Dubai – Mubasher: The Dubai Financial Market (DFM) on Sunday announced the launch of the Regulated Short Selling (RSS) service after completing all regulatory, technical, and procedural preparations.

The new RSS service “enables investors to short securities listed on DFM through selling borrowed shares with a commitment to return to the lender based on the mutually signed agreement,” the DFM said in a statement.

It added that in order to implement the RSS, the brokerage has to ensure that the “borrowed securities are located on the client’s account prior to placing a short selling order, with exception of DvP clients, as a lending confirmation is sufficient to proceed with the order.”

The DFM further stated that it was processing licence requests from seven brokerages, which will provide the RSS service to their customers once they receive the DFM’s approval and complete their required technical testing.

The new service comes as part of the market’s efforts to provide traders and market participants with the new tools to support their trading activities and to enhance their market liquidity.

The DFM recently received the Securities and Commodities Authority’s (SCA) approval to introduce the RSS service via its platform.

“The exchange has successfully completed extensive preparation stage over the past few months that included the consultations with market participants on the operating model and the necessary technical enhancements in order to ensure the full readiness of DFM’s systems and regulation,” the statement showed.

“Over the past few months, we have implemented wide-ranging enhancements for the systems and regulations to ensure full readiness for such significant development in accordance with international best practices and in coordination with market participants. We have carefully designed this new service to give investors the opportunity to short listed securities while safeguarding the market from any unsolicited repercussions on the market,” said DFM chairman Essa Kazim.

The RSS complements the securities lending and borrowing activity under which approved lenders can lend securities to approved borrowers in order to settle RSS trades.