ADX Declares Readiness to Provide General Clearing Service

Press release

Published July 5th, 2017 - 10:40 GMT

Rashed Al Baloushi , ADX Cheif Executive

Abu Dhabi Securities Exchange (ADX) has declared its technical and logistical readiness to provide the general clearing service.

The move is considered unique – regionally - when the Securities and Commodities Authority (SCA) granted Emirates National Bank of Dubai the license for the service - after modifications on brokerage regulations.

The license for Emirates National Bank of Dubai is expected to pave the way for many small brokerage companies to be transformed into full trading members, which will reduce the operational costs and increase its financial capabilities.

ADX has also confirmed that all its systems do cope with the highest global standards that would facilitate the work of general clearing members after securing the required procedures for this service.

The Exchange said that the requirements to obtain this service include three standards: (1) filling the form for this activity including providing sufficient information regarding the clearing (2) writing a guarantee statement equivalent to 25 million Dirhams (3) obtain the approval of Securities and Commodities Authority.

ADX also expects that the general clearing service will witness high levels of activity in the coming period due to the fact that many brokerage companies need this service, which subsequently will allow increased volumes of trades, particularly when many brokerage companies are released from the previous bank guarantees to become full trading members.

SCA granted Emirates National Bank of Dubai the approval to become general clearing member in local markets – thus become the first side in UAE financial markets to practice general clearing. The approval came as part of the Authority’s plans to improve the performance of financial markets in UAE and promote it among global markets in the coming period.

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.