The Securities and Commodities Authority (SCA) is investigating whether companies listed on the UAE’s stock markets meet the standards of regional regulation and international best practice, it said in a statement on 3 July.

The SCA is scrutinising whether firms adhere to the rules of the UAE’s Commercial Companies Law and are in accordance with the disclosure and corporate governance requirements of the International Organisation of Securities Commissions, the Washington-based IMF and the World Bank.

It responded to criticism from investors accusing the SCA of not having clamped down on Arabtec Holding’s share price fluctuations, which quadrupled between January and May before dropping in recent months, by urging them to make decisions based on financial analysis instead of market rumours.

“The SCA has demanded [that Arabtec] react to the rumours and provide clarifications to the disclosures it had made regarding itself and [the departure of Hasan Abdullah Ismaik, its former] CEO, and is coordinating efforts to hold a press conference regarding the issue as soon as possible to allay the fears of investors on the company’s projects and to boost their morale in the company’s performance and future plans,” the regulator said.

“Stopping or suspension of a company from trading its shares on the market cannot be applied as that action can be taken only in certain circumstances outlined specifically by the laws and the regulations.”

It also pointed out that detecting violations requires “enough time to cross-check all trading activities to ensure whether or not a violation has been committed, collection and presenting of all evidence and documents before taking the appropriate punitive action against the violation according to rules and regulations”.