A merger between Dubai's top stock exchanges, Dubai Financial Market DFM.DU and Nasdaq Dubai NDAQ.DI, is a possibility, a leading official said, according to newspaper Emirates Business (www.business24-7.ae).

Under a consolidated approach, because Borse Dubai owns both DFM and Nasdaq Dubai, the merger can be looked into, Abdulla al-Awar, chief executive of the DIFC Authority, was quoted as saying in the newspaper.

The two exchanges are already in the process of combining some back office operations like clearing and trading, a move last year that sparked speculation that they were moving closer to a formal merger.

Any consolidation would signal a long-awaited restructuring of Dubai's financial architecture in the wake of the global economic crisis. Dubai is home to the regional offices to dozens of major international banks the financial hub for the region.

There isn't, to the best of my knowledge, any official talks. But one thing is for sure, when we develop strategies we will be in close contact with Borse Dubai, Nasdaq Dubai and our regulators, Dubai Financial Services Authority, to make sure that the proposition of the UAE is a good one, Awar said.

The DIFC Authority is the body that develops policies and oversees the strategic development and administration of the Dubai International Financial Center, or DIFC. Borse Dubai is the holding company for the two exchanges, DFM and Nasdaq Dubai.

A spokesman for Borse Dubai and Nasdaq Dubai declined to comment. A DFM spokesman was not immediately available to comment.

Nasdaq OMX acquired a one third stake in Nasdaq Dubai, where shares can list in UAE dirhams and in dollars and according to international protocols, in 2008. The exchange has suffered from the perception that it lacks liquidity. Shares on the DFM are listed in UAE dirhams and follow local rules.

(Reporting by Thomas Atkins; editing by Jerry Norton)

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