H.E. Dr. Obaid Al Zaabi, CEO of the Securities and Commodities Authority (SCA), made statements to reporters on the sidelines of the Corporate Restructuring Summit held yesterday in Dubai, with the Abu Dhabi Global Market joining as a strategic partner.
Dr. Al Zaabi said that the Commercial Companies Law states that in case a company sustains losses amounting to half its capital, it is required to provide a restructuring plan and to have the general meeting vote on it. He added that the Ministry of Finance’s Financial Restructuring Committee, established pursuant to the Bankruptcy Law, has become ready to provide restructuring services to companies prior to bankruptcy declaration.
He said that SCA receives numerous listing applications and expects more in the coming period, especially that markets are already on the way to recovery given the strong economic indicators.
As to funding small and medium enterprises (SMEs), Dr. Al Zaabi explained that SCA is working with the Abu Dhabi Securities Exchange (ADX), the Dubai Financial Market (DFM), and other competent authorities to create funding platforms, using blockchain technology. He said that by 2020, SMEs will be able to obtain funding through a joint committee.
He reiterated that SCA is devising mechanisms for investor protection and that brokers are obliged to provide investors with booklets to acquaint them with their rights. SCA is also introducing mechanisms to help investors incapable of attending general meetings to vote online and other mechanisms for the representation of minority investors.He said that SCA introduced its new law that covers activities to be regulated by the UAE Central Bank. Dr. Al Zaabi added that there will be new regulations in the coming period, including those concerning coin offerings to keep pace with the rapid development of the digital tokens market and the subsequent response of supervisory authorities across the world.
As to performance expectations, Dr. Al Zaabi said that the market performance is generally outstanding compared to the same period last year and added that more growth is projected due to the improved geopolitical conditions, stable oil prices, improved corporate performance, stimulus and incentives offered by the government, and the fact that the economic indicators paint a promising picture of the country’s economy.
He added that opening foreign ownership limits is an MSCI requirement. He added that the Commercial Companies Law allows foreign ownership of up to 49% and that most companies have not reached this percentage yet. Accordingly, opening ownership to foreigners will maximize investment opportunities and enhance market attractiveness to institutional and foreign investors alike.