Abu Dhabi: The Securities and Commodities Authority (SCA) has announced a draft resolution on the practice of clearing activities in UAE capital markets, urging all parties concerned to send their feedback on the draft not later than September 17, 2017, before its entry into force.
According to the draft, which excluded UAE banks and branches of licensed foreign banks, a no-objection certificate (NOC) from the UAE Central Bank is crucial for the approval of clearing activities — besides the provision of all needed IT infrastructure, a convenient location, qualified staff and an internal supervisory guidebook to ensure full application of all relevant rules and regulations.
The 11-article draft stipulates that a payment of Dh50,000 is required to get an SCA approval of a clearing activity, in addition to providing collateral in the form of either a letter of bank guarantee or a financial amount, with the possibility of providing both options, in order to ensure fulfilment of a clearing agent’s commitments to clients.
As per the resolution, the SCA shall oversee on a regular basis or without notice the activities of clearing agents in order to ensure their compliance to all relevant laws and regulations and investigate all possible violations and complaints.
The SCA, as per the resolution, shall take all necessary measures against potential violators, ranging between warnings, suspensions of no more than two months and disqualification.
