Dubai Financial Market, PJSC

Listing shares of foreign public joint stock companies

To list shares of a foreign public joint stock company 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 foreign company’s shares with ESCA

The company should fill the Authority Listing Application and submit it to the Authority signed by a person or an entity authorized to sign on behalf of the company.
The company issuing the securities shall be compliant with all the provisions of its country Federal Law.
It should be a public joint stock company.
The company should be listed in the stock exchange of its mother country, or it is working under the umbrella of an authority that has similar responsibilities of Emirates Securities and Commodities Authority.
The company should have been incorporated for not less than two years with financial statements issued for each year and audited by approved auditor.
The company should have a minimum Paid Up Capital of AED 40 million and number of shareholders should be at least 100.
The net assets of the company shall be more than 120% of its Paid up Capital or it should have realized net profits which can be distributed to its shareholders at a minimum average of 5% of the Paid up Capital, during the two years prior to the submission of the listing application.
The company must prove to have held an ordinary general meeting at least once a year.
There should be no full restrictions to transfer the company shares’ ownership between investors other than the mother country nationals. The limited restrictions should be mentioned (if any).
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.
The company must appoint a representative in the UAE to handle all matters related to the registration of the shares, distribution of dividends, submission of required reports to regulatory authorities and any other relevant matters.
Any additional requirements that the Authority Board may require.
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 Foreign 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- 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.

2. Description of the securities that the company has previously issued and those it wishes to issue in the near future.

3. 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.

4. The significant events that the company has witnessed from the date of its incorporation until the submitting of the listing application.

5. The assessment of the Board of Directors, supported by figures, regarding the performance and accomplishments of the company in comparison with its plan.

C- 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 an authorized auditor in the mother country.

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.

D- Other Documents about the Company:

1. The company’s Memorandum and Articles of Association attested by the Ministry of Foreign Affairs of the mother country in addition to the UAE Embassy at that country.

2. Listing Certificate from the stock market in the home country and any other markets the company is listed within.

3. Minutes of the company’s general assembly meetings for the two years prior to the listing application date.

4. Photocopy of the UAE daily media containing the published financial statements and results of operations of the company, and undertaking letter to publish these statements for investors.

5. An undertaking that there is no restrictions in the company or the mother country prevent the transfer of the shares between investors, or details of any restrictions if existed.

6. A statement as to the procedures for the transfer of ownership of shares, and as to whether there exist restrictions on such transfer to persons who are not nationals of the state to which the company belongs by its nationality.

7. A statement as to whether it is possible for the shares to be amortized, with a statement as to the conditions therefore.

8. Document of appointing a representative in the UAE to handle all matters related to the registration of the shares, distribution of dividends, submission of required reports to regulatory authorities and any other relevant matters.

Second: Listing with Dubai Financial Market

Listing requirements of foreign company’s shares with DFM

A) The company must obtain approval for trading in the UAE from the Emirates Securities and Commodities Authority.

B) DFM should be satisfied that the financial position of the company is sound.

C) The company should comply with International Accounting Standards or US GAAP and should present its financial statements in US dollars in addition to its local currency.

D) The company must issue and offer to interested investors in the UAE, free of charge, before listing an information memorandum in Arabic and English. The information memorandum should contain such information as is necessary for potential investors to make an informed assessment of the company and its securities.

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.

Documents to be attached with Foreign Company’s Listing Application with DFM

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.
DFM listing application signed by authorized signatory.
Copy of the Emirates Securities and Commodities Authority shares listing approval.
Copy of all documents attached to the Listing Application submitted to the Emirates Securities and Commodities Authority (other than documents mentioned below). It is essential to provide DFM with all documents required by ESCA.
Copy of the company’s certificate of incorporation.
Copy of the company’s trade license or equivalent.
Copy of the company’s trade register.
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.
List of names of Board of Directors and Executive Managers, mentioning securities owned by them and their first degree relatives, It is mandatory to mention the names of the first degree relatives (parents, husband / wife, and children on securities issued by the company.
Membership in the board of directors of other public joint stock companies.
Details of affiliated and associated companies including percentage of ownership therein, and names of founding shareholders.
Details of investment in UAE public joint stock companies including percentage of ownership therein.
List of the company’s branches in UAE with contact details..
Issuing Prospectus or Information Memorandum.
Soft copy of the company logo and financial reports for the last financial years and the interim financial report for the last quarter.
Letter of choosing a trading symbol in English capital letters of maximum 10 characters.
The name of the person or the authorized entity who is responsible for the company disclosures with contact details.
Any other related documents, please attach.

Requirements after DFM approval to list shares

1. Coordinating with Clearing, Depositary and Settlement Department (CDS) in DFM, regarding shares transfer and registry process between DFM and other relevant markets, in addition to signing the related agreements.

2. Publish, in two Arabic 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.

The announcement should include the followings:

· General Board of Directors Summary about the company.

· Auditors report.

· Financial Statements including:

Balance sheet (comparison)
Income statement. (comparison)
Statement of Cash Flows. (comparison)
Statement of changes in Shareholders' Equity.
Earnings Per share.

3. Publish announcements for shareholders who are interested in transferring shares to DFM.

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 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.