The Dubai Financial Market (DFM) says it plans to buy Nasdaq Dubai for $121m to try boost liquidity on the emirate’s exchanges.

A spokeswoman for the DFM says the purchase is designed “to create liquidity on the Nasdaq Dubai by giving local retail investors who trade on the DFM access to the Nasdaq Dubai.”

She adds that the deal would also give traders on the DFM access to a more diverse range of stocks. “The idea has been under consideration for some time and the aim is to create a common pool of investors on both exchanges.”

Under the terms of the deal, Nasdaq Dubai and the DFM will continue to operate as separate stock exchanges, but some administrative processes will be merged.

Regulators still need to approve the transaction but Borse Dubai, the owner of the DFM and Nasdaq Dubai, has approved the deal. The DFM says it will create a new holding company to own the DFM and Nasdaq Dubai.