DGCX to be regulated by Dubai-based SCA

The Dubai Gold and Commodities Exchange (DGCX) today announced that the Securities and Commodities Authority (SCA) based in Dubai will regulate the new electronic commodities derivatives exchange.

DGCX will be incorporated under the Dubai Metals & Commodities Centre Free Zone Authority.

The Securities and Commodities Authority (SCA) is a public establishment in Emirates working under the ministry of economy and commerce.

DGCX is a joint venture between the Dubai Metals and Commodities Centre (DMCC), a strategic initiative of the government of Dubai, the Multi Commodity Exchange of India Ltd (MCX) and Financial Technologies India Ltd (FTIL).

Announcing about this development, David Rutledge, DMCC acting chief executive and DGCX director, said, "As a member of the International Organisation of Securities Commissions, SCA is well positioned to regulate DGCX and it offers stability and credibility that will assist us to attract members from around the world."

Rutledge further added, "With the regulatory structure in place, DGCX will be formally incorporated as a DMCC company. We expect to announce details of the membership structure, and applications for membership in the coming month."

Commenting on SCA's role as regulator of DGCX, SCA chief executive Abdulla S Alturifi said, "We at SCA look forward to the regulatory challenges and will be cooperating with DGCX to ensure that the highest standards of market integrity and investor protection are maintained."

Jignesh Shah, director of DGCX, said, "We are pleased that the implementation of DGCX is progressing as per schedule. Getting the necessary regulatory arrangements is one of the critical milestone that have been accomplished. Being governed under SCA regulations, DGCX is now well poised to become a dynamic international exchange in future."

The SCA is an autonomous body which at present regulates the Abu Dhabi Stock Market (ADSM) and Dubai Financial Market (DFM).

It is also a member of the International Organisation of Securities Commissions (Iosco), which is an association of major securities and commodities regulatory authorities across the globe. It suggests norms and procedures for efficient markets by bringing the regulators on a common platform.

DGCX is due to commence operations before the end of 2005. It will initially list futures contracts in gold, to be followed by gold options, and futures and options in silver.