The United Arab Emirates has sets rules to develop covered bonds market, which will allow the practicing of activities like the issuance, listing and trading of covered bonds on the local markets.
The move comes as part of the Securities and Commodities Authority (SCA’s) efforts to enhance the legislative system of the local financial markets.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The regulation will outline the conditions for acquiring license to practice the activities of issuing, listing and trading covered bonds, as well as disclosure requirements for that activity.
Sultan bin Saeed al-Mansouri Economy Minister said that the new rules will provides a new investment tool for market investors in addition to adding greater in-depth to the country’s financial markets.
The regulation will cover the listing of bonds on the country’s securities markets is expected to be passed in the first half of this year.
In order to get SCA approval to practice the activity of issuing covered bonds, the body must be a commercial or investment bank, a financial institution or branch of a foreign bank which had received approval of the Central Bank and should have a minimum capital of Dh100 million.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataAccording to the regulation, the validity of the licence will be one year ending on 31 December of every year and renewal of license will be before the end of November of the year.
However, covered bonds, which are backed by cash flows from mortgages or public sector loans are considered to be safe because investors have a preferential claim on the assets in the event of a default.
