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As part of the UAE’s efforts to protect public health and minimize physical social contact to assist in containing the Coronavirus, the UAE Securities and Commodities Authority (“SCA”) has instructed listed public joint stock companies in the UAE (“PJSCs”) to arrange for their shareholders to attend and vote at upcoming general assembly meetings electronically. These instructions apply to all general assembly meetings from 17 March 2020 until the end of April 2020.
In addition to the usual applicable legal and regulatory requirements for general assembly meetings, PJSCs are also expected to observe the following:
A PJSC should liaise with the market on which it is listed (Abu Dhabi Securities Exchange (“ADX”) or the Dubai Financial market (“DFM”)) to enable electronic voting and e-attendance, as well as to enable video conferencing tools, if possible. These companies must record the meeting in audio or visual form and such recording must be kept at the PSJC’s premises and a copy provided to its SCA representative.
If a PJSC does not have a registrar, the PJSC should appoint a local financial market (ADX or DFM) or other authorised institution to act as its registrar. The registrar should make available an electronic link to enable shareholders to attend the meeting and vote on agenda items.
General assembly meetings should be held at the premises of the PJSC with attendance from the members of the board, auditors, registrar, secretary and the vote counter, all respecting the principles of social distancing. At the beginning of the meeting, it should be emphasized that the shareholders are attending electronically and the voting mechanism should be explained. Information on the percentage of attendance (quorum) should also be provided. Attendance and voting must be noted in the minutes of the general assembly, and quorum and voting requirements under current legislation shall be applicable.
Given the exceptional circumstances, SCA does not require a PJSC to amend its constitutional documents to allow for such attendance and voting, if it has not already done so, whilst the above instruction prevails. If a PJSC wishes to change its constitutional documents to allow for electronic voting and attendance at its general assembly meetings in the longer-term please refer to our previous article.
On 14 March 2020, the Egyptian Financial Regulatory Authority announced similar calls for all listed companies and companies operating in non-banking financial services to commit to setting up a system for remote voting by shareholders in their General Assemblies, as well as enabling the voting delegation mechanism through one of the authorized custodians or registered owners. Please refer to our recent client alert relating to this announcement.
It should also be noted that the ADX announced that it will manage remote e-voting for general assembly meetings of companies listed on the ADX free of charge. This move will enable a crucial aspect of general assembly meetings to be carried out remotely and will apply from 17 March 2020 until the end of April 2020. This ability is facilitated through an attribute of SAHMI, ADX’s integrated services’ digital platform – a programme compatible with Smartpass that allows users to access all services provided by the ADX. The ADX will provide the remote e-voting service to its listed companies without incurring any fees for its implementation.
On 17 March 2020, the Minister of Economy, Chairman of the SCA issued a decision decreasing the range of movement in the price of a share of a UAE listed entity on an onshore UAE market over a trading day to 5% of the previous closing price as a maximum decrease. If this price range is exceeded, trading on the shares shall be suspended. This figure was previously 10%.
As of 18 March 2020, the downward limit shall be 5%. However, the ADX or the DFM (as applicable) may, in its discretion, increase the downward limit to 7% for certain shares based on specific criteria determined by the relevant market and as approved by the SCA.
Pursuant to SCA’s Board of Directors’ Decision No. (2/R) of 2001 concerning the Regulations as to the Trading, Clearing, Settlement, Transfer of Ownership and Custody of Securities, the upward limit was set at 15%, with the market having the authority to override this percentage provided SCA’s approval is obtained. This upward limit remains the same.
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