The most noticeable development in the Gulf region has been the issuance of new commercial companies laws in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA), which prompted the market regulators in both these countries to issue new regulations to comply with the new laws.

The UAE new commercial companies law, which has been expected for at least 10 years, has come into force on 1 July 2015. It has brought some important new developments in relation to capital markets as it lowered the free float to 30% (versus 55% previously). It also introduced concepts such as of employee stock ownership plans, strategic shareholders, conversion of debts into shares, underwriters, bookbuilding, electronic subscription and others.

The introduction of these concepts prompted the UAE market regulator, the Emirates Securities and Commodities Authority (ESCA), to work on and issue a draft regulation that has now been put forward for consultation with market practitioners for their comments.

The draft regulation aims to develop the above-mentioned concepts and determines how they will work in practice.

These developments have been expected for a while by market practitioners and are anticipated to have the effect of reviving a fledgling market; however, the price of oil and the unstable geo-political environment have had a negative effect on issuances during 2015 and the first half of 2016. A recovery should be underway in the second half of the year.


Mazen Boustany has over 16 years’ experience in banking and finance law in the Middle East and has practised in the UAE for more than six years. He advises on all aspects of banking and finance law including Islamic finance, structured finance, securitization, private equity, financial structuring and restructuring, cross-border transactions and investment funds.