News / LME signs Memorandum of Understanding with SHFE

LME signs Memorandum of Understanding with SHFE

May 28, 2004 - The London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) today signed a Memorandum of Understanding (MOU) to pursue joint business development initiatives in commodities products, the first such agreement between SHFE and a European exchange. Under the agreement, the Exchanges will discuss a variety of initiatives, including future product development, mutual sharing of information and assistance with the understanding of market regulation and compliance issues.
Commenting today, LME chief executive Simon Heale said, �We value our relationship with the Shanghai Futures Exchange and we admire their achievements. I am delighted, therefore, that we are today signing an MOU which confirms the strength of this relationship and gives us the opportunity of working together and progressing how best we can co-operate to provide a good service to our customers. This is an important step forward for both organisations�.

Mr. Jiang Yang, SHFE chief executive officer, said today, �The signing of MOU is a milestone in the cooperative relationship between Shanghai Futures Exchange and the London Metal Exchange. China is one of the largest producing and consuming economies in the world, and the London Metal Exchange is the largest metal futures exchange. I am confident that this partnership will be positive for the global metal market and to the benefit of both exchanges."

Notes to editors:

1. The LME is the world�s largest non-ferrous metals futures and traded options Exchange.

2. It trades by open outcry, through an electronic platform LME Select, and through a 24-hour inter-office telephone market.

3. The LME turns over contracts with a value of more than $2,500 billion each year and contributes some �250 million in invisible earnings each year.

4. The Shanghai Futures Exchange (SHFE) is the largest futures exchange in China. An entity created by the merger of the three futures exchanges of Shanghai in 1999. It now has three major commodity futures products of regional and global significance. In the past year, the total trading volume of SHFE was 801,599,500 (aluminium: 4,310,996; copper: 22,332,576; natural rubber: 53,515,928) and trading value was RMB 6.05 trillion (USD 730 billion).

5. SHFE is a membership-owned organization and regulated by China�s Securities Regulatory Commission (CSRC). At present, there are about 220 members, 80% of whom are futures brokerage firms and the balance, proprietary members (i.e. those who trade merely for hedging purposes, such as industrial manufacturers). Only corporations organized in Mainland China and individuals of the People�s Republic of China are allowed to use the market. SHFE is a fully electronic market and all the members place orders via remote trading terminals or through the leased lines. For more details, please visit SHFE website at www.shfe.com.cn.

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