A new multi-asset trading venue, the Bahrain Financial Exchange (BFX), is to begin trading on 7 February 2011, following an opening ceremony held by His Royal Highness Prince Khalifa Bin Salman Al Khalifa, prime minister of the Kingdom of Bahrain, on the first day of the month.
Regulated by the Central Bank of Bahrain, BFX will initially offer users Islamic products, currencies, commodities and equity indices through its Islamic division, Bait Al Bursa. Trading will then be expanded to BFX's conventional segment on 7 March, allowing international market participants to trade the exchange's full range of securities, structured products, Shariah-compliant financial instruments and derivatives on a single exchange environment.
The two-phased approach is designed to allow market participants to develop business in the BFX's Islamic sector before the launch of the conventional market. The launch of the BFX will also be accompanied by the start of operations of the BFX Clearing and Depository Corporation (BCDC), on 7 February.
Jignesh Shah, CEO and chairman of the Financial Technologies Group and chairman of BFX and BCDC, said the new exchange was built to address a gap in the market for a multi-asset class venue serving Middle East and North Africa (MENA), adding that it would lead to benefits for the whole region.
When it launches, the exchange will offer 10 tradable products across commodities, currencies and equity indices on its conventional platform, while its e-Tayseer Islamic trading platform will support Shariah-compliant ”Murabaha' transactions, in which the seller discloses both the market value of the instrument and the margin to the buyer. The venue is also being supported by the opening of an accredited training institute, BFX-TI.
“The launch of the Bahrain Financial Exchange will signal a significant and beneficial change in the way that financial services in the MENA region operate and interact with global markets,” said Arshad Khan, managing director and CEO of BFX and BCDC. “The exchange has a unique business model which will draw liquidity from across the region into a range of asset classes. Every element of the Bahrain Financial Exchange, Bait Al Bursa, the BFX Training Institute and the BCDC has been designed to deliver a self-sufficient and self-sustaining business built around robust technology and risk management.”
BFX is a wholly-owned initiative of Financial Technologies Group, which currently owns a network of 10 exchanges across Africa, the Middle East, India and Southeast Asia.