The UAE has enacted two federal decree laws to reform its capital markets sector, introducing measures to strengthen regulatory oversight and align the country with international standards.
The legislation establishes new powers for the Capital Market Authority and sets out a framework for market regulation, consumer protection and crisis management.
The decree laws define the core mandates of the Capital Market Authority, which include regulating licensed financial activities and issuers, supervising operations according to international standards, and issuing regulations to ensure fair financial practices, according to a statement by the Emirates News Agency (WAM),
New UAE capital market authority laws align regulations with international standards
The authority will monitor system-related risks and work to develop the UAE’s position as a financial centre with international standing.
The laws aim to enhance compliance with requirements set by the International Organisation of Securities Commissions, the World Bank, the International Monetary Fund and the Financial Action Task Force.
The framework supports international cooperation, facilitates mutual recognition procedures and enables recognition of financial products across jurisdictions.
The legislation establishes a framework requiring licensed persons to enable all community segments to access financial services in line with digital transformation and financial technology developments.
The framework provides for awareness programmes in cooperation with the financial sector and civil society institutions. It maintains practices related to aligning credit facilities with client income levels and protecting clients from irresponsible practices.
The decree law introduces measures to address indicators of deterioration in the financial position of licensed persons to ensure stability and protect clients.
New UAE financial sector laws support digital transformation and market access
Measures include activating recovery plans, imposing capital and liquidity requirements, adjusting strategies and structures, appointing committees or placing licensed persons under direct administration, and taking merger, acquisition or liquidation measures when necessary.
The Capital Market Authority will act as the resolution authority in managing crises through dismissal and appointment of management, appointment of administrators to manage licensed persons and assets, capital restructuring and implementation of rescue measures to ensure continuity of operations.
The decree laws provide for administrative fines proportional to the gravity of violations and transaction size. The authority can impose fines of up to ten times the profit realised by violators or ten times the value of loss avoided.
The legislation allows for reconciliation with violators before final judicial decisions and permits publication of sanctions on the authority’s website to enhance transparency and market discipline.
