China Europe International Exchange to provide access to Chinese markets

Deutsche Boerse, the Shanghai Stock Exchange and the China Financial Futures Exchange announced yesterday a new joint venture named China Europe International Exchange. The newly created Exchange gives investors outside China indirect access to the Chinese market by allowing them to trade CNY-denominated instruments based on Chinese underlyings. For example, fund managers can buy licenses to launch ETFs based on Chinese indices and denominated in CNY. It will be incorporated in Frankfurt and operations are to commence in Q4 this year with an initial offering of cash market products. 

In terms of ownership, Deutsche Boerse and the Shanghai Stock Exchange will hold 40% each and the remainder by the China Financial Futures Exchange, notes Commerzbank. This also marks China's 2nd mutual access program following the Shanghai-HK Stock Connect launched in November 2014. It is consistent with continued financial and capital market liberalization and internationalization of CNY. For USD-CNY, it is holding steady around the 6.2000 level.