Dubai: The UAE’s capital markets regulator has asked the brokerages to sell shares of clients if they don’t replenish any shortage in margin within two days of such intimation, as per the law.
The Emirates Securities and Commodities Authority (ESCA) has asked the brokerages to inform clients of any shortage in margins in the accounts on a daily basis.
The statement comes after the Dubai Financial Market General Index shed more than 25 per cent since the start of the month, and many said leveraged trades were partly responsible for huge losses on the DFM compared to other exchanges.
The ESCA said in a statement that they don’t spare any efforts in monitoring the commitment of companies, and conduct supervisory visits, routine inspections, and look into complaints on margin trading.
“They are just concerned about the amount of leverages in the system, and making sure that there are sensible monitoring system in place,” said Saleem Khokhar, head of equities, National Bank of Abu Dhabi Asset Management Group. “It’s something that put discipline in place.”
The ESCA has asked people concerned to complain of any unsound practices of violations in margin trading and has assured of looking into complaints and take necessary action.
