NASDAQ Dubai recently consulted on its new proposed Admission and Disclosure Standards (the “ADSs”).

Reform of the DIFC’s Listing Regime

The proposed ADSs, issued on 6 February 2012, are part of significant ongoing reform of the regulatory architecture governing NASDAQ Dubai and other securities exchanges in the Dubai International Financial Centre (the DIFC). The reforms date back to early October 2011, when responsibility for Official List and listing authority functions in the DIFC was transferred from NASDAQ Dubai to the DIFC’s regulator, the Dubai Financial Services Authority (the “DFSA”). Responsibility for admission of securities to trading on NASDAQ Dubai remains with the exchange. This approach mirrors the position in the UK, where there is a similar split in function between the Financial Services Authority (in its role as the UK Listing Authority) and the London Stock Exchange.

The ADSs and the DFSA’s Markets Rules

It is proposed that the ADSs will form part of the NASDAQ Dubai Business Rules, and will replace the existing Issuers and Securities Rules. Separately, the DFSA has been consulting on its proposed new Markets Rules, which will include the DFSA’s listing rules. It is intended that the NASDAQ Dubai Business Rules and DFSA Markets Rules will come into force at the same time.

Ensuring Liquidity on NASDAQ Dubai

In an effort to ensure liquidity on NASDAQ Dubai, the proposals include provisions in the ADSs which would require an issuer to have a sufficient number of bona fide shareholders or a form of market maker, to ensure sufficient supply and demand exists to facilitate a reliable price formation process.

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