Securities Trading and Market Operations Flashcards

What are the trading hours for UAE securities exchanges?

Answer: Pre-opening session followed by continuous trading from 10:00 AM to 2:00 PM UAE time (Sunday to Thursday)

UAE exchanges operate Sunday to Thursday with a pre-opening session for order entry, followed by continuous trading from 10:00 AM to 2:00 PM UAE time, with a closing auction session.

What is the T+2 settlement cycle used by UAE exchanges?

Answer: Securities trades settle two business days after the trade date, with delivery of shares and payment of funds occurring simultaneously

T+2 settlement means that the final exchange of securities (delivery) and cash (payment) occurs two business days after the trade execution date, using the delivery versus payment (DVP) mechanism.

What types of orders can investors place on UAE securities exchanges?

Answer: Market orders, limit orders, stop orders, and special condition orders (fill-or-kill, immediate-or-cancel)

UAE exchanges accept various order types: market orders (execute at best available price), limit orders (execute at specified price or better), stop orders (triggered at specified price), and special conditions like FOK and IOC.

What are the SCA regulations on short selling in UAE markets?

Answer: Regulated short selling is permitted under specific SCA rules including borrowing securities, disclosure requirements, and market maker exemptions

The SCA has established a regulated short selling framework requiring securities borrowing arrangements, position disclosure requirements, uptick rules, and specific exemptions for market makers performing liquidity functions.

What is the role of market makers on UAE exchanges?

Answer: Provide continuous two-way quotes (bid and ask) to enhance market liquidity, reduce spreads, and facilitate smoother trading for designated securities

SCA-licensed market makers provide continuous two-way price quotes for designated securities, enhancing liquidity, narrowing bid-ask spreads, and ensuring trading continuity, operating under specific SCA obligations and incentives.

What circuit breaker mechanisms exist on UAE exchanges?

Answer: Price limits and trading halts triggered when security prices move beyond specified percentages (typically 10-15%) to prevent excessive volatility

UAE exchanges implement circuit breakers that halt trading when stock prices move beyond specified percentage limits (typically 10-15% from the reference price), preventing panic selling or buying and allowing orderly market conditions.