Dubai mandates regional joint-stock firms to list on local securities exchanges

By Shilpa Annie Joseph, Desk Reporter
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UAE Vice President, Prime Minister, and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum has issued Decree No. (3) of 2021 concerning the listing of joint-stock companies on Dubai’s securities exchanges.

According to the Decree, and subject to current federal regulations, all local public joint-stock firms established in Dubai, including those set up in special economic zones or free zones including the Dubai International Financial Centre (DIFC), should list their stocks in local securities exchanges including Dubai Financial Market (DFM) and Nasdaq Dubai.

After ensuring compliance with local listing criteria and regulations, approved private joint-stock companies can go public in the local stock markets. Organizations listed in local markets can also have secondary listings in other markets.

According to the rules and regulations of the local securities exchange, foreign companies founded and licensed outside the country with branches, assets, and activities in Dubai can list their shares on local markets either as a primary or secondary listing.

According to the order, non-local companies should list their stocks in local markets when their annual profits or revenues generated from activities in Dubai exceed 50 percent or more of their overall annual profits or revenues, or when their total assets owned in Dubai account for 50 percent or more of their total assets. The listing should be completed within a year of the date of reaching this percentage.

Non-local companies whose profits or assets have not met the required percentage can also list their shares in local markets, subject to compliance with local rules and regulations. Foreign companies can also list their securities in local stock markets either in the form of a primary or secondary listing.

The Decree also specifies the duties of licensing authorities, which include Dubai Economy, authorities in charge of special economic zones or free zones including DIFC, and local securities exchanges including DFM and Nasdaq Dubai. Their roles include monitoring the compliance of local and non-local businesses with the bylaws of this Decree, taking action against violators that may include cancellation of registration, and so on.

All firms that are subjected to this Decree must change their status within a year of the issuance of the Decree. The deadline can be extended by the licensing authorities as required. The Decree is valid from the date of its publication in the Official Gazette.