The Emirates Securities and Commodities Authority (Esca) has approved margin trading after making slight amendments to the system that decides the percentage of the initial margin and the maintenance margin.
Abdullah Al Turaifi, Chief Executive of Esca, said the approval of the margin trading system followed a careful study of the best systems and practices in world markets. The move will boost the confidence of those dealing in the market and attract more investments, he said.
According to Al Turaifi, several months ago Esca placed the draft decision on its website, asking financial and legal bodies, investors and specialists for their remarks. Several suggestions were received, which helped in developing the final formula of the system. Discussions were also held with a committee of brokers and financial market experts, he said.
Mohammed Ali Yasin, Managing Director of UAE Stocks and Bonds, highlighted the positive side of the margin trading system, saying it was needed at the moment to develop the country's financial markets and improve their efficiency to meet global criteria.
Meanwhile, Dr Humam Al Shammaa, economic adviser of Al Fajr Securities, said margin trading was necessary, especially after the Esca decision to separate accounts of brokerage companies and customers.