DFM and Bahrain Bourse plan swift transfer of securities

Bahrain Bourse (BHB) signed a Memorandum of Understanding (MoU) with Dubai Financial Market (DFM) to introduce an electronic system that represents a significant advance in the method of share transfer between the two exchanges, by enabling investors to transfer their shares easily and quickly. DFM listed securities currently include three Bahraini companies: Gulf Finance House, Al Salam Bahrain Bank, and Arab Insurance Group-ARIG. A total of 4,707,846,560 shares in those companies have been transferred to DFM.
Sheikh Khalifa Ebrahim Al Khalifa, CEO of Bahrain Bourse signed the MoU with His Excellency Essa Kazim, Chairman of DFM, in the presence of senior representatives from both sides.
The MoU creates the general framework that defines the guidelines of the transfer process and administers the relationship between both sides as well as explaining their capacities. It has been agreed to introduce the new electronic system during the second half of 2015, enabling swift share transfers to be executed during the official working hours of the exchanges. The system will not require any official correspondence regarding share transfer, validation and endorsement.
Sheikh Khalifa Ebrahim Al Khalifa BHB’s CEO expressed his happiness for signing this MoU with DFM, which is the second with a Gulf market after signing the first with Kuwait Clearing Company in May 2014. He emphasized that it will facilitate transferring of shares accurately and securely between DFM and BHB where non-Bahraini investors that belong to more than 98 nationalities own over 40%of the market capitalization, and UAE citizens represented 11.36% of the total value of shares traded in the bourse until November 2014."
"This MoU comes as part of the strong and long cooperation between both markets which aims at achieving a higher objective which is the integrity of the GCC financial markets and bourses and improve the quality of services provided to investors", Bahrain Bourse’s CEO added.
He also said that this will be enhanced by the initiative that BHB launched few weeks ago allowing UAE and GCC licensed brokerage firms to directly trade in Bahrain Bourse without the need of personal presence or representative offices in Bahrain which will reduce the transaction cost on the UAE investors trading in the Bahrain Bourse.
Commenting on this, His Excellency Essa Kazim, Chairman of DFM, said: "We are delighted to sign this MoU with Bahrain Bourse as part of our mutual commitment to provide investors with most sophisticated, efficient and swift services, in line with the growing drive towards electronic and smart services. We have maintained wide-ranging and continuous cooperation with (BHB) over the past years and constantly explore prospects to further improve investor services and facilitate their activity. In fact, this has bolstered the trading activity of the three Bahraini companies dual listed on DFM, as their total trade value on DFM has reached AED 35 billion so far this year, representing 10% overall trade value of the market. We are privileged to have the Bahraini companies among our listed securities, and we are confident that the new arrangement will further strengthen DFM’s leading position as the market of choice for GCC- based companies looking for dual listing abroad."
Maryam Fikri, Deputy Chief Executive and Head of Clearing, Settlement and Depository, DFM, said: "The collaboration with (BHB) to simplify and accelerate the share transfer process is highly important to investors. As part of this agreement, we will develop a highly efficient and protected electronic system that enables the swift transfer of shares between the two exchanges as of the second half of 2015. We take this opportunity to extend our sincere thanks to (BHB) management for the high level of cooperation. We believe that the respected investors will recognize the positive effect of this step, similar to what DFM has achieved with the Kuwaiti Clearing Company last year."