Time demands delay steel contract
'Overwhelming' pressure prompts Dubai Gold and Commodities Exchange to postpone launch of steel futures contract.
The Dubai Gold and Commodities Exchange (DGCX) has delayed the launch of its steel futures contract after traders complained about a lack of information on the system and time to prepare themselves.
Originally scheduled for 27 June, the DGCX said it faced 'overwhelming' pressure from the industry to delay the launch, as more time was needed to put in place the required administrative elements, which would enable trading.
"A decision to revise the launch was taken with a view to give adequate time to the trading community to prepare itself fully for commencing trade," said John Short, executive director at DGCX.
"Overwhelming requests to delay the launch to enable all players to actively take part have compelled us to revise the start date," added Short.
While DGCX said it was ready to launch the contract, many in the industry blame a lack of information provided about how to join the scheme for leaving traders unprepared and hesitant about signing up from the start.
"There isn't enough information out there," said Arvind Sharma, managing director of Kwik Steel.
"And there definitely wasn't enough of a ramp-up on how it was actually going to work. I knew it was happening but I wasn't quite sure when, and there wasn't much of an awareness campaign."
Sharma added that he would participate in the contract if it were more transparent and the mechanism behind how it's going to work made clearer.
"I'm not aware of how one can participate, and if people don't participate from the beginning, then it doesn't make a market."
DGCX is yet to announce a new launch date. It hopes traders will be ready after the summer, but Short admitted that further delays are possible.
"Our desire would be to have enough clients in a technical position to trade by the end of August. But we have to be realistic in understanding the situation faced by those who have not previously worked in a regulated derivatives world.
"Summer is a slow time here, as well as in Europe, and we're conscious of Ramadan, which may impact on our launch intentions," added Short.