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Frequently Asked Questions

 

The DVP (Delivery Versus Payment) procedures are meant to ensure that investors using the services of a Settlement Agent for safekeeping of securities and as agents for financial settlement who settle their trades based on DVP principles, whereby securities are delivered only if payment is received and there are matched settlement instructions received by the Settlement Agent to settle the trade.

No, if the Local Member does not trade for clients using Settlement Agent for settlement, the impact to the Local Trading Member will be limited to the new buy-in feature introduced by the Dubai Clear, where the Local Members can participate in a buy-in by placing offers to any buy-in bids under an open status. Only Local Members which trade for clients using a Local Settlement Agent for settlement will have to follow the DVP process.

The Clearing Member’s (CM's) Trading Member (TM) can increase his Trading Limit through the following options:

  • Submit a new bank guarantee to the market including the amount of increase.
  • The bank issuing the guarantee sends an official letter to Dubai Clear stating that they bear the responsibility for the increase in the bank guarantee limit, provided they undertake to pay entitlements due as a result of default by the CM’s Trading Member.
  • Deposit an amount of money either cash or cheque in Dubai Clear's Account with: 
  1. Emirates NBD, or
  2. Standard Chartered Bank.

You then send a copy of the credit advice along with an official letter from the CM’s Trading Member requesting to increase the trading limit by email to clearing&settlement@dubaiclear.ae


  • Submit an official letter to the Dubai Clear requesting to increase the Trading Limit by using the settlement due payments which are to be collected in the next settlement date (T+1). 
  • Submit an official letter to the Dubai Clear requesting to freeze securities owned by the CM’s Trading Member or one of its owners. In this case, the Trading Limit will be increased by 50% of the securities current value in the Market. In case the CM’s Trading Member exceeded the original bank guarantee value, shares shall unfreeze on (T+2) only but if the CM’s Trading Member wishes to unfreeze the shares on (T+1), he should deposit in the Dubai Clear account the amount exceeding the original bank guarantee value.


The requirements are as follows:

  • Minimum amount must be AED 20 million for the Trading Clearing Member (TCM).

  • Clearing Members can split the guarantee between the Dubai Clear and ADX by submitting to each market a new bank guarantee and copy of the bank guarantee that is submitted to the other market including the other market receipt stamp, provided the amount of both guarantees is not less than AED 20 million with a minimum of 2 million AED per market.
  • The Clearing Members must follow Dubai Clear’s Format for Bank Guarantee letters
  • The Issuer bank must be licensed under the Central Bank of the UAE
  • Submit the Original to the Dubai Clear via one of the following options.

The Clearing Member must coordinate with the Bank Guarantee issuing bank to send an official letter addressed to the Dubai Clear requesting Dubai Clear to issue a No Objection Letter for the reduction of the Bank Guarantee amount.

The Clearing Member must coordinate with the Issuer bank of the Bank Guarantee to send an official letter addressed to the Dubai Clear requesting Dubai Clear to cancel the requested bank guarantee.

If the Clearing Member desires to change settlement bank and deal with other Dubai Clear settlement banks, they must follow the steps below:

  1. Send an official letter addressed to the Dubai Clear stating the following:
    • Settlement Account Number with the New Settlement Bank
    • Determine the date on which the settlement will commence with the New Settlement Bank
    • Undertake to pay all of its obligations with the Current Settlement Bank
  2. Send a copy of the undertaking letter that is addressed to the New Settlement Bank (Stating the new settlement account in AED and USD).
  3. Send a copy of the New Settlement Bank’s letter confirming the settlement account number and the Clearing Member name.
  4. Send an undertaking letter addressed to Dubai Clear of not trading in dollars (in case the broker does not wish to open a dollar account). 

As part of Dubai Clear’s deployment of its “Delivery Versus Payment” (DVP) settlement mechanism, the Dubai Clear addressed the need to operate dual accounts to mitigate unlimited access by local Clearing Members to the trading accounts.

