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BY JAMILA QADIR
2 July 2006
DUBAI - IT security is crucial to the UAE financial markets,
as the
financial sector in particular has always been a target for
fraud
worldwide, according to Khalfan Al Mazrouei, IT manager, Abu
Dhabi
Securities Market (ADSM).
The dramatic growth in Internet and email use has helped and
hindered
financial markets. Internet and email gives investors
instant access
to financial markets all over the world. But both have also
opened up
new opportunities for hackers to exploit, he explained.
Pressures on security come from within a corporation as well
as
outside. Up to 70 per cent of all IT security fraud is
internal. "No
matter how advanced our systems are, we are always
vulnerable," he
said.
Since it was established in November 2000 ADSM has made IT
security
one of its top priorities as part of its international best
practices
programme. ADSM is playing a leading role in promoting
security
awareness across the market. It has already improved and
broadened its
trading and registry reporting services to shareholders
through voice,
Internet and mobile systems.
"We have also introduced e-trading for brokers. In
fact, the majority
of them now operate remotely which poses a huge security
challenge for
our IT systems. We have enhanced transparency by introducing
International Financial Reporting Standards (IFRS)
compliance and
quarterly reporting from all ADSM listed companies."
The UAE is the first country in the Middle East to be
awarded an XBRL
(eXtensible Business Reporting Language) provisional
jurisdiction. It
allows companies to compile and publish financial data in a
format
that can be better understood and analysed than the current
process.
This will enhance transparency in the market, he said.
ADSM, with the UAE XBRL steering committee, has been
instrumental in
this move. "We will be taking a lead in encouraging
all UAE listed
companies to adopt XBRL to improve both transparency and
efficiency in
the market. Our IT systems have had to evolve to deal with
new office
openings, a huge increase in the number of brokerage firms
and new
links with foreign exchanges."
National investors should be able to trade foreign stocks
from ADSM.
They should not have to expose themselves to the risk of
trading
directly on a foreign exchange, he said, adding that was the
reason
why ADSM has created links with other foreign exchanges.
"We currently have an electronic link with Muscat and
we are
introducing another one with Doha. We also have
cross-listing
agreements in place with the Cairo & Alexandria (CASE)
and Khartoum
exchanges. We look forward to further links with other
exchanges in
the near future," Al Mazrouei said.
The number of trades on ADSM this year goes up each month
compared to
2005. Since the inception, it has opened four regional
branches
throughout the UAE and will be opening a further two this
year.
ADSM now has over 60 broker firms operating in its market.
Almost half
of these opened in the first quarter of this year alone, he
said. One
of ADSM's current aims is to become the first exchange in
the UAE to
achieve ISO 17799 certification, which will enhance the
security
procedures between the brokers, registrars and investors, he
added.
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