21.01.2022

Getting listed on the Dubai Financial Market.

What is the Dubai Financial Market ?

The Dubai Financial Market (DFM) was established as a public institution in 2000. The Executive Council Decree of 2005 set the DFM as a Public Joint Stock Company. 

It is an onshore financial exchange markets and is subject to the supervisory authority of the UAE Securities and Commodities Authority (SCA). The SCA has authority to impose laws, regulations, and standards with which the DFM must comply.

The DFM is the first financial market in the world to comply with Islamic Sharia rules. It deals in debt instruments, equity instruments, Exchange Traded Funds (ETFs) and securities lending and borrowing. 

Why should you go public?

Being listed in a capital market provides the issuing entity to have an enhanced access to capital, a dominant global presence and a minimum assured liquidity. It also encourages the company to transform itself into a more efficient and sustainable business model. 

Going public on a financial exchange has the following benefits:

• Ongoing access to capital: publicly listed companies have an enhanced access to both, equity and debt capital markets.
• Liquid and transparent market for shares: having a transparently valued company facilitates all capital market related transactions a listed company may take. 
• Enhanced public profile: being registered on a well established financial exchange strengthens the company’s credibility, image and visibility. 
• Opportunity to improve business: the diligence carried out during the IPO process provides the business to evaluated by industry specialists and, put in place effective internal processes and controls.
• Attract talent: the recognition gained by getting listed attracts talented individuals from the industry, especially if there is quit-based compensation, so they would benefit alongside the financial success of the company. 
• Succession planning: an IPO provides an opportunity for a gradual transfer of control to professional management personnel, board of directors and ultimately the shareholders.

Things to consider when choosing to go public

The Initial Public Offering (IPO) of a company is no easy task, before doing so the following things must be considered: 

1. Offer structure: the offer size, pricing and capital structure.
2. Marketing and Communication Strategy
3. Timing
4. Legal Structure 
5. Liaising with regulators: engaging with the respective regulators such as SCA, the relevant Department of Economic Development and DFM
6. Pricing: whether it will be Fixed Price IPO Offering or Book-Built IPO Offering 
7. Corporate Governance: the governance framework of the company

Why should you chose to list on the DFM ?

The DFM is the most dynamic financial market in the Middle East. Being based in the region’s financial hub, Dubai, provides it with diverse portfolio in international trade, banking and finance, infrastructure, technology and tourism. 

In 2007, DFM became the first exchange, in the region, to be publicly listed while complying with sharia’ principles. The DFM had its position further strengthened when it consolidated its operation with Nasdaq Dubai. The consolidation allows investors an even greater choice of asset classes and an easier access to DFM and Nasdaq Dubai listed securities via a single investor Number. This provides for a seamless experience across the two exchanges. The DFM has witnessed growth through developing a number of key international and regional strategic partnerships and adapting to the best practices. 

DFM has built a reputation of being a leader in market infrastructure, innovation, service and excellence in capital markets across the region and shares expertise with other regional exchanges.

Moreover, what makes DFM exceptionally distinct from other capital markets is technology. The DFM has by far the most advanced trading engines globally, the Nasdaq X-Stream. It is capable of handling multiple asset classes listings, such as equities, fixed income, and derivatives of multiple currencies. Furthermore, the current system is capable of handling up to 200 times its current average market activity and volume. It shows the DFM is here to stay and intends to grow by at least 200 times. Your company could grow as the DFM grows. This is something only the DFM can provide as all other established trading platforms are highly saturated.

The DFM has a very customer centric approach. It provides all the assistance required and expected from a capital market, and a little more. Firstly, it has an Issuer Support Program, under which, an experienced DFM IPO team guides you through the various stages of the listing process with DFM and the SCA. Secondly, there are the Innovative Issuer Services, DFM provides numerous values adding services, such as; electronic shareholders reports, dividend distribution services, etc., for its listed companies. Lastly, the DFM provides its listed companies various opportunities to increase their corporate awareness and visibility among global institutions and investors.