Nasdaq Dubai, a Dubai-based stock exchange that lists regional and international shares in the Middle East, has seen the acting regulatory framework of Dubai Financial Services Authority (DFSA) garner parity with European Union (EU) equivalents in terms of central counterparties, according to a group statement.
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The announcement helps solidify Nasdaq Dubai’s regulatory backing in the region, which presently acts as a DFSA-licensed central counterparty (CCP) for equities and derivatives trading in the Dubai International Financial Centre (DIFC). By achieving an equivalency with its EU counterparts, the advent of DFSA regulation could be an important step in securing international participation form overseas clearing entities.
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To date, Dubai has been one of the more insular market blocs, not just in the Middle East but worldwide. The classification of the DFSA’s CCP framework was recently made by the European Commission, which was aimed at reducing the regulatory encumbrance of participating in the local market.
The announcement follows on the heels of a recent venture from Nasdaq Dubai, which extended shares of the UAE and international companies as well as launching an equity futures market in September 2016. Such a move could help advance this agenda and foster greater international participation in its market structure.
According to Hamed Ali, Chief Executive of Nasdaq Dubai, in a statement on the classification: “This international acknowledgement of the high calibre of DFSA’s regulatory regime will encourage further cross-border investment in Nasdaq Dubai equities and equity futures. As the region’s international financial exchange, we are taking steps towards increasing participation in our market by overseas clearing entities.”