The Hindu Business Line : Dubai derivatives exchange open for membership

THE Dubai Gold and Commodities Exchange (DGCX), the first electronic multi-commodity derivatives exchange in West Asia, on Tuesday announced that it is open for membership.

The exchange also announced that it would commence trading in November this year in precious metals contracts, and identified its initial clearing banks.

DGCX would have two membership categories. The first category would be broker members who will be able to trade on all market segments such as precious metals, energy, agricultural commodities, etc., either as principal or on behalf of clients, according to an exchange release.

The second category would be trade members who can trade only on the respective trade segment for which membership has been applied and as principal only.

In the first tranche of membership offered, the admission fees for broker membership is $100,000 and that for trade membership is $20,000 per segment.

DGCX will commence operations in November 2005 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.

"DGCX will initially restrict membership in broker and trader categories to 250 each. To boost the market confidence, we will attract participation from leading commodities and securities players and make it the most preferred exchange regionally and internationally," said Mr Jignesh Shah, Vice-Chairman, DGCX, in the release.

DGCX is also organising a series of international road shows across the region in key markets including the GCC, Istanbul, and India in the coming weeks.

The exchange also announced that its initial clearing banks would be HSBC and National Bank of Dubai.

The new-generation online trading system of DGCX would enable producers, traders, and investors to transact business in a transparent environment without any counterpart risk, since all transactions executed on the exchange would be guaranteed.

DGCX would trade seven days a week with trading hours extending from 10 a.m. to 11 p.m. This would overlap with the trading hours in the US, Europe, and the Far East.

Members of the exchange would 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.

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