Listing Shares of public joint stock companies incorporated in the UAE
To list shares of a public joint stock company incorporated in the UAE for trading in the UAE, the company should be licensed by the Emirates Securities and Commodities Authority (ESCA) first. It shall then choose a securities market in the UAE and apply for listing on it.
First: Acquiring license of Emirates Securities and Commodities Authority (ESCA)
Listing requirements of local company’s shares with ESCA
The conditions for listing shares of public joint stock companies incorporated in UAE is classified into 2 categories: first class and second class depending on their situation.
I. First class listings requirements:
- The company must be registered at the Ministry of Economy and Planning.
- The company should have been incorporated for not less than two years with financial statements issued for each year and audited by an auditor registered in the schedule of working auditors and authorized to audit the accounts of joint stock companies.
- The Paid-Up Capital should not be less than 35% of Shareholders’ Equity, or not be less than AED 25 million, which ever is higher.
- The Shareholders’ Equity, for each category of shares the company issues, shall be equal.
- The Shareholders’ Equity may not be less than the Paid Up capital upon applying for listing.
- The company must prove to have held an ordinary general meeting at least once a year.
- The company undertakes to publish its balance sheet and financial results in the daily UAE media before its stocks can be traded in the market.
- Any additional requirements that the Authority Board may require.
II. Second class listing requirements:
Such classification is suitable for companies which conditions for the first class are not applicable.
2nd class companies transformed into 1st class when their situation fulfills the 1st class requirements. 1st class companies transformed into 2nd class when they fail to comply with the 1st class rules and regulations provided they fulfill the 2nd class requirements.
ESCA Council has the right to transform any company from 1st class to 2nd class when this company fails to comply with the rules of disclosure and transparency.
Shares listing fees:
- Fee of registration and listing with the Authority is AED 2,000 to be paid upon submission of the application.
- Minimum fee of the company registration with the Authority is AED 25,000. In case the company's capital exceeds AED 50 million, 0.0001 of any amounts over the AED 50 million and a maximum of AED 100,000 will be added to the above fee.
- Minimum fee of renewing the company's registration with the Authority is AED 5,000. In case the company's capital at the time of registration or renewal of the registration exceeds AED 50 million, 0.0001 of any amounts over the AED 50 million and a maximum of AED 10,000 will be added to the above fee.
Documents to be attached to Local Company’s Listing Application with ESCA
Documents submitted to ESCA should be in Arabic format.
A) ESCA licensing application signed by authorized signatory plus the application fee.
B) Copy of the company’s Articles of Association (and their amendments) in accordance with the provisions of the Commercial Companies Law.
C) Copy of certificate from Ministry of Economy and Planning stating that the company satisfies all provisions of Federal Law No. 8 of 1984 concerning Commercial Companies, as amended.
D) Report from the company’s Board of Directors including the following:
1. Brief about the company’s incorporation, its main objectives, and its relationship with related companies including parent, subsidiary or associated companies (if any).
2. Description of the securities that the company has previously issued and those it wishes to list.
3. Name of Board of directors and Executive managers, mentioning securities owned by them and their first degree relatives, whether these securities are issued by the company, its parent, subsidiary, or associated company (if any), and their membership in the board of directors of other public joint stock companies.
4. Names of persons who own with their minor children more than 5% of the securities issued by the company including the number of securities owned by each of them.
5. The contributions of non-U.A.E. nationals to the company’s capital.
6. The significant events that the company has witnessed from the date of its incorporation until the submitting of the listing application.
7. The assessment of the Board of Directors, supported by figures, regarding the performance and accomplishments of the company in comparison with its plan.
8. A letter stating that The Shareholders’ Equity, for each category of shares the company issues, is equal.
E) The company’s financial statements containing the following:
1. The company’s annual report for the two financial years prior to the submitting of the listing application accompanied by the Board’s report and a report from the company’s auditors.
2. The interim financial statements, which cover the period from the end of the financial year prior to the listing application until the end of the last quarter prior to the application date, approved by the company auditor.
F) Minutes of the company’s general assembly meetings for the two years prior to the listing application date.
