Dubai, February 01: Dubai Financial Market announced on Monday its full readiness to introduce the new settlement mechanism, Delivery versus Payment (DvP), by March.
DFM has completed all the technical requirements to apply DvP in coordination with custodians and brokerage firms. The exchange is poised to be at the forefront of regional markets to adopt DvP before the end of the first quarter 2011, according to a DFM statement.
“This development is phase one of DFM‘s drive to implement international best practices, whilst continuing to respond to the UAE Securities and Commodities Authority (SCA) future regulations and closely cooperating with SCA in its efforts to develop the financial markets in the UAE,” the statment said.
Phase two will include getting DFM geared up for the introduction of ’short selling’ and ’securities borrowing and lending’ later this year, it added.
“This announcement is a significant development for the UAE markets and takes a crucial step forward in elevating the UAE markets to ‘Emerging Markets’ status by the MSCI, who previously cited the absence of DvP as one of the main reasons for not promoting our markets in their 2010 review. Undoubtedly, this will further promote our markets amongst a larger number of international investment funds,” Essa Kazim, Managing Director and CEO, Dubai Financial Market said.
The international index company is expected to review the status of the UAE markets in June 2011.
The internationally acclaimed settlement mechanism is a low risk and more efficient system, which is widely used by the international exchanges.
–Agencies–