DGCX Will Start Trading In Third Quarter

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

23 June 2005

Brokers on the Dubai Gold and Commodities Exchange will be able to work from anywhere in the world, when it opens in Q3, 2005, says board member Ahmad bin Sulayem.

Trading systems for the DGCX are already in place and trading will take off by the third quarter of the current year, according to officials. The basic registration requirements for brokers will be announced soon, but Mr bin Sulayem said: “The brokers registered on DGCX can trade from anywhere in the world unlike on the other commodities exchanges, which insist that the brokers be resident in that particular country.”

Ahmad Bin Sulayem is the chief operating officer of Dubai Metals and Commodities Centre, a partner in the DGCX along with the Multi Commodity Exchange of India Ltd and Financial Technologies (India) Ltd.

The Dubai Metals and Commodities Centre (DMCC) is a strategic initiative of the Dubai government created to establish a commodity market place in Dubai. Rated 'A' by Standard & Poor's, it provides industry-specific market infrastructure and a full range of facilities for the gold & precious metals, diamonds & coloured stones and commodities industries (including metals, softs and energy). DMCC is also a free zone authority offering 100% business ownership, a guaranteed 50 year tax holiday and freehold property options.

The DGCX, an electronic commodities derivatives exchange which will be established within the DMCC, will be regulated by Emirates Securities and Commodities Authority. DMCC Acting Chief Executive and DGCX Director, Dr. David Rutledge, said, "As a member of the International Organization of Securities Commissions, SCA is well positioned to regulate DGCX and offers the stability and credibility that will assist us to attract members from around the world."

Alongside the DGCX, the newly created Dubai Mercantile Exchange (DME) is likely to focus on energy trading starting with crude futures, and will not compete against the DGCX. Collin Griffith, executive director for gold and precious metal at DMCC, said DGCX would primarily focus on commodities and not energy. DME is a joint venture between the New York Mercantile Exchange and Dubai Holding, the investment arm of Dubai Government. “The first futures contracts to trade on the exchange will likely be high-sulphur, or ‘sour’ crude, and fuel oil,” Nymex said in a recent press release.

DGCX will start off with gold and silver futures followed by futures on other commodities like cotton, sugar and also freight futures. Once the trading in futures is stabilised, DGCX will allow options trading on different commodities.

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