Abu Dhabi Securities Exchange to cut trading activity fees
ABU DHABI, February 6, 2021
The Abu Dhabi Securities Exchange (ADX) has announced that it is reducing overall trading activity fees on all exchange transactions starting from February 14 as part of its "ADX One" strategy to double the market capitalization of companies listed on the exchange in the next three years.
The new pricing structure will be the second time the exchange would have reduced its charges in the past two years to enhance market liquidity further.
Trading commission on ADX was cut in June 2019 as part of Abu Dhabi's Ghadan 2021 plan of lowering the cost of doing business in the mirate.
According to ADX, under the new initiative, fees of all its transactions are to be reduced by more than 22% to 0.175% from 0.225%, effective February 14.
As part of the new fee structure, the exchange has created an incentive plan, applied on an annual basis, for brokerage firms who generate AED20 million worth of trading commission.
Firms that fulfill the annual incentive requirement will be exempt from paying any trading commission to ADX for the year in which the threshold is met. The new initiative favors investors seeking to broaden and diversify their investment portfolios without incurring high transaction costs, it added.
On the new move, Chairman Mohamed Ali Al Shorafa Al Hammadi, said: "Our ADX One strategy further enhances our position as one of the most competitive exchanges in the region."
"Reducing overall transaction costs for trading on the exchange is one of many initiatives we are undertaking to achieve our strategy of attracting new liquidity sources and making listing and investing in ADX an attractive value proposition,," stated Al Hammadi.
"Abu Dhabi continues to diversify its economy on a path of sustainable long-term growth, and we are fully aligned with this vision. We will continue to deepen our markets through a wide range of products and services that meet the evolving needs of our stakeholders," he added.
The reduction in transaction fees will increase overall market depth by decreasing the bid-ask spread on the exchange, an effective way to measure market liquidity. Furthermore, the new initiative comes amid ADX efforts to attract more investors by offering more high-quality services and products.
CEO Saeed Hamad Al Dhaheri said: "Cutting overall transaction costs on all trades taking place on ADX will complement measures we have recently taken to attract new institutional investors and generate greater liquidity."
"It will also further strengthen our commitment to provide the highest levels of customer service," he added.-TradeArabia News Service
