ADX and DGCX Agree to Collaborate on a Unified Clearing House in the UAE
Dubai, UAE, July 9 2017: The Abu Dhabi Securities Exchange (ADX), a leading securities exchange in the region, signed a Memorandum of Understanding (MoU) with Dubai Gold and Commodities Exchange (DGCX), the region’s largest and most diversified derivatives bourse, and its parent company, DMCC (Dubai Multi Commodities Centre) to create the basis for collaboration on a unified Clearing House (CCP) in the UAE.
The MoU was signed by Rashed Al Blooshi, Chief Executive, ADX; Gautam Sashittal, Chief Executive Officer, DMCC and Member of the DGCX Board of Directors; and Gaurang Desai, Chief Executive Officer, DGCX and Dubai Commodities Clearing Corporation (DCCC).
Commenting on the initiative, Ahmed Bin Sulayem, Executive Chairman, DMCC, said: “This is a unique collaboration which we expect will lead to the creation of a national clearing house with the size, scale and capability to clear all asset classes.”
Additionally, this collaboration aims to promote a stronger cooperation across a number of areas, including clearing and settlement of equities, commodities, currencies, OTC instruments and derivatives products, as well as support with the listing of respective products and securities.
Rashed Al Blooshi, Chief Executive of ADX, said: “This memorandum will provide a framework for understanding and collaboration between ADX and DGCX. As a home-grown entity just like the DGCX and DMCC, we are deeply committed to accelerating the growth and development of the UAE financial markets and raising the bar in terms of trading and clearing standards. We see this as the beginning of a long and prosperous relationship that will open up new opportunities to mutually benefit both exchanges.”
“Moreover, the signing of this MoU comes in accordance with ADX strategic goals to increase market cap and product range as well as attract and activate a wider range of investors. In accordance with Abu Dhabi Plan, ADX is committed to creating a business environment that is both competitive and flexible in the framework of enhancing the competitive environment for doing business and attracting investment into the Emirate,” added Al Blooshi.
Gaurang Desai, Chief Executive Officer of DGCX and Dubai Commodities Clearing Corporation (DCCC), said: “We are delighted to partner with ADX. We believe that this will build a strong market connect within the UAE, especially in the areas of clearing and settlement. As the largest and the only multi-asset CCP in the region that is globally recognized, DGCX and its wholly owned CCP, DCCC, has a pioneering role to play in ensuring that it extends itself as a strong clearing base for partner exchanges, not only in the UAE, but also in the wider region.”
DCCC, a wholly owned subsidiary of DGCX, was recently recognized by ESMA as a Third-Country CCP. Having handled DGCX’s clearing without a single default since inception, DCCC has earned itself the reputation of being a credible and reliable partner for clearers, clients and market participants of the DGCX. DCCC is the only CCP in the Middle-East that offers clearing services across multiple asset classes: FX, Precious Metals, Energy and Equity Derivatives. DCCC offers Clearing Members the option of settlement in multiple currencies along with accepting a wide range of collaterals against margins.
About ADX: Abu Dhabi Securities Exchange (ADX) was established on November 15 of the year 2000 by Local Law No. (3) Of 2000, the provisions of which vest the market with a legal entity of autonomous status, independent finance and management. The Law also provides ADX with the necessary supervisory and executive powers to exercise its functions.
ADX is a market for trading securities; including shares issued by public joint stock companies, bonds issued by governments or corporations, exchange traded funds, and any other financial instruments approved by the UAE Securities and Commodities Authority (SCA).
At the end of 2016, ADX had 71 listed securities with a market capitalization of AED 475 billion (USD 129 billion). Those securities include 66 public joint stock companies, 2 private joint stock companies, 1 Exchange Traded Fund (ETF), 1 Abu Dhabi Government bond, and 1 convertible bond. ADX listed companies are allocated in nine sectors; Banking, Real Estate, Consumer Staples, Investment and Financial Services, Industrial, Telecommunication, Services, Energy, and the Insurance sector.
In 2014, ADX was upgraded to ‘Emerging Market’ status by both MSCI index (Morgan Stanley Capital International) and S&P Dow Jones, thus greatly increasing the likelihood of inward global investment flows. ADX was already classified as an Emerging Market by FTSE in 2009 and in 2011 by S&P and Russell Investments.
About DGCX: Established in 2005, DGCX is the region’s leading derivatives exchange and the only one allowing global participants to trade, clear and settle transactions within the Gulf region. The Exchange has played a pioneering role in developing the regional market for derivatives and financial infrastructure. DGCX is an electronic commodity and currency derivatives exchange with over 200 members from across the globe, offering futures and options contracts covering the precious metals, energy and currency sectors. DGCX is a subsidiary of DMCC (Dubai Multi Commodities Centre), a Dubai Government Authority for trade, enterprise and commodities. For more information: www.dgcx.ae
DGCX also owns and operates the region’s largest and only multi-asset Clearing House – Dubai Commodities Clearing Corporation (DCCC). DCCC is federally regulated by the Securities & Commodities Authority (SCA) and is recognised as a Third-Country CCP by European Securities Markets Authority (ESMA) with over 80 clearers from across the globe. For more information: www.dccc.co.ae
About DMCC: DMCC is the authority on trade, enterprise and commodities in Dubai – home to the world’s leading businesses of today, and tomorrow. The most successful markets create conditions that enable producers, traders and consumers to thrive. DMCC is a Dubai Government Authority committed to developing these ideal conditions and has a strong track record in commodity trade facilitation where we encourage and support business through the platforms we provide. These include our Free Zone, commodity exchanges, legal and regulatory frameworks and our real estate offering.
DMCC is developing the ‘Burj2020 District’ as part of our DMCC Free Zone expansion strategy to provide leading businesses with a commercial property offering unique to the Dubai marketplace. Indispensable to the economic growth of the nation, we – together with our members – deliver strong performance today, and sustainable growth tomorrow. DMCC. Made for Trade. www.dmcc.ae
Meng Chan Shu
Director of Business Development and Sales
Dubai Gold and Commodities Exchange
Tel: +9714 361 1660
Dhanya Issac/Lara Batato
Weber Shandwick PR
Tel: +971 (0) 4 445 4222