The Dubai Financial Market (DFM) said it has admitted Al Ramz Capital as the first Regulated Short Selling (RSS) Service Provider to focus on providing market participants with a diversified array of products and services that enhance trading activity and market liquidity.
The Regulated Short Selling enables investors to short securities listed on DFM through selling borrowed shares with a commitment to return to the lender based on the mutually-signed agreement.
To implement RSS, the brokerage firm has to ensure that the borrowed securities are located in the client’s account before placing a short-selling order, with exception of DvP clients, as a lending confirmation is sufficient to proceed with the order. The RSS complements the Securities Lending and Borrowing activity whereby approved lenders can lend securities to approved borrowers for settlement of RSS trades.
Ayman Ghoneim, Chief Operating Officer of Al-Ramz Capital, said: “Short Selling aims to increase the level of liquidity and will contribute to increasing volumes and trading values. This mechanism will create a buyer at each point, which will result in enhancing investment opportunities and creating better risk management environment and the possibility of making profits from stock markets in the event of a downturn.”