[Last updated: 1 January 2024, unless otherwise noted]

A Nasdaq Dubai listed company has disclosure and reporting obligations both to Nasdaq Dubai and the DFSA. Generally, a listed company must release quickly to the public any news or information that might reasonably be expected to materially affect security values or influence investment decisions. Further, Nasdaq Dubai strives to ensure that listed companies provide timely and regular financial information.

Disclosure of material information

Generally, Nasdaq Dubai seeks to avoid a situation where unusual market activity or substantial changes in price occurs shortly before an important corporate action or development is announced, particularly because these changes may indicate trading on the basis of inside information. Nasdaq Dubai believes these risks are prevalent in the context of negotiations and preparations regarding mergers and acquisitions, new contracts, products or discoveries. Nasdaq Dubai recommends that companies exercise caution to keep these matters confidential. If confidentiality can be maintained, a public announcement may not be necessary, but if unusual market activity appears to be taking place while important corporate developments are under discussion or undertaken, Nasdaq Dubai recommends that the company be ready to make a public announcement.

A listed company must also give Nasdaq Dubai prompt written notice of a variety of corporate events affecting the company and its securities.

DFSA disclosures

A listed company must make timely disclosure of inside information. Such disclosures must not be misleading, false or deceptive and does not omit anything likely to affect the import of the information.

Such disclosures must be made as soon as possible and must be made to the DFSA, Nasdaq Dubai, on the website of the listed company and to any approved regulatory announcement service.

Periodic financial disclosures

Periodic disclosures are required in a number of circumstances and can include interim financial reports and accounts, prospectuses, bidder’s statements and target statements. A listed company must disclose to the market its annual financial report, its semi-annual financial report and its preliminary financial results.

The annual financial report must be disclosed as soon as possible after the financial statements have been approved, but no later than 120 days after the end of the financial period. The semi-financial annual report must be disclosed as soon as possible and in any event no later than 60 days after the end of the period to which the report relates. Preliminary financial results must be disclosed as soon as possible but no later than 30 minutes before market opens on the day after the approval of the board of directors.

Disclosure of interest by connected persons

Connected persons are defined as board members, senior managers or persons owning directly or indirectly securities carrying more than 5% of the voting rights of the company or of an entity controlling the company. Connected persons must file a report with the DFSA and the company upon becoming or ceasing to become a director of a controller of the company, or upon acquiring or ceasing to hold (either alone or with an associate) any securities in the company or in a controller of the company or upon an increase or decrease of 1% of its shareholding in the company.

Insider trading

A company must establish effective arrangements to deny access to inside information to any person other than those who require it inside the company for the exercise of their functions. A company must establish and maintain adequate systems and controls to enable it to identify at all times any person working for it who has or may reasonably be likely to have access to inside information whether on a regular or occasional basis.

A company must take necessary measures to ensure that its directors and employees who have or may have access to inside information acknowledge the legal and regulatory duties entailed including dealing restrictions in relation to the company’s securities, and are aware of the sanctions attaching to the misuse or improper use or circulation of such information.

Dealings by restricted persons

"Restricted persons" involved in the senior management of a company listed on Nasdaq Dubai (such as executive directors and other senior executives) are prohibited from dealing in the company’s securities during "close periods", unless prior clearance for those dealings is obtained. The prohibition applies to any dealing by restricted persons whether or not such dealings are with another restricted person or any other person.

A person is a "restricted person" in relation to a listed company if involved in the senior management of the company. Persons are considered as involved in the senior management if they are in a position of authority and influence in making management or executive decisions with regard to the day-to-day management of the business of the company. Some members of the board of directors, such as executive directors, are considered restricted persons because they undertake managerial functions and responsibilities relating to the day-to-day management of the company.

However, the following dealings are considered as "exempt dealings" and will not trigger the prohibition:

• A rights issue or dividend reinvestment offer, or allowing such an entitlement or offer to lapse.
• Undertakings to accept, or the acceptance of, a takeover offer as defined under the DFSA Takeover Rules.
• Dealings where the beneficial interest in the relevant security does not change.
• Transactions between the Restricted Person and an associate of such a person.
• Transactions relating to dealings in an employee share scheme in accordance with the terms of such a scheme.

A "close period" is the period from the relevant financial year end up to and including the time of the announcement or publication of the annual financial reports. If the listed company reports on a semi-annual or on a quarterly basis, the period from the end of the relevant semi-annual or quarter up to and including the time of the announcement.

A restricted Person can obtain prior written clearance to deal in the company’s securities from a director designated by the board of directors for these purposes. However, a clearance must not be given at any time if the director believes that the dealing in securities involves any matter which constitutes "inside information" as defined under the Markets Law.

Related party transactions

A person is a "related party" to a listed company if that person:

• Is, or was within the 12 months before the date of the transaction, either a director or a person involved in the senior management of the listed company or a member of its group, or an "associate" of that director or person.
• Owns, or has owned within 12 months before the date of the transaction, voting securities carrying more than 5% of the voting rights attaching to all the voting securities of either the listed company or a member of its group.
• Is, or was within the 12 months before the date of the transaction, a person exercising or having the ability to exercise significant influence over the reporting entity (this may include an advisor or consultant to the company) or an associate of such a person.

In any related party transaction of a listed company, the listed company must ensure that:

• If the transaction value is greater than 5% of the company’s net assets (as stated in its most recent financial reports), it does not enter into the transaction unless the transaction has been duly approved by a majority of the shareholders with voting power.
• If the transaction value is less than the 5% threshold discussed above, it notifies the DFSA as soon as possible after the transaction of the relevant terms and the basis on which the terms are considered fair and reasonable, supported by a written confirmation by an independent third party acceptable to the DFSA.

For purposes of determining the 5% threshold, a series of related party transactions with the same related party in any 12 month period generally are aggregated.

The following transactions are considered related party transactions:

• Transaction between the listed company (or a subsidiary) and a related party.
• Transaction under which the listed company (or a subsidiary) invests in another undertaking or asset, or provides financial assistance to another undertaking, in which a related party also has a financial interest.
• Transaction between the listed company (or a subsidiary) and any other person the purpose or effect of which is to benefit a related party.

The related party transaction rules do not apply if the transaction:

• Is made in the ordinary course of business and on commercial terms no less favorable than those of an arm’s length transaction with an unrelated party.
• Where it, or any series of transactions with the same related party in any 12 month period, does not exceed 0.25% of the value of the net assets of the listed company as stated in its most recent financial reports.
• Where it is made in accordance with the terms of an employee share scheme or other employee incentive scheme approved by the board of directors of the listed company.

Where it involves the issue of new securities for cash or pursuant to the exercise of conversion or subscription rights attaching to securities issued to existing shareholders where the securities are traded on a Nasdaq Dubai.

Other corporate actions

The board of directors of the company must ensure that all necessary information and facilities are available to its shareholders to enable them to exercise the rights attaching to their securities on a well-informed basis, such as matters to be determined at shareholders meetings. All shareholders must have access to any relevant notices or circulars giving information in relation to rights attaching to the securities.