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ESCA nods cabinet decision on GCC citizens

posted on 02/01/2006: 790 views

The Board of Directors of Emirates Securities and Commodities Authority (ESCA) held a meeting on Saturday, which was presided over by Sheikha Lubna Al Qasimi, Minister of Economy and Planning and the board's Chairperson. During the meeting, ESCA approved a resolution made by the cabinet to allow GCC citizens to set up and fully own stock brokerage companies. The meeting was attended by Dr. Mohammed Khalfan bin Kharbash, Minister of State for Financial and Industrial Affairs, Sultan bin Nasser Al Suweidi, UAE Central Bank Governor and other board members.

Abdullah Salem Al Turaifi, ESCA Chief Executive, said in a press conference held after the meeting, that the board has also approved proposals by Abu Dhabi Securities Market (ADSM) and Dubai financial Market (DFM) to trim their commission on the transactions made in the respective markets from 1.5 per thousand to 1 per thousand. He added that the new tariff will be enforced soon. "This will automatically reduce commission to be paid by the investor from 3.25 per thousand of the total transaction value to 2.75 per thousand," Al Turaifi said. He also said that the board welcomed a decision to float 20 percent of DFM shares.

On the cabinet's decision to allow GCC citizens to incorporate and own 100 percent of brokerage companies, he said that the decision will be implemented soon and, "to be more specific, once discussions with local stock markets on the appropriate implementation mechanism are over." He allayed fears that the decision might affect transactions by local brokerage companies. "Implementation of the decision is poised to encourage competition, which will reflect positively on the quality of services offered," Al Turaifi commented. He revealed that the board had decided to exempt government - owned public shareholding companies from mandatory listing.

"there are 13 public shareholding companies owned by either federal or local governments which will be exempted. There are also eight companies in which federal or local government own less than 100 percent of their respective capitals. They will be asked to make initial public offerings." Al Turaifi also said that 10 government - owned companies have not yet met the listing requirements. According to him, the meeting had approved ESCA's annual budget for the new year and that during the new year, the Authority will seek to hire over 45 specialists to boost its performance. Al Turaifi noted that the board reviewed a memorandum on cooperation with the London Stock Exchange. (The Emirates News Agency, WAM)


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