Dubai Market defines the procedures for executing direct large deals

Dubai (Al-Ittihad) The Dubai Financial Market announced the procedures for implementing large direct deals, which entered into force as of March 7, and replaced the circular issued in 2022.

The market clarified, in a circular, that direct large deals are deals that are executed outside the order book, and will not affect the closing price of the concerned company’s share, nor the price index, nor does it affect the highest and lowest price that was executed during the session and during the last 52 weeks.

According to the circular, the new system will make it easier for brokers to arrange transactions and large deals and notify the market about them, and give brokers and their clients greater flexibility regarding the price and timing of those transactions when executing these direct large deals. administrative series.

Review ranges of average daily trading values
The circular pointed out that the large direct transaction that the broker wishes to execute, its value must be equal to or higher than the limits allocated for the values ​​of executing large direct transactions, and the ranges of average daily trading values ​​for the security and the limits allocated for the transaction execution values ​​of the relevant security are reviewed semi-annually, It will be announced on the market website. The circular specified the continuing obligations of the brokers, as the broker who executes large deals must ensure that the stock and cash obligations arising from the transaction transaction are fully settled on the settlement day, unless otherwise stipulated in the Dubai Clearing Rules, and the broker must also ensure that the amount of shares sold is available. The direct large transaction in the securities account of the selling customer, and that these securities are a negotiable balance. The circular stated that the broker must ensure that sufficient funds are available to the buying customer to settle the large direct transaction on the day of settlement, either directly or indirectly, and short sales are not allowed to trade large direct deals.

He explained that trading commissions on direct large deals are calculated on the basis of the transaction execution price.

Brokers order management system
He pointed out that brokers are allowed to enter and execute direct large deals in the trading system, either by entering orders for deals through the command window for a new order in the market’s trading system, or through the brokers’ order management system using the “FIX” protocol formula, and the brokers must submit a request for deals. Large and errors through the market electronic services system portal. The market will verify the conformity of requests for direct large deals with the requirements stipulated in these procedures and technical details, and the market will confirm the execution of large deals or reject them in the event that these deals do not match the requirements, and the brokers will receive confirmation through the trading system when executing the deals. Large direct deals will bear an initial margin and variable margins in accordance with the margin policy and procedures approved by Dubai Clear.

Brokers and members of Dubai Clearing House
Brokers and members of Dubai Clear may request the advantage of change margin subject to conditions that subsequent sales are not allowed unless the broker and member of Dubai Clear are in a position to ensure that the funds are fully settled successfully on the settlement date. Delivery against payment «DVP», and in the event that the clearing member of the buying broker fails to settle the obligations of the funds of large transactions, Dubai Clearing will reflect the securities that the clearing member delivered to the seller’s broker without any compensation.

The Dubai Market Circular confirmed that brokers must enter the request for large direct deals on the trading system within 15 minutes after matching the transaction on the part of the broker and the member during the trading session, and brokers and members must enter the request for large deals on the trading system on the next trading day in the event that the deal is matched. After the trading session closes. The circular indicated that brokers must continuously ensure that the implementation of large transactions is in accordance with applicable laws, the decisions of the Securities and Commodities Authority and market rules, and it is not allowed to implement large transactions in the event of stopping and suspending trading on the security of the shares of the listed company concerned. The Market may cancel any large direct transaction that, at the Market’s discretion, does not comply with applicable law or if an error is discovered.