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Dubai Financial Market, DFM, has signed a Memorandum of Understanding, MoU, with the National Bonds Corporation, NBC, to fortify Dubai’s position as the capital of Islamic economy globally. The agreement creates the framework for a series of Islamic financial services’ initiatives the two sides plan to implement in the coming period.
It also enables NBC’s accessibility to DFM’s numerous services including, trading, depository, custody as well as dividend distribution, according to a DFM announcement.
According to this MoU, the parties will establish an electronic linkage for efficient trading of NBC’s leading Shari'a compliant savings bonds through DFM’s licensed brokerage firms. DFM’s current and potential investors, as well as holders and potential clients of the national bonds, will be able to seamlessly purchase and redeem their bonds through brokerage firms. The DFM will also manage the dividend distribution process to bondholders.
Essa Kazim, Chairman of DFM and Mohammed Qasim Al Ali, Chief Executive Officer of National Bonds Corporation, signed the MoU in the presence of senior representatives from both sides.
The new arrangements will provide DFM investors with a flexible tool to utilise any excess liquidity in purchasing national bonds, achieving returns from this investment, while being able to promptly liquidate their investment in order to seize other opportunities on listed securities.
The new service will add value to the brokerage firms as part of efforts to diversify their services and sources of income.
Commenting on the agreement, Essa Kazim said, "Dubai’s position as the capital of Islamic economy globally has been relentlessly strengthening since the launch of this leading initiative by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, in early 2013. Considering the active contribution of the Islamic financial services as one of the key sectors supporting this initiative, we are delighted to sign this MoU today, as a steppingstone for widespread cooperation and many joint initiatives.
"The main objective is to diversify DFM’s product offering as well as creating an effective platform for National Bonds' clients. We look forward to swiftly implement the projects of this MoU employing DFM’s innovative services of trading, depository, custody and dividend distribution as well as the vast experiences of NBC, which will ultimately benefit various market participants in general and the DFM investor base of approximately 844,000 as well as NBC’s clients in particular."
Mohammed Al Ali said, "The agreement signing comes in alignment with the wise leadership’s vision aimed at transforming Dubai into the capital of the Islamic economy and with our vision in 'National Bonds' regarding the key role of Sharia-compliant financial institutions in innovating, supporting, and contributing to the development of the national economy.
He added, "The agreement will further provide DFM customers with the opportunity to invest their dormant cash that is sitting idle with their brokers in National Bonds various products which will earn them competitive returns and the excitement of winning in our AED37 million rewards programme."
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