NYMEX Receives CFTC Regulatory Approval to clear DME trades
The Dubai Mercantile Exchange Limited 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™. 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™, 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.