Dubai Mercantile Exchange
From MarketsWiki
| Dubai Mercantile Exchange | |
| |
| Founded | 2007 |
|---|---|
| Headquarters | Dubai, UAE |
| Key People | Thomas Leaver, CEO |
| Products | Oman crude oil |
| Web site | www.dubaimerc.com |
The Dubai Mercantile Exchange (DME) was launched in June 2007, a joint venture between the Dubai and Omani governments and the New York Mercantile Exchange which marked the latest effort to establish a Middle East crude oil futures benchmark. The exchange is one of four created with backing by the emirate as part of its effort to create a global financial-services hub[1].
The electronic platform includes a “virtual trading floor” in its headquarters at the Dubai International Financial Centre, and lists the physically-delivered Oman crude oil futures contract and two financially-settled contracts, the Brent-Oman Financial Spread and the WTI-Oman Financial Spread.
Contracts are cleared and settled by the Nymex clearinghouse, and the exchange is regulated by the Dubai Financial Services Authority. The exchange received regulatory approval to accept OTC trades in the Oman contract, submitted through the Nymex ClearPort portal[2].
Volumes in the Oman Crude Oil Futures Contract reached 42,658 contracts in November 2007, compared with 39,571 in June. Open interest reached 11,060 in November[3].
Contents |
History and Ownership
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The DME emerged from the combined efforts of the Dubai government to establish a range of exchanges in the Gulf emirate and plans by the Nymex to expand in Europe and the Middle East.
Approximately 60 percent of the world’s crude oil reserves are located in the Gulf region, yet until the DME’s launch there was no sufficiently transparent pricing mechanism for Middle East sour crude oil.
The exchange was slated for launch in early 2006, but the final design took a further 18 months, with its backers opting for a fully electronic platform with a hybrid floor element after considering an open-outcry pit in addition to screen-based trading[4].
The exchange started as a 50/50 joint venture between Tatweer, a member of state-controlled Dubai Holding, and the New York Mercantile Exchange, which contributed capital and services. The Oman Investment Fund (OIF) acquired a 30 per cent stake in November 2006, reducing the holdings of the founders to 32.5 per cent, with floor traders holding the remaining 5 per cent.
In August 2008, Goldman Sachs Group, Morgan Stanley and four energy-related companies -- Royal Dutch Shell, Vitol, Concord Energy, and Casa Energy Trading -- took minority stakes in the DME.[5]
In September 2008, Thomas Leaver replaced Gary King as the CEO of the DME. Leaver had previously served as the exchange's COO.[6]
The delayed launch saw the IntercontinentalExchange emerge in May 2007 with its own Middle East sour contract, sparking another spat between the rival US exchanges[7]. However, both contracts have struggled[8].
The DME offers three classes of membership - floor, off-floor and clearing - though trading is not limited to members[9], off floor members[10] and floor members[11]. .
Floor members: are members who own one or more floor membership privileges and physically occupy one or more of the 50 seats located on the DME's trading floor.
Off-floor members: have the right to access and to trade on the trading platform off the exchange floor.
Clearing members: All current Nymex Clearing Members are able to apply for DME Clearing Membership to clear DME transactions. Clearing members also have the right to access and to trade on the trading platform off the exchange floor.
Products
- DME Oman Crude Oil Futures Contract
- DME Oman Crude Oil Financial Contract
- DME Brent Crude Oil Financial Contract
Regulation
The DME is authorized and regulated by the Dubai Financial Services Authority (DFSA), an independent regulator. All trades executed on the DME are cleared through and guaranteed by the clearing house of the New York Mercantile Exchange, which is recognized and licensed by the DFSA.
Approved Jurisdictions
The DME has received approvals and letters[12] of 'no objection' from overseas financial services regulators from the following jurisdictions that will allow traders in those locations to access the DME via DME Direct™.
Approved Jurisdictions
References
- ↑ Raft of bourses crowd market. Financial Times. Retrieved on November 20, 2007.
- ↑ Press release. DGX. Retrieved on January 22, 2008.
- ↑ Press Release. DME. Retrieved on November 27, 2007.
- ↑ Dubai sticks to electronic trading. Financial Times. Retrieved on November 20, 2007.
- ↑ "Goldman, Morgan Stanley, Shell among firms taking minority stake in Dubai Mercantile Exchange". Chicago Tribune. Retrieved on August 13, 2008.
- ↑ Dubai Mercantile Exchange Confirms Appointment of Thomas Leaver as CEO of Exchange as of 1st September 2008. Dubai Mercantile Exchange. Retrieved on September 2, 2008.
- ↑ Nymex calls rival's Dubai contract a "copy cat". Reuters. Retrieved on November 20, 2007.
- ↑ Mideast oil contracts in troubled waters. Financial Times. Retrieved on November 20, 2007.
- ↑ DME Clearing Members. Dubai Mercantile Exchange. Retrieved on December 7, 2007.
- ↑ DME Off Floor Members. Dubai Mercantile Exchange. Retrieved on December 7, 2007.
- ↑ DME Floor Members. Dubai Mercantile Exchange. Retrieved on December 7, 2007.
- ↑ DME Approved Jurisdictions. {{{org}}}. Retrieved on December 7, 2007.
