The ADSM has suggested the introduction of a capital adequacy regime, investor guarantee funds, training and international accreditation programmes, as well as rules aimed at governing margin and day trading.

'Margin trading rules are the most important,' says Khalid Shawkat, head of compliance at EFG-Hermes Brokerage-UAE.

'Some brokers have internal policies on margin trading and others don't. It's a very big risk. But the problem is ESCA can't approve new rules without talking to the DFM [Dubai Financial Market] as regulations would cover both markets.'

The DFM is understood to be in discussions with brokers and new margin trading rules are expected soon.

The ADSM has also proposed a review of brokerage licensing to permit brokers to offer investment advice. Currently, ESCA licenses brokers to trade and the central bank licenses investment advisers.

'As brokers, we can't offer advice, research, investment banking or asset management,' says Shawkat. 'But you can't do brokerage without advising. Clients need information from us.'

The ADSM also plans to produce a revised set of corporate governance proposals at the end of the year.

The new code of practice will govern the activities of listed companies and will be the result of an ongoing public consultation exercise.