New ESCA regulation will curb speculative trading
A new regulation of the Emirates Securities and Commodities Authority (ESCA) to prevent speculative trading will suspend trading for listed companies on days on which board meetings are held or important decisions are made.
Market analysts stated that the decision was a good one, and would allow for more efficient trading.
"With this new step, all investors will be able to take decisions on trading based on the news the company has released through the stock market. So it prepares investors and brokers to know the news along with company insiders," one analyst told <i>Gulf News</i>.
An ESCA representative explained that companies would be required to announce all future board meetings.
"It is mandatory now for listed companies to inform the stock market when a board meeting is due to take place," he said, adding, "This decision has been taken to prevent any speculative trading of stocks due to rumors or inside information."
The Abu Dhabi Securities Market (ADSM) will reportedly inform all listed companies of the new regulation.
"We want this to be enforced because it is not fair for company insiders to take positions on trading just because they get to know their company news first," said an ADSM official.
"If the board meeting is on a particular day, the trading of that company's shares will be suspended for that day and when the company releases the news we will make it public so that everyone is aware of it before trading commences the next day."