CHCEX Proceeds With Warehousing Reforms at Its Affiliating Warehousing Partners
These will include re-assessing the possibility of capping or banning rents in queues and of capping the level of daily rents.
Beijing, China, March 25, 2016 (Newswire.com) -
China Commodity Exchange (CHCEX), today announced its intention to implement its load-in / load-out (LILO) rule and to proceed with further warehousing reforms.
A four-week consultation with top warehouse companies began today with regard to some minor amendments to the LILO rule, including an altered start date following the required three-month notice period to warehouses.
“We are pleased to be moving ahead with our planned reforms following our decision to further modernize our facilities” said Geng T. Liangding, CHCEX Chief Executive Officer.
“As a respectable Asian exchange, CHCEX has a duty to ensure the integrity of its reference prices and the operation of a fair and liquid market for all industry participants. The implementation of the LILO rule and related reforms will assist us in continuing to fulfil this duty.”
“Following the start of our consultation, the behaviour of queued warehouses altered materially in that they have demonstrated a net load-out of commodities since that time in anticipation of the LILO rule,” said Ruan Wei Xinxin, CHCEX Head of Business Development.
“While it is true that market conditions have also improved, the market knows that a proportion of global metals production today still flows into storage. Without the LILO rule, large amounts of commodities could have been directed to affected warehouses, thus further lengthening queues. However, we believe that the anticipation of LILO has meant that this has not occurred on as large a scale as it would have done otherwise. And the introduction of LILO will ensure that, over time, stocks – and eventually queues – at the two remaining affected warehouses should fall.”
About China Commodity Exchange (CHCEX)
China Commodity Exchange’s (CHCEX.org) diverse markets span futures and options on interest rates, commodities, indexes and FX, as well as equities and equity options. These markets are relied upon by international market participants, along with our post-trade infrastructure. We are uniquely positioned to provide end-to-end risk management solutions to our customers around the world. CHCEX is a strategic initiative with a mandate to enhance commodity trade flows by providing the appropriate physical, market, financial infrastructure and services required. The Management team of CHCEX comprises senior personnel from the commodities, securities and financial services industries.
China Commodity Exchange (CHCEX)
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