To achieve full control by local Settlement Agents over client accounts, Dubai Clear is implementing processes to provide local Settlement Agents the ability to reject buy and / or sell trades for settlement if matched settlement confirmations are not received from clients.

The Dubai Clear changes are summarized as follows:

  1. These enhancements impact Clearing Members dealing with clients which use a Local Settlement Agent for the settlement of trades, whereby a Local Settlement Agent can reject both securities and cash settlement of purchase and sell trades if it does not receive settlement instructions from its clients.
  2. A ‘buy-in’ mechanism to facilitate settlement of rejected sell trades is also introduced whereby Clearing Members which do not trade for clients who settle trades using a Local Settlement Agent will be able to participate in a buy-in, by selling to any buy-in bids in the DFM buy-in board.
  3. A Late Confirmation period of up to T+4 will be introduced for Local Settlement Agents clients to confirm settlement of trades. The Late Confirmation period is however subject to the Clearing Members agreement.
  4. A Local Settlement Agent will now have full control of securities making it unnecessary to operate a dual account structure. This means that all securities may be held in one account of the Local Settlement Agents (i.e. the Agent Trading account). 

The enhanced DVP processes are only applicable to clients using a Local Settlement Agent for settlement and not to retail investors settling trades using their direct accounts with Local Clearing Members.

Any investor using a Local Settlement Agent to settle their trades executed through a Local Clearing Member will be impacted by the changes.

No. There are no changes to the way trading on the normal Dubai Clear is conducted. There is an alternative option for investors to sell securities via the Dubai Clear buy-in board. Investors will need to inform their Local Clearing Member if they intend to sell securities via the buy-in board.

No, the enhanced processes merely allow clients using Local Settlement Agents for settlement more time to provide settlement instructions to the Local Settlement Agent. This Late Confirmation Period is subject to agreement by the executing Clearing Member and is subject to penalties.

The Late Confirmation Period is from T+2 to T+4 or S+2. The Late Confirmation Period is a market infrastructure provided by the Dubai Clear to facilitate trade settlement for clients using a Local Settlement Agent for the settlement of trades. It is a commercial decision of the Local Clearing Member to determine whether or not a Late Confirmation Period should be offered to its client using a Local Settlement Agent for settlement.

Yes. A Local Settlement Agent can reject purchase / sell trades if no matched settlement instructions are received from clients.

When a Local Settlement Agent rejects a purchase trade, the buying Clearing Member will pay Dubai Clear the cash settlement obligations and Dubai Clear will credit the purchased securities to the designated rejection account under the control of the Local Clearing Member.

Yes. However, the ‘Late Confirmation Window’ for purchase trades is subject to the client / Clearing Member agreement on due dates for late payments. The proposed ‘Late Confirmation Window’ for purchase trades is merely a facility provided by the Clearing Member to facilitate any subsequent transfers arising from a settlement agreement between the client and the Clearing Member.

Clients may utilize a ‘Late Confirmation Window’ within which instructions may be provided for settlement of a rejected purchase / sell trade subject to late settlement agreement between the client and its Clearing Member. This Late Confirmation Window begins on T+2 and will end on T+4. The last settlement day of the Late Confirmation Period will be T+4.

Yes. Acceptance of the Late Confirmation by the Local Clearing Member is on a discretionary basis and provided that the rejected trades have not already been settled by the Local Clearing Member in the market either directly or via the buying in mechanism.

Yes. A client has the option to settle rejected purchase trades within the Late Confirmation Period, therefore beginning T+2 and ending on T+4, subject to agreement by the Local Clearing Member and provided the local Clearing Member has not sold the purchase securities.

The Local Settlement Agent will contact the Local Clearing Member to arrange for the transfer of securities back to the client’s Agent Trading account subject to payment by the Local Settlement Agent to the Local Clearing Member first.

If a client does not provide settlement instructions within the Late Confirmation deadline to settle the purchase trade, the Local Clearing Member will dispose of the securities underlying the rejected purchase trade latest by 2 market days after the end of the Late Confirmation Period.

