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Tue 15 Oct 2019 11:40 AM

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Dubai Financial Market to closely monitor loss-making firms

The DFM will monitor and classify loss-making companies with a new colour-coding system

Dubai Financial Market to closely monitor loss-making firms
Companies with losses of 50 percent or more of their capital will be required to submit a plan to remedy the situation within a defined timeframe.

The Dubai Financial Market has introduced a number of new measures to improve oversight of companies reporting losses of 20 percent or more.

According to the statement posted on the DFM’s website, loss-making companies will be monitored by the exchange and will be classified by a colour-coded system on the website.

“Companies that are running at an accrued loss of 20 percent and above of their capital are obliged to disclose to the regulator and the DFM, concurrently with the period or annual results announcements,” the statement said.

The statement added that such companies “are also obliged to submit an explanation about the main causes of the losses and the planned measures to handle the situation.”

Companies with losses of 50 percent or more of their capital will be required to submit a plan to remedy the situation within a defined timeframe.

The companies will also be colour-labelled on the DFM website to allow investors to easily identify them. Companies with losses of between 20 and 50 percent are to be marked in yellow, while those with losses of over 50 percent will be marked red.

“The DFM is committed to provide investors with a fair and transparent trading environment enabling them to take well-informed investment decisions based on the highest levels of clarity about each company,” DFM CEO Hassan Al Seral said.

Additionally, the statement said that the DFM plans to host a number of workshops for listed companies, as well as for brokers and investors.

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