Authority’s Board of Directors’ Resolution No. (2/R) of 2001 Concerning the Regulations as to Trading, Clearing, Settlement, Transfer of Ownership and Custody of Securities

§Preamble

THE AUTHORITY’S BOARD OF DIRECTORS’ DECISION NO. (2/R) OF 2001 CONCERNING THE REGULATIONS AS TO TRADING, CLEARING, SETTLEMENT, TRANSFER OF OWNERSHIP AND CUSTODY OF SECURITIES The Chairman of the Board of Directors of the Securities and Commodities Authority,

Having considered the provisions of Federal Law No. (4) of 2000 concerning the Emirates Securities and Commodities Authority and Market, The Council of Ministers’ Resolution No. (193/18) of 2000 concerning the Composition of the Board of Directors of the Authority, After consultation and coordination with the parties concerned in establishing the Markets in the State, and Upon the approval of the Board of Directors of the Authority at its meeting on 11/2/2001,

Has decided to approve the following regulation for trading, clearing, settlement, transfer of ownership and Safekeeping of Securities.

Chapter One: Definitions

§Article 1

The following words and expressions shall have the meanings set forth opposite each of them, unless the context of the provision requires otherwise: Law: Federal Law No. (4) of 2000 concerning the Emirates Securities and Commodities Authority and Market.

State: The State of the United Arab Emirates.

Authority: The Emirates Securities and Commodities Authority.

Board: The board of directors of the Authority.

Market: A securities and commodities market licensed in the State by the Authority.

Securities: Shares, bonds, and notes issued by joint stock companies and bonds and notes issued by the Federal Government, Local Governments, public authorities and public institutions in the State, and any other financial instruments accepted by the Authority.

Broker: A juristic person authorized under the provisions of the Law to operate a brokerage business in the Market.

Broker's Representative: A natural person licensed to carry on brokerage business in the Market in his capacity as representative of a Broker. Floor: The trading floor in the Market.

Clearing House: The entity conducting settlement operations and issuing orders for the payment of funds due to clients in the Market.

Trading: Sale and purchase transactions in Securities.

Broker's Office: The part of the Floor allocated to a Broker by the Market. Market Controller: The person authorized by the director general of the Market to oversee Trading movement.

Investor: Any person who makes a practice of selling and buying Securities in his name and for his account, and has been given a number by the Market directly or through a Broker.

General Clearing Member: A legal person licensed by the Authority to conduct clearing and settlement processes.[1] [2]

Material information: Any information, event, decision or fact that may directly or indirectly affect the price or trading movement or volume of the security or may have an effect on the investor's decision, including but not limited to, information or decisions related to the following:

1.Distribution of profits.

2.Increasing or decreasing the capital.

3.Changing in the Company's Board of Directors or its senior executive management.

4.Changing of the Company's activity or objective.

5.Acquisitions or mergers processes.

6.Restructuring, voluntary liquidation or bankruptcy of a Company or Mother, Subsidiary, Sister or Affiliate Company.

7.Credit rating report and any updates thereto.

8.Significant changes in the company's assets if it reaches 5% or more of its capital.

9.Financial contracts and obligations concluded or cancelled by the company once it reaches 5% or more of its capital.

10. Issuance of bonds or sukuk and any change thereto.

11. Transactions and dealings with the related parties.

12. The Company, one of its branches or the Mother, Subsidiary, Sister or

Affiliate Company suspends its activity.

13. Any judicial lawsuit in which the company, any of its board members or senior executive management is a party ex officio.

The Board may determine any other information, decisions, events or facts to be material. [3]

Chapter Two: Trading

§Article 2

Transactions in the Market shall be restricted to the Securities listed thereon. The price of the Securities shall be displayed in accordance with the regulations issued in that respect.

§Article 3 — [4]

Trading in Securities listed on the Market shall take place on the Floor and through one of the Market’s registered Brokers. The following cases are excluded from the requirement of trading on the Floor:

1- Transfers of ownership between spouses and relatives to the second degree.

2- Transfers of ownership taking place as a result of inheritance, wills or gifts made to official charitable bodies in the State without consideration.

3- Transfers of ownership taking place pursuant to court orders.

4- Transfers of ownership taking place pursuant to an amicable settlement with a financial institution.

5- Transfers of ownership taking place between persons whose names appear on one single certificate of ownership.

6- The sale of Securities by public auction.

7- Transfer of ownership transactions requested through the banks, finance companies or mutual funds licensed to complete the financing operations in securities. The Market shall set the necessary controls for this purpose with the Authority’s approval. [5] Notwithstanding the above, the procedures for transfer of ownership shall in the preceding cases be completed in accordance with the practices observed in the Market in this respect.

