Dubai: The UAE market regulator, the Emirates Securities and Commodities Authority (Esca) has approved the introduction of the market marker system along with three other new regulations including lending, borrowing and short-selling of securities, a move that may boost trading on the country’s stock markets and increase its chances of securing an upgrade by index compiler MSCI Inc.
The move was taken at Esca’s meeting chaired by Sultan Bin Saeed Al Mansouri, Minister of Economy and Esca Chairman.
Al Mansouri stressed the importance of market maker in supporting UAE’s financial markets — one of the main pillars of the national economy, as well as in maintaining market balance and helping attract more foreign investments.
He said the Authority has taken all the necessary measures and offered all requirements necessary to make the market maker system a success. Al Mansouri said the system was issued after an-in-depth study was conducted by a specialised consultancy company to examine the status of financial markets in the UAE and the feasibility of the system.
The study was conducted in compliance with the best international practices. The concerned parties, stakeholders and financial experts were engaged in the discussion of the draft system and collection of feedback and suggestions from partners in the market.
The Market maker system contains 13 articles revolving around the definition of market maker system requirements for market maker licence, obligations of the licence applicant in terms of administrative and technical personnel, internal control, and procedures for licence application, duration and renewal of licence. The system also covers other issues, including rules for registration of foreign market maker, functions and obligations of market maker and facilities provided to market makers. It also stipulated the jurisdictions and powers of Esca and financial markets with regard to control over market makers, violations and penalties, and reasons of suspension and cancellation of licence.
