DFSA Signs Regulatory Protocol with CFTC
New York, December 1, 2005: A Regulatory Protocol was today agreed between the Dubai Financial Services Authority (DFSA) and the Commodity Futures Trading Commission (CFTC).
The Protocol was signed by David Knott, Chief Executive of DFSA, and Reuben Jeffrey III, Chairman of the CFTC, at a ceremony in New York.
CFTC is the primary regulator of commodity derivatives trading in the United States with responsibility for some 24 exchanges and clearing houses. It is the home regulator of NYMEX Inc (Nymex) which has announced its intention to establish the Dubai Mercantile Exchange (DME) in a joint venture with Dubai Holding, the commercial arm of the Dubai Government next year. DME is in discussions with the DFSA and is finalising its licence application for lodgment early next year.
Mr. Knott said:
“The relationship between DFSA and CFTC will be important to ensure effective and coordinated regulation of the proposed DME. Much of the technical operating and clearing platform of the new exchange will be provided by NYMEX and it is expected that some key activities will be processed through NYMEX’s existing infrastructure in New York. It is therefore essential that DFSA has a strong working Protocol with CFTC to ensure adequate cooperation and information sharing on regulatory matters.
The signing of this Protocol will assist cooperation between the two regulators in both the establishment phase of DME and during its subsequent ongoing supervision.”
Dr Habib Al Mulla, Chairman of DFSA, said:
“Establishment of DME within the DIFC next year will be facilitated by this new Protocol between DFSA and CFTC. The commercial partnership between Dubai Holding and NYMEX is now underpinned by a formal relationship between the two regulators. This provides increased confidence that cross border regulatory issues will be effectively coordinated.”
Prior to signing the Protocol with CFTC, Mr. Knott met with senior officials of NYMEX to discuss their planned operations in the DIFC. He then visited the Nymex futures trading floor during which he rang the opening bell to commence the day’s trading on the exchange.