The Emirates Securities and Commodities Authority (SCA) has signed an agreement with the Abu Dhabi Stock Exchange (ADX) and the Dubai Financial Market (DFM) to start implementing international financial reporting standards for listed companies, by using the eXtensible Business Reporting Language (XBRL).

Abdullah Al-Turifi, SCA Chief Executive Officer, signed the agreement for his side, while Essa Kazim, DFM Executive Chairman and Rashid Al-Buloushi, ADX Deputy CEO and Director of Operations, also signed for their respective outfits.

The agreement is part of the efforts being made by the SCA, in collaboration with the two markets, to improve transactions by enhancing disclosure and transparency on the markets. It is also in implementation of the SCA’s strategic plan of applying advanced technologies on the local markets.

Based on the schedule for implementing the project in the UAE, the first provisional report of the new system will coincide with the time for release of the fourth quarter (Q4) report of 2011, which will cover twenty companies listed on each of the ADX and DFM. The companies are to be selected according to market value and sector.

In a comment after the signing of the agreement, Al-Turifi said the move will facilitate the smooth display, storage and use of financial data electronically, information delivery at the right time to match with investment developments on the markets and direct transaction of securities business.

He added that the new system will allow investors and financial analysts to quickly and accurately analyze data due to its ability to arrange and categorize financial data in a way that facilitates comparison vertically and horizontally, leading to high quality and accurate in-depth analysis.

He pointed out that, regionally, the UAE has set the pace in the implementation of XBRL in the financial markets, just as it did in the area of using XBRL in issuing financial adequacy reports of brokerage companies, in addition to being a pioneer in using the XBRL for the 2011 international financial reporting standards ranking.

He said the new development was in line with the UAE’s 2021 National Charter, which aims at making the UAE "one of the best countries in the world" and to boost the country’s status among the comity of nations, showcasing it as a regional and international role model through its enviable achievements.

Essa Kazim also commented at the end of the signing ceremony saying that the application of the XBRL standards has a lot of benefits, particularly in the area of preparing and releasing of financial statement and disclosure, adding that the system, which saves time and efforts, is very effective and would further boost accuracy and authenticity of data for all the concerned parties, including issuers and users of the data.

He pointed out that the new standard provides for companies a mechanism for releasing all types of information, including financial statements and corporate disclosures. "The applying of XBRL in publishing financial statement will help improve disclosure by companies listed on our local markets and elevate the system to the highest level of its application on the international markets," he said, adding that applying the system will also contribute immensely in the swift disclosure of financial statements by companies, making such information available to concerned investors at the right time.

He noted that the DFM collaborated with the SCA and the ADX to set up the phases of implementing the new system in a very professional way, by tasking a joint committee to probe for the best way to apply the new system. He said the committee continues to work to educate the public joint stock companies about the new system to help them adjust to it rapidly and effectively, adding that the committee had also held a meeting with representatives of major auditing and accounting firms handling the financial statements of concerned companies to sensitize them about the new development and project. "We look forward to positive cooperation from the concerned companies, in view of the fact that the new system will enhance financial statement preparation, analysis and publishing, which will, in turn, boost investor confidence," he said.

Also commenting on the occasion, Rashid Al-Buloushi, ADX Deputy CEO. said the customizing of the XBRL for financial statement purposes is an important achievement as it takes the sharing and display of financial information to the internet age thereby saving efforts and cost, adding that the successful conversion to the new system was the fruit of joint efforts among the concerned bodies in the UAE as a joint committee and professional task force, with members drawn from the SCA, the ADX and the DFM, worked assiduously in the past to make the project a successful reality.

He pointed out that the market will continue to exert great efforts to ensure continuous development of services being rendered to investors. "By collaborating with the SCA and the DFM, we remain committed to providing the best products and services our clients expect from us. Therefore, we will continue to work side by side with all the concerned government and professional entities to ensure that all concerned parties in this country benefit from our adoption of the XBRL system," he said, adding that the new system is part of the UAE government’s vision, in general and the ADX’ vision, in particular, having been based on the principles of transparency, disclosure and application of best international practices, which are prerequisites the ADX set forth for all its listed companies in their daily transactions.

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