Dubai Financial Market (DFM) today announced the implementation of the new procedures approved by the Securities and Commodities Authority (SCA) for listed joint stock companies, which realized accumulated losses of 20% or more of its capital, as of the financial results for the third quarter of 2019.
This comes in the framework of joint efforts between the regulator, the market and listed companies to enhance the operational effectiveness of these companies on the one hand, and to educate investors on any developments related to the financial situation of companies and require action by the market.
The market explained that under these procedures will be added a distinctive mark on the trading screen in the market for each company based on disclosures on the percentage of accumulated losses, so that it is easier for dealers to know the status of each company and take this into account when making investment decisions.
He added that the listed joint stock companies, whose interim or annual financial statements show accumulated losses of 20% or more of the capital, must disclose to the market and the Authority in conjunction with the disclosure of these data, explaining the main reasons leading to these losses, and the procedures. That will be taken to address their situation.
The listed company is required to disclose to the Authority and the market once the accumulated losses reached 50% or more of the capital with the amount of the accumulated losses and their percentage of the capital, and the main reasons that led to this level of losses with a detailed plan to address them according to Specific schedule.
Moreover, the market adds a distinctive yellow mark beside the company name on the price screens, indicating that the accumulated losses of the company amounted to 20% to less than 50% of its capital upon the issuance of the disclosure from the company. The market also adds a distinctive red mark beside the company name on the price screen, stating that the accumulated losses of the company amounted to 50% or more of its capital immediately after the disclosure of the company.
Accordingly, the accumulated losses companies were divided into two categories: companies with accumulated losses ranging between 20% and 50% of their capital, and companies with accumulated losses exceeding 50% of their capital.
Hassan Al Serkal, Chief Operating Officer and Chief Operating Officer, DFM said, “The market provides a fair and transparent trading environment that enables investors to make their decisions in the context of a clear vision on the status of each listed company. This is further reinforced by the new procedures that we are pleased to implement following the official approval of the Securities and Commodities Authority. ”
Obliging listed companies to disclose once their accumulated losses reach 20% or more of their capital.