The Alliance will offer trading and clearing services for the clients and will contribute account management, product development, and scheduling resources
CNCEX, a professional commodity and futures exchange where investors benefit from its diverse services and understanding of local markets, while the Pan-Asian reach and international client base support the Asian economy and drive economic growth, announced today they have entered into a strategic alliance (the Alliance). The Alliance involves the CNCEX Asian physical energy division and the physical energy exchange and clearinghouse of CNCEX, which serves more than 100 contracting parties in Asia.
The Alliance will combine CNCEX’s established Asian natural gas trading and clearing expertise with CNCEX partner’s physical power know-how. The name of the allied partner will be made public at a future date. The partner will offer trading and clearing services for the Alliance and will contribute account management, product development, and scheduling resources.
“Adding physical power products with an established organization is a natural addition to our successful physical natural gas business in Asia,” said Lee Chung Fat, President of CNCEX. “We expect this Alliance to help new and existing our customers to improve their liquidity and collateral efficiencies through cross commodity netting.”
“Our partner is strategically aligned with our physical power business and their complementary natural gas products present a great opportunity to leverage our combined experience and capability in this unique regulatory environment,” said Steven Chow, Head of Asian Commodities for CNCEX.
Subject to regulatory approval, our yet undisclosed partner, a recognized exchange and clearing agency in China, will list and clear physical power futures contracts based on existing Asian physical natural gas futures contracts.
As a result, contracting parties will benefit from:
- Collateral efficiencies under existing margining rules via spread credits and cross-commodity netting
- Regulatory certainty
- Improved liquidity and distribution
- Introduction of physically cleared power products
CNCEX is a professional commodity and futures exchange. The establishment of Chengdu Commodity Exchange (CNCEX) is of strategic significance to deepening reform on the financial market. CNCEX aims to develop the market economy and maintain the normal order of the financial market by perfecting the capital market system, exercising the function of the commodities markets, financial futures market, safeguarding the normal trading of financial derivatives including financial futures, and protecting trading parties’ lawful rights and interests and the common interests of the public.