The Dubai Gold and Commodities Exchange (DGCX), the first electronic multi commodity derivatives exchange in the Middle East, took a major step towards commencement of operations today, when it announced that the Exchange is open for membership. DGCX also announced that it would commence trading in November this year in precious metals contracts, and identified its initial clearing banks.
At an industry function and press conference in Dubai, Dr. David Rutledge, Chairman of the Exchange and Acting CEO of Dubai Metals & Commodities Centre (DMCC), said that the opening of the membership was a milestone not only for DGCX, but also for the entire regional market. “DGCX is a key initiative for Dubai and we believe that the Exchange will create a dynamic and transparent marketplace, which will generate greater trade flows and associated benefits within the region, including creation of jobs and wealth,” the Chairman said.
Jignesh Shah, Vice Chairman of DGCX stated that DGCX would initially restrict its membership in broker and trader categories to 250 each. “To boost the market confidence, DGCX will attract participation from leading commodities and securities players and make DGCX the most preferred exchange regionally and internationally.” said the Vice Chairman.
While outlining the membership structure of the new Exchange, DGCX Chief Executive, Framroze Pochara stated that “DGCX will have two categories of memberships: Broker Members who will be able to trade on all market segments of DGCX such as precious metals, energy, agricultural commodities, etc, either as principal or on behalf of clients, and Trade Members who can trade only in the trade segment for which membership has been taken and as principal only.
“In the first tranche of membership offered, the admission fees for Broker membership is US$100,000 and Trade membership is US$ 20,000 per segment.”
DGCX also announced that the Exchange’s initial clearing banks would be HSBC and National Bank of Dubai. “We are very pleased that such globally and regionally recognised banks have partnered with DGCX in its initiatives”, said Mr. Pochara.
Mr. Pochara said that the new generation, online trading system of DGCX will enable producers, traders and investors to transact business in a transparent environment without any counterpart risk, since all transactions executed on the Exchange will be guaranteed. The in-built risk management system checks margins, positions and profit/loss on a real time basis and automatically prohibits the member from creating fresh positions once trading limits are exhausted.
DGCX will trade 7 days a week with trading hours extending from 10.00 am to 11.00 pm to overlap with trading hours in US, Europe and the Far East. DGCX members will be able to connect to the DGCX trading system from anywhere in the world. The orders placed by members on the exchange will be routed to a central order book with automatic order matching algorithm.
DGCX will commence operations in November this year with trading in gold futures contract followed by silver. This will be followed by options trading in gold and silver in early 2006 and trading in other commodities such as steel, fuel oil and freight rates will follow.
The Dubai event was the first in a series of international road shows that will take place across the region in key markets including the GCC, Istanbul and India during the next two weeks.
Note to Editors:
The Dubai Gold and Commodities Exchange (DGCX) is a fully automated, screen-based, online commodities exchange scheduled to start live operations in November 2005 . Strategically located in Dubai, the exchange is the first international commodities derivatives marketplace in the time zone between Europe and the Far East. A joint venture between the Dubai Metals and Commodities Centre, (DMCC), Financial Technologies (India) Limited (FTIL) and Multi Commodity Exchange of India Ltd. (MCX), the DGCX will be located in the DMCC free zone in the prestigious purpose-built AU (Gold) Tower. With its extensive portfolio of listed commodities including Gold, Silver, Freight, Cotton, Steel and Fuel Oil, DGCX is set to offer an efficient electronic platform for the trading, clearing and settlement of a diverse range of commercially important derivative products.
