Dubai Financial Market begins trading futures contracts

Dubai Financial Market begins trading futures contracts
Dubai Financial Market begins trading futures contracts

The Financial Market announced today the start of trading futures contracts within its integrated derivatives platform, in an important step that gives the market’s strategy to diversify products and financial instruments and attract more investments and new impetus.The platform is based on a set of regulatory rules prepared in accordance with international best practices, providing a supportive framework for the expansion of the activities of various dealers on these futures contracts. This strategic step allows investors to diversify their investment portfolios and hedge, as well as benefit from leveraged facilities.

The Dubai Financial Market witnessed today a special ceremony to ring the bell to start trading on the occasion of the launch of the integrated futures trading platform, in the presence of Hassan Al Serkal, CEO of Dubai Financial Market, Maryam Fikry, CEO of Dubai Clearing and Central Depository Holding Company, and Hamed Ali, CEO of Nasdaq Dubai and Vice President The executive of the Dubai Financial Market, in addition to prominent officials in the companies cooperating with the Dubai Financial Market as partners to launch the platform, as the list includes 16 leading companies, including brokerage firms active in the field of trading services and market industry, in addition to companies that provide technology and data services.

The Chairman of the Dubai Financial Market, Issa Kazim, said: “The Dubai Financial Market spares no effort to study and explore ways of innovation and continuous development of its products and services in line with the growing needs and aspirations of all categories of dealers day after day. The launch of the new platform represents an important milestone. In the course of the successful market, and in the context of its efforts to diversify investment opportunities in front of its huge base of local and international investors, and thanks to this strategy, the Dubai Financial Market is one of the most regional markets providing a variety of asset classes including stocks, bonds, sukuk, ETFs and futures contracts. During the next stage, to further enhance this trend by listing REITs, expanding the range of our various platforms, and attracting new companies to list their shares in the market.

The platform currently provides futures contracts for various terms, ranging from one to two months to three months, on individual shares of a group of active companies listed on the market, including: Emaar Properties, Dubai Islamic Bank, Emirates NBD, Emaar Development and Emaar Malls. The platform aims to enhance and diversify the list of derivatives traded through it later by adding futures contracts linked to indices.

Promising prospects

For his part, Hassan Al Serkal, CEO of the Dubai Financial Market, expressed his hope that all categories of dealers in the market would benefit from the futures contract trading platform, indicating that it has promising growth prospects during the next stage, in light of the increasing interest by investors in trading on various financial instruments and categories Multiple origins. He added, “This interest contributed to the launch of the platform with the unprecedented support and strong participation of many brokerage firms that have shown keen interest in engaging in futures trading and market-making activities from day one as partners to launch the platform.”

A supportive work environment

The CEO of Nasdaq Dubai and Deputy CEO of the Dubai Financial Market, Hamed Ali, said: “Dubai financial markets have succeeded in developing an advanced organizational and infrastructure structure that allows the trading of multiple asset classes, as well as providing many supportive mechanisms for trading activities such as providing liquidity, making the market and others. Preparing the rules for trading futures contracts according to international best practices and in coordination with market members and regulators, which created a favorable work environment for the growth of the futures market in line with the high growth rates recorded on global stock exchanges.

Statistics from the Futures Association (FIA) indicate a 12% rise to 19.24 billion contracts in 2019.

World class clearing solutions

The Dubai Clearing Company, a subsidiary of the Dubai Financial Market, provides effective clearing services for futures contract trades by leveraging the technical and operational infrastructure of Nasdaq Dubai. Maryam Fikry, CEO of the Dubai Clearing and Central Depository Holding Company, welcomed the new platform, which is at the forefront of beneficiaries of the advanced clearing solutions provided by the company after its official launch last April. The company is considered one of the first integrated and independent CCP companies in the region, as these solutions allow better use of the guarantees provided by clearing members in order to achieve more effective and safe use of available liquidity in accordance with international best practices.

Launch partners welcome the new platform

The futures trading platform is widely supported by leading brokerage firms. Officials of brokerage firms and technology and data providers, which joined the list of “platform launch partners”, welcomed this step, pointing to its great importance in diversifying investment opportunities for dealers and meeting the increasing demand for new financial products.

10 brokerage firms have obtained membership in stock futures trading, namely: BH Mubasher Financial Services, Daman Securities, Hermes Financial Group (UAE), Argaam Securities, Shuaa Securities, Global Shares and Bonds Trading, Aldar Shares and Bonds, Al Ramz Capital, SICO Financial Brokerage, and Mena Corp for Financial Services. The market granted Al Ramz Capital and BH Mubasher Financial Services a license to provide a market maker service within the stock futures contract trading platform, and the market also included SK Adviser, IT novice, Global Market Access Holding (DIFC) and Horizon Software as technology and data providers.

During the next stage, the market will continue to expand the scope of stock futures contracts, strengthen the list of trading members, as well as license market makers to activate its trading in response to the increasing interest on the part of investors.

It should be noted that the new platform is based on the tremendous balance of capabilities and expertise possessed by the institutions of the Dubai Financial Market Group, including the Dubai Financial Market, the Dubai Clearing Company, and the Nasdaq Dubai Stock Exchange, where these experiences and capabilities are used in the best way to achieve the strategic objectives of the market and keep pace with Aspirations of dealers.

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