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National Bank of Abu Dhabi (NBAD), the safest bank in the Middle East and in Emerging markets, has become the first bank to operate as a Securities Lending and Borrowing Agent for the UAE market, after it was granted approval by Securities & Commodities Authority (SCA).
This achievement illustrates NBAD’s leadership position in the market. In addition to being currently the only SCA-licensed Securities Lending and Borrowing Agent, NBAD is the UAE’s first licensed custodian bank and first and only official market maker since April 2014.
Jonathan Titone, Executive Director - Head of Product Development of Global Wealth at NBAD, said: “The combination of these capabilities will allow NBAD to offer its institutional clients a distinctive opportunity to earn incremental revenue on share positions which would have otherwise remained dormant and likely add liquidity and efficiency to the market. This sets up another milestone in our strategy to build the best Arab Bank in the world.”
For clients choosing to participate in the program, securities lending and borrowing transactions facilitate the temporarily transfer of the title of their securities to NBAD as a borrower for use in market making activities. Collateral will be posted to the lender and lenders will earn revenue from use of their shares. As the borrower, NBAD is obliged to return the securities to the lender at a later agreed date, or on demand.
Mr. Titone added: “We are proud to be the first UAE Securities Lending and Borrowing Agent, and to reaffirm our leading role in local and regional capital markets. It represents another step forward in the market’s impressive development journey; the program will increase market efficiency and liquidity in supporting market making activities, thus providing for greater market complexity.”