Abu Dhabi Securities Exchange (ADX) recently signed a Memorandum of Understanding with the Securities Depository Centre Company (EDAA), which is wholly-owned by the Saudi Stock Exchange (Tadawul) and the sole entity responsible for providing custody, registration, clearing and settlement services for securities traded on the Saudi Stock Exchange. The MoU was signed in the Saudi capital Riyadh with the aim to strengthen bilateral cooperation in the dual listing of securities in Saudi and UAE financial markets.

The agreement falls within the framework of cooperation between the two countries, and the Saudi-Emirati Coordination Council, which seeks to achieve a common vision of integration between the two countries and bolster bilateral cooperation on key issues and common concerns. The agreement is part of ADX and EDAA continuous efforts to enhance their regional standing and implement the highest standards of governance and transparency in the listing process.

Khalifa Salem Al Mansouri, Acting Chief Executive of ADX, and Mamdooh AlSedairy, CEO of EDAA signed the MoU.

The agreement aims to identify and standardise the operational, administrative and technical procedures between the two countries, and establish effective cooperation on dual listing of securities in their financial markets. This will be achieved through the exchange of information and data included in the ownership register or relevant to transactions carried out by brokers, members, or investors. Additionally, this agreement allows for the transfer of securities, and updating the securities ownership registers in each country.

Commenting on the signing of the agreement, Al Mansouri reaffirmed ADX's keenness to develop its legal and legislative structure in accordance with the best international standards to ensure a competitive, transparent and fair trading environment. He said, "The MoU with EDAA will enhance the Exchange’s efficiency in the governance of dual listing operations, which in turn will increase the Exchange’s attractiveness to foreign investors, enhance liquidity and boost investor trading."

Al Mansouri added, "This agreement reiterates the strong relationship that ADX enjoys with Tadawul and other organisations in Saudi Arabia. We continuously seek to bolster these partnerships through cooperation agreements and the standardisation of frameworks in various aspects of ADX operations, such as corporate governance, listing requirements, disclosure, and trading rules. The agreement will also prove an attractive platform for Saudi, UAE and foreign investors alike, thanks to the stable and competitive investment environment in the region's financial markets. The number of Saudi investors in ADX reached 147,412 by the end of 2018, of which 147 were institutional investors, with a total trading value (buy + sell) of AED1.6 billion in 2018.

Mamdooh AlSedairy, CEO of EDAA, said, "This partnership stems from our mutual commitment to enhance our cooperation with ADX to facilitate depositary services between the Saudi and UAE financial markets through providing all facilities to enable the depository operations, preservation and maintenance of ownership registers between both parties."

The agreement between the Abu Dhabi Securities Exchange and EDAA will enable each party to open a deposit account with the other party to deposit and transfer securities in accordance with their procedures. In addition, it will enable holding and maintaining securities ownership registers of the deposited securities within each party and managing them , as well as effective exchange of information, data and records related to the ownership registers or the transactions executed or to be executed by brokers, members or Clients or any information and data that both Parties deem necessary.

ADX had previously signed an MoU with the Saudi Stock Exchange Tadawul to enhance mutual cooperation and bilateral relations between the two parties through the exchange of information and expertise. The MoU facilitates knowledge exchange programmes, possibility of utilizing the expertise that both stock exchanges have, interchange of financial market data and dual listing opportunities as well as cooperation in market-development initiatives.

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