Nasdaq Dubai has delayed plans to launch a new settlement system which is key to the UAE's chances of earning MSCI emerging market status.
The proposed market enhancements will now take place in early July subject to regulatory approval, the exchange said in a statement.
UAE domestic bourses were originally due to launch the new settlement system on April 28, the country's regulator said last month.
The so-called delivery-versus-payment system is a securities industry procedure in which payment for a security must be made when the security is delivered. Usually, the payment is made to a bank, which in turn pays for the security.
The DvP system is one of MSCI’s criteria for the country’s upgrade to emerging-market status.
After snubbing the UAE for a second time in 2010, index compiler MSCI warned domestic bourses must change from dual account structures such as separate custody and trading accounts.
MSCI will announce in June whether it will upgrade the UAE and Qatar from the 'frontier markets' category, a move that could open up the countries' bourses to multibillion dollar liquidity and drive index fund investments.For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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