Nasdaq Dubai has announced that all trading of its listed equities will take place through the X-Stream trading platform of Dubai Financial Market (DFM) starting on June 27, subject to final regulatory approval.

The move is part of an outsourcing strategy to increase trading volumes on Nasdaq Dubai and strengthen Dubai’s role as a centre for international capital markets activity.

At the same time, clearing, settlement and custody functions for Nasdaq Dubai equities will also migrate to DFM’s systems.

Nasdaq Dubai’s regulator, Dubai Financial Services Authority (DFSA), stated that it had no objection in principle to the outsourcing, which was announced in December 2009.

FM last week became the majority owner of Nasdaq Dubai through an acquisition of shares from Borse Dubai and Nasdaq OMX, the international exchange group.

Jeff Singer, chief executive of Nasdaq Dubai, said: “This new structure will create the same look and feel for trading on both of Dubai’s exchanges, which will stimulate trading of Nasdaq Dubai equities by DFM’s 552,000 retail and other investors.

Combined with Nasdaq Dubai’s international regulatory standards and links with international investors, this will create a powerful listing and trading hub that in is unique in the GCC. Issuers can choose which exchange to list on according to their commercial and regulatory needs.

“We are grateful for the strong support we are receiving from our Members and other market participants in working towards a successful migration,” he noted.

Essa Kazim, managing director and CEO of DFM, said: 'Since the inception of DFM in 2000, we have remained committed to playing a vital role in developing regional financial markets through various initiatives and today’s announcement is a major step for us and the region.'

'Through its growing links with Nasdaq Dubai, DFM gains a wider array of product offerings and international expertise,' he noted.

“Collaboration between the two exchanges will increase, promoting higher liquidity and more listings on both of them from across the region and beyond. Dubai will expand as a centre of capital markets dynamism and innovation,' he added.

Final DFSA approval for the outsourcing is conditional on several  milestones being met, said the official.

Nasdaq Dubai remains a separate company regulated by the DFSA, the financial services regulator inside the Dubai International Financial Centre (DIFC).

It will retain its own legal framework, listing rules and Members, and trading of equity derivatives will continue to take place on Nasdaq Dubai’s own trading platform and systems.

Its equities will remain listed on Nasdaq Dubai, and will not be listed on DFM under the outsourcing plan.-TradeArabia News Service