UAE's Securities And Commodities Authority: At 14th Meeting Of Committee Of Heads Of GCC Financial Market Authorities - Financial Market Authorities Discuss A Strategy And A Package Of Initiatives To Achieve Market Integration

Pursuant to the directives of H.E. Sultan bin Saeed Al Mansoori, Minister of Economy and Board Chairman of the Securities and Commodities Authority (SCA), SCA took part in the 14^th meeting of the Committee of Heads of the GCC Financial Market Authorities (or their equivalents) held in Riyadh. The SCA delegation was led by H.E. Dr. Obaid Al Zaabi, Acting CEO of SCA. Present at the meeting were heads of the GCC financial market regulatory authorities, as well as H.E. Abdullah bin Juma Al Shibli, the GCC Assistant Secretary General for Economic Affairs.

H.E. Dr. Al Zaabi said that the committee reviewed the latest developments in the GCC financial markets using the model put forward by the Secretariat General and exchanged views about those developments.

Dr. Al Zaabi added that committee members also reviewed a proposal put forward by the Saudi Arabia-based Capital Market Authority (CMA) to set up a central GCC- based agency to support joint action by the GCC financial market authorities, as well as the minutes of the 1^st meeting of the Working Group on the GCC Financial Market Integration Strategy and the minutes of the 4^th meeting of the Working Group of Training Officials at the GCC Financial Market Regulatory Authorities. The committee then offered its recommendations on them.

The meeting discussed the committee’s agenda and made the following decisions:

A Brief about the Economic Decisions by the Supreme Council in Its 36^th Round

The committee reviewed a brief by the Secretariat General on the economic development decisions made by the Supreme Council in its 36^th round, especially with respect to economic and development affairs. It approved the unified acquisition rules of the GCC financial markets and decided that they be should be used as guidelines until the unified rules and principles for market integration become fully-fledged and consistent.

A Central Agency to Support Joint Action by Financial Market Authorities

The committee recommended that the Working Group on the GCC Financial Market Integration Strategy be in charge of updating the frame of reference for looking into the strategy and the package of initiatives aimed at market integration in light of the CMA’s proposal to set up a central agency to support joint action. According to the proposal, a legally and administratively independent GCC-based regulatory and legislative agency must be set up to regulate financial markets. Its point of reference is the GCC and it has full powers to draft and review the regulations, standards, and principles regulating the GCC financial markets, as well as the strategic objectives and the initiatives proposed by the working group, provided that the work required is finished within a month of the convening of the meeting. The committee also convened an extraordinary meeting to discuss the updated frame of reference and present its recommendations about it to the Ministerial Committee of Board Chairmen of the GCC Financial Market Regulatory Authorities.

Financial Market Integration Strategy

The meeting reviewed the minutes of the 1^st meeting of the Working Group on the GCC Financial Market Integration Strategy convened at the end of January of last year and recommended that the strategic objectives and initiatives to achieve market integration be reviewed by the working group, provided that the topics on the role and significance of clearing houses, financial services, brokers, and trading platforms are clear. Recommendations were also made to devise standards for financial market integration, in addition to the standards of the International Organization of Securities Commissions (IOSCO), and to check the terms stated in the objectives, such as “encouraging institutional investment”.

Training and Development Programs

The committee reviewed the minutes of the 4^th meeting of the Working Group of Training Officials at the GCC Financial Market Regulatory Authorities. The minutes discussed the 2016 training and development program, the outcomes of the 2015 training and development programs, the continuing professional development program, and the currently-held training programs. The committee ensured the importance of coordination between the GCC Secretariat General and liaison officers to achieve mutual benefit from the key training and development programs held at regulatory authorities and coordinate in organizing joint training programs and enter into joint negotiations with regional and international training bodies. It has also been agreed that the presiding country takes charge of designing a website through which training programs can be viewed, in coordination with the GCC Secretariat General and the GCC market regulators.

A Mechanism for Monitoring Percentage of Ownership of GCC Corporate Persons

The meeting reviewed the study presented by the CMA on a mechanism to monitor the percentage of ownership of corporate persons at joint-stock companies and the trading hours in the GCC capital markets. The committee recommended that the study be referred to the Working Group on Financial Market Supervision and Oversight for discussion and recommendation. The committee also recommended that a workshop be held for the Working Group on Financial Market Supervision and Oversight discuss the CMA’s paper on trading hours in the GCC financial markets.

It is noteworthy that the Committee of Heads of the GCC Financial Market Authorities was founded upon a proposal made by the UAE to coordinate among the GCC states to unify securities market-related policies.