TMX Group Signs MOU with Shanghai Clearing House

The MOU between both groups will form a working group to help jointly evaluate multiple business opportunities.

TMX Group, an operator of cash and derivative markets and clearinghouses across multiple asset classes, has signed a memorandum of understanding (MOU) with Shanghai Clearing House (SHCH), helping propagate a multilateral informational exchange across both businesses, according to a recent TMX statement.

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The MOU itself is the first partnership between the two groups and will look to form a working group to help jointly evaluate multiple business opportunities as well as the development of progressive market solutions. Moreover, one of the fundamental goals of the partnership will be to culture foreign investor participation in China’s financial markets.

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For its part, SHCH is a qualified Central Counterparty (QCCP) as stipulated by the People’s Bank of China, to issue Chinese commercial bonds. As such, both TMX Group and SHCH will look to leverage opportunities across each other’s respective core businesses to kindle innovation and market efficiency – implicit in this arrangement is also the engendering of RMB bond and offshore RMB topics.

The announcement is the latest in a series of MOUs from leading institutional venues with Chinese entities, many of which are looking to bolster their involvement with mainland China, arguably the best growth market today.

According to Zhen XU, Chairman of SHCH, in a recent statement on the MOU: “As China’s economy continues to develop, the country’s financial markets are rapidly opening up to globalization and opportunities for cross-border cooperation. The signing of this MOU with TMX Group marks the beginning of an important partnership for SHCH and the cooperation will enhance communications between Chinese and Canadian financial markets.”

“This MoU with SHCH marks the beginning of a promising new relationship for TMX as China begins to take significant steps to open its markets to foreign participation. We look forward to working with an industry leader to closely examine emerging opportunities in the region to leverage TMX’s depth of capabilities and expertise in operating efficient markets,” added Lou Eccleston, CEO, TMX Group, in an accompanying statement.

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