Nevertheless, the director general of the Market or whoever is designated on his behalf may however sanction the transfer of ownership off the Floor in particular cases other than those mentioned above, when the circumstances so require.

§Article 4

The party which Securities transferred over the Floor shall inform the Market of the transactions that have occurred in such Securities, within a period not exceeding two working days following such transaction.

§Article 5 — [6]

1. A Broker is not permitted to trade on behalf of an Investor unless an account has been opened for that Investor at the Clearing House.

2. Subject to the provisions governing the activity of market-making, lending and borrowing of securities and trading by consolidated accounts system, the broker is not allowed to sell on behalf of an investor unless the securities subject of the sale have been transferred from the investor’s account with the clearing house to the investor’s account with the broker prior to the sale transaction.[7]

§Article 6 — [8]

Trading in Securities shall be executed through the electronic trading system available in the Market, unless the Market approves in advance the execution of transactions pursuant to special orders exceeding 80% of the guarantee of the Broker, General Clearing Member or Market Maker

§Article 7

A Broker shall enter sale or purchase orders by the means provided by the Market.

Trading Currency

§Article 7 bis — [9]

1. A total commission of 0.00275 of the value of each transaction executed in the Market shall be collected and distributed as follows:

a- 0.0005 for the Authority.

b- 0.00125 for the Broker.

c- 0.0005 for the Market.

d- 0.0005 for the Clearing House.

In all cases, the trading commission shall not be less than (65) Dirhams, of which the Broker shall have (30) Dirhams, the Market (20) Dirhams, the Authority (5) Dirhams and the Clearing House (10) Dirhams. The Broker may decrease the value of the commission which the Broker receives for each executed transaction, provided that the commission which the Broker actually receives is recorded in a register for this reason and is included in the client’s account statement or in a separate invoice sent out to the client. [10]

2. The trading commission shall be due for each trading transaction executed in the Market.

3.The Authority shall collect a total commission of (0.0005) of the value of each transfer of ownership transaction executed in the Market by the banks, finance companies or mutual funds licensed to complete the financing operations in securities in accordance with clause (7) of Article (3) of this Regulation[11]

4. A broker for trading in unregulated derivative contracts and currencies in the spot market shall collect a trading commission for each trading transaction that is executed according to what is specified in the agreement concluded between him and the client.

5.The crypto-asset broker shall collect a trading commission for each trading transaction that is executed as specified in the agreement concluded between him and the client.

6.The crypto-asset market shall determine its trading commission, provided that it is approved by the Authority before it is implemented[12]

§Article 8

The Market shall set rules in relation to :

1- The business hours on the Floor, the rules for admittance thereto and the instructions to be observed by those present on the Floor.

2- The number of Broker's Representatives who can be present together in a Broker's office.

3- Admittance to a Broker's Office, and the instructions required to be observed by those present therein.

4- The resale of Securities purchased in the same Trading session.

§Article 9

The range of movement in the price of a share over one day of Trading shall be 15% of the previous closing price as a maximum increase or decrease. The Market may however override this percentage in cases where this is required, provided that the Authority's approval is obtained.

§Article 10

The board of directors of the Market shall be responsible for the daily monitoring of Trading in Securities so as to ensure justice between traders.

§Article 11

The Market Controller, assisted by a number of employees, shall oversee the opening and proper functioning of Trading session, and the correct application of Trading instructions. The Market Controller shall be responsible for managing the Trading session and monitoring the Brokers' compliance with the observed Trading norms, including maintaining order in the Floor. The Market Controller shall immediately inform the general director of the Market or the person designated on his behalf of any orders or transactions which were subject to a dispute, in order to take the action he deems appropriate in its regard.

§Article 12

Without prejudice to the provisions of Article (3) of this Regulation, all transactions in relation to Securities listed on the Market shall be recorded in the

Market’s records, and any transaction in Securities listed on the Market not recorded in accordance with the provisions of the Law, regulations and decisions issued in implementation thereof shall be void.

§Article 13

Unless proved otherwise, the entries in the Market's records, whether inserted manually or electronically, and any documents issued by the Market shall constitute legal evidence of dealing in, and ownership of, the Securities stated therein as of the date of such records or documents.

§Article 14 — [13] [14]

The chairman and the members of the board of directors of a company, whose Securities are listed on the Market, its general manager, and any of its employees who have knowledge of material information of the company, shall not deal by themselves or for their accounts through others or for others in any other capacity, in the Securities of the company itself, or Securities of the mother, subsidiary, sister or affiliate company of such company, if the Securities of any of these companies are listed on the Market, during the following periods: A.Ten (10) working days prior to the announcement of any material information, unless the information was a result of sudden or unforeseen circumstances. B.Fifteen (15) days prior to the end of the financial quarterly, semi-annual or annual period until the disclosure of the financial statements.

