 22:00 and 10:00 London time, while IPE may only commence trading of the Brent contract after 10:00 London time. The two exchanges will now work on the detailed legal arrangements (which will need approval from both Boards and regulators) and on establishing an implementation timetable. The new arrangements will have a term of five years and will replace the current mutual offset agreement, which is due to expire in June 2000. Lynton Jones, Chief Executive of the IPE said "the new deal with SIMEX will enable us to provide a better service to energy and futures companies operating in both the Asian and European time zones". Ang Swee Tian, President of SIMEX said "as the influence of Brent as a price marker is likely to grow in the Asia Pacific region, it is beneficial to SIMEX members to continue having direct access to the IPE's Brent futures contract. The new arrangement will mean that we can preserve access beyond 2000".