ADX Expects Jump in Liquidity after 22% Trading Fees Cut

The new fee structure will come into effect from February 14.

The Abu Dhabi Securities Exchange (ADX) has announced on Monday the reduction of its trading activity fees for all exchange transactions by more than 22 percent from the existing 0.225 percent to 0.175 percent.

The updated fee structure came as a part of the exchange’s strategy to double the market capitalization of companies listed on the exchange in the next three years. According to ADX, the reduced fees will increase the market liquidity by decreasing the bid-ask spread.

Commenting on the development, ADX Chairman H.E. Mohamed Ali Al Shorafa Al Hammadi said: “The exchange’s ‘ADX One’ strategy further enhances our position as one of the most competitive exchanges in the region. Reducing overall transaction costs for trading on the exchange is one of many initiatives we are undertaking to achieve our strategy of attracting new liquidity sources and making listing and investing in ADX an attractive value proposition.”

Reducing Business Costs

Additionally, the exchange has created an incentive plan under the new fee structure. Brokers generating over AED 20 million worth of annual trading commission will be exempted from paying any trading commission to ADX for the year.

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This is the second time the Abu Dhabi bourse has reduced its fees in the past two years. Last time, the commissions were reduced in June 2019 under the Ghadan 2021 plan to lower business costs in the Emirates.

The new reduced fees will come into effect from February 14.

“Abu Dhabi continues to diversify its economy on a path of sustainable long-term growth, and we are fully aligned with this vision. We will continue to deepen our markets through a wide range of products and services that meet the evolving needs of our stakeholders,” Al Hammadi added.

“Cutting overall transaction costs on all trades taking place on ADX will complement measures we have recently taken to attract new institutional investors and generate greater liquidity. It will also further strengthen our commitment to provide the highest levels of customer service,” said Saeed Hamad Al Dhaheri, CEO at ADX.

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