A prosperous country aspiring to be a place where capital meets investment opportunities plainly needs a mechanism to bring the two together. This platform should be modern, efficient, reliable, transparent and stable.
The truth is that the UAE's financial markets have a long way to go before they meet all of those criteria. The good news is that the effort is under way.
As The National reported yesterday, the Securities and Commodities Authority requires company directors to disclose the share holdings of their spouses and minor children. The SCA also warned directors that profiting from inside information can bring penalties of up to three years in jail and a fine of Dh1 million.
Rules like these are enforced - not always perfectly - on exchanges around the world, and the seriousness of enforcement is in proportion to the importance of the market. Another key indicator is that regulators have the independence and authority to apply the law impartially.
This new SCA initiative is one more in a series of efforts to attract domestic and outside investors to local markets. That these measures are necessary is demonstrated by the thinness of local stock markets, where brokerages have been closing. Companies eschew the UAE's markets for IPOs in London, Hong Kong and Singapore.
Investors are naturally wary of markets in which anomalies occur. There has still been no explanation, for example, of the lockstep changes in share prices for Sorouh and Aldar in March before their merger talks were revealed. This year has also seen lively share price movements in Arabtec, before it became known that Aabar was buying a stake.
A spokesman for institutional investors has mentioned regulatory "grey areas" that may need attention. It would be hard to argue otherwise.
Efforts to improve local markets are substantial. The SCA itself is to be renamed the Financial Services Authority and given more enforcement staff. Fifty stockbrokers have reached a new level of professional qualification. Tighter fund-management regulation is on the way. And so on.
It remains to be seen this summer if the UAE's markets will win a coveted upgrade from "frontier" to "emerging market" status as determined by MSCI, a company that provides such ratings for investors. Either way, there is still a long way to go.