A Look at the Dubai Financial Market
Within a short period of time, the Dubai Financial Market (DFM) has fast developed into a leading financial market across the region. Its ongoing efforts and strategic initiatives have further reinforced Dubai as a centre of excellence in this part of the world and enhanced its leading position as a powerful capital market hub which embraces international best practices to meet the evolving needs of its investors locally and internationally.
DFM operates as a secondary market for the trading of securities issued by public shareholding companies, bonds issued by federal or local governments, local public institutions and mutual funds as well as other local or foreign DFM approved financial instruments.
The first exchange in the UAE
Established as a public institution with an independent legal entity by virtue of Decree 14/2000 issued by the Government of Dubai, the DFM launched its activities on 26th March 2000. On 27th December 2005, the Executive Council of Dubai decided to transform the DFM into a public shareholding company with a capital of AED 8 billion divided into 8 billion shares, and 20% of the capital, equal to 1.6 billion shares, was offered through an IPO. The public offering was met with great demand that exceeded all expectations, with subscriptions amounting to AED 201 billion. On 7th March 2007, the Dubai Financial Market Company was listed on the market with the trading symbol DFM.
The first regional exchange to become publicly listed
The DFM is the first financial market to have offered its shares through an IPO in the Middle East, and this reflects the leading role played by the Emirate of Dubai in selling shares of governmental institutions in the region.
A Shari’a compliant exchange
DFM operates according to Shari’a principles and this clearly reflects the ambitious vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President of the UAE, Prime Minister and Ruler of Dubai.
Regulated by the Securities and Commodities Authority (SCA)
The Dubai Financial Market (DFM) is governed and regulated by the UAE Securities and Commodities Authority (SCA) which has the authority to impose laws and standards which the DFM must comply. The DFM works proactively with the SCA to protect investors and provide an optimum trading platform, which includes initiatives such as the development of Margin Trading and Delivery v Payment (DvP) mechanisms.
The first regional exchange to consolidate its operations
In 2010, the Dubai Financial Market consolidated its operations with NASDAQ Dubai to create a dynamic force in the region’s capital markets. The consolidation provides investors greater choice of asset classes and easier access to DFM and NASDAQ Dubai listed securities via a single Investor Number (NIN), which means investors can trade seamlessly across the two exchanges.
Both exchanges continue to be regulated separately, DFM by the SCA and NASDAQ Dubai by the Dubai Financial Services Authority (DFSA).
The DFM philosophy is based upon a well developed and innovative corporate culture defined by its vision, mission and core values, all of which are strategically focused on implementing a growth strategy, preparing the business to face increasing challenges, and more importantly, demonstrating DFM’s ongoing commitment to enhance its products and services for the benefit of its investors. In 2011, the Board of Directors of Dubai Financial Market Company (PJSC) adopted a vision and mission based on its efforts to enhance its leading position amongst regional financial markets.
The World Class Regional Marketplace.
To provide stakeholders with innovative services in conducting trading, settlement and depository of securities, in an efficient, transparent and liquid environment.
DFM Accredited Market Participants
As a leading regional financial market based on international best practices and regulated under the jurisdiction of the UAE Securities and Commodities Authority (SCA), the DFM ensures that members go through a vigorous application process to become accredited brokers and custodians, in order to protect investors and their rights.
Market participants include investors, listed companies (issuers), brokers, and custodians, all of whom play a key role within the financial market dynamics:
DFM Advanced Systems
The Dubai Financial Market (DFM) strategy since its inception on 26th March 2000, has focused on continuous investment in developing its IT infrastructure. Ongoing developments have played a major role in cementing DFM’s status as the leading exchange and the main destination for local, Arab and international investors regionally. Technological innovation, transparency, confidentiality and efficiency, are core DFM values which shaped the introduction of numerous advanced systems available for investors and market participants alike.
The DFM was the first regional market to adopt the highly sophisticated trading system ‘’X Stream” in 2009, known to be one of the best trading systems amongst the world’s financial markets.
Corporate Social Responsibility & Educational Programs
Since its establishment in 2000, DFM has been committed to developing numerous educational initiatives and programs to raise awareness of investing and creating a culture of well-researched securities investment among various market participants and the youth in the UAE, as part of its ongoing corporate social responsibility.
The awareness and educational programs provided by the DFM include: