What is a Central Counter Party (CCP) and what are the advantages of using DCCC
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).
DGCX is a subsidiary of DMCC, a strategic initiative of the Government of Dubai, with a mandate to enhance commodity trade flows through the Emirate by providing the appropriate physical, market, financial infrastructure and relevant support services. DGCX commenced trading in November 2005 as the regions first commodity derivatives exchange and has become today, the leading derivatives exchange in the Middle East.
DCCC has evolved to become the largest and most diversified CCP operator in the Middle East and has handled DGCX’s clearing without a single default since inception. DCCC is the only CCP in the Middle-East that offers clearing services across asset classes ranging from Precious Metals to Energy to Equity Derivatives.
Some of the key advantages of using DCCC include, but are not limited to : –
- Acts as neutral central party to every transaction and offers neutral risk management standards. In essence, DCCC becomes the Seller to all Buyers and Buyer to all Sellers on the Exchange.
- Protected Payment System for funds settlement through Emirates NBD, Standard Chartered Bank, Bank of Baroda, HSBC, Bank of China and Industrial and Commercial Bank of China.
- Settlement Guarantee Framework with Zero defaults since inception. This is being upgraded to include a Default Fund structure with DCCC committing its own resources in line with global best practices.
- Fully integrated with DMCC Tradeflow for physical settlement of commodities using electronic warrants
- Approved by the DFSA as a recognised Exchange & CCP for DIFC firms
- Direct Member of SWIFT, Euroclear Bank & Clearstream.
DCCC operates a world class Real-Time Clearing (RTC) system provided by Cinnober Financial Technology, Sweden and offers multi-currency, multi-asset clearing capabilities where all processes are fully automated and requires minimal manual intervention. This System is also used by leading global clearing houses like LME Clear, ASX Australia, Japan Exchange Group and Johannesburg Stock Exchange to name a few.
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.