In a first step of its kind amongst regional markets, Dubai Financial Market (DFM) today announced it has granted Equities First Holdings, LLC (EFH), a global lender and a leader in shareholder financing solutions, an approval to provide Repurchase (Repo) transactions.
The nod permits EFH to provide Repo services on the market in line with the regulations of both the Securities and Commodities Authority (SCA) and DFM.
This significant step empowers investors’ access to liquidity without forfeiting future growth opportunities.
A Repo, or repurchase agreement, is a financial instrument in which a Repo buyer provides capital to a Repo seller collateralised by the seller’s securities. After a fixed period of time, the seller has the opportunity to repurchase the securities used as collateral from the buyer at a set price agreed upon at the beginning of the transaction.
Maryam Fikri, Chief Operations Officer (COO) and Head of Clearing, Settlement and Depository Division of DFM said: “We are pleased to license the first Repo provider in a momentous development that further strengthens DFM’s leading position in the region. The new service underlines our constant efforts to identify new opportunities for investors in line with DFM’s strategy 2021 to further diversify market products and services. Through the Repo transactions, DFM investors can release part of the value of their securities through an OTC repo with the lending company, which in turn can trade them on the market leading to further improvement in trading activity.”
“As an emerging market, the UAE, and the Dubai Financial Market specifically, has been part of EFH’s ongoing growth plan for several years,” said EFH Founder and CEO Al Christy, Jr. “Currently, there is a need to enhance market liquidity, and EFH’s approval as a provider of Repo transactions offers tremendous opportunity to businesses and investors looking to appropriately leverage their holdings and grow.”
“Potential demand for this product and for EFH’s services within the DFM is expected to be immense,” said Andrew Stevens, the director of EFH sales in the Middle East. “I look forward to continuing to develop relationships in the market and working with individuals and businesses looking to access liquidity.”
EFH will immediately commence executing transactions with clients, and as a Registered Repo Buyer (RRB) in the DFM, and will continue to adhere to all regulatory requirements set forth by the DFM and its regulatory body.
