The Chicago Mercantile Exchange (CME) has named HSBC and Standard Chartered Bank (SCB) as the first market-makers for futures contracts on the Chinese renminbi (RMB) against the US dollar, euro and yen, which started trading on August 28.HSBC will trade these contracts from 9:15am to 4:30pm Hong Kong time, and SCB will trade them from 9:15am Hong Kong time to 4:15 pm New York time, according to statements issued by the two banks.
The contract size for the three contracts listed by the CME is RMB1 million ($125,376), and delivery will be in 13 months plus two quarters.
The new contracts are expected to bring about transparent pricing, risk management opportunities for businesses and institutions with RMB exposures, guarantee of counterparty credit and central clearing, as well as access to more than $60 billion in overall market liquidity each day.
The CME has also announced plans for options on the futures contracts, though both banks have declined to discuss specific details.
“The two banks have a long-standing presence in China and play unique and important roles in Asian financial markets,” said CF Wong, the CME’s Hong Kong-based managing director for products and services for Asia. “We believe their role as market-makers will help make these contracts attractive to market participants and build liquidity in this market.”
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