Stock markets in the UAE should unify their back office operations and processes for settlement and regulation, the chief executive of the Abu Dhabi Securities Exchange (ADX) said on Sunday.

Last year Abu Dhabi and neighbouring Dubai hired banks to advise on a possible state-backed merger of the ADX with the Dubai Financial Market (DFM), which would be one of the biggest reforms in the UAE's financial industry in recent years.

Rashed Al-Baloushi, addressing a news conference at a financial event in the UAE capital, declined to comment on progress in the talks or say whether a merger was likely.

But the ADX head said if a merger did not happen, consolidating the exchanges' back offices would be a good alternative. Other bourses in the GCC could unify their back offices with the UAE's combined system later, he added.

Fund managers and analysts have said consolidating back office operations of the ADX and the DFM could cut costs and, by creating a single framework for settling trades, make it easier for more foreign investors to enter the UAE.

Baloushi said the ADX was initiating the idea of combining back offices and was recommending it to all stake holders, including investors, listed companies and brokerages. He did not say when it might take effect.

The ADX expects this year to introduce market makers, dealers which maintain trading liquidity by undertaking to buy or sell at specified prices at all times, Baloushi added. - Reuters