The Hindu Business Line : Dubai Gold Exchange to start operating in Nov

DUBAI Gold and Commodities Exchange (DGCX), the first such marketplace in West Asia, will commence operations on November 22. The DGCX will open its gold futures market on the same day.

The DGCX is a joint venture of the Dubai Metals and Commodities Centre (DMCC), Financial Technologies (India) Ltd (FTIL) and Multi Commodity Exchange of India Ltd (MCX). It will be located in the DMCC free zone in the purpose-built AU (Gold) Tower.

With a portfolio of listed commodities such as gold, silver, freight, cotton, steel and marine fuel oil, DGCX is set to offer an electronic platform for the trading, clearing and settlement of commercially important derivative products, according to a statement from the exchange.

DGCX will offer an uninterrupted trading window of more than 13 hours to provide arbitrage opportunities against Far-East, European and US markets. The exchange is confident that it will see wide participation from approved members such as commodity traders, banks, brokerages and other financial institutions, who will trade and clear their obligations on the T+1 basis. The market will ensure that the best risk containment measures are implemented and followed.

DGCX opened its membership last June and received more than 270 applications in less than two months. Of these, 200 have now been approved in principle by the DGCX Board, and 50 have completed all documentary requirements and have been formally admitted to membership. Mr Framroze Pochara, Chief Executive of DGCX, said, "We estimate that we will have around 100 members trading on the DGCX markets on day one. This critical mass of members will ensure that the first day of trading will be meaningful, and will see active participation from across the globe. These numbers will increase within a very short period of time." To begin with, members will be able to trade in six forward months for gold futures, and trading of silver futures and gold and silver options will begin during the first quarter of 2006. Following this, commodities such as steel, marine fuel oil and cotton will be introduced for trading. The DGCX is a fully automated, screen-based, online commodities exchange.

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