Abu Dhabi is executing a second screen for shares that were suspended from trading. Image Credit: Gulf News Archive

Dubai: Listed companies in Abu Dhabi and Dubai that have their shares suspended from trading will have a separate screen to operate from July 5.

The listings will be transferred from the first to the second category if suspended from trading for six months or more, or if its audited annual financial statements reveal accumulated losses of 50 per cent or more of the capital. This was a recommendation by the UAE’s Securities and Commodities Authority.

Displayed details will include the company’s 2019 third-quarter financial statements and its disclosures on accumulated losses of capital. This “transparency of information” will allow investors to understand precise financial position of each company and then take decisions.

Companies currently suspended from trading on Abu Dhabi Securities Exchange are InvestBank Company and Al Khazna Insurance Company.

Khalifa Al Mansouri, Chief Executive of ADX, said in a statement: “Our digital expertise will allow companies suspended from trading to resume through an independent display screen. As demonstrated during recent market turbulences, our digital infrastructure ensures business continuity and develops suitable solutions to answer specific trading needs.

Swift moves

A joint committee was formed earlier that included a representative from SCA, Abu Dhabi Securities Exchange (ADX), and supervisory authorities assigned with monitoring companies placed on the “watch list”.

The committee will assess compliance with the disclosure and listing requirements and whether necessary actions have been taken to regularize their status in line with applicable requirements within a one-year period (and extendable to three years).

The period commences on the date of the share's listing transfer to second category.

If the committee reckons that that the listed companies are able to regulate their status within the specified timeframe and meet conditions to resume trading, then it must make a recommendation to transfer the listing back to the first category.

But if the companies are unable to regularize their status within the specified period, the committee can make one of two recommendations:

• Either the company remains listed in the second category while continuing trading its shares.

• Or the stock delists the troubled company in line with the trading mechanism and operational procedures.