Abu Dhabi: The board of directors of the Securities and Commodities Authority, SCA, has approved a new regulation for brokers and amended two other regulations.
The board approved the new draft regulation for brokers, which was prepared in coordination with the UAE markets and all other stakeholders and concerned bodies in the securities industry.
The 34-article regulation classifies brokerage firms into those which engage in trading only while the clearance and settlement operations are conducted through clearance members and those which engage in trading clearance and settlement operations for their clients.
The most significant features of the new regulation include the new classification of brokerage firms, the relatively low capital requirement to beef up liquidity on the markets and increment in the value of bank guarantee to safeguard the rights of clients. The new regulation also states that no company shall engage in brokerage activity without acquiring the SCA licence which must be renewed annually. All companies must also be registered in the SCA record book for brokers.
A number of financial market-related issues were discussed at the meeting, in addition to a new regulation for securities brokerages and proposed amendments on Regulation for Margin Trading issued by virtue of Resolution No. (25/R) of 2008 and other proposed amendments on Regulation for Trading, Clearance, Settlements, Ownership Transfer and Securities Custody, issued by virtue of Resolution No. (2) of 2001.
