The first tranche of products will be listed in March 2004 and will include equity index futures and futures option contracts, and individual equity options. The agreement provides scope for SFE and NZX to develop derivative products based on other underlying New Zealand securities in the future.
As one of the ten largest financial futures and option exchanges in the world, SFE will provide technology infrastructure and considerable market operations expertise, whilst NZX, as the premier securities exchange in New Zealand, is ideally placed to provide product development expertise and distribution into the New Zealand equity market. NZX will also be responsible for the branding of products and promotion to customers.
Mark Weldon, Chief Executive of NZX said, "We believe the deal with the SFE will provide NZX, and the local investment community, with the most cost effective access to derivative products. By entering into this relationship with the SFE, we are effectively avoiding the significant investment required to build our own market infrastructure and concurrently gain instant access to SFE's global participant base. We would also expect, as has occurred in nearly all other markets with liquid futures and options, that liquidity in the underlying instruments will improve,"
Peter Hiom, SFE General Manager - Exchange Business Development, added 'the agreement with NZX is another example of how SFE can provide third parties, including other exchanges and clearing entities, with affordable access to world class trading, clearing and settlement infrastructure, global connectivity and expertise in product design".
The agreement with the NZX comes shortly after strong trading activity levels at the Sydney Futures Exchange. On Thursday, September 11, a record 651,178 futures and options contracts were traded, up from the previous record of 640,605 set on March 13, 2003. This was followed on Friday September 12, by record overnight trading volumes of 112,343 compared to the previous overnight record of 101,573 traded on March 14, 2003.
