United States IRS Recognizes DME as 'Qualified Board or Exchange'
The Dubai Mercantile Exchange Limited (DME) announced that the United States Internal Revenue Service ("IRS") has issued a public ruling (Revenue Ruling 2009-4) that the DME is now recognized as a "qualified board or exchange" within the meaning of the Internal Revenue Code.
Commencing with DME contracts entered into or after on February 1st, 2009, the IRS ruling allows U.S. taxpayers to elect to treat the gain or loss recognized with respect to DME contracts as 40% short-term and 60% long-term.
Commenting on the announcement, Ahmad Sharaf, Chairman of the DME stated, "This ruling recognizes the robust framework put in place when we initially established the DME. The DME is regulated by the Dubai Financial Services Authority (DFSA) with further regulatory approvals, no objection or legal opinions from 23 other global regulators, and sold 72 memberships to blue chip financial institutions and energy trading firms in its first year of operation. These achievements clearly underline the importance that the Exchange places on maintaining international best practices and standards, and we believe that this latest ruling further reflects the DME's success in this regard."
Thomas Leaver, CEO of the DME added, "We are currently finalizing the migration period which will transition the DME contracts to CME Globex, the world's largest electronic trading platform, which will dramatically increase the exposure of DME contracts to the global trading community. We believe that this recognition from the IRS as a qualified board or exchange, and the related tax benefits to traders domiciled in the U.S.A, will further attract new market participants."