DIFX, the regional securities market being set up within the Dubai International Financial Centre (DIFC), is planning to introduce the concept of Dubai depository receipts (DDRs).

DDRs are likely be tailored along the lines of American depository receipts (ADRs) or global depository receipts (GDRs) which are issued by well established markets such as those in New York, London and Luxembourg.


An artist's impression of the proposed Dubai International Financial Centre.
Lynton Jones, the chairman of DIFX, told Gulf News that DDRs will help eliminate the obstacles to the companies established outside UAE being listed on DIFX.

Since DIFX eyes reputed companies interested in the secondary listing on DIFX, from within as well as outside the region, the DDR route can play a major role in attracting such companies into DIFX.

These companies can structure tranches of their stocks into bundles and can be issued in the form of DDRs denominated in dollars, since all the transactions within the DIFC will be in dollars. This will eliminate the complication associated with the DIFX trading of stocks from different countries denominated in different currencies.

Suresh Kumar, general manager of Emirates Bank Group, said DIFX's unique selling propositions (USPs) will have to be well-defined and appealing to the global financial community.

"In the past, cross-listing efforts by Omani, Kuwaiti and Bahraini Exchanges, such as for Arig or Q-Tel, have not been runaway successes. Part of the problem has been the relatively low liquidity and trading volumes in the regional exchanges," Kumar said.