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DME Commodity Receipts (DME CR)

1. What are the categories of DME CR membership and what is the role of each membership category?

There are five categories of DME CR membership, of which four have access to the DME CR System for the purpose of transacting business electronically. These are
• “Originators”, who are traders or processors of physical commodities which may be stored in any acredited warehouses and which may be used as collateral for obtaining finance.
• “Issuers”, who are warehouse operators responsible for the storage of goods in their facilities, or collateral managers who take responsibility for the custody of goods stored in warehouses.
• “Collateral Managers/Inspectors” (“CMIs”), who may, when so requested, certify that the goods that are the subject of a DME CR conform to their description on that DME CR.
• “Security Beneficiaries”, who are financial institutions that may be prepared to provide finance to Originators using a DME CR as collateral.

There is a further category of DME CR membership, which does not enable access to the System for the purpose of transacting business. This is DME CR Associate Membership, which is designed for service providers to the commodities industry such as shipping companies, freight forwarders and insurance companies. DME CR Associate Members have the benefit of having their name associated with the DME CR System, on the DGME website and elsewhere where it will receive substantial exposure to the commodities sector globally.



2. What is the process for becoming an Originator Member?

Applicants for Originator membership must complete an Application Form, which can be downloaded from the DGME website (dmexchange.webexone.com) or obtained directly from DGME website or send to any Applicant by email upon request. The completed Application Form, together with the Application Fee and Annual Membership Fee, should be submitted to DMExchange sprl, where it will be processed, normally within a few days. Once the application is approved, DGME will allocate an “Administrator User ID and Password” to the member; the member can change this password, can nominate DME CR System users within its own organization, and can assign access rights (for purposes of transacting DME CR business) to its nominated users.


  3. Must a DME CR Member be registered or licensed as an institution, a company or government agency to be a participant in DME CR System?

It is not necessary that a DME CR Member be registered or licensed as an institution, a company or government agency. Warehouses that store goods that are the subject of a DME CR must be MGME accredited. Issuing members and CMI members must have a verified physical presence location acceped and verified by DGME as they play a direct role in dealing with the physical goods that are the subject of a DME CR. However Originator members and Security Beneficiary members need not have a verified and accepted physical location (their interaction with the DME CR System being entirely electronic).



4. How does an Originator member transact business on the DME CR System?

The DME CR System is a web-based platform. A DME CR member can login to the Trade Portal and, using its User ID and Password, access the services provided by the DME CR System.



5. Is the DME CR System a trading platform or a trade finance platform?

While it is possible for the owner of goods that are the subject of a DME CR to transfer title to those goods via the DME CR System, the System is not primarily designed as a trading platform. Its primary purpose is to provide traders in physical commodities stored worldwide with ready access to a range of financial institutions who are prepared to accept Dme CRs as collateral for the provision of finance, and to provide a convenient, cost-effective framework for the delivery of that finance.



6. Does a DME CR represent title to the goods that are the subject of that DME CR?

A DME CR is a document of title in respect of the goods described on that DME CR.


7. What is the process by which a DME CR is issued? Is it issued to the Originator?

When goods an Originator deposits goods in a warehouse controlled by a DME CR Issuing Member, that Issuing Member may issue a DME CR for those goods by
• Completing the necessary details on the “Issue DME CR” screen, and
• Electronically submitting the DME CR to the System.
At this point the DME CR is created. The Originator can view the DME CR on its “Originator Status” screen and print a copy (which is clearly marked as such) for his records. DGME  will print a “master copy” of the DME CR that it will retain at its offices, essentially as custodian on behalf of the Originator. In the event that the DME CR is to be transferred to another Member or used as collateral for a finance facility from A Security Beneficiary Member, DGME will endorse the master copy of the DME CR that it is holding on instructions electronically transmitted from the Originator. At no time does the Master Copy of the DME CR leave DGME’s custody.



8. For which commodities can a DME CR be issued?

There is no list of “approved commodities” as such, for which DME CRs can be issued. Any commodity that can be stored in a verified and accepted warehouse worldwide, or otherwise controlled by a DME CR Issuing Member is a candidate for DME CR issuance.



9. Must commodities covered by DME CRs comply with prescribed quality or other standards?

No. The DME CR System is designed to cover as much of the flow of goods through its accepted and verified worldwide locations  as is commercially feasible and hence no particular consignment of goods is ineligible for DME CR issuance simply because of its quality or description.



