The Securities Market is responsible for clearing and settlement of the transactions executed in the marketplace. To this end, ADSM and DFM provides relevant regulations on the structure, procedure and supervision of the clearing and settlement aimed at reducing risk and improving market efficiency. *All transactions in ADSM and DFM are settled on a book-entry clearing basis on T+ 2.
1)SETTLEMENT METHOD
The ADSM and DFM adopts multilateral netting system under which transactions are cleared and settled on a net basis by broker. After the clearing of the transactions by The Securities Market, the transfers of securities ownership is done through the book-entry system which is operated by ADSM or DFM.
2)SETTLEMENT PROCEDURE
a.Netting (T)
At the end of each trading session, the amount of securities and money to be delivered and/or paid on the settlement day is determined through netting process and reflected in CSD settlement report.
b. Delivery of Securities and/or Payment of Money (T+2)
Transactions are finally settled on T+2 in the way of delivery versus payment. Ownership of purchased securities are transferred among Investors' trading accounts. The cash settlement is done among Brokers through the designated settlement bank.
The main type of trading orders conducted at The Securities Market are the limit-price order and the market price order. In addition, as part of efforts to service all types of investors, The Securities Market has introduced other types of orders for trading. These are Orders carrying time validity and other specified orders.
3)SUPERVISION OF SETTLEMENT
a. Measure to ensure settlement'.
Broker bank guarantee: all Brokers are required to deposit a bank guarantee of 10 AED millions. The money is used for implementing the obligation of a broker who is involved in a troubled transaction.
b. Disciplinary Measure against failed settlement:
When a Broker fail to settle its transactions, The Securities Market is empowered to suspend the concerned Brokers from trading at ADSM or DFM.
HOW WILL SECURITIES TRADING BE DISPLAYED ON THE SCREEN?
The screen displays a continuous flow of real time quotes and includes the following information:
1. Company Name: All names of companies listed in The Securities Market are displayed.
2. Company Symbol:Special Symbol provided to companies for trading purposes as given by The Securities Market.
3. The last closing price: The average price of the securities at the last trading session, computed as the value of securities traded divided by the number of securities traded.
4. Opening Price: The price of the first executed transaction on a security during a trading session.
5. Highest Price: The highest price executed on a security during a trading session.
6. Lowest price: The lowest price executed on a security during a trading session.
7. Last Price: The price of the last executed transaction on a security during a trading session.
8. Change: The Change price for the day is the difference between the last price and the last closing price.
9. The 52 Week High Price: The highest price executed on a security during the preceding 52 weeks.
10. The 52 Week Low Price: The lowest price executed on security during the preceding 52 weeks.
11. Ask Price: The lowest quoted to sell a security.
12. Ask Size (Volume): Represent the number of shares a seller is willing to sell at the Ask Price.
13. Bid Price: The Highest quoted to buy a security.
14. Bid size (Volume): Represent the number of shares a buyer is willing to buy at the bid price.
15. Number of transactions: Total executed transaction per company.
16. Trading volume: Total volume of shares traded per company.
17. Trading value: Total value of shares traded per company.
18. Market index: A statistical market capitalization-weighted index that represents the performance of The Securities Market listed companies through the measurement of the change of securities prices now relative to some base value.
19. Total Market activity: Include the total shares traded value, total shares trading volume and the total number of transactions executed for all companies during a trading session.