Nov 07 2011 |
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U.A.E. Regulator Proposes New Rules On Short-Selling
Monday, Nov 07, 2011
DUBAI (Zawya Dow Jones)--The main markets regulator in the United Arab Emirates has published draft rules that would permit short-selling for the first time, in a bid to revive market activity and attract foreign investment.
The Securities and Commodities Authority , or SCA , published four sets of draft rules on its website, governing market making, short selling, the provision of liquidity and securities lending. It said it is seeking comments on its proposals from market participants by Nov. 17.
Short selling is not currently permitted on the U.A.E.'s two markets, the Dubai Financial Market and the Abu Dhabi Securities Exchange .
The SCA has been considering the rule change for a while, in a bid to improve trading on local markets which have suffered from a sharp drop in liquidity since the 2008 financial crisis.
Many brokerages in the U.A.E. have been under pressure as a result, with several cutting down or closing their operations in the past few months.
U.K.-based banking giant HSBC Holdings PLC (HBC) said last month it will close its U.A.E. retail brokerage business in December and instead focus on institutional clients.
Index compiler MSCI Inc. is due to decide in December whether it will upgrade the U.A.E. to emerging markets status from its current "frontier" status, a move that would likely encourage more foreign interest in local shares. The move to permit short selling should help the U.A.E.'s case for an upgrade in its status, though it isn't a requirement for the upgrade.
By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; leila.hatoum@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
07-11-11 1143GMT
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