“The SCA will have regulatory and oversight jurisdiction while the ADX will have operational and executive jurisdiction,” Dr. Maryam Butti Al Suwaidi

“Some powers were transferred to the ADX including approving listings and buybacks,” Saeed Hamad Al Dhaheri 

Abu Dhabi—September 1, 2021: As part of the efforts of the Securities and Commodities Authority (SCA) to promote the securities sector, and pursuant to Federal Decree Law No. 22 of 2020, which distributes powers between the SCA and the licensed securities and commodities markets operating in the UAE to enhance the efficiency of securities transactions, the SCA and the Abu Dhabi Securities Exchange (ADX) signed a cooperation protocol establishing a general framework for coordinating joint efforts to implement the decree law. The SCA’s Acting Chief Executive Officer, Her Excellency Dr. Maryam Butti Al Suwaidi, signed the protocol with the ADX’s Chief Executive Officer, His Excellency Saeed Hamad Al Dhaheri, in the presence of His Excellency Mohammed Khalifa Al Hadari, Deputy Chief Executive Officer for Supporting Services at the SCA, and Khalid Al Zaabi, Executive Director of Licensing, Surveillance, and Compliance at the SCA.

In accordance with the provisions of the decree law, the protocol provides a comprehensive coordinating framework regarding the powers exercised by each party. While the SCA will have regulatory and oversight jurisdiction, the ADX will have operational jurisdiction. The protocol also establishes channels of communication between the parties and notification periods and methods.

Following the signing, Dr. Al Suwaidi said that “this protocol translates into action the Federal Decree Law No. 22 of 2020 and complements the self-regulatory model adopted by the SCA since 2016, thus allowing it to grant the markets specific powers,” explaining that “the markets will exercise operational and executive powers while the SCA will carry out its regulatory role (by introducing legislation and regulations) and perform oversight functions over the markets and other financial market institutions, such as securities brokerage firms, analytics companies, financial consultancies, etc.”

“This cooperation protocol acts as a coordinating framework whereby roles and communication channels between the two parties are identified in a manner that does not contradict the regulations and governing decisions in place. It is a product of ongoing and sustained cooperation between the SCA and the markets to promote the securities sector in particular and the UAE economy in general,” she concluded.

For his part, Al Dhaheri said: “We are pleased to have signed with the SCA this cooperation protocol, which allows for the introduction of new decisions and internal regulations that will help to encourage listings and develop innovative investment mechanisms and vehicles. This will in turn enhance liquidity and enable the markets to implement these regulations more effectively and efficiently. Accordingly, this protocol is in the best interest of all market participants and interested parties.”

“Since Federal Decree Law No. 22 of 2020 was enacted, the ADX focused primarily on promoting its performance and competitiveness through the introduction of modern processes and systems to facilitate this task. Under the cooperation protocol, the ADX will be able to perform a greater role in advancing Abu Dhabi’s economy. The transfer of powers will create a more attractive environment for companies and the investing public at the regional and international level, which will have positive implications for doing business and the economy as a whole,” he concluded.

Under the protocol, it has been agreed to transfer the following operational powers to the ADX: approving listings, approving buybacks, and setting controls for shareholder registers in public joint stock companies, distribution of dividends, and member affairs in market institutions.