Dubai - Mubasher: The Dubai Financial Market (DFM) on Wednesday launched the Allocation Account mechanism to create the mechanisms and services, which promote the trading activity of market participants.

The new mechanism enables brokerages to use a combined account with the clearinghouse to conduct buying and selling transactions of securities on behalf of their clients, but these transactions must be allocated to the clients' accounts within the allocation period, the DFM stated.

“The service has created a proficient electronic interface for trading activities of such funds enabling them to implement their daily transactions and allocate the proceedings to investors’ accounts in a fair and transparent way based on the average price,” said Essa Kazim, the DFM’s chairman.

Brokerage firms must be a trading and clearing member enjoying the necessary technical, administrative and financial capabilities in order to obtain the DFM’s approval to use Allocation Account, the Dubai-based market remarked.  

“The regulation clearly identifies the responsivities of brokerage firms utilising the Allocation Account as well as timeframes of allocating the transactions after the trading session, in addition to market actions in case of having unallocated securities or failed transactions,” Kazim concluded.