ESCA approves brokerages' financial umbrella standards

Abu Dhabi, Jan 3, 2010 (WAM)- The board of directors of Emirates Securities and Commodities Authority (ESCA) has approved the standards for financial umbrella of brokerages dealing with securities and commodities contracts.
The approval was made during a meeting chaired by UAE Minister of Economy and Chairman of ESCA Sultan bin Saeed Al Mansouri to meet the best relevant practices and standards adopted by global markets.
Present at the meeting were Governor of the Central Bank Sultan Nasser Al-Suwaidi, CEO of ESCA Abdullah Al-Tarifi and Sami Zaen Al-Qamzi, director of Dubai Department of Economic Development.
Liquidity and risks will be the base for figuring out the financial umbrella of brokerages. The net liquid capital is calculated as a percentage of the company's obligations and shall always be proportional with the size of the company's business and its ability to determine it.
Regarding the risks, companies shall dedicate a capital to face all credit risks, market risks and operation risks, whether or not it is stated in their budgets. The said capital reflects the company's financial position and umbrella as well as its ability to deliver on its obligations to customers.