Dubai
Abu Dhabi Securities Exchange (ADX) said on Wednesday it is ready both technically and logistically to provide general clearing services.
Clearing services in markets refer to activities that start when deals are reached to when a transaction is completely settled. Clearing services facilitate transactions among banks.
In a statement, ADX said the move came after the Securities and Commodities Authority (SCA), granted Emirates National Bank of Dubai the license for the service after modifications on brokerage regulations.
The approval came as part of SCA’s plans to improve performance of the UAE’s financial markets and promote them among global markets.
The license for the bank is expected to pave the way for many small brokerage companies to become full trading members. This will reduce operational costs and increase financial capabilities, ADX said.
The Exchange added that it expects the clearing service will witness high levels of activity in the coming period as many brokerage firms need this service, which will allow increased volumes of trade.
ADX said requirements to obtain clearing services include: filling a form with details on the clearing, writing a guarantee statement equivalent to Dh25 million, and obtaining SCA approval.