Securities lending and borrowing (SLB) kickstarted on DFM

Al Ramz Capital behind first SLB transaction for market making

DUBAI/December 16-2020: Dubai Financial Market (DFM) has made a meaningful stride in the journey towards becoming a developed market by facilitating the execution of the first securities lending and borrowing (SLB) for a market making transaction by Al Ramz Capital.

Dubai Clear, a subsidiary of DFM on Wednesday (December 16) announced that Al Ramz Capital has successfully executed the first securities lending and borrowing (SLB) transaction.

“This is the first end‐to‐end transaction using the SLB facility for settlement on the DFM,” a DFM statement said.

SLB transaction

The securities lending and borrowing (SLB) allows investors to enhance the yield of their long‐term holdings by lending out their securities to borrowers for an annualised fee while retaining all their rights of holding the securities.

Short selling

SLB also facilitates Regulated Short Selling on DFM allowing investors to hedge their portfolios. Maryam Fekri (seen in the picture), CEO of Dubai Central Clearing & Depository Holding (DCCD), said that Dubai Clear provides investors with numerous services, enabling them flexible solutions for optimal usage of their securities’ holdings.

These services are supported by a robust framework in line with international requirements on various regulatory, operational and technical aspects.

Investors, brokers welcome move

Within this context, brokerage firms and investors have widely welcomed the SLB service, given its importance in executing Market Making transactions and monetising long-term ownership of securities. “

“We commend Al Ramz Capital, one of the licensed SLB agents, for spearheading the industry in diversifying into new activities and successfully concluding the first SLB transaction through Dubai Clear’s infrastructure, and we look forward for brokers and investors to further leverage this service in the future,” Fekri said.

Karim Schoeib, Chief Executive Officer (CEO) of Al Ramz Capital, said this is yet another milestone for Al Ramz, the first financial services company on DFM to utilise the securities lending and borrowing facility and look forward to utilising this facility on a larger scale.

Timely step

He said DFM has achieved a major step towards upgrading to developed market and offering another investment tool to investors to enhance the return on their long-term holdings while providing the facility to hedge their portfolios from market volatility.

Al Ramz Capital, a subsidiary of Al Ramz, a Dubai Financial Market-listed company that offers a variety of financial products and services including asset management, corporate finance, market-making, liquidity-providing, brokerage, IPO management and research.

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