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Abu Dhabi exchange to bring in short-selling by next month

(2/16/2017 6:13:00 AM)

The Abu Dhabi Securities Exchange (ADX) is coordinating with brokerages to introduce short-selling on the exchange by the end of March, according to Rashed Al Baloushi, the chief executive.

Mr Al Baloushi told Bloom­berg the exchange was working on final touches to the regulations, and expected the practice to be permitted from next month onwards.

The ADX initially announced plans in December for technical short-selling, to boost market liq­uidity and attract more foreign investors.

The Dubai Financial Market last month announced plans to introduce the practice for sel­ected securities "in the coming months".

Short-selling has been practised by institutions throughout the region, despite being illegal outside Kuwait, and has been blamed for sharp falls in local stock markets. The Securities and Commodities Authority introduced regulations enabling short-selling in 2012 for licensed market makers, with other institutions requiring permission from the regulator and the relevant exchange.

A market maker is a broker and dealer that balances supply and demand for shares by matching buyers and sellers. It also stands ready to buy or sell shares when there are no public buy or sell orders, thus creating a market.

The Abu Dhabi bourse lic­ensed Al Ramz Securities as a market maker in September. The DFM has yet to licence any such institutions.

The National