• DFMPress release
  • OUTFLGeneral Information regarding the listing of the company
10:00
01 january 2014
Home > Other > Glossary

A

  • Account Opening Form: Application form required to open a trading account with a DFM licensed broker.

  • Assembly Meeting Announcement Date: The decided date 21 days before the assembly meeting is being held according to the Companies Law Article 123.

  • Assembly Meeting Date: The date the Board of Directors (BOD) decide upon to discuss the Approval of Profit / Loss Accounts, and to discuss and approve any distributions for the stakeholders or any other actions that might occur during the meeting.

  • AGM: Abbreviation of Annual General Meeting, a mandatory yearly meeting of shareholders that allows stakeholders to stay informed and involved with company decisions and workings. This yearly meeting is the single event whereby shareholders are able to gather and ask the Board of Directors questions pertaining to the corporate health and strategy. Due notice must be provided to shareholders with regards to the meeting date and agenda.

  • Audit Confirmation Letter: A letter addressed to auditors issued based on investors and indicates securities ownership details of the investor.

B

  • BG: The Bank Guarantee is the maximum volume of trading by the broker and the net amount payable by brokers should not exceed this limit.

  • Bid: Buy.

  • Bond: A debt instrument issued by corporations and governments on a long term basis. Corporations, governments, states and municipalities use bonds to pay for activities that require large sums of cash all at once, for example for infrastructural projects or expansion into new markets. Sometimes, bonds are referred to as fixed-income securities or fixed-income investments.

  • Broker: A juristic person authorized pursuant to the provisions of the SCA law to conduct a brokerage business in the Market.

  • Broker's Representative: A person appointed by a Broker to conduct on its behalf brokerage business transactions relating to Securities and Commodities.

  • Brokerage: The purchase or sale of securities by a broker in the market in the name of and the account of a third party, or in its own name and for its own account.

  • Buy Order: An instruction given by an investor to a broker to buy a specified amount of securities of a certain issuer at a certain price.

  • Bonus Shares: The distribution of corporate profit in the form of bonus shares instead of cash dividends in proportion to their existing holdings granted to the investor. The percentage of distribution is decided by the company and is done without an increase in the capital.

  • BOD: Board of Directors, a group of individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. Such issues include the hiring / firing of executives, dividend policies, options policies and executive compensation. Every public company must have a board of directors.

C

  • Capital Increase: The company increases its capital by issue of new shares. The existing shareholders have the right to purchase the issued shares at the price set per share. Cash will be paid to the company and shares will be added directly to the investors' balances.

  • Cancelled Order: It is a type of order that is cancelled by the investor or by Market Operations.

  • Cash Dividends: The distribution of the corporate profits shall be in the form of cash directly payable to shareholders and often in the form of cheques, bank order, or iVESTOR Card. Profits shall be calculated on the basis of securities held by the shareholder and according to the percentage of distribution approved by the company.

  • Closing Price: Last traded price on the security.

  • Corporate Actions: Actions taken based on decisions from Annual General Meetings (AGMs) of companies which affect the number of shares in issue or the ratio of a holding to the total number in issue, or the acquisition cost of shares.

  • Correction of Deal: The broker desires to correct a deal that is executed by mistake, he/she should check with Market Operations to correct the mistake which occurred in the investor’s account.

  • Custodian: Giving qualified banks and financial institutions the capacity of foreign or local custodians in the DFM after signing a custodianship agreement. The custodians may act on behalf of their clients who invest in securities listed in the market, in which clients and not the custodian, are the legal owners of securities.

D

  • Deposit of Dual Listed Securities: Investors’ ability to transfer their shares from another financial market to DFM as per the agreement signed between the company, DFM and the other Market.

  • Delisting: The removal of a listed security from the exchange on which it trades for any reason.

  • Disclosure: To announce any relevant news regarding listed securities which could have an effect on the securities' prices. For example, announcing Assembly Meetings, corporate actions (distributions, increasing paid up capital, stock split / consolidation).

  • Dividends: Distribution of earnings to shareholders, prorated by the class of security and paid in the form of money, stock, scrip, or rarely, company products or property. The amount is decided by the Board of Directors and is usually paid quarterly. Mutual fund dividends are paid out of income, usually on a quarterly basis from the funds investments.

  • Dividends Payment Date: The decided date for dividends payment.

