Shanghai Futures Exchange signs MoU with LME

The Shanghai Futures Exchange (SHFE) signed a memorandum of understanding with the London Metal Exchange (LME) today.

The agreement, the first between the SHFE and a European exchange, follows a similar deal between the Chinese exchange and the Chicago Mercantile Exchange signed in March last year.

The memorandum pledges the exchanges to discuss a variety of initiatives, including future product development, information sharing, and assistance with regulatory and compliance issues.

It marks another step in a growing trend of co-operation between Chinese futures exchanges and foreign counterparts. The Dalian Commodity Exchange also signed a similar contract with the Chicago Board of Trade (CBOT) in November. The CBOT hosted a symposium for its partner to share experience on operational and regulatory issues that ended this week.

SHFE was created by a merger of the three futures exchanges of Shanghai in 1999. Its three major futures products are aluminium, trading 4,310,996 contracts last year; copper, trading 22,332,576 contracts; and natural rubber, trading 53,515,928. Its total trading value was RMB6.05 trillion ($730 billion) last year.