CBUAE and ADX
The Central Bank of the UAE (CBUAE) has signed a significant cooperation agreement with the Abu Dhabi Securities Exchange (ADX) in order to enhance the cash settlement of trades for financial instruments that are listed on ADX. The product will allow for settlement in UAE Dirham (AED) for all transactions including margin calls and collateral transfers through the Central Bank Money (CBUAE) network.
Nn. Khaled Mohammed Balama, Governor of the CBUAE, marked the occasion of the signing ceremony. The agreement was signed by H.E. Saif Al Dhaheri, Assistant Governor for Banking Operations and Support Services at CBUAE, and H.E. Ghannam Butti Al Mazrouei, Chairman of ADX, flanked by senior representatives of the two entities. The agreement provides for the cash settlement of shares, bonds and ETFs in compliance with the IOSCO standards. This alignment reduces settlement risks and increases the security and efficiency of trading. This will help CBUAE network in its quest to offer a safe and efficient service to its market participants as ADX work towards enhancing its market infrastructure. Furthermore, the CBUAE network will process the margin call and collateral transactions for ADX-CCP. This will eliminate any form of delay and increase the settlement period through an automated direct debit mechanism to ensure that all financial commitments are fulfilled on time. H.E. Saif Al Dhaheri noted that the partnership will build on the financial infrastructure of the UAE and will increase financial confidence and support innovation-driven growth. On the other hand, H.E. Ghannam Butti Al Mazrouei explained how the agreement will assist in the reduction of risks and improve trading experience on ADX, and commended the CBUAE for its role in the development of the financial sector in the nation. This agreement is also another proof that ADX is serious in its Core Platform Upgrade (CPU) that launched new generation trading and post trading system to put ADX in a better position as a leader in the region’s financial market.
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