Euroclear Bank and the Dubai International Financial Exchange (DIFX) have reached an agreement by which DIFX members will be able to settle cross-border DIFX securities transactions with Euroclear Bank clients.
This agreement is the first relationship Euroclear Bank has formed withy any exchange or CSD in the Middle East.
In early 2007, Euroclear Bank will work with Deutsche Bank, its sub-custodian in Dubai, to provide access to the DIFX’s central securities depository. All Euroclear-eligible trades on DIFX will be settled in US dollars; settlement of transactions between Euroclear Bank clients can take place in any of the 36 settlement currencies currently offered by Euroclear Bank.
“Euroclear Bank is delighted to be the first foreign central securities depository to provide access to the entire DIFX market infrastructure,” says Martine Dinne, Chief Executive Officer of Euroclear Bank.”In a region where international participation is likely to grow, we aim to ease the operational path for foreign investors seeking to invest in the Gulf Cooperation Council states and other markets in the region. In parallel, we look forward to reinforcing our commitment to clients in the Middle East by providing international investor access to the DIFX.”
Per E. Larsson, Chief Executive of the DIFX, says the main effect of the deal is that investors who want to buy or sell shares listed on the DIFX can now choose to settle the trades efficiently through Euroclear Bank. “This agreement is based on growing demand from investors internationally and locally to trade DIFX shares,” he says.
Hamed Ali, Executive Officer of the DIFX, says the exchange is actively building links with regional as well as international institutions. “This process will benefit issuers and wholesale and retail investors alike,” he says.
Roger Harrold, Head of Domestic Custody Services at Deutsche Bank, adds that Deutsche Bank is glad to help create “seamless settlement capabilities for institutional clients trading in securities listed on the DIFX.”
The DIFX was launched in September 2005 and currently has 16 member banks – ABN AMRO, Abu Dhabi Commercial Bank, Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, EFG-Hermes, HSBC, Jefferies International, KAS BANK, Morgan Stanley, Merrill Lynch, Mashreq Capital (DIFC), SHUAA Capital, Standard Chartered and UBS.
Issuers on the DIFX include Aabar Sukuk (Sukuk), Albaraka Banking Group (ordinary shares), Deutsche Bank (certificates over indices), Fortune Management Inc. (ordinary shares), Gold Fields (American depositary shares), Hikma Pharmaceuticals (global depositary receipts), Kingdom Hotel Investments (ordinary shares), Man Industries (global depositary receipts), MashreqBank (Euro Medium Term Notes), National Bank of Dubai (Euro Medium Term Notes), Ports, Customs and Free Zone Corporation (Sukuk) and Rana Sugars (global depositary receipts).