Monday, September 20, 2021

Abu Dhabi Securities Exchange or ADX Enters Agreement with Nasdaq to Establish Derivatives Market

The Abu Dhabi Securities Exchange (ADX) reveals that it has taken an important step towards establishing a derivatives market in 2021 by entering an agreement with Nasdaq (Nasdaq: NDAQ) in order to provide marketplace tech services, such as matching, real-time clearing and settlement technology.

Abu Dhabi‘s Securities Exchange has been steadily expanding asset classes and creating various new offerings for regional and global investors. The ADX General Index (ADI) has now reached 7700 points for the first time ever, and it’s being supported by several listings and greater participation by global investors. Additionally, the index has surged 52% YTD, which makes it one of the best-performing equity indexes worldwide.

The exchange intends to introduce single stock futures and index futures during Q4  before expanding to a broader range of derivative products. The initiative aims to keep diversifying investment avenues and offer investors with appropriate hedging tools for proper risk management.

The derivatives market will also be accompanied by central counterparty clearing (CCP) to support clearing efficiency, stability and confidence in the market.

H.E. Mohammed Ali Al Shorafa Al Hammadi, Chairman of ADX, stated:

“ADX is on a journey to significantly enhance liquidity and expand market capitalization through our ‘ADX One’ strategy, which provides a clear road map for further development of a vibrant exchange. By deepening our capital markets and increasing the range of innovative products and services, we are supporting the UAE’s strategy for economic diversification, providing growth companies with favorable access to global capital and allowing investors to participate in the UAE’s ambitions.”

Saeed Hamad Al Dhaheri, CEO at ADX, remarked:

“Our commercial relationship with Nasdaq dates to ADX’s establishment in 2000, and over the last two decades, we have collaborated on a range of initiatives to ensure investors benefit from efficient market infrastructure technology. We are confident that the launch of a derivatives market will be another important milestone, empowering investors on the exchange who wish to implement sophisticated trading strategies. Our strategy is to ensure that investors and issuers derive significant benefits of a sophisticated marketplace by investing further in technology, broadening our offering, and attracting a wider range of institutional investors.”

Lars Ottersgård, EVP and Head of Nasdaq Market Technology, added:

“ADX continues to be an industry leader in innovating and evolving the Middle East’s capital market ecosystem. By leveraging Nasdaq’s robust and flexible technology solutions, ADX can further evolve its endeavors to expand into a leading derivatives marketplace and one of the largest multi-asset marketplaces in the Middle East. We look forward to progressing our technology partnership and supporting ADX in their growth journey.”

Nasdaq’s market technology powers over 2,300 firms in 50 different countries, covering the global financial sector, which includes capital markets infrastructure operators, market participants, banking institutions, and regulatory agencies.

The ADX One strategy, introduced at the start of this year, intends to provide a wider offering of products to market and invest in key infrastructure in collaboration with international market participants. As of August this year, ADX has 78 firms that are listed on its main and Second Market.

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