On June 25, 2015, Industrial Bank (IB) and Shanghai Futures Exchange (SHFE) entered into a strategic cooperation agreement in Shanghai. Vice President Chen Jinguang of IB and Vice General Manager of SHFE attended the signing ceremony.
Both parties will, centering on the main line of “transformation and development driven by innovation”, further cooperation in the areas, including innovation in services and products, channel sharing, development of customer resources, personnel training, and market cultivation, joint research and information exchange, in combination with their respective business features and competitive edges. Additionally, both parties will also establish a day-to-day joint coordination mechanism to implement all provisions laid down in the all-round strategic cooperation agreement and push forward the substantial progress in cooperation regarding all businesses.
Specifically, in the aspects of professional cooperation and service, IB will also actively take part in the trading and delivery of types of products released by SHFE to the market as well as relevant innovative businesses, and jointly intensify research and control of risks. In the meanwhile, IB will also actively develop supporting services applicable to the management of futures assets, including product development, relevant financial services and support, so as to further propel institutional investors to join the market of SHFE.
In the areas of product innovation and business development, both parties will actively explore and push forward cooperation in the business of futures delivery, including but not limited to management of futures delivery warehouse, standard warehouse warrant pledge based financing, and bonded delivery, explore the international product and service system, and jointly push the research of innovative businesses such as multi-currency settlement, cross-border settlement and offshore business.
Based in Fuzhou, Fujian, China, IB is one of the first group of joint-stock commercial banks established with the approval of the State Council and the People's Bank of China. It is learnt that IB has also committed itself to providing all-sided supporting services for futures business while participating in futures trading actively. As early as 2006, the bank set up a special futures business team to learn the market needs of futures companies and institutional customers and actively push forward the bank-futures cooperation including futures security depository and bank-futures transfer. In March 2009, it became a member of SHFE, getting actively involved in the trade of precious metal futures. In addition, in September 2009, it established a special functional department – Futures Finance Department, responsible for organizing and promoting businesses related to futures finance. In recent years, considering the types of products released by SHFE and other commodity futures markets and needs of industrial customers, IB has also launched many financing products and services targeting at industrial customers, keeping improving its services to the real economy.
SHFE bends itself to building an exchange for commodity futures, options and other derivatives that plays a leading role in the region of Asia Pacific and has significant influence around the world. Now, it has 12 futures types covering a number of bulk commodity areas such as non-ferrous metal, precious metal, black metal, energy, and chemical. Specifically, Shanghai Copper has become one of the three biggest cooper pricing centers in the world. In 2013, the trading volume of the exchange accounted for 15.87% of the total volume of global commodity futures and options, ranking No. 4 in the world. Its trading volume of threaded steel and silver futures ranked No. 1 in the same types around the world, that of cooper futures No. 2, and that of natural rubber futures No. 5. Currently, SHFE is making active preparation for important types, including crude oil futures, non-ferrous metal index, commodity futures and options, and derivatives.
The cooperation between both parties showcases the general trend of extended and deepened cooperation areas between pan-financial institutions against the general backdrop of market-oriented finance in China and globalization. The mutual benefit and win-win results of both parties with the strategic cooperation will further enhance the capabilities of futures market to provide market service and create values for real economy. Meanwhile, it will also be propitious to promoting sound development of capital market, improve the multi-layered capital market system, optimize resource allocation and drive the transformation and upgrading of futures market.