Sultan Al Mansoori receives the members of Securities and Commodities Authority (SCA) Consultants Council and discusses the global developments in the financial markets with them
The members of SCA Consultants Council praise the procedures taken by the SCA regarding regulations and legislations and its initiatives to develop the securities markets in the State.
Dr. Obaid Al Zaabi:
The meeting discussed measures to support the infrastructure of financial markets, measures to protect investors and regulate offshore derivatives and platforms to encourage small and medium companies.
H.E. Eng. Sultan bin Saeed Al Mansoori, Minister of Economy and Chairman of the SCA Board of Directors, received, at his office in Dubai, members of SCA Consultants Council, which consists of international experts specialized in the securities industry. During the meeting, H.E. discussed a number of developments related to the international financial markets and their repercussions on the UAE markets. He also reviewed the recent global trends with regard to the securities industry, especially with regard to the need for keeping pace with the impact of accelerated technology on the work of markets and their regulators.
The SCA Consultants Council held a meeting in Dubai under the chairmanship of H.E. Dr. Obaid Saif Al Zaabi, SCA CEO, in the presence of full members of foreign experts and prominent global personalities in the field of financial markets in addition to SCA directors and consultants, as well as high-level representatives of the UAE financial markets. During the meeting, the meeting agenda topics were discussed and a number of recommendations aimed at developing the securities industry were presented.
Dr. Obaid Al Zaabi, Vice Chairman of the International Organization of Securities Commissions (IOSCO), opened the meeting with a speech in which he shed light on the most prominent projects and initiatives that the SCA is working on, and the regulations being adopted. The topics discussed during the meeting focused on investor protection, whether in terms of caveats, liabilities, litigation, OTC derivatives regulation procedures, market infrastructure, SMEs platforms, and major global developments. He noted that the SCA and markets are working together to develop governance practices, including the issuance of a governance index.
A statement issued by the SCA after the meeting pointed out that, a number of recommendations were reached during the meeting on the above-mentioned topics. At the level of Investor Protection, the recommendations included the possibility of establishing Investor Protection Funds as an important means to protect them, not stipulating provisions regulating the securities market in the companies law so that all provisions are included in the SCA law, the necessity for separating trading commissions from financial consulting commissions,the adhering to apply the requirements of suitability when selling financial products to customers, taking into account the international experiences and practices that took into account the prevention of the sale of some complex and dangerous products to individual investors, emphasizing the need to establish the requirements for accreditation and control of external auditors, and setting standards for members of listed companies’ boards.
With regard to the promotion of SMEs, the recommendations also included establishing rules specially facilitated for SMEs to facilitate listing them in the second markets, with the need to have a listing consultant, and simplifying the bond issuance by SMEs through cooperation with markets to use artificial intelligence and Blockchain, taking advantage of the global experience, in which governments allocate funding to research bodies in order to prepare research and reports on these enterprises.
In addition, the participants discussed the remarkable global technological developments with respect to blockchain, artificial intelligence, and expressed their interest in the rapid growth in the field of financial technology “FinTech” and encrypted assets, emphasizing the importance of the need for legislation regulating the same, and that the regulatory authorities should have the competencies and capabilities necessary for controlling the advanced technology.
In the context of Investor Protection, they discussed, during the meeting, the possibility of increasing the period to invite the General Assembly, the need for providing voting by electronic means for investors in the general assemblies, the possibility of appointing a body to vote on their behalf according to controls set by the SCA, and the need setting controls for proxy.
Regarding the regulation of OTC derivatives regulation, the meeting-participating experts and the SCA representatives considered OTC derivatives regulation with a commitment to central clearing and operation disclosure, taking into account the availability of a large industry volume justifying their regulation. Otherwise, risk reduction measures shall be applied to them by increasing capital requirements.
In addition, the meeting participants noted a global focus on various aspects of social responsibility (economic-socio-governance aspects) known as “ESG”, and presented their future vision that there may be an evaluation of companies from a three-dimensional perspective as well as a credit rating. They noted that non-financial disclosures have become very important to investors (in terms of social aspects - gender balance in boards of directors, etc.), in addition to focusing on KYC rules.
The experts addressed also the growing environmental sustainability, paying attention to the need for further monitoring and development, and clarifying that offering Sovereign Green Bonds is an activation of the Sustainable Finance Initiative.