The Abu Dhabi Securities Exchange (ADX) Group has announced the removal of daily price limits on Exchange Traded Funds (ETFs) and futures contracts, with the new policy set to take effect on 3 August, 2026.
The initiative aims to enhance liquidity and provide a more responsive trading environment for investors.
Market Implications
ADX stated that lifting price limits would allow ETF and futures prices to fluctuate freely, reducing trading disruptions caused by pauses and halts triggered when prices reach their daily bands.
The exchange emphasised that this change would enhance the overall quality of price formation in the market.
Renowned as the most liquid ETF hub in the MENA region, the Abu Dhabi bourse offers a diverse range of thematic and Sharia-compliant funds. The removal of price limits is expected to increase its attractiveness to investors seeking efficient trade execution and varied investment exposure.
Expansion of Derivatives Market
The decision is also linked to the ongoing expansion of the derivatives market as ADX noted that the removal of these limits would provide investors with greater flexibility to hedge their positions and execute trading strategies without the constraints imposed by daily price bands.
This move aligns with ADX’s broader strategy to foster agility within the market and modernise its infrastructure, aiding in efficient capital allocation and deeper liquidity.
While implementing these changes, ADX will continue to monitor intraday volatility and may introduce temporary trading pauses during exceptional circumstances to maintain market order.
This builds on ADX’s continued growth in the derivatives sector, having launched its market in November 2021 with single stock futures on five major companies, marking a significant step in the development of Abu Dhabi’s capital markets.
Stay Up to Date with the Latest Updates at Finance ME
Oblique Consult’s Wahaj Siddiqui says GCC Advisory is Entering its Speed Era
UAE Reinforces Overseas FDI Commitment in U.S. Despite Iran War
EDGE’s Rodrigo Torres on Risk, Sovereignty and Defence Finance in a Multipolar World