§Article 15

Any transaction in Securities executed by any person shall be considered void if: a- The transaction is executed on the basis of unannounced or undisclosed information the trader acquired by virtue of his position.

b- The trader is the chairman of the company, or a member of its board of directors, or an employee of it, and has exploited his inside information in relation to the company in his transaction.

§Article 16 — [15]

No person, whether alone or in collusion with others, shall be permitted to effect any disposition or dealing such as to deceive or mislead Investors, including:

1- Executing a transaction or transactions in particular Securities with the aim of misleading Investors as to the existence of an active market for such Securities,

or with the aim of affecting the price of a Security (by way of an increase, decrease or stabilisation of price) or the volume of Trading in the Market, or with the aim of affecting an Investor’s decision of whether or not to invest.

2- Entering, amending and/or cancelling a purchase or sale order or orders for a particular Security with the aim of misleading Investors as to the existence of an active market in such Security or with the aim of affecting its price or the volume of Trading in the Market, or with the aim of affecting Investors’ decision of whether or not to invest.

§Article 17 — [16]

No person, whether alone or in collusion with others, shall be permitted to exploit information relating to the orders of Investors for the purpose of achieving personal benefits for himself or for others.

§Article 18 — [17]

At the end of the Trading session, the Brokers shall review all orders and Trading to ascertain their correctness. If it becomes evident that a transaction has been erroneously booked to an account, the Broker concerned shall submit to the Market Controller an application for the necessary alteration in the prescribed form prepared by the Market within thirty minutes of the closing of the Trading session during which the Trade in question took place, attaching to that form a copy of the executed order for the purchase or the sale.

§Article 19

The Market shall prepare a daily and a weekly bulletin on the traded Securities. The bulletin shall be approved by the general director of the Market or whoever he authorizes for this purpose, and shall be regularly published in local daily newspapers issued in the Arabic language. The Market shall also prepare a monthly bulletin includes information on the Securities listed during the month, the total monthly Trading volume in the various sectors of activity compared with the previous month with a statement of the Trading indices.

§Article 20

The Market’s publications shall be restricted to aggregated statistical data, without reference to names of traders or their Brokers.

§Article 21

The Market shall provide the Authority with the Trading data in the prescribed forms prepared by the Authority in this regard.

§Article 22 — [18]

1. The shareholders shall have the right to trade freely in the market; and the company may not include in its Articles of Association any stipulation to ban trading on its shares before or during the meetings of its general assemblies or to make a deal, transaction, action or doing that have an impact on the company's capital.

2. The Authority may issue a decision to temporarily halt trading in any securities listed on the market if there were exceptional circumstances so warrant, or if it considers that the trading of the securities does not serve the public interest or constitutes a deception or infringement to the rights of shareholders, or for any other reasons.

3. Subject to the approval of the Authority, the director general of the market may temporarily halt the trading of any security listed on the market in the event of exceptional circumstances threatening the proper functioning and system of the market, or in such cases where he sees a need therefor.

§Article 23 — [19]

1- The registered holder of a share on the working day preceding the meeting of the general assembly of a company shall be deemed to be the holder of the right to vote in that meeting of the company's general assembly.

2- . The right holder to the division of the nominal value of the share or dividends, whether cash or bonus shares, shall the registered owner of the share on the tenth day starting from the day following the date of holding the General Assembly / Board of Directors’ meeting which decided to distribute such dividends or decided the value division.

The company must deposit the cash dividends in the bank account of the market, within the period and using the process determined by the market in coordination with the SCA, and the market must deposit the cash dividends in the bank accounts of the shareholders within thirty days from the date of the General Assembly resolution / Board of Directors decision to distribute such dividends.[20]

3- The person entitled to subscribe for the shares following an increase in capital shall be the registered holder of shares on the day that is 10 days prior to the first day of subscription, provided that the invitation to subscribe has been published at least 15 days prior to the date of commencement of such subscription. If the date of a shareholder’s entitlement arising under paragraphs (2) and (3) falls on an official holiday, the subsequent working day shall be deemed to be the date on which such entitlement arises.

The company shall address the invitation to all shareholders in two daily local newspapers issued in the Arabic language and a newspaper issued in the English language at least 21 days prior to the date fixed for the meeting of the general assembly. The invitation shall include the date referred to in paragraphs

(1) and (2), and also the agenda for the general assembly.

