UAE updates capital market laws to strengthen financial oversight

The UAE has introduced two new federal decree laws aimed at modernising how its financial markets are regulated and supervised.

The changes focus on strengthening the role and independence of the Capital Market Authority (CMA), improving investor protection, and aligning the country’s financial system with international standards.

The new laws update the framework governing capital markets, which include stock exchanges, investment firms and other licensed financial activities. Officials say the reforms are designed to improve market stability, boost confidence and reinforce the UAE’s position as a global financial centre.

Stronger role for the Capital Market Authority

Under the new legislation, the CMA is given clearer powers and responsibilities. These include regulating and supervising licensed financial firms, issuing rules to ensure fair market practices, monitoring risks to the financial system and promoting good governance.

The authority will also play a central role in managing financial stress or crises, with the power to step in early if a licensed firm shows signs of financial trouble.

This could include requiring recovery plans, increasing capital or liquidity levels, restructuring management, or in extreme cases overseeing mergers, acquisitions or liquidation to protect clients and market stability.

Greater alignment with global standards

The updated laws bring the UAE’s financial regulations closer in line with international best practices set by organisations such as the International Organization of Securities Commissions, the World Bank, the International Monetary Fund and the Financial Action Task Force.

They also support closer cooperation with regulators in other countries, making it easier for financial products to be recognised across borders and helping the UAE improve its international financial ratings.

Focus on consumer protection and inclusion

The reforms introduce a stronger framework for consumer protection and financial inclusion. Licensed firms will be required to ensure financial services are accessible to all segments of society, including through digital platforms and financial technology.

The laws also reinforce existing safeguards, such as linking credit limits to income levels and protecting customers from irresponsible lending practices. National awareness programmes will continue to be developed in partnership with the financial sector and civil society.

Tougher penalties for violations

The new legislation increases administrative fines for financial misconduct, allowing penalties to reflect the seriousness of violations and the size of transactions involved.

In some cases, fines may reach up to ten times the profit gained or losses avoided through misconduct. The CMA will also be able to publish details of sanctions on its website, increasing transparency and accountability.

The authority is also permitted to settle cases with violators before final court rulings, providing flexibility while maintaining market discipline.