The board of the UAE federal stock market regulator has appointed Obeid al Zaabi as acting chief executive to take over from Abdullah Al Turifi, who stepped down in October, three sources told Reuters on Sunday.

He is reform-minded and will help push through planned regulatory changes including allowing companies to give their employees stock options and making it easier for strategic shareholders to raise or reduce their shareholding, one of the sources said.

Zaabi, who was deputy chief executive for licensing, supervision and enforcement at the Securities and Commodities Authority (SCA), was appointed as temporary head of the organisation on Thursday, three sources aware of the matter said, speaking on condition of anonymity as the information is not public.

The move signals he may be the lead contender to take over the federal government body permanently, the sources said.

SCA's board is led by UAE Minister of Economy Sultan bin Saeed Al Mansouri, who sits as chairman.

Typically at UAE federal government bodies, when an appointment is made from within, a draft circular is sent to all government bodies for endorsement and then is submitted to the president's office to issue a decree for the appointment. It is very rare that government bodies will not endorse the circular, the sources said.

Zaabi declined to comment when contacted by Reuters on Sunday. The SCA could not be immediately reached for comment.

Prior to his role at SCA, Zaabi worked at Abu Dhabi Investment Authority sovereign wealth fund, his last role there was internal investment funds manager, according to information on SCA's website.

Turifi, who had been in office since 2003, resigned from his post in July, Reuters reported on July 9.-Reuters