Dubai Financial Market Essay Example | Topics and Well Written Essays - 1750 words

Dubai Financial Market - Essay Example Dubai Financial Market (DFM) is one of the few stock exchanges of UAE which was established as a public institution on March 26, 2000 (Dubai Financial Market, 2013a). It has its own independent body which was formed as a result of a resolution passed by the Ministry of Economy (MOE) number 14 2000 (Dubai Financial Market, 2013a). It operates as secondary market responsible for trading of securities, bonds, units of investment fund, any other financial instrument which is issued by the public joint stock companies, Federal government or any other local government & public institutions of the country. DFM was established as a joint stock company with a paid up capital 8 billion Dirham with a par value of 1.6 per share. The first IPO by DFM had resulted in more than 8 billion Dirham. The main objective of DFM is to make it a world class market place and provide the stakeholders with innovative facilities in trading, settlement, depositary of securities and clearing in an efficient metho d. Some of the important market values of DFM are efficiency, transparency, innovation, confidentiality and integrity. The existence of a strong investment market in UAE has attracted several potential investors and is considered as one of the most potential investment hubs of the world. As per a survey conducted by the Economic Department of Dubai 28 percent of the surveyed respondents had claimed Dubai to the most lucrative investment destinations of the world (DED, 2012). Mission and Objectives of DFM The mission and the objective of DFM are to create a fair, transparent and efficient liquid market for smooth trading purposes. It helps in provident various investment opportunities through optimum utilization of resources. The management of DFM provides opportunities for investment purposes in securities markets which would serve for the best interest of the Dubai economy. It also helps in facilitating liquidation of funds invested in securities markets which ensures the smooth interaction between demand and supply by developing principles of fair dealing. One of the main objectives is to arrange for transfer of ownership of securities through deposit, transfer and clearing center within an integrated system which enables fast and correct transfer of ownership of shares. Operations of DFM DFM was initially operated by the government of UAE however, in the year 2006 DFM had turned into a public joint stock company through an Initial Public Offering (IPO) which led to sale of 20 perc ent of the shares to the public and the remaining 80 percent were subscribed by Bourse Dubai. Figure 2: Organizational Hierarchy of DFM (Source: Dubai Financial Market, 2013c) Registrar of Listed Public Shareholding Company The registrar of the issuer company are an essential element of the securities market and the first necessary step for the investor is to submit the