The financial markets are very strong and active in the UAE. This is partially due to the competent regulatory agencies operating in the country. The most prominent regulatory authority regulating the financial markets in the UAE is the Securities and Commodities Authority (SCA). This authority is the most prominent legal entity that carries out the legislation, supervision, and regulation of the financial sector in Dubai and the UAE.show more
The UAE Securities and Commodities Authority was established in 2000 for the supervision and monitorization of the financial markets. The SCA is an independent legal entity that reports to the Economy Minister. The primary roles of the SCA are as follows:
• The promotion and development of a stable environment to attract financial investment.
• The protection of investors and other participants in the financial markets.
• To provide guidance and encourage best practices among market participants.
• To create a fair, transparent, efficient, and quality investment ecosystem.
The main responsibility of the SCA is to create and implement a set of regulatory guidelines in which are focused on creating a fair investment environment for both investors and brokers. The SCA is responsible for the licensing and regulating of financial services companies who apply for SCA regulation. As well, they are responsible for the supervision of these companies to ensure they remain compliant with their guidelines. The SCA publishes a list of compliant brokerages and fraudulent brokerages to keep the public informed, as informing the public is a major responsibility of theirs. Another major responsibility is to remain transparent and project this transparency into all aspects of the financial markets.
The SCA is responsible for the protection of investors involved in the UAE financial markets and accomplished this in a variety of ways. The SCA takes in complaints about financial services and businesses from the public. They may then conduct investigations and takes legal action if necessary. Another way they protect investors is by ensuring brokerages are liquid enough to carry out their services. As well, they ensure brokerages are compliant with the SCA regulatory guidelines which ensure safe, reliable and competent services.
The SCA requires that the brokerages regulated by them train their staff to operate in line with the guidelines laid out by the SCA. As well, in order to monitor the brokers, they are required to submit periodic reports on their finances and services. The SCA also requires brokers to undergo auditing on an annual basis. Another guideline is for brokerages to hold their client’s funds in segregated bank accounts. Brokerages are also required to collect identification information from all of their clients for KYC and AML purposes.