Once a sell trade is rejected by the Local Settlement Agent, Dubai Clear will determine if the Local Clearing Member has sufficient balance of securities in the designated rejection account. If there is sufficient balance in this account, Dubai Clear will debit this account, settle the rejected sell trade and pay the Local Clearing Member the cash proceeds on T+2.

If the Local Clearing Member does not have sufficient balance in the designated rejection account, Dubai Clear will create a negative available balance under this account and will retain the cash proceeds until final resolution of the failed trade. Dubai Clear will retain the ‘Pending’ status flag on the securities held under the client’s Agent Trading account until final resolution of the failed trade. In order to rectify the negative available balance in the designated rejection account, the following 4 options are available:

  1. Local Clearing Member buys securities directly in the Company for settlement before the last settlement day of the Late Confirmation Period
  2. Late Confirmation Window can be utilized wherein client provides matched settlement instruction to Local Settlement Agent subject to agreement by the Local Clearing Member
  3. The buy-in mechanism is utilized by the Clearing Member / DFM, or
  4. A mandatory cash closeout against the original seller if the above options are unsuccessful to resolve a sale rejection. 

Yes. The client can send settlement by providing matched settlement instructions within the Late Confirmation Period, therefore beginning T+2 and ending on T+4, provided the Local Clearing Member has not settled the sale rejection.

Yes, a penalty will be applied for a minimum of AED 500 or the total order values of each sell rejection transaction X 0.05%.

Yes, a penalty will be applied for a minimum of AED 2500 or the total order values of each sell rejection transaction X 0.25%.

The Transfer Fees will be levied for two situations:

  1. T+5 Transfer Fee: this Transfer Fee will be applicable where the Clearing Member failed to transfer the paid purchased securities from the Client Buy Rejection Account to the client’s Agent Account of a Settlement Agent by T+4 upon receiving payment from the client within the Late Confirmation Period of T+2 to T+4.
  2. T+6 Transfer Fee: this Transfer Fee will be applicable where the Clearing Member failed to transfer unpaid purchased securities from the Client Buy Rejection Account to the Members’s Buy Rejection Sellout Account by the existing prescribed T+5 deadline.

A buy-in may be used only by a Selling Clearing Member when there is a negative balance in the designated rejection account.

The features of the buy-in mechanism are as follows:

  • The buy-in process is managed via the DFM trading system. The buy-in board will be available for input of offers by new sellers daily between 2.30pm and 2.45pm UAE time. Clearing Member with negative available balances can opt to post buy-in bids to the buy-in board from 2:15pm on T+2 onward until the settlement day before the last settlement day of the Late Confirmation Period.
  • All Clearing Members (including the selling Local Clearing Member) will be permitted to participate in the buy-in and offer their own securities or their client securities in the Buy-in by quoting the relevant NIN investor number. The client whose securities are being bought-in cannot offer his securities to the buy-in. Other clients may choose to offer their securities in the buy-in through their Local Clearing Member.
  • The maximum buy in price can be the daily closing price plus fifteen percent (duly adjusted for any corporate actions).
  • Partial completion of buy-ins will be allowed.
  • The matching algorithm is best price offered, volume and time priority until the quantity is obtained.
  • The securities will settle on the same day of the buy-in, whilst the cash will settle on the next day (i.e.T+1 basis). This is mainly due to the fact that the Central Bank of the UAE is closed by this time and the cash can only move on the next day.
  • Dubai Clear will pay the buy-in cash proceeds to the new Selling Clearing Member. If the buy-in price is greater than the original traded price, the Local Clearing Member must pay the difference. However, if the buy-in price is lower, then the Dubai Clear will retain the gains.


Where the buy-in against the Local Clearing Member fails, a cash closeout against the Local Settlement Agent client will be invoked by Dubai Clear.

The DVP (Delivery Versus Payment) procedures are meant to ensure that investors using the services of a Settlement Agent for safekeeping of securities and as agents for financial settlement who settle their trades based on DVP principles, whereby securities are delivered only if payment is received and there are matched settlement instructions received by the Settlement Agent to settle the trade.

