Nasdaq Dubai has established minimum requirements that must be met by all companies applying to admit their securities on the exchange. These requirements meet international standards without being unduly onerous.
Initial public offering (IPO)
In order to IPO on Nasdaq Dubai a company must meet a number of criteria that are set out by the DFSA, the exchange’s regulator, in line with international standards.
They include a requirement that the company must have a market capitalisation of at least USD 10 million and that it must normally list at least 25% of its shares. Further DFSA requirements are set out below:
An IPO on Nasdaq Dubai requires the publication by the company of a formal document offering its shares for sale, known as a prospectus.
A prospectus is a company’s key marketing tool in its IPO. It contains important information about the issuer, to provide investors with an informed basis on which to decide whether or not they wish to invest, and at what price.
The publication of a prospectus requires the approval of the DFSA. The table below shows many of the prospectus requirements:
The DFSA may, in its discretion, require a ‘sponsor’ to be appointed by a company that wishes to IPO. A sponsor, which is typically an advisory firm such as an investment bank, must satisfy itself that the company has complied with listing regulations, such as the DFSA’s Markets Rules.
The DFSA imposes no restrictions on foreign ownership of listed companies, and there are no foreign ownership restrictions under DIFC law for holding companies incorporated in the DIFC. Companies incorporated in other free zones in the UAE are also not subject to foreign ownership restrictions. However, companies based elsewhere in the UAE may be subject to foreign ownership limits under UAE law, whereby no more than 49% of a company may be owned by foreign nationals. In practice, this may mean that a listed DIFC holding company which owns a UAE company that is not incorporated in a free zone may itself need to be 51% UAE-owned, to satisfy UAE company law requirements.
Admission to Trading
A company that wishes to IPO must satisfy Nasdaq Dubai, under the exchange’s Admission and Disclosure Standards (ADS), that conditions exist for sufficient supply and demand for the securities.
In order to meet these conditions a company must:
- Have a sufficient minimum number of shareholders, each holding securities of the company with a value of at least USD2,000; or
- Appoint one or more market makers. A market maker is a broker that continuously provides both bid and offer orders in a stock.
As guidance, Nasdaq Dubai considers that 250 is a sufficient minimum number of shareholders and can permit a lower number at its discretion.
For further details see our IPO Guide
Sukuk and conventional bonds
In order to list Sukuk or conventional bonds on Nasdaq Dubai, a company must meet a number of criteria for listing debt that are set out by the DFSA, the exchange’s regulator, in line with international standards.
They include a requirement that the market capitalisation must be at least two million USD and that the issuer must normally provide three years of audited accounts.
The issuer should also provide sharia’a certification, if applicable.
The issuer should also satisfy Nasdaq Dubai’s Admission and Disclosure Standards (ADS).
For further details see our Debt Presentations
In order to list funds on Nasdaq Dubai, a company must meet a number of criteria that are set out by the DFSA, the exchange’s regulator, in line with international standards. The funds should also satisfy Nasdaq Dubai’s Admission and Disclosure Standards (ADS).
Funds can be equity, bond or hedge funds as well as exchange-traded funds or Real Estate Investment Trusts (REITs).
The Units of a Fund may be admitted to the DFSA’s Official List and Admitted to Trading on Nasdaq Dubai if:
- In the case of a Domestic Fund, it is a Public Fund; and
- In the case of a Foreign Fund:
- It is a Designated Fund from a Recognized Jurisdiction; or
- It is a Fund approved by the DFSA as a Fund subject to equivalent regulation as that applying to a Public Fund; and
- It meets the criteria of a Property Fund, it is a closed-ended investment vehicle and 60% or more of the Fund’s assets comprise Real Property;
- The Fund is compliant with the relevant DFSA Collective Investment Rules
For further details see our Funds Presentations