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21 February 2024

DFSA seeks to amend PRS rules

DFSA seeks to amend PRS rules. (EB FILE)

By Vicky Kapur

The Dubai Financial Services Authority (DFSA) is seeking to amend some of the rules in its Price Stabilisation Module (PRS) "to provide DFSA with greater disclosure in relation to price stabilisation activity in DIFC," a consultation paper sent by DFSA yesterday said.

According to the DFSA communiqué, the rationale for permitting price stabilisation, which is also permitted in other major global markets such as the UK, EU, US and Hong Kong, among others, is that it enhances confidence of issuers and subscribers, and encourages companies to raise funds from capital markets.

The current rules mandate only shares and debentures may be stabilised under the PRS, and the DFSA is proposing to enhance the scope of such 'eligible securities'. "We propose that 'eligible securities' include shares, debentures, certificates over shares or debentures, or warrants over shares or debentures," the paper states.

At present, PRS only applies to instruments publicly offered by way of a prospectus offer. The proposed amendments will enable price stabilisation activities to be undertaken in respect of any eligible securities that are admitted to trading on an AMI, subject to meeting other requirements in PRS.

The DFSA has proposed changes to price stabilisation activities for dual listings. The proposed amendments extend the benefit to certificates over shares or debentures, thereby recognising certificates as equivalent to underlying share or debenture. The paper seeks public comments on the proposals until April 22, after which the authority will enact the changes to the DFSA rulebook.


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