The Dubai Financial Services Authority (DFSA) has given final approval for trading of NASDAQ Dubai’s listed equities through the trading platform of Dubai Financial Market, beginning Sunday (July 11, 2010).
NASDAQ Dubai said the move is part of an outsourcing strategy to increase trading volumes on the bourse and strengthen Dubai’s role as a centre of capital market activity.
Clearing, settlement and custody functions for NASDAQ Dubai equities will also migrate to DFM’s systems.
However, NASDAQ Dubai remains a separate company regulated by the DFSA, the financial services regulator of the Dubai International Financial Centre (DIFC). It retains its own legal framework, listing rules and members.
Under the outsourcing strategy, NASDAQ Dubai’s equities will remain listed on NASDAQ Dubai and will not be listed on the DFM.
Welcoming DFSA’s decision, NASDAQ Dubai Chief Executive Jeff Singer said: “Working closely with DFSA and our market participants, we have met a challenging timetable for the outsourcing.
“The new structure will provide DFM’s 520,000 individual investors with easier access to NASDAQ Dubai equities. It will also provide institutional investors, including those based overseas, with the same easy access that they currently enjoy.”
A spokesperson for DP World, the most heavily traded company listed on NASDAQ Dubai, said: “We are delighted that NASDAQ Dubai and DFM are taking active measures to increase regional investor access to trading shares listed on NASDAQ Dubai and improve liquidity.”
“We look forward to working alongside Nasdaq Dubai to attract greater liquidity from the regional markets. We will work with NASDAQ Dubai to ensure fungibility with our planned dual listing,” he added.
A number of NASDAQ Dubai secondary share listings have full fungibility with their listings on other international exchanges. These arrangements will remain in place after the outsourcing arrangement is effected.
NASDAQ Dubai is ready to work with all of its listed companies to put in place fungibility arrangements that will potentially generate and facilitate greater liquidity.
In May, 2010, DFM became the majority owner of NASDAQ Dubai through an acquisition of shares from Borse Dubai and NASDAQ OMX, the international exchange group.
Trading of equity derivatives will continue to take place on NASDAQ Dubai’s own trading platform and systems.