Middle East CCP to Join Euroclear Collateral Highway

The Dubai Commodities Clearing Corporation (DCCC) has signed an agreement with Euroclear to join the Collateral Highway, making it the first CCP in the Middle East to do so.

The DCCC guarantees settlement for all trades executed on the Dubai Gold & Commodities Exchange (DGCX), which is supported by a system of initial and variation margins.

Scheduled for full operation in early 2014, this exclusive agreement with Euroclear will enable clients of DCCC and DGCX to use CCP-eligible securities held in Euroclear Bank – and in all other entities connected to the Collateral Highway – as collateral to fulfill initial and variation margin requirements at DCCC.

Tim Howell, CEO of Euroclear, said the signing was another milestone in its 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,” he says. “We are therefore very pleased to be able to welcome the Dubai Commodities Clearing Corporation as the first CCP in the Middle East to join the Collateral Highway.”

Gaurang Desai, COO of the Dubai Commodities Clearing Corporation (DCCC), added: “At DCCC, it has been a constant endeavour to deepen our offerings and services to all our clearing members. 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.”