Dubai Gold & Commodities Exchange (DGCX), the leading commodity derivatives exchange in the Middle East serving global markets, and Nasdaq announced today that they have signed a major market technology agreement for the delivery of a full suite of integrated marketplace solutions to DGCX. The agreement covers a range of solutions on the Nasdaq Financial Framework, including multi-asset trading and real time clearing capabilities, as well as pre-trade risk management, market intelligence and market surveillance.
We met with Les Male, CEO of DGCX, to learn more about DGCX diverse product portfolio, and how this technology investment plays in to their vision ahead.
1. DGCX initially launched in 2005, can you please tell us a bit about your mission and the journey to becoming a leading market in the Middle East?
The DGCX Group has been on a remarkable journey over the last 15 years. When we commenced operations in 2005, we only had a couple of products. Over the years, we introduced more contracts and asset classes to diversify our product portfolio, while, at the same time, constantly reviewing and making changes to our existing services. Today, DGCX offers a diversified portfolio of derivative products, with electronic trading made accessible from anywhere in the world.
We are the Middle East’s leading and most diversified derivatives and commodities exchange, and a true pioneer in the development of the region’s derivatives marketplace. The DGCX now plays a vital role in strengthening the physical commodities and forex market across the region by providing hedging tools and mechanisms that allow market players to transfer and manage risk within a well-regulated environment.
2. Can you tell us a bit more about DGCX’s product portfolio – which are the most traded products today, and where do you see most growth potential for the future?
The DGCX’s product suite is divided into four asset classes – Currencies, Metals, Hydrocarbons and Equities. Our Gold Futures contract is our flagship product, and the first contract we ever launched; this year it has recorded year-to-date volume growth of 81.8% and has facilitated further contract development with our Shari’ah spot gold offering.
However, I would say our Indian Rupee (INR) FX contract is our jewel in the crown. We provide access to the world’s largest pool of offshore liquidity for exchange-traded INR-USD currency product – something we are extremely proud of.
This success in the FX space has paved the way for our recent expansion of our Currencies portfolio. Last month we launched a Weekly INR Futures Contract to provide market participants with short-term hedging and arbitrage opportunities, and we also launched three innovative FX Rolling Futures contracts – Euro, Pound Sterling and Australian Dollar against the US Dollar.
The FX market in MENA has been gathering pace, with investor appetite significantly increasing over the last few years, and we anticipate further growth in this area.
3. What is your vision for DGCX’s position ahead, and how does this major technology upgrade play into that?
In line with our vision to become the Exchange and Clearing House of Choice in the GCC (Gulf Cooperation Council), the DGCX has been particularly focused on partnerships and collaborations in recent months that will improve and upgrade the quality of our products and services.
Our latest agreement with Nasdaq is an example of this, providing the DGCX with full high-velocity multi-asset class clearing, settlement and risk management capabilities, enabling us to provide our members and their clients with ever increasing levels of service performance. In particular this technology upgrade will enable DGCX to deliver a key part of its strategic vision for its clearing house DCCC to provide services to other market infrastructure providers in the region and globally.
4. DGCX has won multiple awards over recent years, what do you think is the key to your past and future success?
First, we pride ourselves on being a member led Exchange. We are constantly working with our clients and investors to identify new trends and opportunities, receive feedback, and ultimately improve our services. And secondly, we strive to give our clients products that are innovative and add value, rather than lookalike products that are available on other Exchanges. This is what has been reflected in our award success to date, and we will continue to do so moving forward.