No, if the Local Member does not trade for clients using Settlement Agent for settlement, the impact to the Local Trading Member will be limited to the new buy-in feature introduced by the Dubai Clear, where the Local Members can participate in a buy-in by placing offers to any buy-in bids under an open status. Only Local Members which trade for clients using a Local Settlement Agent for settlement will have to follow the DVP process.

If the Clearing Member desires to change settlement bank and deal with other Dubai Clear settlement banks, they must follow the steps below:

  1. Send an official letter addressed to the Dubai Clear stating the following:
    • Settlement Account Number with the New Settlement Bank
    • Determine the date on which the settlement will commence with the New Settlement Bank
    • Undertake to pay all of its obligations with the Current Settlement Bank
  2. Send a copy of the undertaking letter that is addressed to the New Settlement Bank (Stating the new settlement account in AED and USD).
  3. Send a copy of the New Settlement Bank’s letter confirming the settlement account number and the Clearing Member name.
  4. Send an undertaking letter addressed to Dubai Clear of not trading in dollars (in case the broker does not wish to open a dollar account). 

As part of Dubai Clear’s deployment of its “Delivery Versus Payment” (DVP) settlement mechanism, the Dubai Clear addressed the need to operate dual accounts to mitigate unlimited access by local Clearing Members to the trading accounts.

To achieve full control by local Settlement Agents over client accounts, Dubai Clear is implementing processes to provide local Settlement Agents the ability to reject buy and / or sell trades for settlement if matched settlement confirmations are not received from clients.

The Dubai Clear changes are summarized as follows:

  1. These enhancements impact Clearing Members dealing with clients which use a Local Settlement Agent for the settlement of trades, whereby a Local Settlement Agent can reject both securities and cash settlement of purchase and sell trades if it does not receive settlement instructions from its clients.
  2. A ‘buy-in’ mechanism to facilitate settlement of rejected sell trades is also introduced whereby Clearing Members which do not trade for clients who settle trades using a Local Settlement Agent will be able to participate in a buy-in, by selling to any buy-in bids in the DFM buy-in board.
  3. A Late Confirmation period of up to T+4 will be introduced for Local Settlement Agents clients to confirm settlement of trades. The Late Confirmation period is however subject to the Clearing Members agreement.
  4. A Local Settlement Agent will now have full control of securities making it unnecessary to operate a dual account structure. This means that all securities may be held in one account of the Local Settlement Agents (i.e. the Agent Trading account). 

The enhanced DVP processes are only applicable to clients using a Local Settlement Agent for settlement and not to retail investors settling trades using their direct accounts with Local Clearing Members.

Any investor using a Local Settlement Agent to settle their trades executed through a Local Clearing Member will be impacted by the changes.

No. There are no changes to the way trading on the normal Dubai Clear is conducted. There is an alternative option for investors to sell securities via the Dubai Clear buy-in board. Investors will need to inform their Local Clearing Member if they intend to sell securities via the buy-in board.

No, the enhanced processes merely allow clients using Local Settlement Agents for settlement more time to provide settlement instructions to the Local Settlement Agent. This Late Confirmation Period is subject to agreement by the executing Clearing Member and is subject to penalties.

Generally, the enhanced processes allow a Local Settlement Agent to reject both purchase and sell trades if it does not receive (matched) settlement instructions from its clients. The DVP changes also provides a ‘buy-in’ mechanism to facilitate settlement of rejected sell trades.

This means that the Local Settlement Agents will now have full control of securities. Therefore, there will no longer be a need to establish segregated custody and trading accounts in order to mitigate the risk from Local Clearing Members having unlimited access to the trading accounts. The Settlement Agents account will remain as an optional feature whereby clients will have a choice to determine how they wish to manage assets.

The Late Confirmation Period is from T+2 to T+4 or S+2. The Late Confirmation Period is a market infrastructure provided by the Dubai Clear to facilitate trade settlement for clients using a Local Settlement Agent for the settlement of trades. It is a commercial decision of the Local Clearing Member to determine whether or not a Late Confirmation Period should be offered to its client using a Local Settlement Agent for settlement.

