UAE Regulator Issues Rules To Protect Minority Shareholders

The United Arab Emirates Securities and Commodities Authority has issued new rules to protect minority shareholders, including regulations covering halts to trading in companies’ shares, it said on Sunday.

The changes include a provision saying no company has the right to halt trading in its shares before or during an annual general meeting or during a transaction, though the regulator can call a halt for several reasons, including a threat to the proper functioning of the market.

The new rules also tighten restrictions on initial public offers of shares, including banning any advertisement for an IPO before regulatory approval for the offer has been obtained.

Among other regulations, an investor will be required to make a general offer for a company if its ownership reaches 50 per cent and it wishes to exceed that level. Previously, such a threshold was not explicitly spelled out.

A subsidiary cannot be a shareholder in its parent company, and any subsidiary which is put in that position by an acquisition must dispose of its shares in the parent within 12 months.