Business | Markets
Cabinet approves buyback option
The UAE government on Monday continued its efforts to support the country's financial system and capital markets by allowing companies to buy-back shares even during the periods specified by the companies law.
- By Ahmed A ElewaSenior Reporter
- Published: 23:28 October 13, 2008
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Abu Dhabi: The UAE government on Monday continued its efforts to support the country's financial system and capital markets by allowing companies to buy-back shares even during the periods specified by the companies law.
The Cabinet headed by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, approved the exceptional measure given that the disclosure of the third quarter results can delay the practice.
"Given the exceptional circumstances, the Cabinet aims at providing the maximum ease and flexibility for companies willing to buy-back shares in accordance to their respective strategies and policies," commented the Minister of Economy, Sultan Bin Saeed Al Mansouri.
The Minister issued a directive, in his capacity as the chairman of the Securities and Commodities Authority (SCA), to form a special committee that includes specialised experts to accelerate the assessments and approvals for buyback applications to support shareholders as well as the markets' performance.
"The exceptional decision will be applied in accordance with the regular criteria for allowing buy-backs, and the authority will ensure all the technical requirements to prevent any speculative trading or abuse," revealed an SCA official.
The requirements for buy-back include publishing an advertisement in two daily newspapers, and executing the buy-back after two weeks of the announcement. Regulations also prohibit any buy-back within 15 days prior to, and three days after, quarterly financial disclosures.
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Meanwhile, Abu Dhabi Securities Exchange (ADX) on Monday urged listed companies to bring forward the third quarter results, in a move that aims at the prevention of rumours among investors.
The deadline set for disclosing third quarter results is November 15, yet the market seeks the listed companies' for its endeavour, given the turbulent times when rumours find listening ears from worried investors.
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