UAE Introduces New Federal Decree Laws to Strengthen Capital Markets Regulation
- 03.01.2026
- Posted by: Uwe Hohmann
- Categories: Dubai, Middle East
The UAE Government has issued two important pieces of legislation to reshape the regulatory framework for capital markets.
The first concerns the CMA (Capital Market Authority) itself, while the second addresses the Regulation of Capital Markets more broadly.
For businesses operating in or entering the UAE financial sector, these changes carry important implications.
What the New Decree Laws Cover
The legislation defines the core responsibilities of the CMA, positioning it as the primary regulator for licensed financial activities and issuers. The Authority will oversee compliance with international standards, issue regulations to ensure fair financial practices, and monitor system-related risks across the sector.
A central aim of both decree laws is to align the UAE capital markets with global best practices. This includes meeting requirements set by bodies such as IOSCO (International Organization of Securities Commissions), the World Bank, the IMF (International Monetary Fund), and FATF (Financial Action Task Force). The alignment is expected to improve the UAE’s standing in international assessments and support cross-border recognition of financial products.
Early Intervention and Resolution Powers
One notable addition is a framework for early intervention when a licensed person shows signs of financial deterioration. The CMA now has authority to take proactive steps before a situation escalates.
These measures include activating recovery plans, imposing additional capital and liquidity requirements, restructuring administrative and operational frameworks, and appointing temporary committees to oversee a licensed person’s affairs. In more serious cases, the Authority may place a licensed person under direct administration or initiate merger, acquisition, or liquidation procedures.
As the designated resolution authority, the CMA can dismiss and appoint management, assign temporary administrators, restructure capital, and implement rescue measures to maintain critical operations.
Stronger Sanctions and Transparency
The decree laws introduce tougher administrative penalties. Fines may now be set at up to ten times the profit gained or the loss avoided by a violator, depending on the severity and scale of the breach. This marks a significant increase in potential penalties and signals a stricter enforcement stance.
The legislation also permits reconciliation with violators before final judicial decisions are issued. Importantly, the CMA may publish sanctions on its official website, a move intended to increase transparency and reinforce market discipline.
Consumer Protection and Financial Inclusion
Both decree laws establish obligations for licensed persons to ensure financial services are accessible to all segments of the community. This aligns with ongoing digital transformation and the growth of financial technology in the UAE.
The framework includes provisions for national awareness programmes developed in partnership with financial sector participants and civil society organisations. It also reinforces existing protections, such as requirements to align credit facilities with client income levels and safeguard clients from irresponsible lending practices.
What This Means for Businesses
For companies operating in capital markets or considering entry into the UAE financial sector, these decree laws represent a more rigorous regulatory environment. Compliance standards are rising, enforcement is becoming stricter, and the expectations around governance and consumer protection are now more clearly defined.
Businesses should review their current compliance frameworks and ensure alignment with the updated requirements. Those involved in licensed financial activities should pay particular attention to the new early intervention provisions and the increased penalties for violations.
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