Cash settlements for financial instruments listed on the Abu Dhabi Securities Exchange (ADX), including stocks and bonds, will now be conducted in dirhams.
The use of dirhams will also extend to transactions related to margin calls and collateral through the Central Bank Money network.
This development follows an agreement signed between the UAE Central Bank and ADX.
As part of the agreement, cash settlements for trades involving shares, bonds, and exchange-traded funds (ETFs) will be processed via the Central Bank’s network, ensuring full compliance with the International Organisation of Securities Commissions (IOSCO) standards for central counterparty clearing (CCP) and central securities depository (CSD) services.
This initiative aims to reduce settlement risks and supports ADX’s objective of delivering secure and dependable financial services.
“This agreement represents an important step towards enhancing a resilient and innovation-driven financial infrastructure,” said Khaled Mohamed Balama, Governor of the CBUAE.
Margin calls included
Margin calls and margin collateral transactions for ADX-CCP will also be handled through the Central Bank’s network. This will introduce an automated direct debit mechanism, streamlining the settlement process and ensuring financial obligations are met without delays.
