UAE Issues Two Decree Laws to Overhaul Capital Market Regulation and Strengthen Independence of Capital Markets Authority

The UAE Government has issued two federal decree laws aimed at regulating capital markets and strengthening the role of the Capital Markets Authority (CMA), as part of broader efforts to modernise the legislative and regulatory framework governing the financial sector.

The new decree laws seek to enhance the stability, efficiency and competitiveness of the UAE’s capital markets while ensuring closer alignment with leading international regulatory standards. They also reinforce the independence of the Capital Markets Authority and its central role in safeguarding the integrity and soundness of the capital markets sector and promoting fair competition.

The legislation is designed to improve compliance with global best practices and the requirements of international organisations concerned with financial regulation, including the International Organization of Securities Commissions (IOSCO), the World Bank, the International Monetary Fund and the recommendations of the Financial Action Task Force (FATF). These measures are intended to strengthen international assessments of the UAE’s financial system and reinforce investor confidence.

In the area of consumer protection and financial inclusion, the decree laws establish an integrated regulatory framework that obliges licensed entities to provide access to appropriate financial services for all segments of society. This approach supports digital transformation and the growth of financial technology, while promoting sustainability and leadership across financial activities and services.

Regulation of capital markets

The Federal Decree Law on the Regulation of Capital Markets introduces proactive early-intervention mechanisms to address early signs of financial deterioration among licensed entities. These measures aim to protect clients and ensure the continued stability of financial activities and services.

The law empowers the regulator to activate recovery plans, impose additional capital and liquidity requirements, and require changes to business strategies, governance structures and operational frameworks. It also allows for the appointment of temporary committees, the placement of licensed entities under direct administration, and, where necessary, the implementation of merger, acquisition or liquidation measures. Special regulatory actions may be applied if an entity fails to correct its financial position.

Capital Markets Authority

Under the new framework, the Capital Markets Authority acts as the resolution authority, with expanded powers to manage financial distress and crises. These powers include dismissing or appointing management, appointing a temporary administrator to oversee a licensed entity and its assets, restructuring capital, and implementing rescue measures to ensure the continuity of critical financial activities.

The decree laws also strengthen the administrative sanctions regime. Administrative fines may be increased in proportion to the seriousness of violations and the size of the transactions involved. The Authority is authorised to impose fines of up to ten times the profit gained by the violator or up to ten times the value of any loss avoided as a result of the violation.

In addition, the legislation allows for reconciliation with violators before the issuance of final judicial rulings and permits the publication of sanctions on the Capital Markets Authority’s official website, enhancing transparency, accountability and market discipline.

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