  • Dubai Financial Market: Governmental Institution that supervises and regulates trading and maintains the securities register of listed issuers.

  • Dual Listed Companies: Companies who are registered mainly in a foreign market and its shares are traded in more than one financial market.

  • Distributed Cash Dividends: The portion of a company's profit allocated to each outstanding share of common stock. Net income (reported or estimated) for a period of time is divided by the total number of shares outstanding.

  • DFM General Index: The DFMGI represents those companies that are listed on the DFM as a principal Market

E

  • EGM: Abbreviation of Extraordinary General Meeting. It is a meeting other than the Annual General Meeting between a company's shareholders, executives and any other members. An EGM is usually called on short notice and deals with any urgent matters.

  • Electronic Connection: Granting issuers, their registrars and custodians the ability to be connected with the CSD system (AS400 Equator), where they can identify various details related to the company’s shareholders / clients through the connection.

  • Special Deal: Transactions are executed outside the trading ground through CSD in the case of trades with a value of AED 10 Million and above.

F

  • Face Value: The nominal value of a security stated by the issuer. Or it is the original cost of the stock shown on the certificate.

  • Financial Statements: It includes income statements, balance sheets and any other statements.

G

  • Gainers: Most active securities by percentage of price change.

I

  • Investor Number: Also known as NIN, a unique number given to an existing securities holder after submitting his / her securities or to a new investor who does not own securities. This number allows the investor to trade in the DFM.

L

  • Last Trading date to entitle: The right of entitlement for shareholders of any proposed dividends for those holding stocks until that specified date or for shareholders buying shares on that specific day. It is also known as T+0.

  • Listed Security: Securities that have been accepted for trading purposes by a recognized and regulated exchange. The DFM represents listed companies, bonds, Sukuk and mutual funds.

  • Limit up: 15% limit up for price movements on a security from its previous close in DFM.

  • Limit down: 10% limit down for price movements on a security from its previous close in DFM.

  • Losers: Least active securities by percentage of price change.

M

  • Market Value: The current quoted price at which investors buy or sell a share of common stock or a bond at a given time.

  • Merge of Accounts: In case the client holds more than one Investor Number (NIN) due to a mismatch between the subscription data and the ones provided to DFM by the investor, but holds some shares in the inactive NIN. As a result, the shares are transferred from the inactive to the active NIN, and the inactive NIN is cancelled accordingly.

  • Mutual Fund: The idea behind a mutual fund is simple: Many people pool their money in a fund, which invests in various securities. Each investor shares proportionately in the funds' investment returns - the income (dividends or interest) paid on the securities and any capital gains or losses caused by sales of securities the fund holds. Every mutual fund has a manager, also known as an investment adviser, who directs the fund's investments according to the fund's objective, such as long-term growth, high current income, or stability of principal. Depending on its objective, a fund may invest in stocks, bonds, cash investments, or a combination of these financial assets.

  • Market Operations: A DFM section that monitors the compliance of the trading operations to the approved rules and regulations.

  • Market: Dubai Financial Market.

N

  • Net Profit: This term results from the traditional appearance of an income statement which shows all allocated revenues and expenses over a specified time period with the resulting summation on the bottom line of the report.

O

  • Offer: Sell.

P

  • Paid-up capital: Essentially the portion of authorized stock that the company has issued and received payment for.

  • Pledge Release: After the investor has paid the entire bank commitments, the shares will be transferred from pledge account to CSD account and he / she will have full rights and control over the securities.

  • Pledge Securities: Blocked investor’s shares in favor of the bank in order to access the bank’s facilities. This forbids investors from dealing with their pledged securities without the bank’s permission.

  • Primary Market: The market in which investors have the first opportunity to buy a newly issued security.

  • Private Companies: Private shareholding companies are not listed companies in the DFM for trading, however the CSD manages the register of the company whereas they later play the role of the official registrar of these companies after signing an agreement in this regard.

  • Public Companies: Companies which have an unlimited number of shareholders and can offer their shares to the public.

  • Public Joint Stock Company: Also known as PJSC, is a company established under the UAE laws, whose shares are traded and owned by the general public.

Q

  • Quorum: The minimum acceptable level of individuals with a vested interest in a company needed to make the proceedings of a meeting valid under the corporate charter. This clause within a company's charter ensures that there is a sufficient representation of stockholders present at meetings before any changes can be made by the board.

R

  • Registrar: The division that maintains the securities register of an issuer.

