BOCA RATON, Fla., March 14, 2003 ― the Shanghai Futures Exchange (SHFE) and Chicago Mercantile Exchange Inc. (CME) today signed a Memorandum of Understanding to pursue joint business development initiatives in derivatives products―the first such agreement between SHFE and a North American exchange. Under the agreement, the exchanges will discuss a variety of issues, including cooperation related to product development, information sharing and market regulation.

Officials of the two exchanges signing the agreement today at the 28th annual International Futures Industry conference in Boca Raton, Fla. were SHFE Chief Executive Officer Dr. Jiang Yang and CME Chairman Terry Duffy.

"The MOU lays a solid foundation for the mutual cooperation between the two exchanges. By joining the MOU, the SHFE expects to benefit from CME’s skills and experience in terms of product development and market operation. Under this MOU, each side will also gain more local knowledge towards the other’s market," said Dr.Jiang Yang, chief executive officer of SHFE.

“SHFE has developed an impressive track record in developing futures trading in China,” said CME Chairman Terry Duffy. “It is a tremendous honor for CME to participate in the development of futures markets in China as an essential tool for managing financial risk.”

“CME is focused on long term growth in the risk management arena,” said CME President and Chief Executive Officer Jim McNulty. “Our important relationship with the SHFE positions us well to collaborate in the expansion of the Chinese marketplace.”

“This is our first step in a long journey to achieve common goals between our two exchanges and the People’s Republic of China,” said CME Chairman Emeritus and Senior Policy Advisor Leo Melamed, who chairs the exchange’s Board Steering Committee and oversees its Asian market strategy.