Dr. Obaid Al Zaabi responds to press questions at a media briefing on the sidelines of Gitex Technology Week Exhibition
Dr. Obaid Al Zaabi:
The new amendments to SCA's law will provide for tougher penalties on violators.
We are currently working on issuing regulations dealing with preferred stocks and on developing the second market.
Regulations concerning futures and options will be issued in the first half of next year.
Dr. Obaid Al Zaabi, Acting CEO of the Securities and Commodities Authority (SCA), stressed that the new amendments to SCA's law will provide for tougher penalties on violators. In press statements made on the sidelines of the Gitex Technology Week Exhibition yesterday, he said that SCA has been working to devise a plan for exploring the future prospects of the domestic financial markets, covering the next thirty-one years. Dr. Al Zaabi added that SCA is also working to get the UAE stock markets upgraded from emerging to developed market status by MCIS, the index compiler, by 2020.
He also made it clear that SCA is drafting a number of regulations, expected to be issued in the coming period, to further develop the domestic financial markets and that it is currently working to develop the second market. He added that there are further regulations under development, including those concerning preferred stocks, special purpose vehicles (SPVs), and derivatives, explaining that preferred stocks have characteristics that make them distinct from common stocks and that they are similar to bonds in terms of voting rights and dividends. Dr. Al Zaabi stressed that SCA is working with the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) to issue regulations dealing with futures and options, indicating that these regulations will come into effect in the first half of 2018.
Dr. Al Zaabi noted that SCA is looking forward to developing regulations concerning the second market, which are expected to be issued in the first quarter of 2018. These regulations will include fewer governance conditions and more corporate facilities to encourage listing. He said that SCA was the first to launch the second market for private joint-stock companies and added that the market will list various forms of companies upon meeting certain conditions.
Responding to a question about the merging of ADX and DFM, Dr. Al Zaabi said that the merger decision is up to the administration of both markets. He added that SCA has issued several rules dealing with mutual funds and the promotion of units and that it developed corporate governance regulations, which contributed to consolidating the country's position on the World Bank's Ease of Doing Business Index. The country ranked third on the minority investor protection index, compared to eleventh last year. It also ranked twenty-fourth on the Financial Development Index and ninth on the strength of the investor minority protection index, jumping from forty-ninth last year.
Dr. Al Zaabi said that SCA is planning to introduce new amendments to its law, most notably those concerning imposing tougher penalties on violators, explaining that the existing penalties are not enough to deter violators and that the new, revised law will handle this. He stressed that the improved performance of listed companies led to an improvement in the performance of financial indicators in terms of trading values.
Dr. Al Zaabi expected that two new companies will be offered for public subscription in the UAE markets before this year is over. He said that several companies are planning to offer their shares for subscription in numerous sectors, including the oil, distribution, chemicals, aluminum, banking, insurance, and retail sectors. He said that the futures and options regulations will be ready by the end of this year.