DIFX signs agreement with TCS for Central Counterparty Clearing system that will be unique in Middle East



The Dubai International Financial Exchange (DIFX) has signed a contract with Tata Consultancy Services (TCS) under which TCS will supply software systems that will support Clearing and Settlement services for the DIFX.

The agreement is another significant development in the creation of the DIFX’s infrastructure, following its announcement last month that its automated trading platform will be provided by AtosEuronext. The DIFX plans to open for trading on September 26th, 2005.

Clearing at the DIFX will take place through a Central Counterparty (CCP) system, under which the DIFX Clearing House will guarantee that trades between its members will be honoured.

Steffen Schubert, Chief Executive of the DIFX said: “CCP systems are used by some major international exchanges in other parts of the world. However, the DIFX will be the first in our region to have such a sophisticated system. Our CCP system will promote international confidence in our market, by eliminating the default risk and increasing efficiency. This will encourage members, issuers and investors to participate in the creation of a world-class exchange.

“By partnering with first-class companies, the DIFX is creating the leading international exchange in its region. It will be highly attractive to the regional and international financial and business community.”

The eClearSettle system to be supplied and customised by TCS is a state of the art system, providing full post-trade management including Clearing (with CCP and Multilateral Netting), Central Securities Depository with Delivery versus Payment (DvP) Settlement, and Registry services.

The system will allow the DIFX to offer its members the very best Clearing and Settlement services through browser-based interfaces.

S. Ramadorai, managing director and chief executive of TCS said: “We are delighted that the DIFX has chosen our eClearSettle platform for providing world-class Depository, Clearing and Registry services. It gives us an opportunity to leverage our global experience in the financial services space to contribute to the success of this strategic initiative and to the advancement of the region.

“We are proud to be part of this ground-breaking initiative by the DIFX to develop an international financial exchange in Dubai."

The DIFX is located in the Dubai International Financial Centre (DIFC), a financial free zone that opened for business in September 2004. As it progresses towards its launch, the DIFX is holding detailed discussions with potential members and issuers and is applying to the independent regulator of financial services inside the DIFC, the Dubai Financial Services Authority, for a licence to operate as an exchange.

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