The Dubai Commodities Clearing Corporation (DCCC) is a Dubai Multi Commodities Centre (DMCC) Free Zone Company that is wholly owned by Dubai Gold & Commodities Exchange (DGCX) and is regulated by the Securities & Commodities Authority of the UAE (SCA). DCCC functions as the Central Counter Party (CCP), offering fully integrated clearing & settlement services and collateralisation of DGCX-traded derivatives. DCCC members and their clients benefit immensely from secured settlements and capital efficiencies afforded to them via margin offsets and a wide range of acceptable collateral, compared to any other CCP’s in the region.
CCP’s benefit both parties in a transaction because they bear most of the credit risk. If two individuals deal with one another, the buyer bears the credit risk of the seller, and vice versa. When an industry regulated CCP, like DCCC, is central to a transaction, the associated credit risk burden between both buyer and seller, is borne by the CCP, thereby providing transparency, stability and a common regulatory framework to the financial markets that they operate in.
DCCC was set up with the following objectives:
- to bring and sustain confidence in clearing and settlement cycles
- to promote and maintain, consistent and straightforward settlement cycles
- to provide a counter-party risk guarantee, and
- to be a neutral party to every transaction and offer neutral risk management standards.
DCCC has successfully completed more than 2500 settlement cycles without any defaults or delays since the commencement of operations in November 2005.