LAUNCH OF BRENT CRUDE FUTURES WILL MARK A FIRST FOR SMX
Brent Crude Futures and the recent offering of WTI Crude Oil futures to make SMX the first exchange in Asia to jointly offer both contracts
Singapore, 15 June 2010 – Singapore Mercantile Exchange (“SMX” or “the Exchange”), a leading Asian multi-product commodity derivatives exchange, today announced that Brent crude oil futures contracts denominated in Euro will be launched on its state-of-the-art electronic trading platform.
Together with the recent announcement of the availability of West Texas Intermediate (WTI) Crude Oil Contracts, the moves will enable SMX to achieve its goal of being a premier single portal for trading key energy commodity derivatives within Asian time zone. Currently, Singapore leads the way as Asia’s top energy trading hub due to its geographical positioning and established infrastructure. This makes SMX’ offering of Brent and WTI Crude Oil futures, a valuable proposition for the trading community.
Brent is widely used to price two thirds of the world's internationally traded crude oil supplies. It closely represents the supply and demand fundamentals, particularly, in the Asian region. Brent is the second derivatives contract that SMX will offer for futures trading, in addition to the West Texas Intermediate (WTI) Crude Oil Contract.
Thomas J. McMahon, Chief Executive Officer of SMX, commented: “Brent is the one of the most extensively used industry benchmarks to price oil. With robust growth in Asian economies, SMX expects growing interest amongst traders and investors to use this benchmark for their complex physical hedging and investment needs. For anyone with Euro related energy business, this contract would be a perfect hedge, alternatively companies with USD exposure could diversify its currency hedging requirements into the Euro denominated Brent Crude contract.”
The Brent Euro cash settled futures contract will be traded in lots of 1,000 barrels each. Contracts can be traded for the current month and 11 consecutive months. The contract is priced in Euros per barrel, quoted to two decimal places. Trading hours will be from 1000 to 0330 hours (0230 hours during US daylight saving time) Singapore time from Monday to Friday.
Last Trading Day for Brent crude contract on the SMX platform will be the first business day immediately preceding the 15th calendar day prior to the first calendar day of the maturing Contract Month.
SMX has received in-principle approval from the Monetary Authority of Singapore to operate Singapore’s first Asian multiproduct commodity derivatives exchange. SMX announced earlier that the exchange will go live in August 2010 on its state-of-the-art electronic trading platform. The first phase of product launches will include a gold futures contract with physical delivery in high-security vaults in Singapore and the West Texas Intermediate (WTI) Crude Oil, amongst the others, which will be announced soon.
About the Singapore Mercantile Exchange (SMX)
The Singapore Mercantile Exchange (SMX) is the Singapore-based Asian multiproduct commodity derivatives exchange offering a state of the art electronic platform for the global trading of futures and options contracts in multiple commodities, products and different derivative asset classes including Energy, Agricultural, Metals (precious and base), Indices and Currency – Options and OTC Clearing Facility.
SMX will synchronize derivatives and physical trading within the Asian time zone, while offering new products for more effective risk management during Asian trading hours. Participants can expect market transparency, accurate price discovery and benchmarking, price volatility risk management, and multiple connectivity options. Counterparty clearing and settlement risk will be effectively managed through its clearing house, SMXCC. The regulator of Singapore’s financial markets – the Monetary Authority of Singapore (MAS) – had given in-principal approval since 2009.
SMX is backed by the world’s leading creator of exchanges - Financial Technologies (India) Limited - which has successfully established and currently manages 10 exchanges in India, Dubai, Singapore, Africa, Mauritius and Bahrain.
SMX is also a member of leading international derivatives industry associations, such as the Futures Industry Association (FIA), the Swiss Futures and Options Association (SFOA), the Association of Futures Markets (AFM) and the Futures and Options Association (FOA).