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Vimala Vasan

Abu Dhabi , Nov. 2

THE Dubai Gold and Commodities Exchange (DGCX) has entered into a memorandum of understanding (MoU) with the Chicago Board of Trade (CBOT), with the aim of working together for the mutual benefit of markets and customers.

The MoU, signed by the CBOT President, Mr Bernard Dan, and the DGCX Chairman, Mr David Rutledge, specifically allows for the investigation of cooperative action between the two exchanges in relation to spread margining for certain commodity contracts and permits sharing of information, as well as other areas that are mutually beneficial, according to a statement issued by DGCX.

A joint venture between the Dubai Metals and Commodities Centre, (DMCC), Financial Technologies (India) Ltd (FTIL) and Multi-Commodity Exchange of India Ltd (MCX), the DGCX will be located in the DMCC free zone.

Mr Bernard Dan, said: "Entering into an agreement with the DGCX, on the eve of its debut demonstrates our faith in the validity of the exchange. The DGCX will play a critical role in bringing risk management and price discovery to this fast growing region. We look forward to developing and growing our relationship with the DGCX."

Mr Famroze Pochara, DGCX Chief Executive, said: " DGCX is delighted to be associated in this way with CBOT.We are confident that this MoU will lead to the development of initiatives that will be of real commercial benefit to our respective members."

The DGCX will commence trading on November 22, with a 1 kg gold futures contract, to be followed by silver futures, gold and silver options and a range of other commodities contracts.

The CBOT offers its Precious Metals Complex (full-size gold (100 oz.) and silver (5,000 oz.) futures contracts, mini-sized gold (33.2 oz.) futures contracts and CBOT mini-sized silver (1,000 oz.) futures contracts) electronically. Its gold complex achieved several open interest and volume records in October.

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