Lombard loans in United Arab Emirates.
Private, securities-backed credit against United Arab Emirates-listed shares — pledged, not sold, with ownership retained.
A Lombard loan against United Arab Emirates-listed shares is credit secured by a pledge of equity listed on the ADX, DFM. The holder pledges the shares as collateral, draws cash against a fraction of their market value, keeps beneficial ownership and dividends subject to structuring, and recovers the position in full on repayment. It is a loan against shares rather than a sale of them — the Geneva private-banking form of what is elsewhere called a share-backed loan.
- Lombard loans are arranged against shares listed on the ADX, DFM (ADX / DFM).
- The pledge is not a sale: ownership, dividends, and the upside stay with the holder.
- Loan-to-value is calibrated to the specific position, funded in AED or cross-currency.
- Structured under the SCA regime, with disclosure from 5%.
Eligible collateral and venues
Lombard Financing arranges facilities against equity listed on the principal United Arab Emirates venues: Abu Dhabi Securities Exchange (ADX); Dubai Financial Market (DFM). Eligibility at the position level turns on the liquidity and free float of the specific line, its volatility, and the size of the holding relative to its typical traded volume — the same variables that drive the loan-to-value.
Regulator and disclosure
Shares listed in United Arab Emirates are regulated by Securities and Commodities Authority (SCA). Substantial-shareholding disclosure is triggered from 5%, and a pledge over a large line is structured with that reporting regime in view so that the transaction remains discreet and compliant. Where a holding sits near a control or takeover threshold, the structure is arranged to avoid disturbing the position.
Funding, custody, and structuring
Facilities are typically arranged for a tenor of twelve to thirty-six months, funded in AED or in another currency on a cross-currency basis. Throughout the facility the pledged shares are held by a qualified custodian under bankruptcy-remote arrangements, so the security is clean and the holder’s ownership is preserved. Non-recourse, limited-recourse, and full-recourse structures are available, and the choice interacts with the loan-to-value and the pricing. One distinction is worth drawing at the outset: this is not a stock loan in the securities-lending sense, where title passes to a borrower who may on-lend or short the line. Here the shares are pledged and remain the holder’s throughout, as the comparison of Lombard, margin, and stock-loan structures sets out.
| Listing venue(s) | Abu Dhabi Securities Exchange (ADX); Dubai Financial Market (DFM) |
|---|---|
| Regulator | Securities and Commodities Authority (SCA) |
| Currency | AED (cross-currency available) |
| Disclosure threshold | From 5% substantial-holding disclosure |
| Principal indices | FTSE ADX 15, ADX General Index; DFM General Index |
| Indicative tenor | 12–36 months, renewable by agreement |
| Recourse | Non-recourse / limited-recourse / full-recourse |
Detail by listing venue
Each venue has a page of its own, setting out how securities-backed credit is arranged against shares admitted there — the disclosure regime, the settlement and custody chain, the eligible segments, and the currency in which a loan against shares is normally drawn.
- Lombard loans against ADX-listed shares — Abu Dhabi Securities Exchange, Abu Dhabi. SCA-regulated, with disclosure from 5%; indices FTSE ADX 15, ADX General Index.
- Lombard loans against DFM-listed shares — Dubai Financial Market, Dubai. SCA-regulated, with disclosure from 5%; indices DFM General Index.
Considering a Lombard loan against a United Arab Emirates-listed position?
Request terms →The listing venues in United Arab Emirates.
ADX
Abu Dhabi Securities Exchange — Abu Dhabi. Regulator: SCA.
ADX Lombard loans →DFM
Dubai Financial Market — Dubai. Regulator: SCA.
DFM Lombard loans →Lombard loans across Middle East & Africa.
On this market, specifically.
The market and its listed universe
The Emirates has three equity venues rather than one. The Abu Dhabi Securities Exchange and the Dubai Financial Market are the onshore markets, both supervised by the Securities and Commodities Authority, while Nasdaq Dubai sits inside the Dubai International Financial Centre under the separate jurisdiction of the Dubai Financial Services Authority and quotes in dollars. The benchmarks are the FTSE ADX General Index and the FTSE ADX 15 in Abu Dhabi and the DFM General Index in Dubai. Both registers are dominated by government-related holders — sovereign investment vehicles, ADNOC subsidiaries, and the Dubai government entities behind the recent utility and infrastructure flotations — so free floats are frequently modest relative to headline capitalisation.
