He said the BFX, which is located in the Bahrain Financial
Harbour, has a unique business model which will also lead to a significant fund
flow from both institutional and retail customers across the whole region.
The exchange will be rolled out in two phases - its
Islamic division (Bait Al Bursa) will start its e-Tayseer platform on Feb. 7,
2011, followed by its conventional platform on March 7, 2011.
"The BFX, which is licensed and regulated by the
Central Bank of Bahrain, will offer unique benefits to its users. The
multi-asset internationally accessible platform provides end users
opportunities to manage risk, raise capital and to invest," Hewett told
Arab News in an exclusive interview.
The two-phased approach is designed to give market
participants sufficient time to market and develop business in the BFX's
Islamic sector in advance of launching the conventional market, he said.
Hewett said the BFX platform for multi-asset class
trading will offer market participants the ability to trade multiple asset
classes through its sophisticated plug-and-trade trading floor and modern
facilities.
The BFX product portfolio can be split into three main
categories: Cash instruments, derivatives instruments and Shariah-compliant
financial instruments.
When it launches, the exchange will have 10 tradable
products on its conventional platform, including commodities, currencies and
equity indices as well as e-Tayseer on its Islamic platform.
Other products will be rolled out in due course, he said.
The BFX, which is a member of the Futures and Options
Association (FOA), the International Islamic Financial Market (IIFM), the
Accounting and Auditing Organization for Islamic Financial Institution
(AAOIFI), and a member of the Associations of Futures Markets (AFM), is
supported by the Financial Technologies Group (FT Group) network of 10
exchanges, considered to be the world's second largest. This extensive network
connects fast-growing economies of Africa, Middle East, India and Southeast
Asia.
When asked what will be the role of the Bahrain Financial
Training Institute (BFX-TI), which was set up by the BFX, Hewett said,
"this institute's internationally-accredited programs cater to all, not
only Bahrainis. Being in Bahrain, however, we take pride in empowering
Bahrainis. We actively recruit top Bahraini talent and train them on the
various aspects of the business of exchanges."
The BFX-TI will also supply much-needed financial
practitioners to the market, making Bahrain the leading supplier of financial
talent to the region.
The BFX-TI also trains people in various soft skills such
as management, leadership, and so on, he added.
While comparing the BFX and the London Metal Exchange
(LME) - the world's premier metals and industrial materials exchange, Hewett,
who worked earlier as deputy commercial director of the LME, said the LME is
specialized in futures and options contracts for non-ferrous metals in products
such as zinc, copper, aluminum,
tin, nickel and so on.
The BFX is a much broader concept because it is a
multi-class asset exchange, allowing members to trade in a variety of cash
instruments, derivatives, structured product and Shariah-compliant financial
instruments while being also internationally accessible.
Being a multi-class asset exchange, the BFX allows users
real portfolio diversification and risk management.
