King & Wood Mallesons (KWM) and Dentons have leveraged their considerable Asia platforms to secure roles as lead advisers on a landmark agreement between Germany and China to create the first dedicated platform for yuan-denominated trading outside China.
The two firms, along with Allen & Overy, executed a first-of-its-kind deal between two Chinese exchanges to establish a new trading venture with Germany’s Deutsche Börse.
KWM’s Frankfurt-based Christian Cornett and Beijing-based Xu Ping teamed up to advise the Shanghai Stock Exchange on its agreement with both Deutsche Börse and the China Financial Futures Exchange. The agreement has created the China Europe International Exchange (CEINEX), which will become the first dedicated trading platform for renminbi transactions outside of China and marks an important milestone in the internationalisation of the renminbi and for China’s capital markets.
Dentons was instructed by China Financial Futures Exchange on the deal, with corporate partner Hermann Meller – who splits his time between Berlin and Shanghai – leading the team.
Frankfurt-based M&A partner Hartmut Krause led Allen & Overy’s legal advice to Deutsche Börse, which leaned heavily on its own in-house team of Tobias Gressinger and Holger Klafs to pull off the new venture.
CEINEX will offer Chinese investment products, including exchange-traded funds and bonds to international investors. The first of these bonds and exchange traded funds in renminbi will be traded on the new platform from 18 November. The agreement comes just one week after Chinese president Xi Jinping’s state visit to the UK, with Frankfurt having stolen a march on the City in connecting its exchanges to China.
KWM’s Cornett said: ‘The China-Europe stock market deal opens significant new opportunities for investment in China, which is a trend that we in Germany have seen rapidly evolve over recent years. This new platform will help to develop key offshore RMB products, which is crucial to further capital flows between the two countries.’