Derivatives securities in emerging MENA markets: Structuring lessons from other financial markets

Emerging derivatives securities markets have experienced a large amount of innovations and changes in the last two decades; and as a practitioner in the derivatives and risk-management marketplace, I have witnessed remarkable growth in the development of derivatives securities on financial assets in emerging markets. In view of that, it is my aim in this article to share with you my impressions of the major factors and trends that can aid in the proper implementation of derivative securities, particularly in the Middle East and North African (MENA) region. This article confers on some of the main impediments to the initiation of thriving derivative securities in emerging MENA economies and imparts a number of feasible remedies. To this end, key operational and regulatory structuring procedures and policies, which should be considered before launching of derivative securities, are examined and adapted to the specific needs of emerging MENA markets. The recommended structural guidelines can also be applied in almost all emerging markets, if they are adapted to correspond to each market's initial level of sophistication. The real-world guidelines and observations that are discussed in this work will be beneficial to financial entities, regulators and policymakers operating mainly within the context of emerging markets. This article will be of value to those interested in starting of rewarding and reliable trading environment of derivative securities in emerging MENA markets, primarily in light of the aftermaths of the sub-prime financial crisis.