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The Taiwan Futures Exchange (TAIFEX), a rising derivatives exchange in the Asia-Pacific Region and the only derivatives exchange in Taiwan, and CME, the world’s largest and most diverse financial exchange, announced today that they have signed a Memorandum of Understanding (MOU) to establish a cooperative relationship for information sharing and further cooperation between the two organizations. The signing ceremony was held in the Far Eastern Plaza Hotel Taipei and was witnessed by Dr. Shyan-Yuan Lee, a Commissioner at the Financial Supervisory Commission.
“Asia is an important element of our global growth strategy,” said CME Chairman Terry Duffy. “With this MOU, we hope to further develop our channels of communication and continue to foster our relationship with TAIFEX, a dynamic leader in the derivatives marketplace.”
TAIFEX Chairman Dr. Rong-I Wu said, “The trend of globalization is forcing derivatives markets to face unprecedented competition. In addition to adjusting organizational structure and seeking market integration, exchanges are actively seeking international strategic alliances to form long-term growth strategies based on their core competencies. Through the exchange of information and the sharing of experiences, both exchanges can effectively tackle the challenge of internationalization by focusing on management efficiency, product development and market expansion to achieve a win-win situation.”
The MOU was signed by Dr. Wu and Phupinder Gill, President and Chief Operating Officer of CME, on behalf of CME Chairman Terry Duffy. This is the ninth MOU signed by TAIFEX. Through the establishment of this cooperation platform with CME, which has the largest short-term interest rate futures market in the world, TAIFEX hopes to leverage on CME’s experience in financial innovation and global expansion to actively participate in the global derivatives market.
“Signing this MOU with TAIFEX initiates a closer working relationship between our two exchanges and further expands our presence in Asia that began more than 20 years ago,” said CME Chief Executive Officer Craig Donohue. “Through strengthened collaboration, we will learn from each others’ experiences, gain additional insights into the diverse needs of our customers in the global marketplace and position ourselves to better understand and address the risk management needs of market users in this part of the world.”
TAIFEX President Steve C. Wang said, “We are pleased to work with CME on the global horizon. This year TAIFEX launched three U.S. dollar-denominated products and took several market liberalization measures to tailor the needs of international investors. We think this is a good timing for TAIFEX to further strengthen its relationship with global derivatives community. By working with CME, we hope to explore the potential of product co-development, sharing of distribution channels and alignment of standards on trading and clearing system.”
About TAIFEX:
Since the launch of its first product (TAIEX Futures) in 1998, TAIFEX has experienced tremendous growth. According to FIA, as of June 2006, TAIFEX’s was ranked 18th globally in terms of trading volume. The TAIEX Options, TAIFEX’s flagship product, is the third-most actively traded stock index options contract in the world. TAIFEX currently offers 14 products, including futures and options on major Taiwan stock indices, government bond futures, 30-day commercial paper interest rate futures, equity options and gold futures. To further expand the market, TAIFEX has actively taken measures to facilitate internationalization and to boost foreign participation. On March 27 2006, TAIFEX launched three US dollar-denominated products, including TAIFEX Gold Futures, TAIFEX MSCI Taiwan IndexSM Futures and TAIFEX MSCI Taiwan IndexSM Options. In conjunction with the launch of these new products, TAIFEX has taken several market liberalization measures to attract foreign participation. Among other measures, it now allows trading for non-hedging purposes by foreign investors, has introduced omnibus accounts, and accepts US dollar as margin deposit to keep in line with international practices.
About CME:
CME (www.cme.com) is the world’s largest and most diverse financial exchange. As an international marketplace, CME brings together buyers and sellers on the CME Globex® electronic trading platform and on its trading floors. CME offers futures and options on futures in these product areas: interest rates, stock indexes, foreign exchange, agricultural commodities, energy, and alternative investment products such as weather, real estate and economic derivatives. CME is a wholly-owned subsidiary of Chicago Mercantile Exchange Holdings Inc. (NYSE, NASDAQ: CME), which is part of the Russell 1000® Index and the S&P 500® Index.
