Source: Dubai Financial Services Authority
The Dubai Mercantile Exchange Limited (DME), a joint venture between Tatweer, a member of Dubai Holding, and the New York Mercantile Exchange Inc. (NYMEX), announced today that it has been approved as an Authorised Market Institution (AMI) by the Dubai Financial Services Authority (DFSA).
The DME is the second Exchange within the Dubai Financial Centre (DIFC) to be issued such a licence from the DFSA.
The AMI licence allows the DME to operate as an exchange under the regulatory jurisdiction of the DFSA, and this announcement marks a major advance in the DME's development as the Middle East's first energy futures exchange. The DME is scheduled to launch on June 1, 2007 pending regulatory approvals of its clearing arrangement.
Welcoming the decision, Ahmad Sharaf, Chairman of the DME, said: "This is a vital and long-awaited milestone for us as we continue to progress towards the historic launch of the Middle East's first energy futures exchange. I would like to thank the entire DME team for their dedication and hard work over the past three years. I am convinced that our accomplishments to date will lead to the successful establishment of the Middle East's first energy future exchange."
Sarah Watts, Chief Compliance Officer of the DME, further commented: "The DFSA represents regulatory independence and operates within a robust legal regime that promotes confidence and certainty for international players. We are delighted that the DME will be operating within a world-class regulatory framework that is dedicated to best international practice. The DFSA has been most diligent and constructive in guiding us through this process and our thanks go to them."
Upon launch, the DME will list three contracts for trading: The physically delivered Oman Crude Oil Futures Contract and two financially settled futures contracts, the Brent-Oman Spread Contract and a WTI-Oman Spread Contract. The Oman Crude Oil Futures Contract has been developed through extensive industry consultation and is set to become the Middle East's first and only physically-backed energy futures contract. Deliverability will provide true price convergence between the cash markets and the physical markets.
Gary King, Chief Executive Officer of the DME, added: "We continue to be ooverwhelmed by the support and confidence that we are receiving from the industry. Our customers want greater price transparency. They want to be able to better manage their risk. And they know that the DME will deliver just that.
The industry understands what an achievement it will be to launch the Middle East's first and only physically-backed energy futures contract and a totally new, world-class exchange. The DME is committed to providing liquidity for producers, consumers and traders and we look forward to delivering outstanding services to our members throughout the world from day one."