10 Jul 2010
UAE (Dubai)
The move is part of an outsourcing strategy to increase trading volumes on NASDAQ Dubai and strengthen Dubai’s role as a centre of capital markets activity. At the same time, clearing, settlement and custody functions for NASDAQ Dubai equities will also migrate to DFM’s systems.
Welcoming DFSA’s decision, Jeff Singer, Chief Executive of NASDAQ Dubai, said: “Working closely with DFSA and our market participants, we have met a challenging timetable for the outsourcing. The new structure will provide DFM’s 520,000 individual investors with easier access to NASDAQ Dubai equities. It will also provide institutional investors, including those based overseas, with the same easy access that they currently enjoy.”
A spokesperson for DP World, the most heavily traded company listed on NASDAQ Dubai, said: “We are delighted that NASDAQ Dubai and DFM are taking active measures to increase regional investor access to trading shares listed on NASDAQ Dubai and improve liquidity. We look forward to working alongside Nasdaq Dubai to attract greater liquidity from the regional markets. We will work with NASDAQ Dubai to ensure fungibility with our planned dual listing."
A number of NASDAQ Dubai secondary share listings have full fungibilty with their listings on other international exchanges. These arrangements will remain in place after the outsourcing. NASDAQ Dubai is ready to work with all its listed companies to put in place fungibility arrangements that would potentially generate and facilitate greater liquidity.
In May 2010 DFM became the majority owner of NASDAQ Dubai through an acquisition of shares from Borse Dubai and NASDAQ OMX, the international exchange group.
NASDAQ Dubai remains a separate company regulated by the DFSA, the financial services regulator inside the Dubai International Financial Centre (DIFC). It retains its own legal framework, listing rules and Members.
Under the outsourcing, NASDAQ Dubai’s equities will remain listed on NASDAQ Dubai and will not be listed on DFM. Trading of equity derivatives will continue to take place on NASDAQ Dubai’s own trading platform and systems.
NASDAQ Dubai is making changes to its market model in order to facilitate the successful outsourcing of its trading, settlement, clearing and custody functions for equities to DFM systems. Some of these changes are reflected in amendments to NASDAQ Dubai’s Business Rules while others consist of revised operating procedures. All will become effective on 11 July, 2010.
