The Securities and Commodities Authority (SCA) has announced that it is working with the Dubai Financial Market and Abu Dhabi Securities Exchange to launch equity and bond financing platforms in innovative ways to finance SMEs.
In a statement on the sidelines of the "Corporate Restructuring Summit", which concluded in Dubai today, she described the performance of the markets as excellent compared to the same period of 2018, expecting further growth due to improved geopolitical conditions, stability of oil prices, and improved performance of companies and banks. In addition, macroeconomic indicators are promising. It said it was considering another proposal to create a secondary platform on the exchange for losing companies.
Default and bankruptcy
Dr. Obaid Al Zaabi, Chief Executive of the Securities and Commodities Authority, said that the Authority receives applications for incorporation and listing from many companies.
He told reporters that the Companies Law provides for steps in case the company stumbles. If a company achieves losses of 50% or more of the capital, the Authority requests the company to submit a restructuring plan and submit it to the general assembly for voting as a first step.
Al Zaabi said on the sidelines of the corporate restructuring summit, which concludes in Dubai today, that the bankruptcy law emerged from the Financial Regulation Committee of the Ministry of Finance, which completed the legal frameworks to provide services to companies, for the restructuring process before the declaration of bankruptcy, pointing to All restructuring of the listed company is internal.
Innovative financing
Al Zaabi said that the Authority is working with the Dubai Financial Market, Abu Dhabi Securities Exchange and the competent authorities to launch innovative equity and bond financing platforms for small and medium enterprises through capital markets, using financial technology and blockchain technology. He pointed to the existence of a joint committee is expected to be completed soon, so that these companies can subscribe and get public funding starting in 2020.
He stressed that «Securities» in its role in the development of mechanisms to protect investors, including the obligation of brokers to give investors a booklet showing the rights of investors, in addition to new mechanisms to enable investors who are unable to attend the General Assembly, through electronic voting, and a mechanism to represent minorities in companies.
He added that the Authority presented its new law, which includes activities that have been coordinated with the Central Bank to organize, pointing out that the law gives a significant role in the field of control, supervision, enforcement and sanctions.
He pointed to several new laws and regulations to be issued during the coming period, including the launch of the code of governance early next year, and the regulation of digital asset issuance, and recognition as securities, in light of the rapid development of the digital asset market and the response of regulatory authorities in a number of countries in the world with its regulation.
Market performance
On the market outlook, Al Zaabi said that the overall performance is excellent compared to the same period last year, expecting further growth due to improved geopolitical conditions, stability of oil prices, improved performance of companies and banks, incentives and solutions launched by the government, in addition to the fact that macroeconomic indicators are promising .
Own foreigners
Al-Zaabi explained that the opening of foreign ownership ratios in listed companies is one of the requirements of the Morgan Stanley Index, pointing out that the law of companies in the UAE allows the ownership of foreign investors up to 49%, note that most companies did not reach this ratio, and therefore access to This ratio can increase investment opportunities for investors and enhance the attractiveness of markets to investment institutions and foreign investment in general.
He disclosed that «Securities» is considering another proposal to establish a secondary platform in the stock market for losing companies, and these companies will have to submit a restructuring plan, at a time will be monitored the performance of these companies and control.
Restructuring
Companies in the Middle East face many challenges they have not had for 15 years and are lagging behind the restructuring decision until creditor banks or authorities intervene in some countries, said Gabriel Shaheen, managing director of Elkis Partners. Sometimes.
He stressed that companies should ask for intervention to restructure their business early, so as not to go bankrupt, advising companies to start proactive or preventive change.
He revealed that companies in all sectors are demanding restructuring, but the most demanding sectors are: construction and retail, and the least demanding restructuring are oil and gas, health care, and education.