United Arab Emirates' bourse watchdog said on Sunday its board has amended regulations, including the merger of brokerage companies, as the industry struggles with firm closures amid slumping market volumes.

In a statement, the Securities and Commodities Authority (SCA) said its reconstituted board approved a memo amending certain regulations which calls for 'amalgamation' of brokerages in the country to be in the form of either acquisitions or mergers.

Slumping market turnover is forcing some equity brokerages in the United Arab Emirates to cut staff or suspend operations as firms struggle to cope with costs and low revenue.

The resolution shall not take effect until after getting approval from the SCA and other concerned authorities.   

The board also approved lowering the minimum number of broker representatives from four to two, according to the statement. Brokers also need to contract a body licensed to practice securities custody activities in the country, when trading in their own accounts, the new amendment stated.

The amendment also gives rights to the SCA's chief executive officer to issue a final decision stopping any branch office operating without SCA approval from conducting any activity.

SCA also approved cancelling licenses of two brokers, InvestOne Financial Brokerage LLC and Al-Madina Financial and Investment Services Co citing failure of the companies to 'rectify' their situation. It did not elaborate further.   

More brokers are likely to shut this year, analysts warn, with little expectation for a pick-up in trade as domestic indexes languish near 2010 lows. -Reuters