DFM introduces the General Clearing Membership (GCM) service

Dubai Financial Market (DFM)  has announced the launch of the
General Clearing Member (GCM) service enabling approved local banks to provide
brokerage firms with clearing and settlement service, following the completion of various
technical and regulatory arrangements as well as tuning the business model to
accommodate the new service.

With this step, brokerage firms can now outsource the clearing and settlement functions to
a GCM and focus their operations on the trading membership function only.

It is noteworthy that the regulations of the Securities and Commodities Authority (SCA)
enables brokerage firms to operate as trading and clearing member or as trading member
only, noting that the latter requires less collateral requirements as well as any other
operational cost.

The DFM has accredited Emirates NBD Bank as the first GCM service provider in line with
SCA’s approval to the bank to become GCM in local markets. Consequently, the bank has
signed agreements with its brokerage subsidiary, Emirates NBD Securities and Delma
Brokerage to provide clearing services to both companies.

Maryam Fekri, Chief Operating Officer (COO) and Head of Clearing, Settlement and
Depository Division of DFM said: “We are delighted to launch the General Clearing
Member service as well as to welcome Emirates NBD as the first GCM service provider on
DFM. This step underlines DFM’s efforts to further develop its business model in line with
international best practices of clearing, settlement and depository. We look forward to see
DFM-licensed brokerage firms utilizing this new service, which provides them the
necessary flexibility and reduces their financial and operational commitments. Brokerage
firms can now undertake the trading member role and outsource the clearing and
settlement role to a GCM.”

As the first approved General Clearing Member for the UAE equity markets, we are
pleased to support DFM’s ‘go live’ as Trading Members can now avail our trusted clearing
and settlement services,” said Tariq Bin Hendi, Executive Vice President and Head of
Products and Advisory, Emirates NBD Group. “As our service offering meets the key
industry requirement, we are confident of onboarding and servicing more Trading
Members in the near future.”