The Dubai Gold and Commodities Exchange (DGCX) has expanded the eligibility of collateral it accepts through a new custody deal with Standard Chartered.
Standard Chartered Bank will provide custody management services on the additional form of collateral acceptable at the exchange, and will be responsible for the safeguarding of the assets.
Clearing members of the Dubai Commodities Clearing Corporation (DCC) will now be able to use UK and US government treasury bills, bonds, and other approved fixed income securities as collateral.
“With our rich history of 60 years in the UAE, Standard Chartered is well positioned to leverage its extensive global network and capabilities to ensure our client’s financial needs are catered to in an efficient and smooth manner,” said Motasim Iqbal, head of transaction banking, UAE, Standard Chartered Bank.
Prior to the deal, only collateral in the form of cash, bank guarantees, term deposits and Tradeflow Bullion Warrants, were accepted against their margin of trading.
By expanding the range of acceptable collateral to include global securities, traders on the DGCX will be able to benefit from clearing efficiencies and help support liquidity on the exchange, according to DGCX chief executive Les Male.
“The new offering will not only add value to clearing members further helping them to deploy their assets, but will also provide additional security given its backing from one of the world’s most reputable banks,” Male added.