Dubai - Mubasher: Dubai Financial Market (DFM) on Monday announced it will be executing the Securities and Commodities Authority’s (SCA) new measures pertaining to loss-making companies of 20% and above of the issued capital based on the financial results of the third quarter 2019.

This move highlights the joint efforts of the SCA, the DFM, and the listed companies to enhance operational efficiency of listed companies as well as to make investors aware of the company’s financial conditions, according to a press release.

Under the new measures, loss-making companies will be classified and color-labelled on the exchange’s Market Watch webpage.

Accordingly, investors will be able to identify the financial position of each listed company and make decisions regarding investing in these companies, the DFM highlighted.

Loss-making companies of 20% and above of their capital are required to disclose to the SCA and the DFM, concurrently with the periodic or annual results announcements.

Companies shall also provide an explanation concerning the main causes of the losses and the planned measures to handle the situation.

“Similarly, listed companies are obliged to disclose to the Regulator and the DFM about accrued losses of 50% and above of the capital concurrently with their periodic or annual results announcements and submit an explanation of the main causes of the losses in addition to their detailed plans to handle the situation within a definite timeframe,” the DFM noted.

Companies with accrued losses are now classified into two categories; companies with losses between 20% and less than 50%, and companies with losses above 50% of the capital, the exchange said.

Listed companies within the first category will be yellow-flagged on the DFM’s Market Watch, while companies within the second category will be red-flagged.

Hassan Al Serkal, chief operating officer (COO) and Head of Operations Division of DFM said: “The DFM is committed to provide investors with a fair and transparent trading environment enabling them to take well-informed investment decisions based on the highest levels of clarity about each company.”

“We have been collaborating with the SCA in order to further enhance this trading environment with the adoption of the new arrangements that we are pleased to implement after officially issuance from the Regulator. The DFM will host workshops for listed companies as well as brokers and investors as part of an extensive campaign to make them aware of the arrangements,” Al Serkal added.