The UAE has enacted two federal decree laws governing the Capital Market Authority and capital market regulation, marking a significant update to the financial sector’s legal framework. Moreover, the legislation forms part of a broader effort to strengthen stability, enhance market efficiency, and reinforce the country’s competitive position. As a result, the Capital Market Authority’s independence has been expanded, granting it wider powers to safeguard market integrity and promote fair competition at an international level.
Expanded Oversight and Regulatory Powers
Under the new framework, the Capital Market Authority assumes enhanced responsibility for supervising licensed financial entities and issuers, with regulatory standards aligned to international benchmarks. Additionally, the Authority is mandated to develop and enforce rules that ensure fair and orderly market conduct. Therefore, the laws emphasise strong governance structures, continuous risk monitoring, and proactive management of systemic vulnerabilities. Furthermore, adherence to guidance issued by global institutions such as the International Organisation of Securities Commissions, the World Bank, and the International Monetary Fund is embedded in the framework, reinforcing compliance with internationally recognised best practices.
Consumer Protection and Market Discipline
Another central pillar of the legislation focuses on consumer protection and financial inclusion across capital markets. Consequently, licensed entities are required to provide suitable financial services to all segments of society, taking into account ongoing digital and technological developments. Moreover, the framework introduces national initiatives aimed at improving financial literacy through cooperation between financial institutions and civil society. At the same time, safeguards remain in place to align credit facilities with customer income levels and prevent irresponsible practices.
Additionally, the laws empower the Capital Market Authority with early intervention tools to address financial distress among licensed entities. These measures include recovery planning, additional capital requirements, and, where necessary, direct management or restructuring. As resolution authority, the regulator may implement management changes, impose temporary oversight, or adjust capital structures during periods of instability. Furthermore, administrative penalties have been revised to allow proportional fines of up to ten times the illicit gain or avoided loss. The framework also enables reconciliation before court rulings and permits the publication of sanctions, thereby supporting transparency and reinforcing market discipline.
