UAE adopts two laws to bolster oversight of Capital Markets

The UAE has put in place two federal decree laws dedicated to the Capital Market Authority and regulation across capital markets. This legislative step is part of a wider initiative to update the financial sector’s legal environment. Stability, market efficiency, and competitive edge receive reinforcement through these measures. The Capital Market Authority’s autonomy stands enhanced, granting broader authority to maintain sector integrity and foster fair competition on an international scale.

The new framework hands the Capital Market Authority several responsibilities. These involve oversight and regulation of licensed financial actors and issuers, with standards set to mirror those observed globally. The Authority must draft and enforce rules to uphold fair financial operations. Provisions insist on solid governance, regular monitoring and assessment of systemic risks, and deliberate moves to build the UAE’s profile as a leading international finance centre. Adherence to guidelines and recommendations set by bodies like the International Organisation of Securities Commissions, World Bank, and International Monetary Fund remains central, cementing compliance with best practices recognised worldwide.

Another core element of the laws is the introduction of a comprehensive system for consumer safeguards and financial access. Obligations fall on licensed persons to make appropriate financial services available to every part of society, acknowledging the ongoing digital and technological advancements in finance. The framework establishes national initiatives to improve financial understanding, with active collaboration among financial institutions and civil society groups. Measures that match credit facilities to client incomes and shield clients from ill-judged or reckless conduct remain in force.

A suite of early intervention tools is available to counteract any financial weakening among licensed entities. These cover recovery planning, requirements for additional capital, and where warranted, direct management or restructuring. The Capital Market Authority, in its role as resolution authority, may implement management changes, initiate temporary oversight, or alter capital structures in response to financial turmoil. Adjustments to administrative penalties introduce proportional fines — these can reach up to tenfold the illegal gain or loss avoided. The law also creates room for reconciliation prior to court judgement and allows publication of sanctions, supporting both transparency and discipline within the market.