A cooperation agreement to this effect has been signed between the firms. Both the firms will each own 50% stake in the proposed JV.
The JV will enable Deutsche Börse market participants to trade China interbank market products as well as to develop and offer RMB-denominated interest rate and exchange rate (FX) products outside mainland China, the companies said.
China interbank market participants will also be able to trade Deutsche Börse’s cash and derivatives products, through the JV.
In addition to stimulating Chinese and European financial markets, the JV will cater to the demands of the Sino and European real economies to hedge their interest rate and foreign exchange risks, promote bilateral economic and trading activities.
This will also facilitate the development of the European offshore renminbi market, and help to further promote RMB internationalization, CFETS said.
Deutsche Börse CEO Carsten Kengeter said: "We are very pleased to enter into this strategic partnership with CFETS. Based on the strength of both organizations, our joint venture will contribute to the continued growth of our markets and economies.
"Further, it will also strengthen the relevance of Europe as an offshore renminbi hub and be mutually beneficial for our organisations, and importantly, for our customers."
As previously announced, Deutsche Boerse, the Shanghai Stock Exchange and China Financial Futures Exchange will jointly set up the China Europe International Exchange, or CEINEX, for trading of yuan-denominated offshore investment products.
CFETS provides financial services such as trading, information, and benchmark services as well as training facilities to the interbank lending, bond, and foreign exchange markets to its customers globally.
Deutsche Boerse provides a wide range of stock exchange introduction, trading, and operational services to institutions and private investors. It also offers electronic trading systems for buying and selling of securities on stock exchanges in Europe.
Image: Deutsche Börse is a marketplace organizer for the trading of shares and other securities. Photo: courtesy of Dontworry / Wikipedia.
