Indonesia Commodity and Derivatives Exchange (ICDX), also known as PT Bursa Komoditi dan Derivatif Indonesia (BKDI), has signed a memorandum of understanding with Deutsche Börse backed Global Markets Exchange Group International (GMEX Group).
ICDX has also signed a memorandum of understanding with the European Commodity Clearing (ECC), the central clearing house for energy and related products in Europe. ECC is majority-owned by European Energy Exchange (EEX) which is part of Group Deutsche Börse.
The signing ceremony was attended by senior officials from ICDX, GMEX Group and Deutsche Börse in the presence of Muhammad Lutfi, Minister of Trade for Indonesia and Sutriono Edi, head of Indonesia Commodity Futures Trading Regulatory Agency (COFTRA).
Indonesia is the world’s largest producer for many commodity products and the demand for Indonesia to be the benchmark for these is high. ICDX offers a wide range of mostly commodity products: metals, including gold and tin, soft agricultural products, including crude palm oil futures, and foreign currency contracts.
Under the framework of the MoU, GMEX Group subsidiary GMEX Technologies (GMEX TECH) and ICDX will explore the opportunities for ICDX to use the GMEX TECH ForumMatch exchange trading platform and ForumDetect market surveillance system. The two parties will also explore opportunities for cross linkage between GMEX in London and ICDX in Jakarta.
Furthermore, ECC and ICDX will jointly carry out a study investigating clearing services for the markets operated by ICDX. Together, they will examine the opportunities of using ECC’s clearing services and distribution for physically settled products in cooperation with ICDX’s clearing house, Identrust Security International (ISI) Clearing. They will also look at cross-market netting solutions in margining and risk functions and clearing member connectivity needed for the target market participants of ICDX.
“Having a strategic alliance with GMEX, ECC, and Deutsche Börse will be important for our growth strategy. We are very excited with the collaboration potential and we are confident that it will further strengthen our position as one of the leading commodity centres in the world,” says Megain Widjaja, chief executive officer at ICDX.
“This is a unique partnership with ICDX which, in conjunction with ECC, will facilitate optimised distribution and access for the international financial community. It can provide Indonesia with the infrastructure and partnerships to support its position at the heart of global commodity market innovation and paves the way for it to be the benchmark provider of pricing for its strong natural resources in the likes of Tin, Palm Oil and Rubber,” says Hirander Misra, chief executive officer and co-founder of GMEX Group.
“ECC’s experience in physically settled commodity transactions together with our partner exchange approach and distribution network will contribute to the development of the Indonesian commodity markets. We are glad to share our expertise with our partner ICDX,” says Dr Thomas Siegl, chief risk officer of ECC.