Exchanges look for cross-border listing partners

Two of the largest European exchanges have partnered with Asian counterparts to expand investor access to overseas securities.
By None

Two of the largest European exchanges have partnered with Asian counterparts to expand investor access to overseas securities.

Eurex, the international derivatives exchange jointly owned by SIX Swiss Exchange and Deutsche Börse, has teamed up with the Singapore Exchange (SGX) to launch the SGX EURO STOXX 50 index futures and options on futures. The partnership will be based on a license agreement between STOXX, the global index provider also owned by Deutsche Börse and SIX Swiss Exchange, and SGX.

The move will enable SGX to list US dollar-denominated EURO STOXX 50 index futures and options on futures contracts on its exchange. The listing is planned for the second half of 2010 and is subject to approval from national regulator the Monetary Authority of Singapore.

“The SGX EURO STOXX 50 futures and options on futures contracts will complement our suite of Asian products, providing global customers with one-stop access to Asian and European equity markets as well as trading opportunities between SGX and Eurex,” said Chew Sutat, head of corporate and market strategy, SGX. “Customers also will have first-mover advantage to react to weekend or overnight European and US market news and manage their European exposures during Asian hours.”

“Through our co-operation, we extend the user base of Europe's most liquid index derivatives contract,” added Michael Peters, member of the Eurex executive board. “This will result in new trading and hedging opportunities globally and should further increase the liquidity of this benchmark product.”

Meanwhile, the London Stock Exchange (LSE) has signed a letter of intent with India's National Stock Exchange (NSE) to explore areas of co-operation and business opportunities.

Part of the agreement includes examining the feasibility of allowing FTSE Group, the index provider owned by the LSE and Financial Times, to licence the FTSE 100 index to the NSE, and for the NSE to licence the S&P CNX Nifty to the LSE – both for the purpose of issuing and trading options and other index contracts.

The deal will also look at the possibility of cross-access between the LSE and NSE.

“We are optimistic about India’s remarkable growth story and feel strongly that a business relationship with India’s leading stock exchange opens exciting investment opportunities for Indian investors in international companies, as well as giving international investors greater opportunities to participate in India’s growth,” said LSE chief executive Xavier Rolet at the signing of the letter in Mumbai.

Partnerships between exchanges in different regions have started to become more commonplace across the globe.

The NSE has already entered into a cross-listing initiative with US derivatives exchange the Chicago Mercantile Exchange to allow US dollar trading of the S&P CNX Nifty on its platform as well as allowing the NSE to trade rupee-denominated futures based on the Dow Jones Industrial Average and S&P 500.

Brazilian exchange BM&F Bovespa has also recently established links with CME and Nasdaq OMX to develop a new trading platform and cross-border routing capabilities.