Dr. Maryam Al Suwaidi:
The project helps create diversified opportunities and investment instruments and make them readily available to investors, in addition to incentivizing private placement issuers to list locally instead of overseas, thereby enhancing the attractiveness of the national economy.
The Securities and Commodities Authority (SCA) announced a decision regulating the private offering of debt securities, sukuk, and securitized instruments as one of the transformational projects launched as part of the performance agreements signed with federal government entities in 2023-2024. These are distinctive projects that help move the UAE forward, enhance its competitiveness, and create a major cross-sector impact over short periods of time.
H.E. Mohamed Al Shorafa Al Hammadi, the SCA’s Chairman, issued today a decision to regulate the transformational project, which underpins the UAE government’s efforts to accelerate the achievement of the goal to make the country the new global economic hub for the next ten years as part of the ‘We The UAE 2023’ vision, which calls for redoubled efforts to help achieve government aspirations and positively impact the society and the various sectors of the economy.
Commenting on the project’s launch, H.E. Dr. Maryam Buti Al Suwaidi, the SCA’s CEO, said that the project reaffirms the SCA’s commitment to promoting the role of domestic capital markets as a key driver of the economy. The new decision will help create diversified opportunities and investment instruments and make them readily available to investors by regulating private placements, thus incentivizing private placement issuers to list locally instead of overseas and enhancing the attractiveness of the national economy.
Al Suwaidi explained that through this project, the SCA aims to prepare capital markets for a novel trading platform dedicated to professional investors and attract a new segment of investors as well as issuers, which helps increase the market capitalization of local capital markets.
Overview of the decision
The decision applies to issuers upon issuing debt securities, sukuk, or securitized instruments under a private placement, as well as to all parties involved with the private placement. Its provisions do not apply, however, to private placements conducted by local or federal government entities or companies wholly owned by any of them, save for the notifications to be made to the SCA in relation to private placements.
The decision sets out conditions and requirements for issuances in the UAE whereby issuers must secure the SCA’s initial approval before presenting the matter to the general meeting of shareholders. This is done by furnishing the SCA with a draft invitation of the general meeting, along with all the documents and information in line with the conditions and requirements specified in the articles of the decision. According to the decision, the SCA will issue its approval within one business day from the date the request is received, provided that all conditions and requirements are met.
As to issuances made abroad, upon offering or issuing bonds, sukuk, or securitized instruments in a private placement conducted abroad or in a financial free zone in the UAE, the decision obliges issuers to inform the SCA of the key details (such as the size of the private placement offering, its tenure, and the type of securities offered) once the offering and issuance are complete.