Welcome to the latest issue of NASDAQ Dubai Monthly, our online newsletter that updates market participants about developments at the exchange.

NASDAQ Dubai this week annnounced proposals for significant changes to its Listing Rules, including steps to increase participation by individual investors in initial public offerings (IPOs). The exchange welcomes public feedback on its proposals.

All IPOs would be required to reserve at least 10% of the offer for individual investors, or else have a minimum of 400 institutional or individual security holders, under the proposals. The current rules contain no minimum requirements.

Jeff Singer, Chief Executive of NASDAQ Dubai, said: "These proposals would ensure that IPOs have a broad investor base from day one and can be easily bought by individual and other investors after listing. We are also proposing new and more flexible rules aimed at attracting family companies and small and medium enterprises."

Under the proposals, NASDAQ Dubai's existing rule that accepts companies with a minimum market capitalisation of 50 million dollars would be retained. In addition, a new rule would allow listings by companies with a market capitalisation as low as 20 million dollars, provided that in such cases the pre-IPO shareholders undertake not to sell their shares within a year of the IPO.

The rule changes would also allow companies to list without any minimum market capitalisation, provided they meet specific criteria of profitability (of 1 million dollars for the most recent 12 months, and an aggregate of 10 million dollars over the most recent three years), or else hold net tangible assets of 10 million dollars. Specific rules are proposed for listing mining, oil and gas companies.

The new proposals would require all equity IPOs to be offered via a prospectus in the Dubai International Financial Centre (DIFC). The prospectus would be filed with Dubai Financial Services Authority (DFSA), the regulator of NASDAQ Dubai.

The rule changes would also strengthen NASDAQ Dubai's framework for listing exchange traded funds (ETFs) and Real Estate Investment Trusts (REITS). The rules for listing exchange-traded commodities (ETCs) and Sharia securities have been revised.

To support NASDAQ Dubai's debt sector, issuers of Sukuk and conventional bonds would be encouraged to obtain an investment grade credit rating before listing.

The proposals can be read in full at http://www.nasdaqdubai.com/marketinfo/market_news.html . Public consultation will last for 60 days and feedback can be given through the website.

The value of equities traded on NASDAQ Dubai increased by 22% to 1.31 billion dollars in 2010, up from 1.07 billion dollars in 2009.

The increase came in a challenging year for the region, during which traded value on all other GCC stock exchanges fell, in some cases by more than 50%.

The share price of DP World and Depa, NASDAQ Dubai’s most heavily traded shares, rose 47% and 32%
respectively over the year. Both were in the top 5 gainers for all Dubai-listed stocks. 

NASDAQ Dubai outsourced its trading, settlement, clearing and custody functions for equities to Dubai Financial Market  (DFM) in July 2010, as part of a strategy to increase trading of its equities by individual investors and merge them in one liquidity pool with institutional investors.

Seven regional brokers became Members of NASDAQ Dubai in 2010, bringing the total number of exchange Members to 35. Of these 22 are regionally based and 13 have their headquarters outside the region, including most of the world’s large investment banks.  

Regional Members gained market share of traded equities value on NASDAQ Dubai from international brokers in 2010. The regional Members share more than doubled to 43%, up from 20% in 2009.

Jeff Singer, chief executive of NASDAQ Dubai, said: “The activity of regional brokers accelerated after July 2010, when NASDAQ Dubai began using DFM’s trading platform. This demonstrates our success in building a market that is regional as well as international.”