China's three leading stock exchanges have set up a joint venture to develop index-linked and other equity derivatives and cross-border indices, based on the bourses' respective products.
The nine-member board for the newly formed China Exchanges Services Company (CESC) held its first meeting last week, just over three months after the announcement of the joint venture between Hong Kong Exchanges and Clearing (HKEx), the Shanghai Stock Exchange and the Shenzhen Stock Exchange (SZSE).
The joint venture's businesses will also include the development of an industry standard classification for listed companies as well as information standards and information products.
The Hong Kong-based CESC will be headed by chief executive Bryan Chan, HKEx's head of market data and vice director of SZSE's listing funds department. Xie Liansheng has been appointed co-deputy chief executive along with Wu Ying, who has also been appointed chief financial officer.
"The establishment of CESC is an important result of further opening of our capital market and deepened cooperation between the capital markets of mainland China and Hong Kong. It will contribute to the building of the offshore RMB market in Hong Kong. In addition, CESC's products will satisfy global traders' needs and allow international investors to use Hong Kong as a key offshore channel to invest in mainland-related products," CESC co-chairman Jiang Jianren said.
According to Chan, CESC plans to launch a series of cross-border indices by the end of this year. Index products will be available in early 2013 and will be traded on HKEx's derivatives market.
The three bourses have equal shares in the joint venture and have contributed a combined HK$300m (US$38m) for the project.