UAE proposes reforms in GCC auditing systems

The UAE is proposing restructuring of auditing bodies in the emirates to cope with changes worldwide after the global fiscal distress exposed loopholes in such systems, a Saudi newspaper reported on Wednesday.

The Securities and Commodities Authority (SCA), which oversees the UAE’s stock exchanges, presented the proposal to a meeting of bourse regulators in the six-nation Gulf Cooperation Council (GCC) held in Kuwait this week, the Arabic language daily Aleqtisadiah said in a report from Kuwait.

Citing bourse officials, the paper said the participants also discussed a proposal by Kuwait to create the region’s first bourse control centre to monitor stock markets in the region to serve the interest of investors.

It said the two-day talks, which ended on Tuesday, covered the SCA’s suggestion for the restructuring of auditing bodies in the GCC and the establishment of a specialized committee to carry out this project.

“The committee should evaluate the current auditing bodies in the GCC and the global changes in this field and whether they are suitable for the region…it should suggest the necessary organizational body in the light of the world’s developments in regulations governing financial auditing in the aftermath of the 2008 global fiscal crisis,” the paper said.

It said SCA was asked to present a detailed study on its proposal for discussion by the GCC bourse chiefs at their next meeting in Abu Dhabi in April next year.

Aleqtisadiah reported the talks also covered a proposal by Kuwait to set up a joint control centre for the bourses in member states—the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman.

“Kuwait presented that initiative which is intended to serve and protect the interest of investors in the region…the initiative involves the establishment of a control centre to monitor the GCC stock exchanges…it could also be followed with the creation of a bourse data centre for the region.”

GCC states, which control over 40 per cent of the world’s proven oil deposits, have been locked in negotiations to create a common stock market through cross-listing and unification of bourse legislations as part of a landmark economic pact they signed two years after they created their alliance in 1981. The pact calls for the creation of a customs union, a common Gulf market and a monetary union, all of which have been launched.

The bourses in the six members are the busiest and most open markets in the Arab world. On Monday, 725 companies were listed on those bourses, with a combined market capitalization of around $736bn, nearly 77 per cent of the total Arab market capitalization of $948bn.

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