Chapter Three: Clearing, Settlement, Transfer of Ownership and Safekeeping

§Article 24

A company shall, within one week from the date of approval for the listing of its Securities on the Market, update the register of its shareholders and deliver to the Clearing House a copy thereof prepared in accordance with the prescribed electronic forms used by such Market for the recording of data, and shall also update the names of the shareholders whenever necessary.

§Article 25

The Market shall, within one week from the date of its approval for the listing of any security therein, install a terminal in the book allocated to the registrar of the listed company to enable him to access the register for the inquiry purposes and to conduct any required updating of the company's register.

§Article 26

The Clearing House shall undertake mainly the following tasks: a- To allocate numbers to Investors and to supervise the same. b- To operate the computer system for the shareholders' register on behalf of all companies which Securities are listed on the Market.

c- To update the shareholders' register following the Market transactions and

other transfers between Brokers.

d- To certify the updates made to the shareholders' register following the Investors’ transfer of share certificates.

e- To operate the Market's clearing system.

f- To issue orders for payment of remaining amounts due to Brokers (if any). g- To issue orders for the collection of net amounts due from Brokers (if any). h- To keep and administer Brokers' bank guarantees.

§Article 27

In addition to any other tasks designated by the Market’s board of directors, the Market shall make rules regulating the following:

1- Admitting the public and the Brokers to the Clearing House.

2- Opening accounts with the Clearing House.

3-Transferring Securities from the Investor's account with the Clearing House to his account with the Broker.

4- Registering pledge in relation to Securities.

§Article 28

An Investor may submit a request to the Clearing House on the form prescribed for the purpose of confirming his ownership of the shares which he claims to own and which are listed on the Market. The Clearing House shall make a decision on his request within a period that does not pass 10:00am of the working day which follows the receipt of the request.

§Article 29 — [21]

Subject to the provisions governing the activity of market making and the lending and borrowing of Securities, the number of Securities sold shall be deducted from the seller’s account and credited to the buyer’s account once any transaction is executed.

§Article 30

Securities listed for trading shall be deemed to be fungible movables such that Securities of any given class may be transferred from the seller's account and placed in the purchaser's account in lieu of any other Securities of the same class.

§Article 31 — [22] [23]

The Broker, General Clearing Member and Market Maker, which has undertaken a purchase transaction, shall pay the net amount due by it in accordance with the report issued by the Clearing House as to the net due amount according to a procedure and within the time specified by the Clearing House, provided that such time does not go beyond the end of the second working day following the day of Trading.

§Article 32 — [24]

If the Broker, General Clearing Member or Market Maker breaches the provisions of the preceding Article, the Clearing House may address the Bank that issued the guarantee to liquidate the guarantee and settle any amounts due by them.

§Article 33 — [25]

If the Broker, General Clearing Member or Market Maker causes delay in the settlement of transactions in which any of them is a party for more than two consecutive times, the Market may refer the Broker to the disciplinary council or the Authority, as the case may be, without prejudice to the provisions stipulated in the Law, the regulations and the Market decisions issued in implementation thereof.

§Article 34 — [26] [27]

The Clearing House shall issue an order to pay the amount due to the Broker, the General Clearing Member or the Market Maker, who has undertaken a sale transaction, in accordance with its report as to the net amount according to the procedure and the time specified by the Clearing House, provided that such time does not go beyond the end of the second working day following the date of the report.

§Article 35 — [28] [29]

The Broker or the General Clearing Member shall pay the funds due to the Investor or credit them to such Investor's account with the Broker or the General Clearing Member within two working days following the completion of the transaction.

§Article 36

Transfer of the ownership of Securities in the Market and entry on its records shall be executed in accordance with the regulations issued pursuant to the Law. The issuing party of such Securities shall effect the procedures required for the transfer of ownership without delay.

§Article 36 bis — [30] [31]

Subject to the provisions regulating clearing and settlement as stated herein, if the selling Broker, the General Clearing Member or the Market Maker failed to deliver the Securities, subject of the transaction, on the date of settlement, the procedures set forth in the Regulations concerning the Settlement System on the Basis of Delivery Versus Payment (DVP) shall be followed in relation to the failure to deliver the Securities and making a payment.

§Article 37

Any company which Securities are listed on the Market may not issue any certificates in respect of transfer of ownership of shares being held with the Clearing House for the purpose of Trading.

§Article 38

Registrars of companies which Securities are listed on the Market may not issue certificates of transfer of ownership of shares that are not held with the Clearing House, except in the following cases:

a- Transfer of ownership of shares from the register with the company to the Clearing House in the Market on which the company's Securities are listed. b- Transfer of ownership of shares in cases of family transfers, inheritance and pursuant to court orders, and other cases where Trading in shares is permitted over the Floor, provided that the Market is informed of such transfers.

