NYMEX receives CFTC regulatory approval to clear DME trades
DUBAI, United Arab Emirates, May 25 /Xinhua-PRNewswire/ --
The Dubai Mercantile Exchange Limited (DME), a joint venture between Tatweer, a member of Dubai Holding, and the New York Mercantile Exchange Inc. (NYMEX), announced today that it has received "no-action" relief from the Division of Market Oversight of the US Commodity Futures Trading Commission (CFTC). This relief enables US-based DME Members and their "Guaranteed Customers" to enter orders directly from the US through DME Direct(TM). In addition, the CFTC issued an order permitting NYMEX and CFTC-registered Futures Commission Merchants (FCM’s) to hold DME customer positions and associated funds in US customer-segregated accounts in connection with NYMEX’s clearing of futures and options on futures contracts traded on the DME.
Welcoming the decision, Ahmad Sharaf, Chairman of the DME, said: "The DME has now received all necessary regulatory approvals to operate as the Middle East’s first international energy and commodities futures exchange and is ready to launch on June 1. Following three years of preparation and consultation with the industry, we are confident that our historic launch of the Middle East’s first international energy and commodities futures exchange will create increased transparency and provide robust risk management in the region for the first time."
NYMEX President and Chief Executive Officer James E. Newsome said: "NYMEX appreciates the effort and cooperation of the CFTC. The no-action relief and ability to clear DME customers in US customer-segregated accounts will facilitate US participation in the DME markets from day one, which we believe will help establish the Oman Crude Oil Futures Contract as the world’s sour crude oil benchmark."
Gary King, Chief Executive Officer of the DME, commented: "All elements of the Exchange are prepared and ready to go -- most notable, the successful production testing of DME Direct(TM), registration of more than 60 Members and over 20 Market Makers and last but not least the completion of our state-of-the-art trading floor within the Dubai International Financial Centre (DIFC)."
Chief Compliance Officer, Sarah Watts added: "We recently announced that the DFSA had granted us the Authorised Market Institution licence. In addition, twelve of the world’s leading strategic jurisdictions have given us their regulatory approvals and ‘no objections’, which underscores the international confidence in the DME and its regulatory and legal environment. The additional ‘no action’ relief granted by the CFTC provides further confidence and certainty for our customers and partners. The CFTC has been most diligent and constructive in guiding us through this process and we would like to extend our sincere thanks to them."
The DME is set to launch the Middle East’s first and only physically-settled energy futures contract, the Oman Crude Oil Futures Contract, on June 1, 2007 as well as two financially settled futures contracts, a Brent-Oman spread contract and a WTI-Oman spread contract.
In addition, the DME, ENOC Supply & Trading (LLC) and Emirates Airline are currently exploring the development of a jet fuel futures contract in collaboration with other industry stakeholders with a view to listing the first jet fuel futures contract on the Exchange at a later date in 2007.
About the Dubai Mercantile Exchange
The Dubai Mercantile Exchange Limited (DME), a joint venture between the New York Mercantile Exchange, Inc. (NYMEX) and Tatweer, a member of Dubai Holding, aims to become the premier commodity and energy futures exchange in the Middle East, providing a financially secure, well-regulated and transparent trading environment.
The Exchange will initially develop and trade an Oman Crude Oil Futures Contract. This will address a growing market need for price discovery of Middle East Sour Crude Oil while simultaneously bridging the time zone gap between Europe and Asia by providing for the trading of energy futures, options and other products.
The DME will be a fully electronic exchange. However, in a unique concept, it will also bring together a community of traders that will operate from trading hubs and individual trading stations on the Exchange’s floor, which will be located within the Dubai International Financial Centre (DIFC), the region’s leading financial services centre.
The DME is regulated by the Dubai Financial Services Authority (DFSA), a world class, independent regulator, and all trades executed on the Exchange will be cleared through, and guaranteed by, NYMEX’s AA+ rated clearinghouse.
