15 October 2008
A new law to regulate short selling in UAE markets is being drawn up by the Emirates Securities and Commodities AuthorityEmirates Securities and Commodities Authority, its head told Emirates Business.

Abdulla Al Turaifi, CEO of EscaEsca, said the legislation will be issued during the "next period", but declined to set a specific date.

He also revealed that EscaEsca, in co-operation with the UAE Central BankUAE Central Bank and the Insurance Authority, is monitoring and analysing financial data related to banks and insurance firms to know the extent of their adherence to international standards of accounting. This is in order to prevent the occurrence of crises such as those seen in large global banks and insurance firms recently.

Speaking on the sidelines of the Financial Brokerage in the Gulf Forum, organised by EscaEsca in co-operation with the Federation of GCC Chambers, Mashreq SecuritiesMashreq Securities, brokerage companies and financial analysts, Al Turaifi praised the measures taken by the UAE government to rescue the country's stock markets by pumping cash into banks and guaranteeing deposits. He said such measures helped improve the performance of stock markets and gave confidence to investors and financial brokerage companies.

Al Turaifi said EscaEsca had set up a committee to look into the applications of companies wishing to buy back their shares. He said a legislation related to market makers will be issued next year and margin trading system will be introduced before the end of the current year.

Al Turaifi called for a code of conduct to be made binding on brokers. Many brokers need more training in the market, he added. The UAE's financial markets will, in the near future, see new regulations related to brokers, aiming to upgrade brokerage firms to meet the standards set by global organisations, Al Turaifi said.

Meanwhile, Secretary-General of the Federation of GCC Chambers of Commerce, Abdul Rahman Naqi, has called for action to restore confidence of shareholders, investors and customers in banks. He stressed the need to raise the rate of interest on deposits and loans to encourage saving.

By Abdel Hai Mohamad

© Emirates Business 24/7 2008