The Dubai Gold and Commodities Exchange (DGCX) and its central counterparty (CCP) subsidiary, Dubai Commodities Clearing Corporation (DCCC), is now allowing clearing members to deliver eligible global securities as collateral.
Standard Chartered Bank will provide custody management services on this additional form of collateral and will be responsible for safeguarding the assets.
DCCC clearing members currently place collaterals against their margin of trading in the form of cash, bank guarantees, term deposits and tradeflow bullion warrants, but will now also be able to use UK and US government treasury bills, bonds, and other approved fixed income securities.
According to Standard Chartered, the expanded collateral basket will help members efficiently utilise their financial resources and optimise financing costs.
DCCC operates as a CCP offering fully integrated clearing and settlement services and collateralisation of exchange traded derivatives.
DCCC is recognised as a third-country CCP by the European Securities and Markets Authority, Abu Dhabi Global Markets and the Dubai Financial Services Authority amongst other overseas regulators.
Les Male, CEO of the DGCX, commented: “We are delighted to partner with Standard Chartered Bank to expand our collateral basket. By allowing market participants to offset their margin obligations with global securities, we will increase clearing efficiencies and support further liquidity in the DGCX marketplace.”
He added: “The new offering will not only add value to clearing members further helping them to deploy their assets, but will also provide additional security given its backing from one of the world’s most reputable banks.”
Motasim Iqbal, head of transaction banking at Standard Chartered Bank, UAE said: “With our rich history of 60 years in the UAE, Standard Chartered is well positioned to leverage its extensive global network and capabilities to ensure our client’s financial needs are catered to in an efficient and smooth manner.”
