Abu Dhabi-based asset manager Afkar Capital claims to have launched the first fully tradable and transparent ETF listed in the Middle East under new UAE rules.

Dubbed the Afkar S&P UAE UCITS ETF, the vehicle is the "first foreign ETF" on the Dubai Financial Market (DFM) according to a company statement.

It will replicate an S&P index tracking the largest stocks in the UAE.

The launch follows recent work by the SCA, UAE's top financial regulator, to diversify the financial instruments and to provide a wider choice of asset classes as investment opportunities.

Along with ETFs, other financial instruments currently being developed include securities lending and borrowing, market making, short-selling and mutual funds.

There are also new draft rules in the UAE based around separating clearing and settlement functions, transferring securities ownership and depositories.

“We are pleased with Afkar Capital’s decision to list the first foreign ETF on DFM, which further strengthens the market’s leading position as the most favored listing venue for companies in the UAE and beyond,” said Essa Kazim, chairman of DFM, Dubai's stock exchange.

Sylvain Vieujot, non-executive chairman at Afkar Capital, said the ETF comprises a "wide basket of equities" that investors can buy and sell with a single click through your brokerage account, just like a stock.

BNY Mellon has been appointed fund administrator, Irish trustee, transfer agent and global custodian for the fund.

Afkar Capital chief executive Seif Fikry added that BNY Mellon’s expertise in helping to create ETFs and its global capabilities were key factors in its selection.

UAETF is regulated under the European Union’s UCITS Regulation.

It is also governed by the rules and regulations of the SCA, the ADGM, the DFM, and the Central Bank of Ireland.

Authorized participants, in other words liquidity providers, include EFG Hermes, Mubasher Financial services and NBAD Securities.