New law approves listing of cooperative societies in UAE’s financial markets

H.E. Bin Touq: Move contributes to creating an innovative, resilient, and sustainable cooperative model that keeps pace with latest economic trends

H.E. Abdulla bin Touq Al Marri, Minister of Economy, said: “The UAE’s cooperative sector is set to witness a new era of growth and prosperity following the issuance of Federal Decree-Law No. 6 of 2022 on cooperative societies. The sector is poised to achieve new milestones, further support national economy’s sustainable growth and contribute to expediting the UAE’s transition to a new, resilient and sustainable economic model, in line with the futuristic vision of our wise leadership and the objectives and projects of the 50.” 

“The law approves the listing and trading of cooperative societies’ shares in UAE’s financial markets, thus contributing to the creation of an innovative, resilient, and sustainable cooperative model that keeps pace with new economic trends and enabling cooperatives to capitalize on the innovative services and offerings of the UAE’s financial markets. The move will enhance economic returns on cooperatives’ activities and provide numerous benefits to shareholders by protecting their rights and fostering sound, seamless and reliable trading   practices. Furthermore, it will support the development of the UAE’s cooperative sector in line with international best practices, and stimulate its growth and diversify its operations across the various economic and business sectors, particularly sectors of the new economy,” H.E Bin Touq added.

The UAE is the first nation in the region to take this pioneering step, which will solidify shareholders’ confidence and enhance share trading regulation and control, thus creating new opportunities for improvement and development of cooperative shares’ trading in financial markets and serving the interests of cooperatives and shareholders.

Procedures for listing cooperatives in UAE’s financial markets

The Ministry of Economy pointed out that in order to list a cooperative society and trade its shares, an application must be submitted to the relevant financial market. This should include a copy of the ordinary general assembly’s resolution and other documents specified by the financial market. The copies of the application along with the resolution must be sent to the Ministry of Economy and the Securities and Commodities Authority. In this respect, the concerned financial market shall consider the application as per the controls in place and notify the cooperative society of the market’s decision within 30 days, starting from the date it meets all submission requirements. This will be according to the provisions stipulated in the Federal Decree-Law No. 6 of 2022 on Cooperative Societies, and the provisions of the Cabinet Resolution No. 2 of 2022.

In addition, the Ministry explained that the cooperative societies are not required to amend their statutes for the purposes of listing and trading, even if the statutes stipulate such amendments. As for amending any stipulations for purposes other than listing and trading, such as share transfer among shareholders, the procedures must be aligned with the statutes, and amendments should be implemented accordingly.

The Ministry remains keen to continue dialogue with its partners in this regard, most prominently the Securities and Commodities Authority, to enhance cooperatives’ performance, offer complete protection of shareholders’ rights and foster best practices. These efforts are aimed at maintaining cooperative work as a model that operates in parallel to traditional commercial activities, while also enabling it to be a vital contributor to economic growth and prosperity of the community.

The Ministry has developed the new cooperatives law in cooperation with its partners from among federal and local government entities. The law’s articles have been developed by following a proactive, flexible, and future-proof methodology, taking into consideration benchmark studies including the leading nations in the cooperative sector. Moreover, the law was discussed in the Federal National Council to ensure the creation of modern and integrated regulation that follows best practices and meets the requirements of the UAE’s business environment in the next stage.