Abu Dhabi Securities Exchange (ADX), has declared its technical and logistical readiness to provide the general clearing service, in a move to improve performance of financial markets in the UAE, a report said.

The Securities and Commodities Authority (SCA), had granted the Emirates National Bank of Dubai, Emirates NBD, the license for the service after modifications on brokerage regulations in a regionally unique move that is expected to pave the way for many small brokerage companies to be transformed into full trading members, which will reduce operational costs and increase financials, reported Wam, the Emirates official news agency.

ADX has also confirmed that all its systems do cope with the highest global standards that would facilitate the work of general clearing members after securing the required procedures for this service.

ADX said that the requirements to obtain this service include three standards: firstly filling the form for this activity including providing sufficient information regarding the clearing, then writing a guarantee statement equivalent to Dh25 million and thirdly obtaining the SCA approval.

ADX also expects that the general clearing service will witness high levels of activity in the coming period due to the fact that many brokerage companies need this service, which subsequently will allow increased volumes of trades, particularly when many brokerage companies are released from the previous bank guarantees to become full trading members.

SCA granted Emirates NBD the approval to become general clearing member in local markets – thus becoming the first party in UAE financial markets to practice general clearing.