(MENAFN- Emirates News Agency (WAM)) As part of its sustained efforts to develop local capital markets and meet the needs of investors and all strategic partners, the Securities and Commodities Authority (SCA) has granted the National Bank of Abu Dhabi (NBAD) approval to engage in securities lending and borrowing activities.
NBAD is the first to receive this crucial approval to undertake such activities within the UAE capital markets, having satisfied all of the approval conditions and requirements as set by SCA and stipulated under the SCA Board Decision No. (47) of 2012 concerning Regulations on Securities Lending and Borrowing.
According to the SCA, the approval comes to bolster the securities industry in tandem with the growth and development experienced in the region in general, and the local capital markets in particular. It aims to support the pace of local and foreign institutional investment in capital markets, as well as to increase market depth and attractiveness through providing advanced financial instruments that enable investors to borrow and lend securities according to mechanisms and procedures that guarantee the rights and liabilities of all market actors.
SCA has explained that lending and borrowing securities is defined as a contract under which ownership is temporarily transferred from one party (lender) to another (borrower) where the borrower makes a commitment to return the securities, at the request of the lender, at any time during the agreed period or upon its expiry, unless otherwise agreed. This enables lending investors to secure returns on securities available in their account. The borrower can use the borrowed securities for hedging or settlement purposes.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.