Who borrows against listed shares here
Emirati registers are held at the top by the state and its investment arms, and beneath that by two very different private groups. The first is the Emirati merchant family, whose wealth began in trade, shipping and distribution agencies and now sits in listed banks, property developers and logistics groups, held for the dividend stream and for the standing it carries. The second is the expatriate business dynasty — South Asian, Levantine, Iranian-origin and increasingly European — whose operating companies have listed in Dubai or Abu Dhabi, or who simply book regional wealth through Emirati custody. Recent flotations have added newly liquid founders inside lock-ups. All of them want cash without a sale the market can read, which is what share-backed financing is for.
Disclosure and regulation
In the Emirates the Securities and Commodities Authority requires a holder to notify at 5% and on each further 1% change, a regime that applies across both the Abu Dhabi and Dubai venues. The recurring structuring question is foreign ownership: issuer-level caps, though materially liberalised in recent years, still govern how much of a line a non-resident client may hold and pledge, and a number of listings are Sharia-compliant. A Lombard credit is arranged so the SCA notifications are met and the client’s disclosed interest, together with any ownership-cap and Sharia considerations, remains intact.
The legal form of the security
There are, in effect, several UAE legal systems and the right one depends on where the collateral and the borrower sit. Onshore, security over movables draws on the Civil Code, the Commercial Transactions Law and the federal movable-security legislation that created the Emirates Movable Collateral Registry, while a pledge over listed shares is registered with the market that maintains the register. The Dubai International Financial Centre and the Abu Dhabi Global Market are separate common-law jurisdictions with their own security laws, registries and English-language courts. Choosing between an onshore pledge and a free-zone structure is a real decision with real enforcement consequences, and how a realisation would run under each is the question to put to Emirati counsel at the outset.
Custody and how security is taken
Custody in the Emirates is unusual because each market runs its own depository rather than the country having a single central one: ADX and DFM each operate clearing, settlement and registry functions for their own listings, and Nasdaq Dubai has its own central securities depository. Investors are identified by an investor number issued by the relevant market, which historically gave the Emirates a direct, name-on-register model rather than the long nominee chains familiar in Europe, alongside a growing broker and custodian layer. A security interest over listed shares is accordingly given effect by registering the pledge against the holding in the relevant market’s own register. Confirm the procedure, and any market approval required, with the custodian before documenting.
Currency and cross-border considerations
The dirham has been pegged to the dollar at 3.6725 since 1997 and the Emirates operates no exchange control: a non-resident may borrow against a listed Emirati holding, and loan proceeds, dividends and sale proceeds leave the country without approval or registration. The live constraints are about ownership rather than currency. Foreign-ownership ceilings still apply issuer by issuer, set in each company’s own articles, and though liberalised considerably in recent years they govern not only how much of a line a non-resident may hold but who could take the shares after an enforcement. Confirm the ceiling on the specific issuer, because a limit that binds a purchaser also binds the lender’s exit.
Tax questions to put to your adviser
There is no personal income tax in the Emirates, no withholding tax on interest or dividends paid abroad, and no stamp duty on transfers of listed shares, so the country is rarely where the tax friction in a cross-border securities-backed facility sits. The questions changed when federal corporate tax was introduced in 2023. Ask a UAE adviser whether the family holding company that owns the shares falls within the corporate tax regime or qualifies for free-zone treatment, whether the interest expense survives the general interest deduction limitation, whether the lender’s activity could create a taxable presence, and what substance the structure needs. Where the borrower is taxed elsewhere, that other jurisdiction usually matters more than this one.
General information only — not tax advice. Treatment turns on your own circumstances and residence, and on law that changes.
An illustrative example
Take a founder whose company floated in the recent Dubai listing wave and who remains inside a lock-up, with a further constraint in the issuer’s foreign-ownership cap. A sale is neither permitted nor sensible. The existing holding is pledged, the pledge recorded against the position in the market’s own register, and the structuring work goes into deciding whether the pledgor is the individual onshore or a free-zone holding company — a choice that drives the security law, the registry and the enforcement route. Votes, dividends and exposure stay with the founder. The illustration concerns the choice of jurisdiction and the sequence of steps, not any amount, ratio or price.
Illustrative only — not an offer, a quotation, or a commitment to lend.