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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
Laws
Rulebook Modules
Conduct of Business Module (COB) [VER32/02-19]
Sourcebook Modules
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  • Short Selling

    • COB 9.6.6

      (1) An ATS OperatorG must have in place effective systems, controls and procedures to monitor and manage:

      (a) Short SellingG in SecuritiesG ; and
      (b) position concentrations.

      (2) For the purposes of (1), an ATS OperatorG must have adequate powers over its members to address risks to an orderly functioning of its facility arising from unsettled positions in InvestmentsG .

      (3) Short SellingG for the purposes of this RuleG constitutes the sale of a SecurityG by a PersonG who does not own the SecurityG at the point of entering into the contract to sell.

      [Added] DFSA RM123/2013 (Made 13th June 2013) [VER22/07-13]

      • COB 9.6.6 Guidance

        1. An ATS OperatorG should, when developing its controls and procedures with regard to short selling and position management, have regard to:

        a. its own settlement cycle, so that any short selling activities on its facilities do not result in any delay or prevent effective settlement within such cycle; and
        b. orderly functioning of its facilities, so that any long or short position concentration on InvestmentsG that remain unsettled does not interrupt such functioning;

        2. Examples of circumstances that would not be treated as short selling in Rule 6.7.1(3) include where the seller:

        a. has entered into an unconditional contract to purchase the relevant SecuritiesG but has not received their delivery at the time of the sale;
        b. has title to other securities which are convertible or exchangeable for the SecuritiesG to which the sale contract relates;
        c. has exercised an option to acquire the SecuritiesG to which the sale contract relates;
        d. has rights or warrants to subscribe and receive SecuritiesG to which the sale contract relates; and
        e. is making a sale of SecuritiesG that trades on a “when issued” basis and has entered into a binding contract to purchase such SecuritiesG , subject only to the condition of issuance of the relevant SecuritiesG .
        [Added] DFSA RM123/2013 (Made 13th June 2013) [VER22/07-13]