ADX and DFM waive minimum commission fee on trading of listed securities

The waiver will help in boost trading volumes, the two bourses say

Investors at the Abu Dhabi Securities Exchange in the UAE capital. Ravindranath K / The National

The Abu Dhabi Securities Exchange, or ADX, and the Dubai Financial Market, or DFM, have waived their minimum commission fee on the trade of all listed securities in a move aimed at boosting trading by smaller investors.

While the ADX waiver becomes effective on Tuesday, DFM’s waiver will come into effect on Wednesday.

The move is expected to add to liquidity and increase volumes of small trades, which are typically undertaken by individual investors, the ADX said on Tuesday.

The bourse received "positive feedback" on the idea in informal soundings of investors, brokers and listed companies, it said.

"By waiving the minimum fee and reducing commission rates on all listed securities, we are providing more cost-effective trading for individual investors, ensuring that they benefit from the investment opportunities available to institutional investors," said chief executive Saeed Al Dhaheri.

"By increasing liquidity, as well as broadening our offering of products and services, [the] ADX will become an even more attractive market.”

The ADX is the second-biggest exchange in the Arab world after Saudi Arabia's Tadawul. It has gained 52 per cent so far this year, making it the best performing regional bourse.

Earlier this week, the Abu Dhabi bourse said it would slash commissions by 50 per cent and add another hour to trading time as it seeks to boost liquidity in the market.

The ADX's plan to halve trading commissions to 0.025 per cent from September 1 will be its second commission cut in 2021 and third in three years. The extension of trading hours will come into effect from October 3.

The exchange, which is owned by state holding company ADQ, said earlier this year that it plans to double its market capitalisation over the next three years through its new "ADX One" strategy that is intended to increase market liquidity and improve market efficiency.

The DFM also said last week it would extend its trading hours to five from four currently, from October 3, in line with a directive from the Securities and Commodities Authority.

"The larger number of transactions will ultimately benefit various stakeholders including investors and brokerage houses," Hassan Al Serkal, chief executive of the DFM, said in a statement on Tuesday.