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TAIFEX, the Taiwan Futures Exchange, and Eurex Exchange, the international derivatives marketplace, announced an extensive product cooperation to trade and clear derivatives based on the TAIEX index, one of the most heavily traded Asian equity indexes. A Letter of Intent (LoI) was signed today by Dr. Tony Fan, Chairman TAIFEX, and Andreas Preuss, CEO Eurex, in Taipei, Taiwan. The LoI foresees to establish a link between both marketplaces. As a first step, the partners plan to list TAIEX options and TAIEX futures as daily expiring futures on Eurex Exchange in Q4 2013.
The TAIFEX/EUREX project is the first substantial case of cooperation with an international market operator in Taiwan’s capital market according to Taiwan’s regulator FSB (Securities and Futures Bureau), part of the FSC (Financial Supervisory Commission). They say that they encourage the development of mutually beneficial endeavors of this kind.
Dr. Tony Fan said: ”The partnership with Eurex is part of our strategy to sustain the competitiveness in the fast-changing global derivatives market. Licensing our flagship products TAIEX futures and TAIEX options to Eurex as the underlyings of daily expiring futures is a major milestone in the Taiwan capital market. This cooperation will enable investors to trade TAIEX futures and TAIEX options while TAIFEX market is closed. Our members can also thereby expand their business by providing customers with diversified products and services.”
Andreas Preuss said: “This cooperation is a major milestone of our Asia strategy to broaden our global product suite. Our members will benefit from direct access to one of the most successful derivatives contracts in Asia, while Taiwanese market participants will have the opportunity to trade Taiwan’s most liquid index derivatives contracts during Taiwanese after hours. The cooperation also aims to attract new Eurex customers for TAIEX products outside of Taiwan and increase the interest for Eurex products from Asia-Pacific.”
With this product cooperation, TAIEX options and futures will be available after Taiwanese trading hours for the first time. The product listing enables international investors and traders to access the TAIEX index derivatives market during European and US core trading hours. At the end of each trading day at Eurex, the open interest will be transferred to the TAIFEX clearing house.
Both partners believe that the link will further increase the liquidity and efficiency of the Taiwanese derivatives market. In the first month of 2013, average daily volume (ADV) in TAIEX options and TAIEX futures was over 500,000 and 100,000 contracts, respectively. The products’ launch is pending final regulatory approval from the respective authorities in Taiwan and Germany.
About Eurex Group
Eurex Group turns ideas into opportunities – in trading and clearing, technology and risk management. Each of the six businesses is a leader and innovator in their own area. Eurex Exchange was the world’s first electronic cross-border exchange, now offering more than 1,700 products across a growing range of asset classes. Eurex Clearing is one of the leading central counterparties globally and a pioneer in risk management and post-trade technology, offering clearing services for derivatives, equities, bonds, secured funding & financing and energy transactions. In the US, International Securities Exchange (ISE) transformed the options industry as the first all-electronic exchange and is now one of the world’s largest equity options exchanges. European Energy Exchange (EEX) is Europe’s largest market for trading in energy and related commodities. Eurex Repo is the leading market for secured funding & financing in Europe. And Eurex Bonds is one of the most liquid markets for European bonds on an electronic trading platform.
Eurex Group is owned by Deutsche Börse AG (Xetra: DB1).
About TAIFEX
Established in 1997, TAIFEX currently offers 19 products, including stock index futures and options, interest rate futures, single stock futures, equity options and gold futures and options. TAIFEX’s flagship products TAIEX futures and TAIEX options are two of the most successful equity index derivatives contracts in Asia. On November 14, 2012, TAIFEX launched weekly TAIEX Options to better meet market demand. Following launch of the weekly product, the average daily volume of TAIEX Options soared 30% compared to the same period last year. According to FIA, for the first 8 months of 2012, TAIEX options were ranked #4 equity index options contracts in Asia, or #10 in the world. TAIFEX introduced single stock futures (SSFs) on January 25, 2010, aiming to provide stock investors with better hedging tools and reduce tracking errors. In 2012, SSFs average daily volume soared 86.72% to 18,683 contracts. According to WFE, TAIFEX’s SSFs were ranked #10 among WFE members in the first half of 2012.
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