G) An undertaking to publish the company’s financial statements and results of operations in the daily UAE media before its shares can be traded in the market.
Second: Listing on Dubai Financial Market (DFM)
Documents to be attached with Local Company’s Listing Application with DFM
1. The name of the people who are in charge of coordinating the listing process from the company, authorization letter is required in case of assigning a third party along with their contact details.
2. DFM listing application signed by authorized signatory.
3. Copy of the Emirates Securities and Commodities Authority shares listing approval.
4. Copy of the all documents attached to the Listing Application submitted to the Emirates Securities and Commodities Authority.
5. Copy of the Company’s Certificate of Incorporation.
6. Copy of the Company’s Trade License or equivalent.
7. Copy of the Company’s Trade Register (if applicable).
8. List of the authorized signatories on the documents and correspondences addressed to the DFM and sample of their signatures, approved by the Board of Directors.
9. Details of affiliated and associated companies including percentage of ownership therein.
10. Details of investment in UAE public joint stock companies (not mentioned in pervious document) including percentage of ownership therein.
11. List of the company’s branches.
12. Details of any restrictions on the transfer of the company shares.
13. Issuing Prospectus or Information Memorandum .
14. Passport copy of all Board of Directors members and Executive Managers .
15. Soft copy of the company logo and financial reports for the last financial years and the interim financial report for the last quarter.
16. Letter of choosing a trading symbol in English capital letters of maximum 10 characters.
17. The name of the person or the authorized entity who is responsible for the company disclosures with contact details.
18. Any other related documents, please attach .
Additional conditions applying to listing shares with DFM
- In addition to the above listing requirements, the company submitting the listing application may have to satisfy additional requirements and furnish additional documents and information that the ESCA or DFM may require.
- The directors of the company will individually and collectively accept full responsibility for the completeness and accuracy of all information submitted to DFM.
- DFM shall not assume any responsibility for the correctness of any of the information, statements or opinions submitted to DFM.
- Approval for listing at DFM is not to be taken as an indication of the merits of the company or its business activities or its shares.
- DFM Board of Directors shall have discretionary authority to exempt a company from some of its listing requirements or submitting certain documents.
- DFM may decline a listing application without assigning any reason.
Requirements after DFM approval to list shares
1. Coordinating with Clearing, Depositary and Settlement Department regarding transferring the shareholders' register to DFM.
2. Publish, in two Arabic daily Newspapers ten days prior to listing on DFM, the company’s annual financial statements and summary of the Board of Directors’ report, which were submitted with the ESCA Listing Application. Additional publishing in one English Newspaper is required if the company allows non-nationals to trade in its shares.
The publication should include:
- General Board of Directors Summary about the company.
- Auditors report.
- Financial Statements include the last 2 financial years plus the interim financial period of the followings:
§ Balance sheet (comparison)
§ Income statement. (comparison)
§ Statement of Cash Flows. (comparison)
§ Statement of changes in Shareholders' Equity.
§ Earnings Per share.
3. Publish newspaper announcement for shareholders asking them to deposit their shares certificates in DFM along with the announcement mentioned previously.
4. Distributing Prospectus or Information Memorandum among investors and brokers.
Companies obligations for continued listing
- The company must abide by all the rules and regulations of ESCA.
- The company must abide by all the rules and regulations of DFM. However, the company may notify the DFM if it believes that it may be unable to comply with one
- or more provisions of the DFM rules and regulations. The DFM shall have discretion on a case-by-case basis, upon receipt of such notice, to grant exemptions.
- The company must provide DFM, and also publish, its audited annual financial statements within 120 days of the end of the financial year. The company shall also provide DFM, with quarterly and half yearly financial statements and make it publicly available within 30 days from the end of the period. Each of the above should be accompanied by a management report on the business activities for the period under review.
- The company must immediately disclose and report to DFM any material information including information submitted with the listing application form that is likely to affect the price of the securities and the decision-making of investors.
- The company must satisfy any additional requirements and regulations and furnish any additional documents and/or information that ESCA or DFM may require.
- The company that fails to abide by the ESCA and/or DFM rules and regulations may be suspended or de-listed after due process.