Dr. David Rutledge

It also intends to become the second biggest trading platform for commodities after New York.

'This exchange will offer trading seven days a week, and be open from 10am to 11pm UAE time to overlap with global markets,' explains Dr. David Rutledge, Chairman and acting CEO of the DMCC.

'It is a state-of-the-art global electronic trading platform, so members can be sitting in Dubai or New York and it makes no difference. But that said one of the main strengths of the DGCX is the position of Dubai as a strategic hub in the gold industry.'

Gold imports to Dubai totaled around $10 billion last year, or some 500 tonnes. This strong position in the physical trading market will now be complemented by the creation of an options and derivatives exchange to serve both the hedging requirements of the local gold sector as well as global traders.

'We are very confident that we can build the world's second largest bullion futures market in the world in a short period of time,' says Dr. Rutledge who has more than 35 years of international experience in senior positions at New York and Sydney commodities exchanges.

His commitment to ensuring that the DGCX is well regulated to the highest world standards is also clear.

'The exchange will be an active regulator, and as the prime regulator we will regulate the participants,' he says. 'The Emirates Securities & Commodities Authority will be our regulator, and we are confident of matching the highest standards against any city in the world.'

This week the DGCX opened for membership which will be limited to 250 brokers in all its products and 250 traders in particular sectors. These seats on the exchange will also be a commodity which can be bought and sold subject to DGCX rules and regulations. The initial cost for a full broker seat is $100,000.

Starting with gold contracts in November, the DGCX will gradually expand its coverage to gold and silver options in early 2006, and then steel, fuel oil, marine fuel, cotton, freight rates and other commodities will follow. HSBC and the National Bank of Dubai have just been appointed the initial clearing banks for the exchange.

'Retail investors will be able to trade in contracts through brokers,' says Dr. Rutledge. 'And brokers may allow certain clients to trade directly through their accounts, though the broker will still be held responsible for the trade.'

With commodities markets in general still rising, and many talking about the start of a long bull market in this asset class, the timing of the DGCX launch this autumn is probably auspicious. For more details visit, www.dgcx.ae.