Dubai Mercantile Exchange (DME) has announced that Mizuho Bank has been approved to issue letters of credit (L/Cs) for trading on DME directly from Singapore.

Mizuho Bank becomes the first Japanese bank authorised to issue DME L/Cs directly from Singapore.

Issuers in Singapore

Tokyo-headquartered Mizuho Bank joins the handful of banks, including Rabobank and Royal Bank of Scotland (RBS), licensed to issue DME L/Cs directly from Singapore to guarantee deliveries of Oman Blend crude oil.

Established in 2007, DME is a fully electronic exchange, located within the Dubai International Financial Centre.

Efficiency improvements

In February 2014, RBS won approval to issue L/Cs on DME to guarantee deliveries of Oman Blend crude oil directly from Singapore.

The idea of the Singapore direct L/C issuers is to create a more efficient and cost-effective trading system around the exchange

Previous system

Previously, all DME customers in Singapore had to ask their local bank for an L/C for Oman Blend crude oil.

The Singapore bank would then have to ask a New York branch for a back-to-back L/C and the US-based bank would then issue an L/C for clearing.

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