Deutsche Boerse in JV with Chinese exchanges

Deutsche Boerse said on Wednesday that it has agreed to set up a joint venture with Shanghai Stock Exchange and China Financial Future Exchange to develop and market Chinese shares and ETFs for investors outside mainland China.

Shanghai Stock Exchange and Deutsche Boerse will each own 40% and China Financial Futures Exchange the remaining 20% of the venture. The new company will be incorporated in Germany.

Shanghai Stock Exchange is China’s leading stock market, while China Financial Futures Exchange is China’s only financial derivatives exchange.

The venture is designed to support the internationalisation of the Chinese currency, therefore products will be offered in Renminbi (RMB). The company will be named ‘China Europe International Exchange’ and will commence market operations in the fourth quarter of 2015. The initial scope of product development will cover cash market products for market launch.

“Along with China’s integration in global economic activities, the cross-border use of RMB is increasing rapidly, and RMB internationalisation has become an important strategy in the process of the opening-up of China’s economy and financial industry. To promote such a strategy, a well-functioning market with offshore investment and trading opportunities is crucial,” said Deutsche Boerse.