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Dubai CCP steps up collateral mobility
11 September 2013
Dubai Commodities Clearing Corporation is first in the region to join Euroclear's collateral hub
Dubai Commodities Clearing Corporation
The Dubai Commodities Clearing Corporation (DCCC) has signed up to Euroclear's global Collateral Highway, becoming the first central counterparty in the Middle East to join the initiative.
Clients of the DCCC and Dubai Gold & Commodities Exchange (DGCX) will be able to use CCP-eligible securities held in Euroclear Bank and other financial entities connected to the Collateral Highway as collateral for initial and variation margin requirements at DCCC.
Tim Howell, CEO 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.
Euroclear’s collateral hub has been designed as a fully open global market infrastructure allowing participants to source and move collateral across borders. Since opening in July 2012, Euroclear said it was now transporting almost €800bn of securities a day.
The service is scheduled to be in full operation by early 2014.
Gaurang Desai, chief operating officer, DCCC, said: “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.”
Gary Anderson, CEO of the DGCX, said the move would 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," he added.