SCA and ADX hold joint awareness-raising seminar on market makers and liquidity providers

The Securities and Commodities Authority (SCA) and the Abu Dhabi Securities Exchange (ADX) organized a joint awareness-raising seminar for the country’s financial sector personnel, including representatives of listed companies and financial brokerage companies. This comes as part of the efforts of both parties to promote the role of market makers and to maximize the benefits of the positive impacts they have on markets.     

The seminar, held at ADX’s headquarters, was presented by Omar Al Serkal, Head of Market Surveillance. He covered a number of important areas related to market making and said that it mainly depends on providing continuous prices for the purchase and sale of a certain security with the aim of increasing the liquidity in such security in line with the provisions of the relevant regulations.

The seminar gave an overview of the legal amendments that helped to enhance market making regulations and to bring them in line with international standards and practices. The lecturer explained the difference between liquidity provision—a service under which a market maker undertakes to improve the liquidity of a security based on a liquidity provision agreement with the issuer of that security—and liquidity provider, which means a market maker engaged with an issuer of a listed security in order to provide liquidity on that security in accordance with the provisions of this regulation.  

 The seminar introduced the audience to the jobs accredited by SCA for the practice of market making and highlighted the role played by market makers and their positive impact on the market in terms of promoting liquidity, lowering transaction costs, reducing volatility, and improving daily turnover of listed securities. It also dealt with facilities granted to market makers and their obligations.

At a previous meeting, the SCA board ordered that a study be made on the performance of market makers, the challenges faced, and how to promote their role in raising trading values and volume, in accordance with international practices. It is worth mentioning that SCA will organize another similar seminar in the coming period in collaboration with the Dubai Financial Market. 

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