Deutsche Boerse AG (DB1.XE) said Wednesday it sealed a joint venture with two Chinese peers to sell licensing rights for yuan-denominated investment products based on Chinese benchmark market indexes in Europe.
Deutsche Boerse and the Shanghai Stock Exchange will hold 40% each in the venture, with the rest held by the China Financial Futures Exchange, the German stock exchange operator said.
Dubbed China Europe International Exchange, the joint venture will start operations in the fourth quarter of the year.
Under the agreement, asset managers can buy licenses for launching exchange-traded funds that are based on Chinese key indexes and denominated in yuan, but designed according to German and European rules. The funds can be traded on European exchanges.
The Wall Street Journal reported on Tuesday that Deutsche Boerse was close to sealing the deal, which is expected to immediately contribute revenues to the German exchange operator’s earnings, due to limited costs for starting and operating the venture, according to a person familiar with the matter.
In February, Deutsche Boerse’s Chief Financial Officer Gregor Pottmeyer announced plans to forge ties with the Shanghai Stock Exchange. The SSE became official distributor and licensor of Deutsche Boerse market data in mainland China in April 2014.
Source: MarketWatch