10. Can the DME CR system be used to transfer title of goods to a non-DME CR Member, or to obtain finance from a bank that is not a DME CR Member?

No. As outlined in the answer to Q.1 above, only DME CR members have access to the DME CR system, and DME CRs can only be endorsed by way of transfer or security using the System. Thus if an Originator wishes to transfer title of goods that are the subject of a DME CR to a non-member of the System, he will have to arrange for the DME CR to be cancelled and for the sale of the goods to be effected outside the System. Similarly if he wishes to use the goods as collateral for a loan from a non-member financier, he will have to arrange for the DME CR to be cancelled and for another form of collateral documentation to be put in place.


  11. Is an Originator guaranteed a loan using a DME CR as collateral?

No. While DME CR Security Beneficiary members are in principle prepared to provide finance using DME CRs as collateral, or otherwise to facilitate financing using structures involving DME CRs, each case will be treated by the financier on its individual merits having regard to customer and to the commodity covered by the DME CR, amongst other things.



12. Can a trading or processing company use its own warehouse facilities for the purpose of issuing DME CRs?

Fundamental to the integrity of the DME CR System, and its use as a trade finance platform, is the independence of the DME CR Issuer and the owner of the goods covered by that DME CR. Stated simply, it is not possible for the owner of goods to issue a DME CR in respect of those goods. Nevertheless it is possible for a commodity trader or processor with its own warehousing facilities to enter into an arrangement with a collateral management company that is a DME CR Issuing Member, for that Member to take control of the goods and to issue a DME CR accordingly.



13. Is the existence or quality of the goods described in a DME CR guaranteed by DGME or any other party?

DGME is the administrator and regulator of the DME CR System, and the provider of agency and custodial services, but it does not guarantee the existence of the goods, or the accuracy of the description of the goods on the DME CR.
Comfort is available with regard to the existence of the goods and the accuracy of their description on the DME CR, depending on the type to which the DME CR belongs:
• In the case of a “Standard DME CR” the DME CR Issuing Member is responsible for the quantity of the goods, as stated on the DME CR, but no party accepts liability for the accuracy of the description of the goods.
• In the case of an “Issuer-certified DME CR” the DME CR Issuing Member is liable for both the quantity and the accuracy of the description of the goods.
• In the case of a “CMI-certified DME CR” the DME CR Issuing Member is responsible for the quantity of the goods, while a DME CR CMI Member is responsible for the accuracy of their description.

This range of DME CR types is designed to provide for a range of circumstances in which DME CRs may be used to facilitate commercial transactions. Clearly the credibility of the DME CR System, and the level of comfort that it provides financiers and others, depends on the quality of DME CR Issuing and CMI Members. Applicants for these categories of membership are required to satisfy DGME with regard to their financial capacity (both in terms of balance sheet and insurances), their expertise and experience, and (in the case of Issuing Members) the standard of the warehousing facilities.



14. What are the hours of operation of the DME CR System?

The DME CR Trade Portal System, is accessible on a 24/7 basis. The business hours of the DME CR Secretariat are 8.00 a.m. to 12.00 a.m., and 2.00 p.m. to 5.00 p.m. (GMT plus 3 time), Monday to Saturday.



15. What training and Help Desk support does DGME offer for the DME CR System?

DME CR members are provided with comprehensive training in the use of the DME CR System, together with a User manual. A 24/7 Help Desk facility is available to deal with technical issues relating to the system, and questions relating to DME CR business issues can be dealt with during DME CR Secretariat business hours (see answer to Q.15).



16. What level of security has been built into the DME CR System?

The DME CR System incorporates an SSL (Secure Socket Layer) to ensure the security of information transmitted over the world wide web, and database encryption to ensure the integrity of all data. The System also has been designed with a high level of protection against unauthorized access.The System has an audit trail facility to enable all actions of system participants to be fully tracked.

If you have any questions regarding DME CRs that are not fully addressed by the above, please contact the DME CR Secretariat at:

Email: info@dmexchange.safewebshop.com
+255 746 723195/+ 255 787697554/   + 243 810070289/   + 27 768564810/     + 260 97631714/    
+ 971 50 7352699
Fax (eFax): 1-419-593-6889






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