Holding a meeting chaired by H.E. Sultan Al Mansoori
Amendment of the Regulations on Trading, Clearing, Settlement, Transfer of Ownership and Custody of Securities
Approving the rules governing the accreditation of in-kind share evaluators of public joint-stock companies
SCA is among the top ten federal government bodies in a positive work environment
Adoption of the Guide to the Regulatory Philosophy of the Securities and Commodities Authority
The board of directors of the Securities and Commodities Authority (SCA) held its tenth meeting, chaired by H.E. Eng. Sultan bin Saeed Al Mansoori, Minister of Economy and Board Chairman, in Dubai.
The meeting discussed a number of initiatives aimed at developing the financial activities and services related to the securities sector in the UAE to match the best international standards and practices. The meeting addressed, according to the agenda, a number of important subjects and issues related to the securities sector, as detailed below:
Amendment of the Regulations on Trading, Clearing, Settlement, Transfer of Ownership and Custody of Securities
As part of SCA’s and the markets’ endeavors to develop the financial sector and upgrade the local markets from "emerging" to "advanced" by meeting the standards of the indices providers and based on the recommendation and request of the Market Promotion Committee composed of SCA and the financial markets in the country, SCA’s board approved the amendment of the provisions of Articles (31) and (34) of the Authority’s Board of Directors’ Decision No. (2/R) of 2001 regarding the Regulations as to Trading, Clearing, Settlement, Transfer of Ownership and Custody of Securities, which regulate the dates and mechanisms of settlement in the trading in the financial markets in the country, noting that the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM) were coordinated with in this regard. The board approved the subject under discussion on the agenda, taking into consideration that the amendment is commensurate with the requirements for the promotion of the country's financial markets on the MSCI indices.
The amendment adopted by the board to Article (31) allows to grant the clearing house (which is the entity that carries out settlement operations and issues orders of payment of the monies due to customers) the power to change the date and mechanism of settlement in accordance with the criteria for facilitating market accessibility as this is an administrative procedure in the market related to a regulatory mechanism that gives flexibility and authority to set the procedure and the time required for the broker\clearing member to pay off the amounts owed by them in a way that is commensurate with the nature of trading operations in each market.
The amendment to Article (34) of the regulations provides the clearing house with flexibility and authority to set the procedure and the time required to pay the amounts owed to the broker/clearing member in accordance with the nature of the trading operations in each market.
Controls for the accreditation of the in-kind share evaluators for public joint-stock companies
In view of the SCA’s keenness to develop the legislation that regulates the operation of the financial markets in the country, and given that SCA reviewed the regulations and legislation regulating the trading of securities on a periodic basis in order to ensure compliance of these regulations with the levels of development in the international markets, SCA’s board approved the amendment of Articles (1) and (26) of theSCA’s Board Chairman’s Decision No. (11/Chairman) of 2016 regarding the Regulations for Issuing and Offering Shares of Public Joint Stock Companies, in particular, the rules governing the accreditation of the in-kind share evaluators for public joint-stock companies.
The amendment to Article (1) of the regulations is made in order for the definition to conform to what is stated in Article (26) of the same regulations. Clause (B) in Article (26) of the regulations was also amended and deleted from the definition of the in-kind share evaluator. Hence, the text includes all the forms that address the evaluation tasks, while the experience clause has been added to the same article to ascertain the efficiency of the in-kind share evaluator by verifying his/her experience in evaluating the in-kind share in order to protect shareholders' funds by reaching fair values for in-kind shares.
Guide to SCA’s Regulatory Philosophy
In application of the best international practices on clarifying the scope and role of regulatory authorities in financial markets, the board reviewed a guide prepared by SCA entitled, "Regulatory Philosophy of the Securities and Commodities Authority". This guide aims at clarifying the scope and philosophy of SCA to rely on the basic principles adopted in all its activities to fulfill its mission, values and strategic objectives and to provide an overview of the regulatory policies adopted by it in the capital markets sector in order for it to serve the interests of the national economy in accordance with the UAE’s Vision 2021 and the future vision associated with the UAE Centennial 2071. The guide includes many points such as SCA’s strategic objectives, SCA’s powers, the concept of organization in SCA, SCA’s regulatory functions, the basic principles of SCA’s regulatory policies philosophy, competitiveness, future prospecting, disclosure and transparency, governance of the SCA’s design and preparation of legislation process, financial inclusion, innovation and sustainability, awareness, investor protection, investors empowerment, monitoring and compliance, enforcement and adjudication of complaints, and good governance.
Financial Analysis Report for Listed Companies
In order for the board to follow-up on the situation of listed local public joint-stock companies, and in application of the provisions of the Commercial Companies Law No. (2) of 2015, the board reviewed a report on the financial analysis of these companies and the financial sectors in ADX and DFM for the first quarter of this year and directed to follow up on the situations of these companies and take the necessary procedures in accordance with the law and regulations.
SCA is among the Top Ten Federal Government Bodies in a Positive Work Environment
As part of the continuous follow-ups to the periodic subjects and issues, SCA’s board reviewed the results of SCA’s 2018 happiness and positivity study, which included upgrading SCA to ninth place to become among the top ten federal government bodies in the positive work environment. SCA also succeeded in raising the positivity rate in the work environment from (73%) to (78%), and job satisfaction from (74%) to (77%). It also made strides in the gender balance index by an improvement rate of (17%), exceeding the government average by eight degrees.
The results of the study also included SCA’s success in raising percentage of employees responding to the study to (173) employees compared to (140) in 2017 (i.e. an increase of 9%). The board was informed of the report contents and commended its progress and the high rates of indices.
At the beginning of the meeting, the board reviewed the minutes of the ninth meeting of the sixth session and the follow-up report on the implementation of the resolutions and recommendations issued during the same, and decided to adopt it.