The Dubai Metals and Commodities Centre (DMCC) today introduced the Dubai Gold Receipt (DGR), its latest innovative tool designed specifically for gold traders. The creation of the state-of-the-art financing product is part of a strategic move to reinforce Dubai’s role as a global leader in gold trade through supporting trade-specific initiatives.
The DGR, an electronic vault receipt system, offers an efficient and effective means for the gold trade to access additional lines of finance to support the rapidly expanding gold trade of this vibrant region. The web-based system provides members with secure, real-time access to the various forms of gold bars, scrap, coins and jewelry stored in DMCC approved premises.
Speaking about the DGR, Mr. Ahmed Bin Sulayem, Chief Operating Officer of DMCC, said: “The DGR was developed by DMCC with the expert guidance of the Dubai Gold Advisory Group. Identified, as a much needed tool for the trade, DMCC innovated this product to support the specific needs of the trade.”
The system is now open for membership to gold traders, vaults and collateral managers, testers and banks as the participants of the system. When asked about the number of members who have signed up for the DGR, DMCC’s Executive Director for Gold and Precious Metals, Colin Griffith said: “DMCC has already signed up founder members from the international and regional banking sectors as Security Beneficiaries, these include HSBC, National Bank of Dubai, National Bank of Fujairah and Standard Bank. The Issuing members include Brinks, MAF Securicor and Transguard and others.”
The DGR’s are negotiable instruments and can be endorsed by way of transfer to another trader or pledged and endorsed by way of security to participating banks in order to obtain financing
Detailing the legal structure of DGR, Dr David Rutledge, DMCC’s Acting CEO, said, “DMCC acts as an independent administrator of the DGR system and is responsible for providing the legal framework, set of policies and DGR Rules that govern every aspect of the use of a DGR.”
The creation of the DGR follows the successful implementation of the Dubai Commodity Receipt (DCR) last year. The DCR applies to the broad spectrum of commodities trade and involves DMCC approves warehouses in the membership system. The DCR is experiencing a rapid uptake in usage by local and international bank members along with trade members.
