- New Securities Lending and Borrowing (SLB) Model offers a transparent, centrally cleared framework to enhance liquidity, deepen market efficiency, and support investor access.
- Operated by Dubai Clear as central counterparty (CCP), the model ensures robust risk management and is fully aligned with international best practices and governance standards.
Dubai Financial Market (DFM) announced the launch of its centralized Securities Lending and Borrowing (SLB) Program, a strategic market infrastructure initiative aimed at enhancing market liquidity, supporting price discovery, and broadening investor participation in Dubai’s capital market.
The SLB program is operated by Dubai Clear, DFM’s wholly owned subsidiary, which serves as the central counterparty (CCP) for all such SLB transactions. The program introduces a centralized, transparent and fully regulated framework for the loan and borrowing of eligible securities, in line with Dubai Clear’s SLB rules and aligned with international best practices for risk management and governance.
“By introducing a robust and transparent SLB framework, DFM is addressing a critical component of market development, enabling institutional and soon, retail investors to engage in securities lending and borrowing within a secure and regulated environment,” said Hamed Ali, CEO of DFM and Nasdaq Dubai, in a statement. ‘’This initiative is part of our broader strategy to deepen market liquidity, strengthen market infrastructure, and support the growth of a sustainable and diversified investor base in line with global best practices.”
The program allows long term investors to make eligible securities available for borrowing while borrowers, including hedge funds and market makers, can access these securities to implement trading and liquidity enhancement strategies.
Loan transactions are executed through a centralized matching mechanism and settled with the CCP, ensuring full anonymity between counterparties. The SLB Program features comprehensive risk management protocols, including margining requirements, collateral management, all underpinned by Dubai Clear’s capabilities as a CCP.