Bursa Malaysia Derivatives Berhad (Bursa Malaysia Derivatives) today (Oct 2) announced the extension of its longstanding strategic agreement with CME Group through September 2028. The extension reaffirms Bursa Malaysia Derivatives’ continuous commitment to ensure the global accessibility of its derivatives offerings. This move aims to attract new participants to the Malaysian derivatives market, utilising a proven and robust trading ecosystem.
Director of Bursa Malaysia Derivatives, Mohd Saleem Kader Bakas said, “We are delighted to continue the journey together with CME Group. This extension underscores the strength and success of our collaboration, and we look forward to further leveraging this collaboration to enhance our derivatives offerings and fully realise the growth potential of the Malaysian derivatives market.”
The strategic collaboration was originally established in 2009 when CME Group acquired a 25 per cent equity interest in Bursa Malaysia Derivatives. Subsequently, on 20 September 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. The said agreement is now extended for an additional three years, to ensure seamless trading for market participants.
Russell Beattie, Managing Director, Head of Asia Pacific, CME Group, said, “CME Group is committed to collaborating with Bursa Malaysia Derivatives to further develop the derivatives markets in Malaysia. Our close collaboration, which includes the licensing of the settlement prices of the Crude Palm Oil Futures contract and the facilitation of the global
istribution of Bursa Malaysia Derivatives’ contracts through CME Globex has not only provided improved accessibility, but has also elevated the presence of the benchmark Malaysian derivatives worldwide. We look forward to exploring further opportunities to better serve the risk management needs of market participants in Malaysia.”
The continuity of this collaboration complements Bursa Malaysia Derivatives’ forthcoming initiative to launch its inaugural currency futures contract by the 4th quarter of 2023 (subject to final regulatory approval), as well as recent efforts to extend trading hours of selected products.
Notably, the collaboration with CME Group has been instrumental in elevating the global prominence of the Bursa Malaysia Crude Palm Oil Futures (“FCPO”) contract, now renowned as the world’s most liquid and successful FCPO contract. As at August 2023, foreign participants account for 59 per cent of the Exchange’s derivatives trading volume.
