UAE tightens corporate governance rules amid stock market concerns

The UAE’s Ministry of Economy and Planning (MEP) has announced that all listed companies on the local securities markets will have to comply with a new code of corporate governance.

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By  Andrew White Published  February 12, 2006

The UAE’s Ministry of Economy and Planning (MEP) has announced that all listed companies on the local securities markets will have to comply with a new code of corporate governance. The new law, seen as a response to concerns that there are insufficient checks and balances in the nation’s booming markets, is currently in its draft stage but should be introduced in the next few months. The MEP said the guidelines are intended to accelerate the pace of economic development in the region The legislation was unveiled by Abdulla Al Turaifi, chief executive of the Securities and Commodities Authority. He was delivering an address on behalf of Shaikha Lubna Al Qassimi, UAE Minister of Economy and Planning, at a seminar on corporate governance in the UAE. Corporate governance and associated issues such as shareholders' rights, management responsibilities, conflict-of-interest and transaction transparency “are crucial to the development of functioning markets in the UAE,” said Al Turaifi. “As a result of the tradition of family ownership, and the rapid pace of development in the UAE, there is an urgent need to enhance the standards and understanding of corporate governance, the risks associated with inaction, and the clear opportunities to be gained from implementing strong governance structures. “In addition, there is a need to further improve the levels of trust in the UAE market by enhancing the rule of law and voluntary disclosure,” he added. In a different sort of crackdown, the Ministry of Labour and Social Affairs in Dubai has blacklisted 1204 firms for failing to appoint Emirati public relations officers (known as ‘PROs’). Dr Khalid Al Khazraji, under-secretary for Labour Affairs, criticised the firms for failing to comply with rules created as part of the UAE's emiratisation initiative. Dr. Al Khazraji said the blackisted companies had failed to meet a deadline for the employment of local PROs that had been set by the ministry.

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