Bursa Malaysia Derivatives Berhad announced today, Monday, the extension of its longstanding strategic agreement with CME Group (NASDAQ:CME) until September 2028. This extension aims to attract new participants to the Malaysian derivatives market by utilizing a proven and robust trading ecosystem.
The strategic collaboration between Bursa Malaysia Derivatives and CME Group dates back to 2009 when CME Group acquired a 25% equity interest in Bursa Malaysia Derivatives. On September 20, 2010, the Exchange's products were listed on CME Globex, the electronic trading platform operated by CME Group. This move significantly increased accessibility for both local and international traders to participate in the Malaysian derivatives market.
In 2019, Bursa Malaysia Berhad undertook a stake buyback from CME Group. Both exchanges continued to nurture the collaboration via a non-binding Strategic Cooperation Agreement (SCA), and a subsequent agreement was forged to secure the continued hosting of Bursa Malaysia Derivatives contracts on CME Globex until September 2025. This agreement has now been extended for an additional three years.
The extension of this partnership complements Bursa Malaysia Derivatives' forthcoming initiative to launch its inaugural currency futures contract by the fourth quarter of 2023, subject to final regulatory approval. This initiative is in addition to recent efforts to extend trading hours of selected products.
The collaboration with CME Group has significantly raised the global prominence of the Bursa Malaysia Crude Palm Oil Futures (FCPO) contract. As of August 2023, this contract is renowned as the world's most liquid and successful FCPO contract, with foreign participants accounting for 59% of the Exchange's derivatives trading volume.
Mohd Saleem Kader Bakas, Director of Bursa Malaysia Derivatives, expressed delight at the continuation of the partnership with CME Group, stating that the extension underscores the strength and success of their collaboration. He also expressed eagerness to further leverage this collaboration to enhance their derivatives offerings and fully realize the growth potential of the Malaysian derivatives market.
Russell Beattie, Managing Director, Head of Asia Pacific, CME Group, also emphasized the group's commitment to collaborating with Bursa Malaysia Derivatives to further develop the derivatives markets in Malaysia. He highlighted how the collaboration has not only improved accessibility but also elevated the presence of the benchmark Malaysian derivatives worldwide. He expressed anticipation for exploring further opportunities to better serve the risk management needs of market participants in Malaysia.
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