04 April, 2010Plan to integrate GCC securities markets
The Peninsula - The United Arab Emirates has floated a practical initiative aimed at integrating securities markets of all the GCC member states.
The initiative which will see the markets operating under the same policies and regulations was outlined in the statement of Sultan bin Saeed Al Mansoori, Minister of Economy, during the 1st Meeting of the Ministerial Committee of Chairmen of GCC Regulators Board, which was held in Riyadh. The meeting was held at the invitation of GCC Secretary General Abdulrahman bin Hamad Al Atiyyah.
The UAE Minister, who is also the Board Chairman of the Emirates Securities and Commodities Authority (SCA), called for concerted and unified efforts and better coordination among the member states to overcome the repercussions of the global financial crisis.
“Undoubtedly, the global economic crisis has clearly taken its toll on a number of sectors in member states, notably among these sectors is the securities market sector, being the mirror of the economy, due to its high sensitivity in reacting to any change in the general situation, economic or political.
“In view of this, the current situation demands from us better coordination, uniting our front and launching innovative initiatives, at a time when many institutions and corporate entities worldwide are doubling their steps towards forming alliances and blocs, even merging together to defeat the difficulties facing them.
This means, we are in a situation, today, in which we need more actions than our need for words,” Al Mansoori stated in his address, read on his behalf by Abdullah Al Turifi, Chief Executive Officer of the SCA.
The initiative calls for a comprehensive strategy that would be implemented in stages, over a period of time. The strategy must have a permanent committee consisting of CEOs of the regulatory bodies of member states or those in their equivalent status.
The committee should meet three times, at least, in a year, to deliberate over issues and proposals referred to it by member countries. It should also, among other thing, come up with draft laws, policies and guidance regulations for the GCC securities markets and their regulators, look into technical proposals aimed at developing the securities markets in the region and refer its recommendations to the permanent ministerial committee for action.
Member countries at the meeting agreed on referring to the GCC Ministerial Council a recommendation for the setting up of the proposed permanent technical committee for consideration.
The two-tier initiative consists of issues that need instant action and other issues which can be dealt with in stages according to certain timeframe, to be agreed on by members.
The issues which require instant action, include unification of licensing, subscription and listing procedures for public joint stock companies (PJSCs) of member states in a process to be known as the “Unified Gulf License” procedure.
Whereby PJSC that will be set up in any member state shall acquire a Unified Gulf License (UGL) which takes into consideration requirements in all member states. Others are the issuing of unified Initial Public Offering (IPO) regulations and procedures, coordination of the timings of IPOs and their procedures in all GCC states and putting in place a common text for cooperation and partnership agreements between brokerage and financial services.
But the issues that can be dealt with in stages include updating of guidance regulations in various areas of the securities market like the components of the securities sector, the restructuring of the securities sectors of member states in a way that takes into consideration the transformation of GCC securities markets into listed holding companies, having common text for listing conditions and requirements, regulating the incorporation, management and supervision of investment funds.
The initiative calls for a comprehensive strategy that would be implemented in stages, over a period of time. The strategy must have a permanent committee consisting of CEOs of the regulatory bodies of member states or those in their equivalent status.
The committee should meet three times, at least, in a year, to deliberate over issues and proposals referred to it by member countries. It should also, among other thing, come up with draft laws, policies and guidance regulations for the GCC securities markets and their regulators, look into technical proposals aimed at developing the securities markets in the region and refer its recommendations to the permanent ministerial committee for action.
Member countries at the meeting agreed on referring to the GCC Ministerial Council a recommendation for the setting up of the proposed permanent technical committee for consideration.
The two-tier initiative consists of issues that need instant action and other issues which can be dealt with in stages according to certain timeframe, to be agreed on by members.
The issues which require instant action, include unification of licensing, subscription and listing procedures for public joint stock companies (PJSCs) of member states in a process to be known as the “Unified Gulf License” procedure.
Whereby PJSC that will be set up in any member state shall acquire a Unified Gulf License (UGL) which takes into consideration requirements in all member states. Others are the issuing of unified Initial Public Offering (IPO) regulations and procedures, coordination of the timings of IPOs and their procedures in all GCC states and putting in place a common text for cooperation and partnership agreements between brokerage and financial services.
But the issues that can be dealt with in stages include updating of guidance regulations in various areas of the securities market like the components of the securities sector, the restructuring of the securities sectors of member states in a way that takes into consideration the transformation of GCC securities markets into listed holding companies, having common text for listing conditions and requirements, regulating the incorporation, management and supervision of investment funds.
