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 its first approvals from overseas regulators in Singapore and Japan.
The ‘no objection’ letter from International Enterprise Singapore (IES) and the written confirmation of ‘no restriction to provide direct access’ from Japan’s Ministry of International Trade and Industry (METI) allow qualified entities established or incorporated in those jurisdictions to access the DME Direct TM electronic trading platform (subject to the Dubai Financial Services Authority granting the DME a license to operate as an Authorised Market Institution). They will also be permitted to become Members of the DME, providing they meet the relevant DME Membership criteria.
This is a significant milestone for the DME, which is located within the Dubai International Financial Centre (DIFC), as it moves towards its 1st May 2007 launch and establishment as the Middle East’s first international energy futures exchange. Receiving regulatory approvals from overseas jurisdictions is critical to enabling the DME to attract participation from the broadest range of local, regional and international energy traders. Today’s announcement is the first of many approvals that have been requested from regulators around the world.
Gary King, Chief Executive of the DME, said: “We are delighted to have received our first no objections from these important overseas jurisdictions. This validates the strength of the regulatory framework developed by the DME as we have undertaken to establish an exchange that is truly world class in every respect.
“We are especially pleased that two of Asia’s leading financial services regulators, IES and METI, have been the first to provide us with these no objections. Both Singapore and Japan are home to a large number of key players engaged in the trading of Middle East sour crude oil, about 60 per cent of which is imported by Asia’s booming economies. This will ensure that, from a regulatory standpoint, these customers will be able to participate on the DME from day one.”
Mr King continued: “It has always been our aim to encourage a broad mix of market participants and strong levels of liquidity. Approvals and no objections from key overseas jurisdictions are critical to the DME meeting this objective and we expect to announce a number of additional overseas approvals and no objections in the near future. The regulatory approvals process is also well advanced in DIFC, where we continue to make great strides across our operations as we head towards a successful launch.”
The DME recently announced other significant progress including the completion of its two-storey high, 500 square-metre, state-of-the-art trading floor, which is physically located in the DIFC, and receipt of a high volume of applications for Off-Floor, Market Maker and Clearing memberships.
The initial three contracts to be traded on the DME on launch will be the physically delivered Oman Crude Oil Futures Contract, and two financially settled contracts, a Brent-Oman spread contract and a WTI-Oman spread contract.
The DME, ENOC Supply & Trading (LLC) and Emirates Airline are currently exploring the potential 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.
The establishment of an exchange inside the DIFC and the associated clearing and settlement services to be provided by the NYMEX Clearinghouse are subject to regulatory approval from the Dubai Financial Services Authority and the licensing of the DME as an Authorised Market Institution to operate as an exchange.
