Dubai Gold & Commodities Exchange

From MarketsWiki

(Redirected from DGCX)

Dubai Gold & Commodities Exchange

Founded	2005
Headquarters	Dubai, UAE
Key People	Ahmed Bin Sulayem, chairman; Jignesh Shah, vice-chairman; Colin Griffith, director; Malcom Wall Morris, CEO
Products	Futures and options in gold, silver, steel, fuel oil and currencies
Web site	www.dgcx.ae

The Dubai Gold & Commodities Exchange (DGCX) was launched in November of 2005 as part of the Gulf emirate’s efforts to establish a global financial-services hub. The electronic platform was branded as the first commodities exchange in the Middle East, initially offering futures on gold, and expanded to include contracts on silver, fuel oil, steel and four currency pairs, and options on gold futures.

The DGCX is backed by the state-controlled Dubai Multi Commodities Centre (DMCC), the government of Dubai, Financial Technologies (India) Ltd and the Multi Commodity Exchange of India (MCX).

1 History
2 Product Development
3 Regulatory
4 Key People
5 External Links
6 References

History

The DGCX is one of four financial exchanges in the Gulf emirate, and one of two targeting the commodities sector, alongside the rival Dubai Mercantile Exchange.

The DGCX launched its first contract, a gold futures contract, in November 2005^[1] and has added derivatives on silver, fuel oil, steel and four currency pairs, with plans to add contracts based on plastics, cotton and freight rates.

The exchange has over 200 members and is regulated by the Emirates Securities and Commodities Authority. Clearing is provided by the wholly-owned Dubai Commodities Clearing Corporation.

The DMCC owns 51 percent of the venture, with Financial Technologies owning 39 percent - and providing the infrastructure - and the MCX holding 10 percent. The exchange was originally a 50/50 joint venture before the DMCC acquired an additional 1 percent from its Indian partners for $12.5 million in early 2007.^[2]

Framroze Pochara, a former vice-president of the National Stock Exchange of India, was recruited as CEO in mid-2005, but stepped down in mid-2007 to be replaced by Colin Griffith.

Product Development

DGCX offers a range of contracts covering precious metals, energy, metals and currencies. The launch of a gold futures contract in December 2005 was followed in March 2006 by a silver future, with three currency pairs – the dollar against sterling, euro and the yen – followed in October 2006 by a fuel oil future, the latest of many efforts to establish a Middle East crude oil futures benchmark.

Contract volumes in the currency complex surpassed the bullion business for the first time on Apr. 19, 2007 and a fourth currency pair – billed as the first exchange-traded dollar/rupee contract – was launched in June 2007. Exchange volumes passed 200,000 contracts for the first time in the quarter to June 2006 and climbed to 256,094 – with a near-tripling in notional value to $9.02 billion in the June quarter of 2007.

Its first steel future was launched in October 2007, the first of a planned suite of four, including stainless steel and flat products.

Future product plans include a suite of four plastics futures for delivery at points in the Middle East, southeast Asia and northeast Asia. The plastics contracts were slated to launch in mid-2007, but this has been delayed until January 2008.^[3] Executives have also held talks with the Bursa Malaysia about a partnership in palm oil futures, with contracts in freight rates, cotton and pulses also under consideration.^[4]

Regulatory

The DGCX is regulated by the Emirates Securities and Commodities Authority (ESCA). Established in 2000, ESCA is the supervisory and executive public authority overseeing DCGX.^[5]

ESCA is a member of the International Organisation of Securities Commissions (IOSCO) and is also the regulatory authority for the Dubai Financial Market and the Abu Dhabi Securities Market.