The Dubai Financial Market (DFM) Company has unveiled two new business entities to transform the post-trade services scene in the UAE and further protect investors.

The new establishments, Dubai Clear and Dubai CSD (central securities depository), were launched on Tuesday shortly after the stock exchange’s first virtual bell-ringing ceremony that was broadcast through a live stream.

They are the first fully licensed entities by the Securities and Commodities Authority (SCA) of the UAE securities markets and are part of ongoing efforts to improve the structure of the market and delivery of services after trading.

In addition to the functions of a stock exchange, the DFM serves both as the clearing house and depository for the stocks and bonds that are listed and traded on the emirate’s stock exchange.

With the launch, Dubai Clear will serve as a clearing house for equities, while CSD will provide central securities depository services.

“The two new independent companies for clearing and depository are a significant milestone aiming to strengthen UAE markets’ infrastructure and competitiveness,” said Essa Kazim, chairman of DFM.

“The launch of Dubai Clear and Dubai CSD is in line with DFM’s strategy to meet local and global regulatory requirements by ensuring a robust infrastructure,” he added.

According to Obaid Al Zaabi, CEO of SCA, the launch of the two DFM subsidiaries supports their objective to develop the UAE’s financial markets and to achieve full compliance with the International Organization of Securities (IOSCO) standards.

“The national independent clearing company will facilitate the development of liquidity management and the derivatives products market in the UAE,” Al Zaabi said.

As for Dubai Clear, the company will provide the central counter party (CCP) function, making it the first fully operational independent CCP company for equities in the region, according to Maryam Fekri, CEO of the Dubai Central Clearing and Depository Holding (DCCD).

“The introduction of a CCP will enhance clearing risk management and support full-fledged multi-market centralized clearing. On the other hand, the Dubai CSD…will enhance safe custody protection of investors’ securities held by the CSD as a separate legal entity. This further enhances investor protection, noting that securities are primarily safeguarded under local securities laws,” said Fekri.

Sultan bin Saeed Al Mansoori,  Minister of Economy and chairman of SCA, said the launch is a significant step towards implementing a roadmap for upgrading the UAE financial markets to advanced market status.

(Writing by Cleofe Maceda; editing by Seban Scaria)

cleofe.Maceda@refinitiv.com

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