Dubai Mercantile Exchange gets green light from regulators
16 May 2007 | 1482 views | 0
Source: Dubai Mercantile Exchange
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 further to the earlier receipt of approvals and 'no objection' letters from overseas regulators, The Securities and Commodities Authority of the United Arab Emirates (UAE), The Rahoitustarkastus Finansinpektionen of Finland (in charge of Financial Supervision), The China Securities Regulatory Commission and the Central Bank of Lebanon have notified the DME of their 'no objection' to entities in those jurisdictions accessing the DME via DME Direct, the Exchange's state-of-the art trading platform.
These additional approvals follow the recent granting to the DME of an Authorised Market Institution (AMI) licence by the Dubai Financial Services Authority, which at the same time also recognised the New York Mercantile Exchange to provide the financial service of operating a clearing house in the Dubai International Financial Centre (DIFC), where the DME is located.
Regulatory approvals from overseas jurisdictions are essential as the DME seeks to attract participation from a wide range of international as well as local and regional energy traders. To date, the DME has received approvals and 'no objection' letters from twelve jurisdictions in total.
The DME's clients in Finland, Ireland, Japan, the Kingdom of Bahrain, Lebanon, New Zealand, People's Republic of China, Republic of Korea, Singapore, the Sultanate of Oman, Switzerland and the United Arab Emirates will be able to access DME Direct™ when the Exchange launches. The approvals also allow the DME to admit entities from these jurisdictions as members, providing they meet relevant DME criteria.
Commenting on the approvals, Gary King, Chief Executive Officer of DME said: "We continue to set the stage for broad based international participation on the Exchange from key jurisdictions. The ongoing receipt of approvals and 'no objection' letters from regulators around the world serves to underscore the strength and creditably of the regulatory processes put in place at the DME as well as the robust regulatory environment in which we have established the Exchange. In the run up to our launch and thereafter, we expect to receive further approvals in line with the diverse geographic distribution of our clients and member institutions, which we are pleased to report continue to grow in numbers on daily basis."
To date, more than 50 Members and over 20 Market Makers have been approved by the DME Membership Committee, and the leading ISV's have already connected to DME Direct™.
Upon launch, the DME willl 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.