The Chicago Mercantile Exchange (Merc) announced that it will help develop mainland derivatives markets with the People's Bank of China (PBOC). The China Foreign Exchange Trade System, a PBOC subsidiary, will provide information on China's financial regulatory policies to Merc in exchange for knowledge about international derivatives and assistance with designing trading instruments. Derivatives are financial instruments which derive their value from debt and equity securities. Merc also has an information sharing cooperation agreement with the Shanghai Futures exchange and plans to play a leading role in developing China's derivatives markets. US Treasury Secretary John Snow saluted the development, repeating his message that it was best for the global financial system and for the US and China alike for China to begin moving to a flexible exchange rate regime as soon as possible.