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Abu Dhabi bourse issues new trading law

Law regulates procedures for managing confidential information about investors and clients

The Abu Dhabi Securities Exchange (ADX) on Sunday (26 July) issued new law for a trading, clearing and depositary system for its investors, according to the UAE’s official news agency, WAM.

The board of directors of ADX has approved the enforcement of new regulations for its operations including trading, clearance, registration and deposits of securities certificates.

“This law will determine the best practices in the financial markets in order to achieve specific tasks and market works that reflect and confirm the strength and durability of the economic situation of the United Arab Emirates,” the exchange said in a statement.

The bourse said the new law is aimed at strengthening the national economy, maintaining growth, adopting best practices for stock markets and providing high quality services to investors, in line with Abu Dhabi Vision 2021.

“The clearing management will conduct clearing operations and settlement of trades that are in the market for the securities to calculate the clearing members, in order to determine the net rights and obligations of each of them, and the settlement of emerging centres for deposited securities trading and transfer ownership, and by e-limitation,” the statement said.

The clearing member may increase the trading ceiling allowed to him through one of the following ways: increase the value of the bank guarantee, or provide an additional bank guarantee, the statement added.

The 73 articles of the new law regulate operations conducted on the exchange, as well as procedures for managing confidential information about investors and clients, defining the rights and liabilities of parties to transactions, and storing confidential information about securities ownership transfers for at least 15 years.

Article 7 provides for the creation of electronic registers of deposited securities.

The board made the decision at a meeting chaired by Chairman Hamad Abdullah Al Shamsi.