Abu Dhabi Securities Exchange (ADX) to Supply a Separate Trading Screen for Suspended Shares

Press release
Published July 1st, 2020 - 05:53 GMT
Abu Dhabi Securities Exchange (ADX) to Supply a Separate Trading Screen for Suspended Shares
Abu Dhabi Securities Exchange
Mechanism to be actioned by the beginning of July in line with the Securities and Commodities Authority (SCA) mechanism for companies suspended from trading

The Abu Dhabi Securities Exchange (ADX) is currently executing the decision taken by the “Securities and Commodities Authority” (SCA) regarding the return of companies suspended from trading from 5 July through the creation of a separate screen.

The SCA approved the mechanism of dealing with joint-stock companies suspended from trading as of the beginning of July. Under the decision approved by the Board of Directors, company shares listing shall be transferred from the first to the second category if the company is suspended from trading for six months or more, or if its audited annual financial statements reveal accumulated losses of 50% or more of the capital.

H.E. Khalifa Al Mansouri, Chief Executive of ADX, said: “Our high-tech digital expertise will allow companies suspended from trading to resume through an independent display screen. As demonstrated during recent market turbulences, our high-tech digital infrastructure ensures business continuity and develops suitable solutions to answer specific trading needs”.

H.E continued “ADX's customer-centric strategy is designed to provide a fair and transparent trading environment and provide investors with detailed information on the status of the listed company that will enable them to make the right investment decisions. Displayed details will include the company’s 2019 third quarter financial statements and its disclosures on accumulated losses of capital. Transparency of information will allow investors to understand precise financial position of each company and take their investments decision with full background knowledge.”

Companies currently suspended from trading on the "Abu Dhabi Securities Exchange" are InvestBank Company and Al Khazna Insurance Company.

According to the authority’s decision, a joint committee have formed, including SCA (as member and chair), Abu Dhabi Securities Exchange (ADX), and the relevant supervisory authorities assigned with monitoring the companies placed on the Watch list. Together this committee will assess compliance with the disclosure and listing requirements and whether necessary actions have been taken to regularize their status in line with the applicable legislation within a one-year period, extendable to three years. The period commences on the date of their listing transfer to second category.

If the joint committee is of the opinion that the companies are able to regulate their status within the specified timeframe and meet the required conditions to resume trading, then it must make a recommendation to SCA and ADX to transfer the listing of shares to the first category. If the joint committee is of the opinion that the companies are unable to regularize their status within the specified period, the joint committee recommends to the authority and ADX one of the two following recommendations, either  the company remains listed in the second category while continuing trading its shares or ADX delists the troubled company in line with the trading mechanism and operational procedures.

According to the decision, the company must provide SCA and ADX with an action plan for regularizing its status. The plan must be approved by the board of the company and by an entity with financial and technical expertise. The entity must also be approved by SCA. The company must disclose the details of the implementation of its action plan to SCA and ADX, every three months or upon a request by SCA or ADX. It must also disclose details relating to whether it has satisfied the Watch List requirements and the disclosure and listing requirements and conditions.

If the joint committee decides, after consulting ADX, to delist the troubled company that is unable to regularize its status within the specified timeframe and to meet the required conditions to resume trading within the first category, ADX shall post an announcement on its website of its decision to delist the shares of the company within 30 days, clarifying that there will be a proper exiting alternative to permit the wishing shareholders to exit from the shares of the delisted company in line with the SCA procedures.

Background Information

Abu Dhabi Securities Exchange

Abu Dhabi Securities Exchange (ADX) was established on 15th of November 2000 by Local Law No. (3) of 2000, the provisions of which vests the Market with a legal entity of autonomous status, independent finance and management, and gives ADX the necessary supervisory and executive powers to exercise its functions.

Moreover, ADX has the authority to establish centers and branches outside the Emirate of Abu Dhabi, and so far it has done so in Al Ain, Zayed City, Fujairah, Ras Al Khaimah and Sharjah.

ADX's board of directors is comprised of seven members nominated by Amiri Decree. The members of the board hold office for a term of three years. The first board of directors was constituted by Amiri Decree No. (8) of 2000.

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