From 1st January 2016 the Securities and Commodities Authority (SCA) will require all companies listed on UAE exchanges to establish and develop an Investor Relations (IR) function. The Middle East Investor Relations Society (MEIRS) fully supports this pioneering initiative as a significant step towards embedding international standards in local market practice, and encourages companies to further develop their capabilities to meet this requirement.
Announced in March 2014, this decree followed extensive market and stakeholder consultation and led to a unique addition in the 2009 Ministerial Resolution No (518) on Governance Rules and Corporate Discipline Standards (Article 12-7). "In line with the recent reclassification to MSCI Emerging Market status and as market demands for disclosure, access and transparency intensify, this initiative is an important step forward,” said Alex MacDonald-Vitale, Chairman, MEIRS, “These guidelines will help listed companies meet the requirements of both national and international investor communities, as well as prepare the UAE market for eventual upgrade.”
With four primary (mandatory) and three secondary (supplementary) stages, the new regulations are designed to enable companies to meet the requirements in a sustainable manner, while providing them with the tools needed to start accessing the broader investor community:
1) All companies listed in the UAE must appoint an acting Investor Relations Officer (IRO).
With both Arabic and English language capability, the IRO should have both the practical expertise and the regulatory and legislative proficiency required to liaise directly with investors on behalf of the company;
2) Listed company websites must now incorporate a standalone section dedicated to IR-related disclosures including: contact details, financial reports, AGM and EGM minutes, and any other information relevant to the shareholders;
3) The IR section of the website should be used by the company to publish information or statements already disclosed to the markets, regulators and investors, along with any statements on changes in the company or shareholders' rights;
4) At least once per year or following announcement of core financial results, listed companies are now also required to publish investor presentations showing their financial position, strategy and outlook.
a) In line with annual report release deadlines, listed companies may choose to offer financial results via conference calls with media, analysts and investors;
b) They may also proactively organise road shows or annual conferences with investors and stakeholders;
c) Finally, companies can develop a sufficient number of analysts to cover the performance of its stocks in the market.
“By adopting these principles, companies will strengthen their position among the region’s capital markets, better comply with international standards of best practice, and so increase their chances of securing institutional investors across global markets”, added Alex. “We encourage all listed companies to adopt these guidelines as promptly and fully as possible. Always here to support, we advise management teams to engage proactively with their investor base, and as necessary, seek guidance on best practice.”
For further information: http://www.sca.gov.ae/English/PJSC/LDDProcedures/Pages/InvestorsRelationControls.aspx