Date：May 26, 2015
Source:Hexun.com

On May 27, Shanghai Stock Exchange (SSE), China Financial Futures Exchange (CFFEX) and Deutsche Borse reached a strategic partnership agreement on a trading platform for offshore RMB financial instruments, which will be operated by a new joint venture in Frankfurt.
As agreed, SSE, CFFEX and Deutsche Borse will own respectively 40%, 20% and 40% of the joint venture named China Europe International Exchange. To be incorporated in Frankfurt, Germany and be officially launched in Q4 2015, the new company will develop and list offshore RMB-denominated securities and derivatives.
According to SSE, the joint venture is another significant step by SSE and CFFEX following the Shanghai-Hong Kong Stock Connect program in response to the national strategies of “two-way opening-up of the capital market and RMB internationalization” and “the Belt and the Road” initiative. As the agreement has been inked, the teams from the three exchanges will strictly follow the timeline to ensure the duly launch of the platform.
SSE and CFFEX have been considering how to promote the internationalization of China’s capital market and to be better competitors in the international arena. In 2013, the idea of setting up a trading platform of offshore RMB-denominated securities products in Europe was put forward when Chairman of SSE and CEO of Deutsche Borse Group met in Beijing to discuss cooperation opportunities. After two year’s communication, a cooperation model and operation plan are agreed on by all concerned parties and approved by regulators and governments of both countries. As stated in Article 17 of the joint statement released by the First China-Germany High Level Financial Dialogue on March 19, “both sides support the SSE, CFFEX and Deutsche Borse Group’s plan to co-establish a platform to trade offshore RMB-denominated financial instruments in Frankfurt.” A team was later set up by the three exchanges to work on the operation of an offshore trading platform of RMB-denominated products.
The signing of the strategic cooperation framework agreement marks not only the vigorous implementation of the dialog but also another important milestone for the capital market facilitating the internationalization of RMB. Along with China’s integration in global economic activities, the cross-border use of RMB is increasing rapidly, and RMB internationalization has become an important strategy in the process of the opening-up of China’s economy and financial industry. To promote such a strategy, besides increasing RMB outflow through export and investment, products and venues should be in place to accommodate this outflow. Therefore, to promote RMB’s importance in the international arena, the existence of an offshore market for RMB-denominated products trading is crucial.
The cooperation with Deutsche Borse Group in developing the European offshore RMB-denominated securities products trading platform will give full play to the advantages of the exchanges of both countries. A variety of RMB-denominated securities products will be developed in a short period of time to fill in the blanks of the RMB securities markets in European time zones, so as to provide more choices of investment instruments for overseas RMB funds, and help further expand the opening-up and advance RMB internationalization. The decision makers of the three exchanges are confident of the development of the joint venture. “In the context of China’s capital market liberalization, the offshore trading platform set up by the three exchanges will further promote the two-way opening up of China’s capital market, enrich the product line of the offshore RMB market and accelerate RMB internationalization. The joint venture is a major step forward in the cooperation between our three exchanges, and I believe it will also be rewarding and fruitful,” said Dr. Gui Minjie, Chairman of Shanghai Stock Exchange.
“The establishment of the RMB asset trading platform in Frankfurt by SSE, CFFEX and Deutsche Borse is a milestone for Chinese exchanges and capital market in general. It will help pave the way for further opening up of China’s capital market and contribute to RMB internationalization,” said Zhang Shenfeng, Chairman of CFFEX.
“China has developed into an important player for the global economy. The joint venture is meant to support this role further by promoting the internationalization of the RMB with capital market products. The joint venture is also a result of the excellent relationship amongst the three partners. We feel honored to participate in this new venture,” said Andreas Preuss, Deputy CEO of Deutsche Borse AG.