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Dubai Financial Market, DFM, today announced that EFG Hermes Brokerage has become the first member that receives a DFM accreditation to provide the Allocation Account Service to its client base.
The DFM launched this new service recently in a pioneering step amongst regional markets, as part of its efforts to reinforce its business framework for the benefit of various participants including issuers, investors and brokerage firms.
Welcoming EFG Hermes Brokerage’s significant step, Maryam Fikri, Chief Operating Officer and Head of Clearing, Settlement and Depository Division, said, "We are delighted to announce that EFG Hermes Brokerage received the first of its kind licence to provide the Allocation Account Service. This step underlines that the company is rapidly embracing DFM’s development initiatives, noting that this service is invaluable for its investor base in general and institutions in particular."
She went on to say that the DFM has launched this service as part of its strategy to diversify products and services in line with international best practices, considering its status at the forefront of regional exchanges in terms of attracting international funds. "The DFM has developed this unique mechanism for the first time to streamline international funds’ access to the market and further strengthen their activities."
This mechanism has created a unique and transparent solution that caters to the requirements of international fund managers and paves the way for further participation from their side on the market. It enables brokerage firms to implement the orders of clients through this account and allocates the quantities to each investor account based on the average price of the transactions.
Julian Bruce, Head of Brokerage, EFG Hermes Brokerage said, "We are proud to partner with DFM in launching allocation accounts. This is a significant development to attract institutional investors and a notable step in the market’s evolution. We look forward to working in conjunction with DFM on all future developments."
The Allocation Account enables brokerage firms to use a combined account with the clearinghouse in order to execute buy and sell transactions of securities on behalf of their clients, provided that such transactions shall be allocated to the clients' accounts during the allocation period within 45 minutes from the end of the trading session.
DFM is currently processing licence requests from a number of brokerage firms that plans to provide this service noting the high level of flexibility it provides to its clients.
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