The collaboration between BMD and DCE marks an historic milestone in the development of the Asian derivatives market.
KUALA LUMPUR: Bursa Malaysia Derivatives Bhd (BMD) and Dalian Commodity Exchange (DCE) have signed a licensing agreement for the settlement price of soybean oil futures.
The deal marks the first collaboration between a Chinese derivatives exchange and an Asian exchange based outside of the republic.
Under the agreement, DCE has authorised BMD to use the settlement price of DCE soybean oil futures as the basis to calculate the cash settlement price of its upcoming new product, the Bursa Malaysia DCE soybean oil futures contract (FSOY).
The underlying asset of the FSOY contract will mirror that of the DCE soybean oil futures. The product is targeted to be launched by Bursa Malaysia in the first quarter of 2024, subject to regulatory approval.
The collaboration between BMD and DCE marks an historic milestone in the development of the Asian derivatives market.
“It represents the first instance of a Chinese derivatives exchange authorising an Asian exchange to incorporate Chinese commodity futures settlement prices into their product offering.
“Simultaneously, adopting foreign commodity futures prices as the basis for calculating cash settlement prices not only sets a precedent for the Malaysian futures market but also leverages the proven success of the DCE soybean oil futures contract,” the entities said in a joint statement.
The licensing agreement was signed at the 17th China International Oils and Oilseeds Conference (CIOC) held in Dalian, China. The global oils and oilseeds industry event from Nov 1-3 was jointly organised by DCE and BMD.
The settlement-price licensing agreement was signed by BMD chairman and Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift and DCE chief executive Yan Shaoming.
Muhamad Umar said as the leading commodity derivatives marketplace in Asean, BMD continually develops products to help market participants navigate the complexities of international markets and discover trading opportunities. — Bernama
