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ABU DHABI / WAM
The Dubai Financial Market (DFM) on Sunday launched the Regulated Short Selling (RSS) service following the completion of all regulatory, technical and procedural preparations. The service is part of DFM’s efforts to provide market participants with new tools to further strengthen their trading activities, better utilise their resources, and further enhance market liquidity.
The RSS service enables investors to short securities listed on DFM through selling borrowed shares with a commitment to return it to the lender based on the mutually signed agreement. To implement RSS, a brokerage firm has to ensure that the borrowed securities are located on the client’s account prior to placing a short selling order, except for DvP clients, as a lending confirmation is sufficient to proceed with the order.
Essa Kazim, Chairman of DFM, said, “As part of DFM’s strategy to diversify its products and services, we are delighted to announce the completion of our preparations to introduce this significant tool to
our market participants in a step aimed at increasing their capabilities and helping them to strengthen their trading activity and further enhance trading liquidity.
“Over the past few months, we have implemented wide-ranging enhancements for the systems and regulations to ensure full readiness for such significant development in accordance with international best practices and coordination with market participants. We have carefully designed this new service to give investors the opportunity to shortlisted securities while safeguarding the market from any unsolicited repercussions on the market,†he added.