The bourse, under review by the MSCI for an emerging market tag for the last two years, said effective April 11 it will switch to a "delivery versus payment
" (DvP) and will seek to implement reforms in the equity markets throughout the year.
"DFM spared no effort and has taken numerous initiatives to lay out the necessary frameworks for various development steps including the implementation of the "Delivery versus Payment
" (DvP) mechanism since 2011 as well as the implementation of a Buyer Cash Compensation feature last May.
In 2011, to comply with the MSCI criteria, the UAE and Qatar implemented the delivery versus payment
(DVP) models on their bourses.
"The delivery versus payment
(DvP) settlement system is in place and there have been other positive changes.
Description: The TA aims to support CSIF to set new technical as well as operational conditions to materialize the CSD RTGS Linkages for Delivery versus Payment
(DVP) settlement of cross-currency repo and collateral arrangement, leading to the establishment of a new regional safety-net for safer and sound market management in ASEAN+3.
In Qatar and in the UAE, the operational efficiency of the Delivery Versus Payment
(DVP) model has been enhanced through the introduction of a proper false trade mechanism that includes (in the case of Qatar) or will include (in the case of the UAE) securities lending and borrowing facilities.
Following the implementation of new delivery versus payment
(DVP) models on the Qatar Exchange, Dubai Financial Market and Abu Dhabi Securities Exchange in May 2011, the index provider had postponed a decision in June this year to December to get more time to study whether both countries merit promotion.
In a statement released on its website, the MSCI said investors welcomed the implementation of new delivery versus payment
(DvP) settlement models in the UAE and Qatar.
The Vestima suite of services will bring increased operational efficiency and security benefits to the Latin American financial markets by providing centralised delivery versus payment
(DVP) settlement services based on synchronous exchange of cash and securities between fund distributors and transfer agents.
They have introduced a delivery versus payment
(DvP) model and a so-called "false trading mechanism" that removes the requirement for international investors to have a cumbersome dual-account structure to limit local brokerages' access to their trading accounts.
"The main criterion the UAE had to satisfy was the implementation of the delivery versus payment
(DvP) settlement system, which it has done," said Matthew Wakeman, Managing Director of Cash and Equity Linked Trading at Egyptian investment bank EFG Hermes.
Market participants recognized that the Qatari authorities and the Qatar Exchange have made significant progress in enhancing the operational efficiency of the Delivery Versus Payment
( DVP ) model.