SCA Corporate Finance and Listing Requirements 2 — Questions and Answers
Question 1: What financial reporting standards does the SCA require for listed companies?
- Any accounting standards are acceptable
- International Financial Reporting Standards (IFRS) are mandatory for all listed companies, with SCA-specific additional disclosure requirements (Correct answer)
- Only local accounting standards
- US GAAP is required
Correct answer: International Financial Reporting Standards (IFRS) are mandatory for all listed companies, with SCA-specific additional disclosure requirements
The SCA mandates IFRS for all listed companies' financial statements, supplemented by SCA-specific disclosure requirements covering segment reporting, related party transactions, and governance information.
Question 2: What audit requirements does the SCA impose on listed companies?
- Audits are optional for listed companies
- Annual audit by SCA-approved external auditors, audit committee oversight, auditor rotation requirements, and independence standards (Correct answer)
- Only internal audit is required
- Any auditor can audit listed companies
Correct answer: Annual audit by SCA-approved external auditors, audit committee oversight, auditor rotation requirements, and independence standards
SCA requires annual external audit by SCA-approved audit firms, audit committee oversight of the audit process, auditor rotation (firm and partner), auditor independence standards, and timely filing of audited financial statements.
Question 3: What is the SCA regulation on rights issues and capital increases?
- No regulations on capital increases
- SCA and shareholder approval required, existing shareholder pre-emption rights, prospectus requirements, pricing guidelines, and disclosure obligations (Correct answer)
- Companies can issue shares freely
- Only board approval is needed
Correct answer: SCA and shareholder approval required, existing shareholder pre-emption rights, prospectus requirements, pricing guidelines, and disclosure obligations
Rights issues and capital increases require SCA approval, shareholder general assembly authorization, existing shareholder pre-emption rights protection, prospectus filing, pricing guidelines, and comprehensive disclosure.
Question 4: What delisting requirements and procedures does the SCA establish?
- Companies can delist without procedure
- Formal application to SCA, shareholder approval, fair exit offer to minority shareholders, regulatory review period, and orderly market transition (Correct answer)
- Only the exchange decides on delisting
- Delisting is automatic after a period of low trading
Correct answer: Formal application to SCA, shareholder approval, fair exit offer to minority shareholders, regulatory review period, and orderly market transition
Voluntary delisting requires SCA application, shareholder approval at a general assembly, a fair exit offer to minority shareholders, SCA review period, and an orderly transition process to protect remaining shareholders.
Question 5: What SPACs (Special Purpose Acquisition Companies) regulations has the SCA developed?
- SPACs are prohibited in the UAE
- SCA has developed a SPAC listing framework with requirements for sponsor qualifications, escrow of IPO proceeds, acquisition timeline, and shareholder redemption rights (Correct answer)
- No SPAC framework exists
- SPACs follow the same rules as regular IPOs
Correct answer: SCA has developed a SPAC listing framework with requirements for sponsor qualifications, escrow of IPO proceeds, acquisition timeline, and shareholder redemption rights
The SCA has developed SPAC-specific regulations covering sponsor qualification and investment, IPO proceeds escrow requirements, target acquisition timelines, shareholder approval and redemption rights, and ongoing disclosure obligations.
Question 6: What is the SCA's approach to dual listing of securities?
- Dual listing is prohibited
- UAE-listed companies can seek secondary listings on international exchanges subject to SCA approval, compliance with both jurisdictions' regulations, and disclosure coordination (Correct answer)
- Dual listing requires no additional approval
- Only GCC exchanges allow dual listing
Correct answer: UAE-listed companies can seek secondary listings on international exchanges subject to SCA approval, compliance with both jurisdictions' regulations, and disclosure coordination
The SCA permits dual listing where UAE-listed companies can seek additional listings on international exchanges, requiring SCA approval, compliance with both regulatory frameworks, and coordinated disclosure obligations.
SCA Corporate Finance and Listing Requirements 2
What financial reporting standards does the SCA require for listed companies?