DFM admits Al Ramz Capital as the first regulated short-selling provider
12 February 2018 Dubai
Image: Shutterstock
Al Ramz Capital has become the first member of the Dubai Financial Market (DFM) to be given a DFM accreditation to provide a regulated short selling (RSS) service to its client base.
The DFM launched the RSS service back in December after it was given approval by the Securities and Commodities Authority.
The RSS service enables investors to short-sell securities listed on DFM through selling borrowed shares with a commitment to return to the lender based on the mutually signed agreement.
Essentially, investors will be allowed to sell stocks that are not theirs to gain surplus if prices have dropped when trades are settled.
To implement RSS, the brokerage firm has to ensure that the borrowed securities are located on the client’s account prior to placing a short selling order.
According to DFM, the move is part of DFM’s efforts to provide market participants with new tools to strengthen their trading activities, better utilise their resources, and further enhance market liquidity.
The DFM has recently released a list of 19 securities eligible for trading as part of the RSS Service based on the semi-annual review of January 2018.
Every six months a list of potential DFM-listed securities will be reviewed in compliance with international recommendations—the list will also include exchange traded funds.
Hassan Al Serkal, COO and head of operations division at DFM, said: “We are delighted to announce that Al Ramz Capital received the first of its kind license to provide the RSS service. The company is amongst the leading brokerage firms that rapidly embrace DFM’s development initiatives providing diversified and ad advanced services to our market participants.”
Ayman Ghoneim, COO of Al-Ramz Capital, commented: “Short selling aims to increase the level of liquidity and will contribute to increasing volumes and trading values.”
He added: “This mechanism will create a buyer at each point, which will result in enhancing investment opportunities and creating better risk management environment and the possibility of making profits from stock markets in the event of a downturn.”
The DFM launched the RSS service back in December after it was given approval by the Securities and Commodities Authority.
The RSS service enables investors to short-sell securities listed on DFM through selling borrowed shares with a commitment to return to the lender based on the mutually signed agreement.
Essentially, investors will be allowed to sell stocks that are not theirs to gain surplus if prices have dropped when trades are settled.
To implement RSS, the brokerage firm has to ensure that the borrowed securities are located on the client’s account prior to placing a short selling order.
According to DFM, the move is part of DFM’s efforts to provide market participants with new tools to strengthen their trading activities, better utilise their resources, and further enhance market liquidity.
The DFM has recently released a list of 19 securities eligible for trading as part of the RSS Service based on the semi-annual review of January 2018.
Every six months a list of potential DFM-listed securities will be reviewed in compliance with international recommendations—the list will also include exchange traded funds.
Hassan Al Serkal, COO and head of operations division at DFM, said: “We are delighted to announce that Al Ramz Capital received the first of its kind license to provide the RSS service. The company is amongst the leading brokerage firms that rapidly embrace DFM’s development initiatives providing diversified and ad advanced services to our market participants.”
Ayman Ghoneim, COO of Al-Ramz Capital, commented: “Short selling aims to increase the level of liquidity and will contribute to increasing volumes and trading values.”
He added: “This mechanism will create a buyer at each point, which will result in enhancing investment opportunities and creating better risk management environment and the possibility of making profits from stock markets in the event of a downturn.”
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