The United Arab Emirates (UAE) is one of the most financially prosperous countries in the world and has a thriving forex market. A country with a financial situation such as this, needs to have a very smooth financial operation among businesses and the economy. Therefore, every financial entity, including online trading brokerages operating out of the UAE, must be regulated. The main regulatory agency operating and overseeing financial services in Dubai is the Central Bank of the United Emirates (CBUAE).show more
The Central Bank of the UAE was established in 1980 and has since managed the issuance of the nations currency, the enforcement of monetary and fiscal policies, and the regulation of financial institutions and services such as banks, trading brokerages, and money changing services. The CBUAE plays an integral role in the financial well being of the UAE economy. It is a highly respected organization with a well designed framework for the regulation of financial entities both locally and internationally. Brokerages located outside of the UAE can apply for regulatory status by the CBUAE, which is a unique proposition that the CBUAE provides.
As the CBUAE is the central bank of one of the most economically prosperous countries in the world, they have numerous important responsibilities. Three of which were mentioned in the paragraph above. To get into more detail, the CBUAE is responsible for the licencing and regulation of any business involved with the dealings of foreign stocks, commodities, bonds, and currencies. As well, they have various responsibilities which are not directly related with the regulation of brokers. See them below.
• Representation of the UAE in international situations
• Management of the UAE gold and currency reserves
• Maintaining monetary control and acting as a lender of last resort
• Overseas the UAE banking system
• Acts as the governments bank
By trading with CBUAE regulated brokers, you can rest assured that you are protected if anything were to go wrong. Plus, the chances of the brokerage being fraudulent are highly unlikely as the CBUAE imposes strict regulatory guidelines for brokers to implement and follow before becoming licensed and regulated by them. Also, the CBUAE issues public statements about fraudulent brokers and scams to look out for. They will also intervene and take legal action against fraudulent brokerages or brokers who do not follow their guidelines.
The CBUAE has various guidelines for brokerages to adhere to and follow. For instance, in order for a brokerage to be regulated by them, they must have a national shareholding of over 60% of the total capital. As well, they must meet the minimal capital requirements which vary between brokers depending on their scale. Brokers must also keep client funds in a segregated account for their protection in the event of insolvency. Brokers must also submit periodic financial reports to the CBUAE, as well as to be audited by a trusted third party.