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Tue 18 Jan 2011 01:52 PM

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Nasdaq Dubai unveils new IPO, listing rules amid liquidity fears

Exchange says better access for retail investors, listed firms to issue quarterly updates

Nasdaq Dubai unveils new IPO, listing rules amid liquidity fears
Jeff Singer, CEO of Nasdaq Dubai, said the proposed rule change would boost liquidity
Nasdaq Dubai unveils new IPO, listing rules amid liquidity fears
Dubai International Financial Centre

Nasdaq Dubai on Tuesday unveiled a raft of new rules for initial public offerings and reporting requirements for listed firms as the bourse seeks to boost liquidity and attract traders.

Under the proposed rules, new IPOs will need a minimum of 400 individual shareholders or to reserve at least 10 percent of the offer for retail investors, the company said.

Listed firms – which include state-backed ports operator DP World and contractor Depa – will also have to report results quarterly, rather than the current half-yearly updates.

Nasdaq Dubai said the rules would be subject to a public consultation period of 60 days before implementation.

“These proposals would bring new dynamism to our market by ensuring that IPOs have a broad investor base from day one and can be easily bought by individual and other investors after listing,” said Jeff Singer, chief executive of Nasdaq Dubai.

“We are also proposing new and more flexible rules aimed at attracting family companies small and medium enterprises. The changes would promote economic activity as well as create new investment opportunities.”

With less than 20 listed companies, Nasdaq Dubai has been struggling to increase trading volumes since its inception in September 2005.

The company was acquired last year by Dubai Financial Market, which is 80 percent owned by Borse Dubai.

Axiom, a unit of a Dubai-based phone retailer, was scheduled to become the UAE’s first IPO in two years but cancelled its listing in December, citing market conditions.  

Under the proposed laws, Nasdaq will allow companies with a market capitalisation as low as $10m to list, on the condition the pre-IPO shareholders retain their shares for a year.

The move marks the first change to the exchange's rules since 2005.