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Qualified Central Counterparty Statement

This statement is provided with regards to Nasdaq Dubai’s status as a Qualified Central Counterparty (QCCP) under the European Capital Requirements Regulation having been recognized as a Third Country CCP by the European Securities and Markets Authority (ESMA).

Nasdaq Dubai is based in the Dubai International Financial Centre (DIFC), a jurisdiction regulated by Dubai Financial Services Authority (DFSA). It is licensed by the DFSA as an Authorised Market Institution (AMI) to provide the financial services of operating an exchange and operating a clearing house.

Nasdaq Dubai is licensed and prudentially supervised on an ongoing basis to operate as a Central Counterparty (CCP) by DFSA with respect to its services provided, in accordance with domestic rules and regulations that are consistent with the CPSS-IOSCO [1] Principles for Financial Markets Infrastructures.

European Union Third Country Ccp

In March 2017, Nasdaq Dubai was recognized as a third-country CCP [2] by ESMA in accordance with Regulation No 648/2012 of the European Parliament and of the Council of 4 July 2012. This recognition enables Nasdaq Dubai to provide clearing services to European financial institutions based in the European Union (EU).

EU capital regulations impose higher capital requirements on EU financial institutions with exposures to non-QCCPs. However, with Nasdaq Dubai’s QCCP status, EU clearing participants will be able to utilize Nasdaq Dubai’s clearing services and be subject to lower capital requirements.

Capital Requirements For Bank Exposures To Central Counterparties

Further to our consideration as a QCCP, Nasdaq Dubai is required to calculate certain data for the purposes of calculating the capital requirements for default fund exposures under the Basel Committee on Banking Supervision’s “Capital requirements for bank exposures to central counterparties” dated April 2014. [3]

Nasdaq Dubai confirms that it conducts these calculations on a quarterly basis and will make available the results of these calculations to clearing members upon request.

Disclosure Framework

The Principles for Financial Market Infrastructures requires that Financial Market Infrastructures (FMI) provide relevant information to participants, relevant authorities and the broader public. In particular, Principle 23 on the disclosure of rules, key procedures and market data states that a FMI should provide sufficient information to enable participants to have an accurate understanding of the risks and costs they incur by participating in the FMI. The following document has been prepared in accordance with Principle 23:  Disclosure Framework - FMI (August 2019).pdf

 

For questions regarding this statement, email compliance@nasdaqdubai.com.


[1] Committee on Payments and Settlement Systems (CPSS) and the International Organization of Securities Commission (IOSCO)

[2] https://www.esma.europa.eu/press-news/esma-news/esma-updates-list-recognised-third-country-ccps-1

[3] https://www.bis.org/publ/bcbs282.pdf