The DIFX is set up as part of the Dubai International Financial Centre (DIFC), the Dubai government's initiative to create a major financial hub for the Middle East region as a whole.

Naser Nabulsi, CEO, DIFC, said: "Support from these world class  financial institutions confirms the momentum that the DIFC has generated since  General Shaikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Defence Minister, announced establishment of the DIFC. Partnering with such leaders in the financial market place is core to DIFC strategy, and also demonstrates our commitment to ensuring that our plan to develop Dubai and the DIFC as an international financial hub is a success."

Lynton Jones, Chairman of DIFX, said: "We have had detailed discussions with several of the world's major exchanges, clearing and settlement houses over the last few months about entering into partnership for the purposes of bringing the DIFX into being. We received a number of impressive bids, which made our decision very difficult. However, the conclusion we reached was that Euronext and AtosEuronext provide the best combination of market reach, trading system, international connectivity, experience and track record.

" DIFX, the first major international exchange to establish in the Middle East, will be a fully electronic marketplace that will trade a wide range of products, including equities, bonds, funds, and derivatives," added Nabulsi. The DIFX will be regulated by the Dubai Financial Services Authority (DFSA),  an independent unitary regulatory authority, responsible for the regulation of asset management, banking, securities trading, Islamic finance, re-insurance and exchanges operating in the DIFC. The DFSA is being created using principle-based primary legislation modelled closely on that used in London and New York, and its regulatory regime will operate to standards that meet or exceed those in the world's major financial centres.

"It is planned that the DIFX will initially concentrate on the trading of equities and bonds, with a derivatives market following later. The first equities to trade on the exchange will probably be Dubai-based, being extended thereafter to equities from the broader region and elsewhere."  The DIFX also plans to list Islamic instruments, funds such as ETFs and depositary receipts.

"As for the international clearing and settlement links and central counterparty services that are so important to an international marketplace, we felt that the best potential partners for the DIFX would be LCH.Clearnet and Euroclear."  "We  have therefore signed an MoU to enter into exclusive discussions with these four organisations, Euronext, AtosEuronext, LCH.Clearnet and Euroclear, for a period of two to three months. At the end of that period we expect to be able to reach an agreement on a final proposal for the definitive blueprint of the DIFX, which we plan to start live trading in the early part of 2005. We are confident that working with  such highly respected world class bodies will enable the DIFX to become the premier international capital market for the region."

Jean-Francois Theodore, Chairman and CEO, Euronext said, "We are delighted to be entering into this partnership with the DIFX. The ambitions of the government of Dubai to create a major financial centre in the heart of the Middle Eastern region are impressive and Euronext is particularly pleased to be able to participate in this project."

David Hardy, Group Chief Executive of LCH.Clearnet, said "LCH.Clearnet is very pleased to be able to join with Euronext and Euroclear in helping the DIFX develop its plan for a major financial exchange for the Gulf and Middle East region.

"The ability of this exchange to offer central counterparty (CCP) services through LCH.Clearnet will enhance significantly its attractiveness to potential exchange members in both Western Europe, the Middle East region and beyond."

Pierre Francotte, CEO of Euroclear, said: "Euroclear has for many years been providing cross-border settlement and related services for financial institutions in the Middle East and the Gulf. We have followed with significant interest the plans of the government of Dubai to create a major international capital market for the region in Dubai and are confident that we can add value to the infrastructure developments in the region. We look forward to sharing our  experience and expertise on this project with the DIFX and the other project partners," concluded Hardy.