The architecture of the stock market accessibility and operational framework
: What can an emerging market economy learn from the ‘International Standards’ and the ‘Best Practice’ models of the US and UK?

  • Saad Almohammed Alrayes

Student thesis: Doctoral ThesisDoctor of Philosophy


Since the development of global stock markets has become standardised and increasingly linked to the philosophy of free markets, the top international private providers of equity indices (e.g. FTSE Russell, MSCI and S&P) have been working with market authorities to regularly determine the classification of stock markets across their entire index universe as an ‘objective’ ranking of markets as ‘frontier’, ‘emerging’, or ‘developed’. These classifications criteria have created uniform international market standardisations which are designed around a small number of international institutional investor communities in developed and rich countries. A hectic race to adopt these international market standards and increasing regulatory convergence with ‘pioneer’ and liberalised markets are deeply entrenched in the agenda of the majority of the policymakers in the emerging market economies, including the Gulf Cooperation Council (GCC) states. A question arises as to whether emerging stock markets ought to adopt this regulatory approach.

Following numerous global financial crises, a scepticism and significant debate on the development of stock market regulations, best practices, standards and standardisation, structures and infrastructures are prompted. It is not self-evident that stock markets classification and market standardisation ensure better-run corporate activities and efficient, effective and fair markets. The purpose of this thesis is to critically examine the efficiency, effectiveness and fairness of the attempts to modernise the policies and regulations concerning the Dubai Financial Market’s (DFM) accessibility and operational framework to conform with international standards and the best practice models of the US and UK.

This thesis sets out a comparative analysis approach between three jurisdictions, Dubai, the US and UK and is further explored by conducting in-depth expert interviews. It builds on the theoretical expectations derived from policy learning and policy convergence theories (PCT), more specifically the evolution theories in law and market development that predominantly employ analogies of Darwinian natural selection. The thesis detects that market evolution and rule change as evolutionary stages in legal development would neither be predominantly described by Darwinian natural selection nor as an inexorable natural process. Three models of pressures, namely ‘top-down’, ‘middle-up’ and ‘bottom-up’, have been empirically proposed, which impact the configuration of market structure, law and regulation. These models provide a rational elucidation regarding the dynamics of the stock market and its regulatory evolution, explaining why markets might become more similar or remain dissimilar over a specific period of time and, thereby, establishing a serious concern regarding the market standardisation and that the regulatory practices and market structures of the developed stock markets are not always working for the emerging market, nor are they fit for purpose.

The international market standards and best practices could potentially: (i) inspire policy measures to strengthen the resilience of the DFM, including the availability of adequate resources to absorb shocks across markets; (ii) enhance the regulatory capabilities of the DFM by increasing the stock valuations and scaling down the cost of capital; (iii) improve the trust levels between international investors and the DFM and (iv) deploy good and sound governance practices. Whilst orthodoxy of regulatory and structural reforms and improvements in market infrastructure are fundamental to boost the confidence of domestic investors and attract and retain international investors, the thesis principally cautions against the notion that reclassification of the stock market is a panacea for market ills or underperformance. To balance between the above-mentioned theoretical concerns and practical advantages, this thesis concludes with policy and regulatory recommendations.

This thesis is significant, at this particular time, for the United Arab Emirates as its economy is characterised by the low foreign investments flowing to the DFM due generally to the (i) COVID-19 pandemic, (ii) sharp fluctuations in oil prices and (iii) specific market accessibility restrictions and market operational framework. This thesis provides a ‘development and infrastructure toolkit’, allowing high engagement with further development of market agenda-setting theory and practice. In doing so, market-advocates, even more than market-sceptics, stand to gain from such assessment the realisation as to whether the increased similarity of the DFM’s accessibility and market operational framework with ‘pioneer’ jurisdictions is a beneficial approach. It distinctly contributes by (i) identifying how the stock market authorities behave as rule-makers in response to the international standards and the best practice models, whether the market and its rules evolve consistently or episodically and why the market structures and regulations are evolving the way they do; (ii) investigating whether the laws and regulations relating to the DFM’s current market accessibility and the operational framework are adversely affecting the market’s development and whether an open-access market approach and a developed market operational framework designed by global private indices providers are feasible for this particular emerging stock market; and (iii) assessing the distinction between the perception of the restrictions and stringent rules imposed on market accessibility and market operational framework, and the reality in practice. The thesis should, therefore, be of much value to the academic field, market authorities, policymakers as well as the intergovernmental and private standards-setter bodies.

Date of AwardJul 2021
Original languageEnglish
Awarding Institution
  • Queen's University Belfast
SupervisorDieter Pesendorfer (Supervisor) & Marek Martyniszyn (Supervisor)


  • Stock market classification
  • market development
  • equity indices providers
  • emerging stock market
  • developed stock market
  • standardisations market
  • International Standards
  • regulatory convergence
  • regulatory divergence
  • policy convergence
  • policy learning
  • Gulf Cooperation Council (GCC)
  • market accessibility
  • market operational framework
  • market infrastructure
  • evolutionary theory
  • market structure
  • ownership structure
  • regulatory evolution
  • market evolution
  • Standards-Setter Bodies
  • market authorities
  • policymakers
  • Darwinian Natural Selection
  • role change
  • market Evolve
  • Free Market
  • market efficiency
  • best practice models
  • best practice
  • FTSE Russell
  • MSCI
  • S&P
  • one-size-fits-all’ approach
  • disparate ownership
  • ICMA
  • WFE
  • US Market
  • UK Market
  • meme
  • market governance
  • COVID-19 Pandemic
  • foreign investments
  • law and finance
  • law, finance and market development
  • stock market architecture
  • market-based orthodoxy
  • institutional theory

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