Securities & Commodities Authority:
Touching Base with Regulators to Ensure Efficient Compliance 

Dr Ryan Lemand, a speaker at the marcus evans Middle East Investments Summit 2011, on the rapidly developing regulations in the GCC region. Interview with: Dr Ryan Lemand, Senior Economic Advisor - Head of Risk Management, Securities and Commodities Authority

FOR IMMEDIATE RELEASE
 
The Middle East investment sector is young but evolving quickly. This has created a massive increase in the number of new regulations being introduced to accompany the fast development of the financial markets, says Dr Ryan Lemand, Senior Economic Advisor - Head of Risk Management, Securities and Commodities Authority (SCA). Investors must communicate with regulators to be prepared for any upcoming policies.
 
A speaker at the marcus evans Middle East Investments Summit 2011 in Dubai, UAE, 23 - 24 November, Lemand discusses the importance of improving the current investment cycle in the Middle East.

What makes the Middle East an attractive region to invest in?

Dr Ryan Lemand: The Middle East region is very attractive to investors, particularly when considering the sovereign debt crisis in the developed markets, such as Europe and the US.

Financial markets in the GCC are only ten years old and regulations are developing rapidly. Consequently, there is a lack of tools readily available for investors, leading to long-only equity investments in the region. The SCA is now working on completing an investment cycle regulation in the UAE to standardise collective investment schemes and to allow short-selling.

Local investors will need a more complete regulatory framework to better diversify their portfolios in order to thrive in the Middle Eastern markets.

International investors will increasingly look at GCC equity as well as fixed income markets when building their portfolios. As GCC markets improve their efficiency, it is reasonable to have them occupy a bigger share in the international investors’ portfolios.

How can investors prepare for the new regulatory policies?

Dr Ryan Lemand: Regulations are frequently issued and prioritised based on investor needs, with investors often aware of new policies before they come into effect.

They must continue touching base with regulators and follow up on what is being worked on. This way the regulation can come out in line with their aspirations. Most regulators in the GCC adopt a consultation-based approach, with investors providing the regulators with feedback that will be incorporated in the discussions leading to the final regulatory decision.

How can the market provide retail investors with safe and reliable collective vehicles?

Dr Ryan Lemand: The sector must become a savings environment for retail investors rather than a speculative market.

Like many emerging markets, the GCC sector consists of predominantly retail investors as opposed to institutional investors which we often see in developed markets. The focus on retail is due to the lack of collective investment schemes in the sector. The market is young and some of the crucial regulations are being put in place. Collective investment vehicles would help protect retail investors by professionally managing their capital and allow them to save money on a regular basis, as well as allow capital seekers to list their shares in a stable environment.

How can investors reduce systemic risk?

Dr Ryan Lemand: Since 2008, Middle East portfolios have been too concentrated on long-equity with a focus on blue chip companies. With the uncertainty in the markets, equities only portfolios have begun to concentrate risks. This is not a viable diversified investment strategy.

Investors can reduce systemic risk by diversifying their portfolios through new investment tools and mutual funds.

And most importantly, thorough financial analysis should always be employed before any investment decision rather than relying on speculative decision making.

Any final comments?

Dr Ryan Lemand: Investors should reduce the share of speculative investments in their portfolios and rely mainly on fundamental and technical analysis for their investment decisions. Also, retails investors should view their financial market investments as a means of saving and investing money rather than speculating for quick capital gains.

Contact:
Stacey Melvin
Journalist
marcus evans, Summits Division
Tel: + 357 22 849 400
Email: press@marcusevanscy.com

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