DFM implements new measures for loss-making companies

BLOOMBERG/CHARLES CROWELL

The Dubai Financial Market (DFM) has announced the implementation of the Securities and Commodities Authority’s (SCA) new measures concerning companies reporting losses of 20 per cent and above of the issued capital based on the financial results of the third quarter of 2019.

Hassan Al Serkal, the Chief Operating Officer and Head of Operations Division of DFM, said, “The DFM is committed to providing investors with a fair and transparent trading environment, enabling them to make well-informed investment decisions based on the highest levels of clarity about each company.”

Companies that are running at an accrued loss of 20 per cent and above of their capital are obliged to disclose it to the SCA and the DFM, concurrently with the periodic or annual announcement of the results.

Similarly, listed companies are mandated to disclose to the regulator and the DFM about accrued losses of 50 per cent and above.

The companies are also obliged to submit an explanation about the main causes of the losses and the planned measures to handle the situation.

The DFM stated that listed companies with losses between 20 per cent and less than 50 per cent, and companies with losses above 50 per cent of the capital will be yellow-flagged and red-flagged on DFM’s Market Watch webpage respectively once the company concerned discloses its accumulated losses.