  • Register Closing Date: The date that includes the shareholders' names who are entitled to the proposed distribution or for those who deserve any distribution. This date is also represented as T+2 in the DFM, and according to this no trades are counted on the security that day or the day prior to this date.

  • Registry Transfer: Transfer of securities for the investor from a member’s account to CSD’s account.

S

  • Secondary Market: The financial market for the trading of securities that have already been issued in an initial private or public offering. Alternatively, the secondary market can refer to the market for any kind of used goods. The market that exists in a new security just after the new issue, is often referred to as the aftermarket. Once a newly issued stock is listed on a stock exchange, investors and speculators can easily trade on the exchange, as market makers provide bids and offers in the new stock.

  • Suspended Order: A type of buy or sell order that is suspended by the investor or Market Operations.

  • Specimen Signature Form: A form signed by the investor or his / her agent to enable DFM to verify his / her signature.

  • Sell Order: An instruction given by an investor to a broker to sell a specified amount of securities of a certain issuer at a certain price.

  • Securities Register: An official record of securities issued and contains information about the securities holders such as their names, addresses and numbers of securities held.

  • Settlement Date T+2: T+2 = two working days after trading day. For example Sunday Trading –Settlement on Tuesday. It is the day when the Clearing and Settlement Department receives all dues from brokers and pays all entitlements to them.

  • Share: Represents the ownership in a Public Joint Stock Company.

  • Share Book: A register of a company’s shareholders that includes holdings, identification and address details.

  • Shareholder: Any person, company or other institution, that owns at least one share in a company. A shareholder may also be referred to as a "stockholder". Shareholders have the potential to profit if the company does well and the potential to lose if the company does poorly.

  • Security: An instrument representing ownership (stocks), a debt agreement (bonds) or the rights to ownership (derivatives).

  • Stock Consolidation: The process by which a company changes the structure of its share capital by reducing the number of shares it has in issue and increasing the par value of each according to the distribution percentage decided by the company. As a shareholder, the number of shares you own would be reduced, their nominal value would rise to compensate, and the market price of the shares should also rise to reflect the greater 'ownership' which each share represents in the company. This action is taken without an increase of capital and without the purchase of new shares in the market.

  • Stock Split: An increase in a company’s number of shares issued by reducing the basic value of each share, in which the number of shares rises and their nominal value and market price falls. The splitting of every share means that the investor will get an additional share to the shares he / she originally owns, according to a percentage set by the company. Companies use this method to make ownership more affordable to a broader base of investors.

  • Stock Transfer: Transfer of securities for the investor from CSD’s account to a member’s account.

  • Sukuk: An Islamic financial certificate, similar to a bond in western finance, that complies with Shari'a, Islamic religious law. The issuer also makes a contractual promise to buy back the bonds at a future date at par value. Sukuks must be able to link the returns and cash flows of the financing to the assets purchased, or the returns generated from an asset purchased.

  • Securities: Shares, bonds and notes issued by joint stock companies, bonds and notes issued by the Federal Government or Local Governments, public authorities and public institutions in the State, and any other domestic or non-domestic financial instruments accepted by the Authority.

T

  • T+0 Trading Date: The day of completing the sale and purchase during the trading session

  • T+1: The day between the Trading Date and Settlement Date.

  • Transfer Between Broker to Broker: The transfer of all or part of an investor’s stock balance from his / her account with one broker to his / her account with another broker.

  • Transfer of Pledge Securities to Broker for Sale: The investor and the pledgee bank desire to transfer pledged securities to the investor’s account with a DFM accredited (previously agreed upon by the bank and investor) broker a new account specially for selling the pledged securities only.

  • Trading Floor / Hall: The trading floor in the Market.

  • Trading: The process of buying and selling securities.

  • Trading Session: Timing allocated for trading on listed securities on the DFM from 10:00 to 13:50, Sunday to Thursday except on public holidays.

  • Trading Suspension: Suspend trading of a security listed on the DFM.

  • Trading Resumption: Resume trading of a security listed on the DFM.

  • Trading Value: Value of traded shares (AED).

  • Trading Volume: Number of traded shares (quantity).

  • The Authority: The Securities & Commodities Authority (SCA).

W

  • Withdrawal of Dual Listed Securities: Investors’ ability to transfer their dual listed securities from the DFM to another financial market as per the agreement signed between the company, DFM and the other Market.