UAE Securities and Commodities Authority Restructures Licences

The move is aimed at implementing the integrated financial brokerage institution model, which includes FX brokers.

The Securities and Commodities Authority (SCA) announced today that, as part of its efforts to enhance the role and functions, it has made dramatic restructuring of the licenses it issues. This move is aimed at implementing the integrated financial brokerage institution model, which includes forex brokers, according to the announcement.

The new initiative is launched by His Excellency Dr. Obaid Saif Al Zaabi, SCA’s chief executive officer and part of an integrated approach SCA is pursuing to upgrade the financial markets operating in the country to a ‘developed’ market status, thus realizing the targets outlined by the UAE Government Strategy 2020.

The SCA said that the restructuring was made following thorough consideration of the best global practices. A specialized team of qualified UAE national employees, led by Khaled Ghaith Al Zaabi, executive director of licensing and supervision, formulated pieces of legislation after the restructuring to correspond with the best global practices in advanced markets, the UAE regulator revealed.

The initiative aims to promote the infrastructure of licensed companies to enable them to meet their obligations towards investors as well as to achieve record maturity levels across financial services companies that allow them to compete with their counterparts in advanced markets.

“The project requires investment services companies to have greater capacities to provide integrated services across the financial markets operating in the country in line with scientific and professional bases built on a clear strategy to provide the best services to investors and financial markets and hedge against market and operational risks,” the SCA stated.

Licensing categories introduced:

First category (dealing in securities): includes the activities carried out by trading brokers, clearing and trading brokers, international market brokers, unregulated derivatives contracts and currency trading brokers in the spot market, and dealers. 

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Second category (dealing in investments): includes the activities related to the management of securities portfolios, the management of investment fund investments, the establishment and management of investment funds (management companies), and the administrative services of investment funds. 

Third category (safekeeping, clearing, and registration): includes the activities related to general clearing, safekeeping, registrars of private joint stock companies, issuers of covered warrants, and depository banks and their agents. 

Fourth category (credit rating): includes credit rating activity.

Fifth category (arrangement and counseling): includes financial consultations and the activities carried out by financial advisors and listing advisors, in addition to introduction and promotion activities. 

The new initiative has enabled the standardization of licensing requirements and conditions for different groups with the introduction of limited changes, according to the SCA.

The regulator called on various concerned parties in financial markets to provide their feedback on the restructuring project, which can be viewed on www.sca.gov.ae, indicating that the period for accepting feedback will expire in thirty days.

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