Start date: 15 February 2010
Close date: 28 March 2010
On 10 February 2010 the Financial Services Authority (FSA) forwarded to the Office of Fair Trading (OFT) an application from Dubai Mercantile Exchange to become a Recognised Overseas Investment Exchange under section 287 of the Financial Services and Markets Act 2000 (FSMA).
The Dubai Mercantile Exchange (DME) was launched in June 2007 as a joint venture between core shareholders, Tatweer (a member of Dubai Holding), Oman Investment Fund (OIF) and New York Mercantile Exchange, whose stake is now controlled by CME Group. In addition to its core shareholders, global financial institutions and energy trading firms including Concord Energy, Goldman Sachs, JP Morgan, Morgan Stanley, Shell and Vitol have taken equity stakes in the DME.
DME operates an energy futures and commodities exchange in the Middle East. It focuses on developing and trading a crude oil futures contract for various energy market participants, such as energy producers, refiners, traders, and financial institutions. Its contracts are listed on the CME Globex® platform. DME is regulated by the Dubai Financial Services Authority and all trades executed on the Exchange are cleared through and guaranteed by NYMEX (a member of CME Group).
DME currently falls under the UK overseas person exclusion regime. Investment exchange services are typically provided in the UK by either Recognised Investment Exchanges or Recognised Overseas Investment Exchanges. DME is in the process for applying for Recognised Overseas Investment Exchange Status with a view to basing a permanent representative in the United Kingdom.
Under section 303(3) of FSMA 2000, the Office of Fair Trading (OFT) must report to H.M. Treasury, the FSA and the Competition Commission on whether any of the regulatory provisions or combination of regulatory provisions of an applicant for recognition have a significantly adverse effect on competition. When assessing competition in this context, the OFT is likely to pay particular attention to the applicant's rules on participation criteria, its arrangements for clearing and settlement of trades.
The OFT is currently conducting its competition assessment of DME's application. As part of this process, the OFT invited comments from any parties that had an interest in the application. The consultation period lasted six weeks in total and is now closed.
Back to: Consultations
This feature requires Javascript and Cookies to be enabled on your browser
Register for email alerts or amend your existing account details here.