It won't be long before U.S. exchange-traded fund companies are listing ETFs in the Middle East. Yesterday, NASDAQ rebranded the Dubai International Financial Exchange as NASDAQ Dubai, and John Jacobs, executive vice president at NASDAQ, said that ETF cross-listings will soon follow. According to Jacobs, the time until ETF cross-listings on NASDAQ Dubai will be measured in weeks, or at longest, a few months.

Global exchanges including NASDAQ OMX Group and NYSE Euronext are anxious to facilitate the trading of ETFs globally as a result of their acquisitions in foreign markets. NASDAQ bought a one-third stake in the NASDAQ Dubai early in 2008. As a result, U.S. ETF sponsors have been preparing for a watershed year in global ETF listings in 2009.

In fact, three major ETF companies and one major ETF market maker were with NASDAQ in Dubai yesterday as part of the rebranding splash for the NASDAQ Dubai. Barclays Global Investors, Deutsche Bank's x-trackers, ETF Securities, and market maker Susquehanna International Securities all had officials presenting to Middle East investors on ETFs and derivatives panels at NASDAQ Dubai's first conference yesterday. "We want to make this the preeminent ETF market in the Gulf," Jacobs said.

While ETFs are likely to expand into all global markets across Europe, Asia and Latin America, Dubai has made it relatively easy from a regulatory perspective to cross-list quickly, and that should give ETF companies looking to global expansion a head start. Jacobs noted that Dubai modeled its regulatory structure for the Dubai Financial Services Authority on the model of the U.K.'s Financial Services Authority, which is in turn similar to the Securities and Exchange Commission.

While cross-listings will be facilitated through this "passporting" of U.S. regulatory documents, a Gulf ETF market will ultimately present a mix of cross-listed ETFs and locally listed portfolios. Dubai Boerse, the majority owner in the NASDAQ Dubai, has plans to introduce its own locally listed ETFs next year, and Jacobs said it will be equally important to work with local Gulf players to bring local ETFs to the NASDAQ Dubai.