SCA proposes new rules

In a bid to take the local bourses to the next level of maturity, the UAE’s Securities and Commodities Authority (SCA), the country’s stock markets regulator, has announced draft regulations for market making, securities lending, short selling and other liquidity providers.

The SCA published a set of four draft regulations – in Arabic – on its website late last week and is seeking feedback from stakeholders and the general public on the same.

“SCA is pleased to announce to its stakeholder and the public, the posting of draft regulations on the market making, security lending and borrowing, short selling and liquidity providers,” the regulator said in an online statement.

Feedback and comments can be submitted until November 17, 2011, the regulator said.

The Dubai Financial Market (DFM) had announced earlier this year that it was gearing up for the introduction of ‘short-selling’ and ‘securities borrowing and lending’ by the end of 2011 while announcing its full readiness to introduce the new settlement mechanism ‘Delivery versus Payment’ (DvP).

DvP was a precondition of sorts that index provider MSCI required for considering an upgrade of the DFM and its compatriot bourse Abu Dhabi Exchange (ADX) from frontier to emerging market status. Many international investors and fund managers track emerging markets closely.

With MSCI deferring its decision on the upgrade from March to end of 2011, the recent new draft proposals are being seen as initiatives that might just propel the local markets into the big league even though they are over and above the minimum MSCI requirements for an upgrade, which the local markets already meet.

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