Sunday, May 15, 2016

Dubai:

The Securities and Commodities Authority (SCA), UAE’s capital markets regulator, said on Sunday it has approved a new system to organise the issuance and listing of public joint stock companies’ shares, a move taken to upgrade the regulatory and supervisory systems.

The Securities and Commodities Authority gave the approval during the board of directors’ 10th meeting held in Dubai under the chairmanship of Sultan Bin Saeed Al Mansouri, Chairman of the Authority’s board of directors.

The new system organises the terms and mechanisms of listing shares of the public joint stock companies, transformation and capital increase stages. It also regulates the terms and mechanisms of the initial public offering (IPO) and priority rights as well as the terms that govern listing shares of the foreign companies operating in the UAE, the regulator said in a statement.

“These regulations bring the capital market authority in line with international best practice. We see this as a positive development which should have a notable impact on the increase and ease of IPOs coming to market here in the UAE,” Amr Al Shamy, Executive Director - Equity Trading at Arqaam Capital told Gulf News.

The new approved system will replace the authority’s decision on the subscription rights and the ministerial resolution regarding the committees assessing quota shares of the joint stock companies as well as the ministerial decision on the price of securities. It will also replace the ministerial decision pertaining on the allocation of securities for subscribers and the revenues of IPO.

Transparency

“The book building process will add structure and transparency to new IPOs while the new law permitting the listing of foreign domiciled entities should attract more listings companies to list in the UAE,” Al Shamy said.

During the meeting, the authority also endorsed amendments on the clearing process and the financial consultation and financial analysis regulations.

The amendments included some provisions of the authority’s decision on the financial consultation and financial analysis. The move comes pursue the best international practices in this field and aims to provide more facilities for licensed companies.

As per the new amendments, the provision regarding the exclusion of foreign companies from the minimum capital requirement was annulled. The amendments also featured the amendment, addition and annulment of other articles and provisions. The board of directors also approved amendments on the regulations that govern the functioning market, trading, clearing and settlement, transfer of ownership and custody of securities.

“Finally the sections of the law governing trading of rights issues as well as omnibus accounts is a welcome addition to the markets which should improve trading efficiency and liquidity on UAE markets; ultimately generating a greater interest from broader global institutional investors. We await the full specifics of the law to get a better understanding of its mechanics as well as its total impact on UAE markets,” Al Shamy added.

By Siddesh Suresh Mayenkar Senior Reporter

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