The New Zealand Stock Exchange (NZX) has taken "another vital step" towards becoming a global player in the dairy industry by securing status as an authorised dairy trader in the US.
Wellington-based NZX announced earlier today that it has been added to the Foreign Board of Trade register by market regulator, the US Commodity Trading Commission (CFTC).
Its new status, which it applied for in February 2013, means that customers in the US can now take part in trading on the NZX Dairy Derivative platform. Whole milk powder (WMP), skimmed milk powder (SMP), and anhydrous milk fat futures, and WMP options are currently traded on the platform.
NZX's ascension to the Foreign Board of Trade register comes just months after it extended trading hours on the Dairy Derivatives platform to overlap with those of its US and European customers.
It claimed that the overlap, which was announced in August 2013, was “vital to meeting the demands of global customers and further growing liquidity.”
Commenting, NZX CEO, Tim Bennett, branded its new Foreign Board of Trade status "another vital step."
“We are delighted to be able to offer US customers direct access to trade NZX Dairy Derivatives. A number of customers in the US want access to this market to manage risk is globally traded dairy commodities, and we are looking forward to facilitating this,” said Bennett.
“The extension of trading hours has helped to support expansion of global participation in these important risk management tools, and access from the US will be another vital step in building significant liquidity in this market," he added.
Speaking with Radio New Zealand, NZX head of derivatives, Kathryn Jaggard, said that "there are a number of firms in the US who have essentially been waiting for this CFTC authorization to come through so they can directly access our markets."
The CFTC decision "means more participants and more volume in the markets," she added.