China’s DCE allowed to market iron ore in Singapore
Source: Mysteel
Nov 12, 2019 17:30
“There will be some common practices such as seminars, roadshows, advertisements, and what to do will depend on the overall planning by the headquarters,” he added.
MAS is Singapore’s central bank and integrated financial regulator, and it will take approximately six months to process and approve a RMO application, and once approved, it will be valid for life until it is deregistered by the exchange or revoked by the MAS on misconduct, Mysteel Global understands from the governing body’s website.
Upon the approval of the China Securities Regulatory Commission, DCE has started internationalizing its iron ore futures starting May 2018 by allowing overseas institutional investors to open accounts, trade, and settle daily using either the Chinese Yuan or the US dollar through registered futures companies.
The exchange opened its Singapore representative office in June 2018 to serve its international customers, and as of October 2019, over 170 investors from 15 countries have opened accounts for DCE iron ore futures trading, according to DCE.
DCE has been intensifying its reach-out in Singapore as just a few days ago on November 8, it renewed its Memorandum of Understanding (MOU) with the Singapore Exchange (SGX), reaffirming its willingness to cooperate with the SGX especially on iron ore derivatives, as reported.
Asked whether DCE will be listing its Chinese Yuan-priced iron ore futures on the SGX for trading, the Chinese exchange official admitted no acknowledgment of such a plan, though he commented in general that such a listing will need a lot of preparational work and market study.
In February 2011, SGX launched London Metal Exchange’s nonferrous mini-futures including copper, aluminium and zinc and the trading came to an end in early 2014 because of low trading volumes, Mysteel Global understands.
Since April 2009, SGX has launched a basket of iron ore derivatives, all US dollar-priced, for trading, including options, swaps and futures, and DCE launched its iron ore futures in October 2013, though the latter exceeded the former in iron ore derivatives trading volume shortly after the launch, Mysteel Global notes.
In 2018, DCE’s iron ore futures trading volume totaled 23.6 billion tonnes as against 1.3 billion tonnes for the SGX iron ore derivatives, both in single counting.
Written by Hongmei Li, li.hongmei@mysteel.com
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