Middle Eastern exchange Nasdaq Dubai is set to open a platform for on-exchange trading of Islamic and conventional bonds.
The platform will open and gradually be developed in the coming weeks. Tradable securities will initially compromise of at least 12 Islamic bonds, known as Sukuk, and bonds, with a nominal value of US$10.9 billion.
Sukuk and bonds are currently being traded over the counter, but the new service means investors will now simultaneously be able to see prices of NASDAQ Dubai-listed Sukuk and bonds on the same screen-based system, through the exchange. Trades will then be automatically and exclusively routed for settlement at Euroclear Bank.
In a statement, Nasdaq Dubai said the platform would increase transparency and efficiency, and promote liquidity. The exchange is also hoping the new service will bring new participants into the market.
"The opening of the platform will be an important step in Dubai's growth as a global leader in innovation in the Sukuk and bond sectors," Hamed Ali, acting chief executive of Nasdaq Dubai, said.
"We look forward to creating further depth in the fixed income market and will collaborate with investors and other participants to steadily develop and enhance the platform."
Nasdaq Dubai exchange is owned by the Dubai Financial Market and Borse Dubai. It currently lists shares, derivatives, conventional bonds and Sukuk, which are bonds structured in accordance with the Islamic financial law, setting a ban on interest rates and paying investors a profit rate instead.