SCA unveils regulatory overhaul to strengthen market competitiveness, investor protection

Abu Dhabi: The Securities and Commodities Authority (SCA) is in the process of updating the Capital Market Authority Law and regulations governing the financial sector, with the aim of expanding its powers to keep pace with emerging financial activities and implement advanced oversight mechanisms to manage risks and protect investors.

The move was announced by Waleed Al Awadhi, Chief Executive Officer of the SCA, who said the Authority is currently studying and preparing four regulatory initiatives focused on enhancing the competitiveness of the UAE’s financial markets, improving transparency, and strengthening investor protection, Al Khaleej Arabic daily reported.

Al Awadhi emphasised that the regulatory package is designed to boost market efficiency, broaden the investor base, and diversify financial products—reinforcing the UAE’s position as a global financial hub known for its credibility, resilience, and sustainable growth.

Supporting carbon neutrality agenda

Among the initiatives is the regulation of carbon credit trading platforms, a strategic project aligned with the UAE’s national goal of achieving carbon neutrality. The SCA will define licencing and operational requirements, while platform operators will be responsible for developing their own operating rules.

On its initiative on retail sukuk aiming at expanding access to bond markets, the SCA is finalising a draft regulation on retail sukuk, aimed at enabling wider access to bond and sukuk markets through fractional investment instruments. This framework will ensure investor rights are protected within a comprehensive regulatory structure, while also enhancing market liquidity and advancing financial inclusion.

One of the key initiatives under development is legislation on the division of public joint-stock companies, intended to increase flexibility in corporate restructuring and improve operational performance.

Al Awadhi also noted that the SCA Board of Directors has approved a regulatory framework for the recognition and valuation of goodwill in public joint-stock companies. Goodwill—encompassing brand value and corporate reputation—will now be subject to clearly defined evaluation standards.

The new framework is designed to align with international accounting standards, support boards of directors, audit committees, and external auditors in fulfilling their responsibilities, and ultimately improve transparency and investor disclosure.

Enhancing market efficiency

Al Awadhi stated that one of the Authority’s strategic priorities is to develop a regulatory ecosystem that promotes innovation and digital transformation, strengthens corporate governance, and protects investor rights. These efforts also support national agendas in sustainability and financial inclusion, in line with the goals of “We the UAE 2031” and the country’s broader vision for a sustainable, knowledge-based economy.

Al Awadhi highlighted the SCA’s notable progress in reinforcing the UAE’s leadership in sustainable finance. This includes the launch of a comprehensive regulatory framework for green bonds and sukuk, aligned with global best practices. The framework requires issuers to allocate proceeds exclusively to environmentally sustainable projects such as decarbonisation, renewable energy, pollution reduction, biodiversity protection, and circular economy initiatives. Issuers must also submit semi-annual reports detailing the use of proceeds and environmental impact of their projects. Additional obligations include implementing compliance mechanisms and disclosing relevant information through financial markets and official platforms to promote transparency and accountability.

Green bond and sukuk issuance

The SCA has extended the waiver of registration fees for companies seeking to list green bonds and sukuk—a decision that has significantly boosted market activity. As a result, green bond and sukuk issuances registered for listing reached Dh5.5 billion this year.

Since the introduction of the framework, the Authority has approved 11 green bond and sukuk issuances, with a total value of approximately Dh24.6 billion. Meanwhile, the combined value of domestic and international sustainability-linked issuances has reached $8.7 billion, of which $6.7 billion are listed on local and international markets.

Digital transformation

Al Awadhi underscored the role of digital transformation as a core pillar of financial market development. In 2024, the SCA launched several innovative regulatory projects to enhance market efficiency and transparency. These include frameworks for tokenised securities and tokenised commodity contracts, aimed at advancing the digitalisation of the financial services sector.