Font Size

- Aa +

Mon 1 Oct 2007 10:45 AM

Font Size

- Aa +

Eleven firms suspended in regulator clamp-down

Emirates Securities Authority suspends brokerage firms for non-compliance.

The Emirates Securities and Commodities Authority (ESCA) has suspended 11 brokerage firms for a period of one month for failing to fulfil new paid-up capital levels and bank guarantees requirements.

ESCA had previously warned licensed companies to comply to the new requirements before September 30 or face suspension.

"The Securities & Commodities Authority would like to draw the attention of all brokerage companies that have not yet adopted compliance requirements with SCA Board of Directors resolution # 176 of 2006 to expedite compliance procedures on or before the September 30, 2007, the expiry date of the final grace period already extended in this regard," a statement read.

New rules mean that licensed firms now required to have a paid-up capital of $8.1 million and bank guarantees of $5.4 million.

The SCA had previously announced that it would take the "necessary actions" in coordination with the concerned financial markets to suspend violating companies, which have failed to raise their capital amounts and/or the necessary banking guarantees.

Each suspension will last for one month, during which time the companies concerned will be suspended from purchasing operations.

However, the 11 companies will be allowed to handle selling orders for their clients holding accounts at the suspension date.

These clients can also transfer their securities to other brokerage companies or withdraw their due amounts from these companies, the statement added.

If the companies involved are still found to be non-compliant by the end of the month-long period, however, the license issued from ESCA will be cancelled and deleted completely from the brokerage companies list, the regulator added.

The 11 companies involved in the suspension are:

Amwal International Financial Brokerage, Abu Dhabi; Merchant Securities, Dubai; Al Madina Financial Brokers Company, Abu Dhabi; Faisal Shares and Bonds Brokerage, Dubai; Emco Financial Services, Dubai; Delma Brokerage, Abu Dhabi; International Shares and Bonds Centre, Al Ain; Dubai Financial Brokerage, Dubai; Al Theqa Financial Services, Dubai; Global for Shares and Bonds, Abu Dhabi; Falcon Financial Services, Dubai.