Yes. A Local Settlement Agent can reject purchase / sell trades if no matched settlement instructions are received from clients.

When a Local Settlement Agent rejects a purchase trade, the buying Clearing Member will pay Dubai Clear the cash settlement obligations and Dubai Clear will credit the purchased securities to the designated rejection account under the control of the Local Clearing Member.

Yes. However, the ‘Late Confirmation Window’ for purchase trades is subject to the client / Clearing Member agreement on due dates for late payments. The proposed ‘Late Confirmation Window’ for purchase trades is merely a facility provided by the Clearing Member to facilitate any subsequent transfers arising from a settlement agreement between the client and the Clearing Member.

Clients may utilize a ‘Late Confirmation Window’ within which instructions may be provided for settlement of a rejected purchase / sell trade subject to late settlement agreement between the client and its Clearing Member. This Late Confirmation Window begins on T+2 and will end on T+4. The last settlement day of the Late Confirmation Period will be T+4.

Yes. Acceptance of the Late Confirmation by the Local Clearing Member is on a discretionary basis and provided that the rejected trades have not already been settled by the Local Clearing Member in the market either directly or via the buying in mechanism.

Yes. A client has the option to settle rejected purchase trades within the Late Confirmation Period, therefore beginning T+2 and ending on T+4, subject to agreement by the Local Clearing Member and provided the local Clearing Member has not sold the purchase securities.

The Local Settlement Agent will contact the Local Clearing Member to arrange for the transfer of securities back to the client’s Agent Trading account subject to payment by the Local Settlement Agent to the Local Clearing Member first.

If a client does not provide settlement instructions within the Late Confirmation deadline to settle the purchase trade, the Local Clearing Member will dispose of the securities underlying the rejected purchase trade latest by 2 market days after the end of the Late Confirmation Period.

Once a sell trade is rejected by the Local Settlement Agent, Dubai Clear will determine if the Local Clearing Member has sufficient balance of securities in the designated rejection account. If there is sufficient balance in this account, Dubai Clear will debit this account, settle the rejected sell trade and pay the Local Clearing Member the cash proceeds on T+2.

If the Local Clearing Member does not have sufficient balance in the designated rejection account, Dubai Clear will create a negative available balance under this account and will retain the cash proceeds until final resolution of the failed trade. Dubai Clear will retain the ‘Pending’ status flag on the securities held under the client’s Agent Trading account until final resolution of the failed trade. In order to rectify the negative available balance in the designated rejection account, the following 4 options are available:

  1. Local Clearing Member buys securities directly in the Company for settlement before the last settlement day of the Late Confirmation Period
  2. Late Confirmation Window can be utilized wherein client provides matched settlement instruction to Local Settlement Agent subject to agreement by the Local Clearing Member
  3. The buy-in mechanism is utilized by the Clearing Member / DFM, or
  4. A mandatory cash closeout against the original seller if the above options are unsuccessful to resolve a sale rejection. 

Yes. The client can send settlement by providing matched settlement instructions within the Late Confirmation Period, therefore beginning T+2 and ending on T+4, provided the Local Clearing Member has not settled the sale rejection.

Yes, a penalty will be applied for a minimum of AED 500 or the total order values of each sell rejection transaction X 0.05%.

Yes, a penalty will be applied for a minimum of AED 2500 or the total order values of each sell rejection transaction X 0.25%.

The Transfer Fees will be levied for two situations:

  1. T+5 Transfer Fee: this Transfer Fee will be applicable where the Clearing Member failed to transfer the paid purchased securities from the Client Buy Rejection Account to the client’s Agent Account of a Settlement Agent by T+4 upon receiving payment from the client within the Late Confirmation Period of T+2 to T+4.
  2. T+6 Transfer Fee: this Transfer Fee will be applicable where the Clearing Member failed to transfer unpaid purchased securities from the Client Buy Rejection Account to the Members’s Buy Rejection Sellout Account by the existing prescribed T+5 deadline.

Please refer to Special Deal Procedures for the full details.