ASX and China Futures Association Agree to Five-Year MOU

The Australian Securities Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading. Read this Term (ASX) has entered into a Memorandum of Understanding (MOU) Memorandum of Understanding (MOU) A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is viewed as a serious document in the eyes of most authorities.An MOU is seen as an important step in any process given the level of time, energy and resources needed to draft an effective and fair document. This step forces participating parties to reach a semblance of a mutual understanding. An MOU helps all sides naturally mediate and figure out what is most important in moving toward an eventual future agreement that benefits both sides.Memorandums of Understanding (MOU) ExplainedIt is best to think of an MOU as a formal letter of intent, which is a nonbinding agreement stating a binding agreement will soon follow.MOUs are commonly used as part of international relations because, unlike treaties, they can be quickly crafted or signed, while also escaping public attention or scrutiny MOUs can also be used domestically and as a tool to modify existing treaties.These agreements do share some common similarities. As mentioned above, MOUs are not legally binding.While they do vary in complexity, each of these agreements ultimately reflect represents mutually accepted expectations between people, organizations or governments.Of note, MOUs do not involve the exchange of money or finances. A memorandum of understanding (MOU) is defined as a nonbinding agreement between two or more parties that outlines the terms and details of an understanding. This includes each parties’ overall requirements and responsibilities. An MOU is seen as the first stage in the formation of a formal contract between two or more parties. These contracts are used throughout many industries, between companies, authorities, regulators, and individuals.At its core, an MOU is not legally binding though is viewed as a serious document in the eyes of most authorities.An MOU is seen as an important step in any process given the level of time, energy and resources needed to draft an effective and fair document. This step forces participating parties to reach a semblance of a mutual understanding. An MOU helps all sides naturally mediate and figure out what is most important in moving toward an eventual future agreement that benefits both sides.Memorandums of Understanding (MOU) ExplainedIt is best to think of an MOU as a formal letter of intent, which is a nonbinding agreement stating a binding agreement will soon follow.MOUs are commonly used as part of international relations because, unlike treaties, they can be quickly crafted or signed, while also escaping public attention or scrutiny MOUs can also be used domestically and as a tool to modify existing treaties.These agreements do share some common similarities. As mentioned above, MOUs are not legally binding.While they do vary in complexity, each of these agreements ultimately reflect represents mutually accepted expectations between people, organizations or governments.Of note, MOUs do not involve the exchange of money or finances. Read this Term) with the China Futures Association (CFA), according to an ASX statement.

More specifically, the ASX and CFA have signed a MOU at a recent conference in Hangzhou, China. The CFA is a Chinese industry self-regulatory entity, which deals with the development of the futures industry and the coalescence of training and transparent industry standards.

The MOU between both the ASX and CFA caters to interests in the futures markets in Australia and China. This includes a cross training and agglomeration of staff and information exchange to foster an understanding of how the markets and futures products operate and function in each realm, conditional upon a term of five years, per the lifespan of the MOU.

It should be noted that derivatives and OTC markets are amongst the ASX’s largest business, constituting approximately 32% of ASX Group revenues in the 2014 financial year, via a recent ASX report. Moreover, the notional turnover in the Australian dollar (AUD) interest rate futures market was calculated at $42 trillion in 20144, ranking it the largest in Asia and among the top five worldwide.

This is the second such endeavor between the ASX and a Chinese entity, following the Heads of Agreement signed earlier this year between the ASX and the Bank of China. That agreement sought to expand the strategic cooperation between the parties to develop the Renminbi (RMB) as a currency in Australia’s financial markets.

According to Peter Hiom, ASX Deputy CEO in a recent statement on the MOU, “The MOU enables ASX to develop a better understanding of China’s futures markets at a time when these markets are evolving rapidly, and the trade and investment flows between Australia and China are growing.”

“ASX operates some of the most liquid and mature interest rate and equity derivatives markets in the Asia-Pacific region. We look forward to learning more about the strong development of the equity and commodity futures markets in China,” he added.

“With the joint efforts of both parties, we truly believe that this collaboration will further promote the development of the China futures industry. We look forward to working with ASX in the years ahead,” noted Liu Zhichao, Chairman of CFA in an accompanying statement.