The Dubai Commodities Clearing Corporation (DCCC), a subsidiary of the Dubai Gold & Commodities Exchange (DGCX), has become the first central counterparty (CCP) in the region to join Euroclear’s global Collateral Highway.

The Collateral Highway is the first fully open global market infrastructure to source and mobilise collateral across borders.

Scheduled for full operation in early 2014, this exclusive agreement with Euroclear will enable clients of DCCC and DGCX to use CCP-eligible securities held in Euroclear Bank - and in all other entities connected to the Collateral Highway - as collateral to fulfil initial and variation margin requirements at DCCC.

Tim Howell, chief executive officer of Euroclear, said: “Extending our global Collateral Highway to the Middle East is another milestone in our plans to improve cross-border collateral mobility.”

“It also underscores our commitment to clients and market infrastructures in the MENA region to ease cross-border flows and contribute to its appeal as one of the world’s high-growth regions. We are therefore pleased to be able to welcome the DCCC as the first CCP in the Middle East to join the Collateral Highway.”

Gary Anderson, chief executive officer of the DGCX, said: “DCCC’s collaboration with Euroclear’s global Collateral Highway will enhance distribution capabilities, help mitigate risks, lower costs and create greater efficiencies for the DGCX member community. We look forward to leveraging the strengths of both institutions to meet the collateral needs of DGCX market participants.”

Gaurang Desai, chief operating officer of the DCCC, said:  “At DCCC, it has been a constant endeavour to deepen our offerings and services to all our clearing members. As demand for collateral continues to grow, the partnership with Euroclear’s global Collateral Highway is particularly timely and important.”

“By joining forces, we alleviate one of the challenges of collateral fragmentation by facilitating the seamless transfer of collateral to the right place at the right time. By offering increased flexibility and cost efficiencies, we hope to become the CCP of choice in the Middle East and North African region,” he added.

The DCCC was established by the DGCX, the region’s first commodity derivatives exchange, as a wholly owned subsidiary to undertake all clearing, settlement and risk management functions. – TradeArabia News Service