§Article 39

The Market shall set rules to regulate the following:

1- Cases of family and inheritance transfers and transfers pursuant to court orders, and other cases where Trading in shares is permitted over the Floor as referred to in Article (3) of this regulation.

2- Cases where shares are transferred to and from the Clearing House for the purpose of Trading.

§Article 39 bis — [32] [33]

In case any person violates the provisions of this decision or the law or regulations issued thereunder, the Authority may impose the following penalties: A.Serve a Warning.

B.A monetary fine of no more than one hundred thousand Dirhams. C.Suspending the Investor for a period of no more than one year. D.Suspending the accredited persons from practicing the profession for a period not exceeding two months or canceling the accreditation.

E.Suspending the activity licensed by the Authority for a period not exceeding one year or cancelling the license.

Article (39)BIZ/1 [34]

The Board may publish the names of violators of the Authority’s Law, regulations and decisions issued in implementation thereof as well as the breaches and penalties issued against them as it decided.

§Article 40

This regulation shall be published in the Official Gazette, and shall come into effect as from the date of its publication.

Fahim Sultan Al Qasimi Chairman of the Board of Directors

Issued in Abu Dhabi On 24 Dhu Al Qa'da 1421 Hijri Corresponding to 18/2/2001 AD

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• [1] - Definition of (Clearing Member) has been added according to Decision No.

(28) of 2014.

• [2] - The definition has been amended by virtue of Decision No. 34/R.M Of 2019

• [3] - The definition of " Material Information" is added to Article (1) by virtue of Decision No.(34/R.M) Of 2019

• [4] - Article (3) has been amended according to Decision No. (62\R) of 2006.

• [5] - Clause No. (7) of Article (3) has been added according to the Chairman of

the Authority’s Board of Directors’ Decision No. (12/R. M) of 2016

• [6] - Article (5) has been amended according to Decision No. (45) of 2012

• [7] - Clause No. (2) of Article (5) has been amended according to Decision No.

(2) of 2015.

• [8] - Article (6) has been amended by virtue of Decision No.(34/R.M) OF 2019

• [9] - Article (7/bis) has been added according to the Authority’s Board of Directors’ Decision No. (28) of 2014.

• [10] - Article (7)bis has been amended according to Decision No. (1/R.M) of

• [11] - Clause No. (3) of Article (7)bis has been added according to the Chairman of the Authority’s Board of Directors’ Decision No. (12/R. M) of 2016

• [12] - Clause No. 4.5.6 have been added to Article No 7/bis by The Chairman of the Authority’s Board of Directors’ Decision No. ( 18 /Chairman) of 2021

• [13] - Article (14) has been amended according to Decision No. (20) of 2014.

• [14] - Article 14 has been amended by virtue of Decision No. 34/R.M of 2019

• [15] - Article (16) has been amended according to Decision No. (69\R) of 2007.

• [16] - Article (17) has been amended according to Decision No. (69\R) of 2007.

• [17] - Article (18) has been amended according to Decision No. (30\R) of 2004.

• [18] - Article (22) has been amended according to Decision No. (17) of 2015.

• [19] - Article (23) has been amended according to Decision No. (49\R) of 2007.

• [20] - Clause No. (2) of Article (23) has been amended according to Decision No (2) of 2015.

• [21] - Article (29) has been amended according to Decision No. (45) of 2012.

• [22] - Article (31) has been amended according to Decision No. (28) of 2014

• [23] - Article 31 is amended due to Decision No. 34/R.M of 2019

• [24] - Article 32 is amended by virtue of Decision No.34/R.M. OF 2019

• [25] - Article 33 has been amended by Virtue of Article 8 of Decision No. 34/R.M of 2019

• [26] - The article has amended by decision no (28) of 2014

• [27] - Article 34 has been amended by virtue of Article 9 of Decision No.34/ R.M OF 2019

• [28] - The article has amended by decision no (28) of 2014

• [29] - Article 35 has been amended by Virtue of Article 10 of Decision No.34/ R.M. OF 2019

• [30] - The article has amended by decision no (28) of 2014

• [31] - The Article has been amended by virtue of Decision No.34/R.M OF 2019

• [32] - The article has amended by decision no (28) of 2014

• [33] - Article 39/bis has been amended by virtue of Article 12 of Decision No.34/R.M of 2019

• [34] - Article (39/bis/1) has been added according to Decision No. (21) of 2015.