DFM Unveils Centralized SLB Program to Boost Liquidity
Dubai Financial Market introduces a new Securities Lending and Borrowing program to enhance market liquidity and investor access.
Summary
Dubai Financial Market has launched a centralized Securities Lending and Borrowing program to enhance market liquidity, deepen market efficiency, and support investor access.
In a strategic move to bolster Dubai's financial ecosystem, the Dubai Financial Market (DFM) has officially launched its Centralized Securities Lending and Borrowing (SLB) Program. This initiative is designed to enhance market liquidity, improve price discovery, and broaden investor participation in Dubai's capital market. The SLB Program is operated by Dubai Clear, a wholly-owned subsidiary of DFM, which acts as the central counterparty (CCP) for all SLB transactions.
The introduction of this SLB framework marks a significant milestone in DFM's efforts to align with international best practices. It offers a transparent, centrally cleared environment for the loan and borrowing of eligible securities, ensuring robust risk management and governance standards. This move is expected to attract institutional investors and, eventually, retail investors, by providing a secure and regulated platform for securities lending and borrowing.
According to Hamed Ali, CEO of DFM and Nasdaq Dubai, the SLB initiative is part of a broader strategy to enhance market liquidity, strengthen infrastructure, and support a diversified investor base. The program allows long-term investors to lend eligible securities while borrowers, including hedge funds and market makers, can access these securities for trading and liquidity enhancement strategies. The centralized matching mechanism ensures full anonymity between counterparties, further bolstering the program's appeal.
With this development, DFM is poised to become a more dynamic and efficient marketplace, attracting a wider range of participants and fostering a more vibrant trading environment. The centralized SLB program is not only a testament to DFM's commitment to innovation but also a reflection of Dubai's ambition to be a leading global financial hub.
For investors, this presents a promising opportunity. The enhanced liquidity and improved market infrastructure could lead to more favorable trading conditions and potentially higher returns. Given the strategic importance and potential benefits of the SLB program, the current outlook for DFM is optimistic. Investors might consider this an opportune moment to buy, as the market is likely to see increased activity and growth in the coming months.
Source
Summary
The Dubai Financial Market (DFM) has launched a Centralized Securities Lending and Borrowing (SLB) Program to improve market liquidity and investor access. This program, operated by Dubai Clear as the central counterparty, offers a transparent and regulated framework for securities lending and borrowing. It aligns with international standards for risk management and governance. The initiative aims to enhance market efficiency, support price discovery, and expand investor participation in Dubai's capital market. Long-term investors can lend eligible securities, while borrowers such as hedge funds and market makers can use these securities for trading strategies. The program features a centralized matching mechanism and ensures anonymity between counterparties.
