ABU DHABI -- In a bid to strengthen liquidity at UAE equity markets, the Securities and Commodities Authority, SCA, has developed new regulations enabling SMEs to trade at the secondary market launched by the Abu Dhabi Securities Exchange, ADX, and Dubai Financial Market, DFM, two years ago.
The new regulations stipulate that SMEs, which take the form of limited liability companies at financial market, have to change their status to stock companies as per Ministry of Economy's regulations in order to trade their shares at the new market. However, only the founders of these companies will be eligible for trading during the first year following the status change and then all their investors will henceforth have the right to trade in conformity with the ownership restrictions envisaged by each company's statutes.
The Commercial Companies' Law states that a private stock company should not have more than 200 stockholders with a minimum capital of AED5 million each.
The move is premised to incentivise SMEs, being robust economic enablers, accounting for around 94 percent of the total number of companies operating in the country, 73 percent of which at the wholesale and retail trade sector, 16 percent at the service sector and 11 percent in the industry platform.
According to statistics released recently by the Ministry of Economy, the number of SMEs has exceeded 350,000, claiming 86 percent of the private's total workforce and accounting for 60 percent of the GDP, with government plans underway to increase their contribution to 70 percent of GDP in six years as part of the UAE Vision 2021.
Source: Emirates News Agency