Dubai Financial Market also plans to introduce a delivery versus payment
settlement system by the end of March.
The chief of the DFM is quoted as saying how great the Delivery versus Payment
system will be, but we'll spare you that.
The SCA issued a number of new regulations, including regulations for Delivery versus Payment
(DvP), Securities Custodian, Margin Trading and regulations that support corporate investment like regulations for Mutual Funds, Market-maker and its related regulations (Short-Selling, Securities Lending and Liquidity Provider).
The market has operated a delivery versus payment
-- or DVP -- model now for a year, meaning that there's no time lag between stocks and cash being exchanged.
In a statement released on its website, the MSCI said investors welcomed the implementation of new delivery versus payment
(DvP) settlement models in the UAE and Qatar.
In Qatar and in the UAE, the operational efficiency of the Delivery Versus Payment
(DVP) model has been enhanced through the introduction of a proper false trade mechanism that includes (in the case of Qatar) or will include (in the case of the UAE) securities lending and borrowing facilities.
This week, Clearstream goes live with its new delivery versus payment
(DVP) settlement solution the market s preferred settlement choice since it is more efficient, more secure and offers more real time settlement compared to the free of payment (FOP) option.
In 2011, to comply with the MSCI criteria, the UAE and Qatar implemented the delivery versus payment
(DVP) models on their bourses.
The main criterion the UAE had to satisfy was the implementation of the delivery versus payment
(DvP) settlement system, which it has done," said Matthew Wakeman, Managing Director of Cash and Equity Linked Trading at Egyptian investment bank EFG Hermes.
They have introduced a delivery versus payment
(DvP) model and a so-called "false trading mechanism" that removes the requirement for international investors to have a cumbersome dual-account structure to limit local brokerages' access to their trading accounts.
To deliver the best market solution, Clearstream is also preparing to offer over-the-counter (OTC) delivery versus payment
(DVP) settlement in the short term (whereby delivery occurs only if and when payment occurs) while offering free of payment (FOP) settlement in the meantime.