DFM Sharia Board issues first Islamic standards for classifying listed companies |
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Dubai, March 18, 2008: The Dubai Financial Market's (DFM)Dubai Financial Market's (DFM)
Sharia Board issued today the first Islamic standards for trading shares of DFMDFM-companies. The establishment of such standards is in line with DFMDFM becoming first Islamic financial market in the world. The first set of standards was announced during a special session held today in Dubai. The session was attended by a large number of dealers, brokers, representatives of listed companies, professors in Sharia law and members of the media.
Following the 2007 Annual General Meeting of DFMDFM, when the company announced its intention to become the world's first Islamic bourse, DFMDFM's Sharia Board has focused on the establishment of criteria to classify listed companies in terms of Shaira-compliance and accounting practices.
Essa Kazim, Chairman, DFMDFM, said: "The conversion of DFMDFM into a Sharia-compliant bourse further sets Dubai apart on the global stage as a pioneer in the key growth area of Islamic financial services. By providing ample opportunity for conventional firms to continue to serve as full participants in DFMDFM, this strategic move will benefit all our stakeholders."
Dr. Hussaim Hamid, Chairman of the DFM Sharia Board, said: "The Islamic financial industry is witnessing the fastest rate of expansion ever seen in its history. It is fitting that Dubai, home of the first Islamic bank in the world, would also be home to the first Islamic financial market. None of this would have been possible without the hard work and immense effort undertaken by the management of DFMDFM. The transformation from a conventional market to a Sharia-compliant one has been a huge undertaking, but it has gone extremely well."
Dr. Hamid added: "Trading within an Islamic financial market requires criteria that distinguish between Sharia-compliant financial instruments and conventional ones. For this reason the DFM Sharia Board developed criteria that will identify all investments in this regard. Today's meeting marks the formalisation of those criteria for classifying equities into these two categories."
The first standards include details about the trading of DFMDFM-listed companies' shares in accordance with Sharia law, as well as practical implications for brokers stemming from these regulatory changes.
The standards are divided into five sections and cover the following areas: definitions of terms and criteria; implications for brokers and investors; guidelines for compliance for conventional firms; conventional income guidelines; and general rules and regulations. These standards will allow DFMDFM to classify listed companies as either Sharia-compliant or conventional.
Dr. Hamid concluded: "The conversion of DFMDFM from a conventional market to an Islamic one has been implemented according to the principles of Sharia. We are in the process of issuing directives for investors on how to invest in financial markets according to Sharia principles. These directives will be a part of the official DFM Investor Guide, which will be made available soon."
-Ends-
About Dubai Financial Market:
Dubai Financial Market (DFM)Dubai Financial Market (DFM) was established as a public institution having its own independent corporate body. DFMDFM operates as a secondary market for the trading of securities issued by public shareholding companies, bonds issued by the federal Government or any of the local Governments and public institutions in the country, units of investment funds and any other financial instruments, local or foreign, which are accepted by the market. The DFMDFM commenced operations on March 26, 2000.
For further information, please contact:
Ghaleb Zeidan
ASDA'A Public Relations
Dubai, UAE
Tel: +971-4-3355969
Fax: +971-4-3344556
E-mail: g.zeidan@asdaa.com
© Press Release 2008
from ASDA'A Public Relations
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