Trades via UAE Central Bank network will ‘minimise settlement risks’
Cash settlements will be done in dirhams for ADX-listed financial instruments – including stocks and bonds – from now on.
The dirham also applies to transactions related to margin calls and collateral using the Central Bank Money network.
This follows an agreement signed by the UAE Central Bank and Abu Dhabi Securities Exchange (ADX).
Under the agreement, cash settlements for trades – in shares, bonds, and ETFs – will be processed through the Central Bank’s network and ‘fully adhering to the International Organisation of Securities Commissions standards for central counter-party clearing (CCP) and central securities depository (CSD) services.
Doing so will minimise settlement risks and aligns with’ADX’s goal of providing reliable and secure financial services’.
“This agreement represents an important step towards enhancing a resilient and innovation-driven financial infrastructure,” said Khaled Mohamed Balama, Governor of the CBUAE.
Margin calls too
Margin calls and margin collateral transactions for ADX-CCP will also be managed via the Central Bank network, providing for an automated direct debit mechanism that speeds up the settlement process and ‘ensures no delays in meeting financial obligations’.
Source: gulfnews