For Release: May 25, 2007
Washington, D.C. – Today, the Commodity Futures Trading Commission announced that it has issued an order under Section 4d of the Commodity Exchange Act allowing the New York Mercantile Exchange (NYMEX) and registered futures commission merchants to hold Dubai Mercantile Exchange (DME) customer positions and associated funds in segregated accounts. The NYMEX request for this approval relates to the exchange’s clearing of certain contracts traded on the DME.
For the Commission’s review of the request, NYMEX provided the necessary documents and information. In addition, Commission staff traveled to Dubai to meet with DME, the Dubai Financial Services Authority and other officials.
In a related matter, the Commission’s Division of Market Oversight issued a no-action letter that allows DME to make certain contracts listed on its electronic trading system available in the U.S. The no-action letter was issued pursuant to the Commission’s 2006 Statement of Policy on direct access to foreign boards of trade and is subject to a series of terms and conditions.
In addition to providing clearing services to DME, NYMEX will provide DME with technology hosting, trade practice compliance, market surveillance and other services. NYMEX will use the same risk management procedures with the DME contracts as it does with its own contracts. The Section 4d order and no-action letter are limited to the following contracts: the physically delivered Oman Sour Crude futures contract, the cash-settled West Texas Intermediate-Oman Financial Spread futures contract and the Brent-Oman Financial Spread futures contract.
R. David Gary
Last Updated: July 16, 2007