have given brokers and custodians until May 29 to switch to a
new settlement system as the Gulf state seeks emerging market
status from index complier MSCI.
The Dubai Financial Market and Abu Dhabi
Securities Exchange plan to adopt a delivery versus
payment (DvP) system, which is the global standard, on April 28,
a key step in bolstering the country's chances of earning the
coveted MSCI market status.
But market participants, including brokers and custodians,
have been given more time to implement the process after a few
concerns emerged, Abu Dhabi Securities Exchange said.
"We have received a few concerns regarding the readiness
level of the market participants. Therefore, we hereby kindly
ask custodians and brokers to confirm their readiness by no
later than May 29," the statement said.
A spokesman for the Dubai bourse said the DvP system will be
implemented from April 28 and brokers who are ready can utilise
the system from then. Others will be given time till May 29.
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.
Many traders are pessimistic over whether MSCI will upgrade
the UAE, with low volumes and regional political unrest cited as
"These developments have not been planned just keeping in
mind the MSCI tag. Its great for the markets if we are upgraded
this year but its more important to protect the interests of all
market participants," said Arindam Das, regional head of custody
"These changes cannot be implemented in a single day," Das
said, adding that the bank received positive feedback from
clients in the UK and Europe about the new settlement system
during a recent roadshow to explain the initiatives but wanted
more time to prepare for it.For all the latest business 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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