backThe UAE has entered a new stage in the development of its capital markets regulatory framework. On January 1, 2026, two landmark laws came into force, critically reshaping the UAE’s capital markets regulatory framework. Federal Decree-Law No. 32 of 2025 concerning the Capital Market Authority (the “CMA Law”) and Federal Decree-Law No. 33 of 2025 concerning the Regulation of the Capital Market (the “Capital Market Law”) together replace the prior framework under Federal Law No. 4 of 2000 concerning the Emirates Securities and Commodities Authority and Market, marking a significant restructuring of the federal securities regime towards a consolidated and enforcement driven regime.
At a time of continuing expansion of capital markets activity and increasing demand for regulatory clarity and alignment with global best practice, the new regime introduces welcome structural and substantive changes aimed at enhancing certainty, strengthen market integrity and encouraging deeper institutional investment.
The overview below summarises the key provisions of the new laws. Licensed persons, issuers, market participants, and advisers should take note of these changes, though much will hang on how these provisions are enforced by the CMA in practice.
I. Broader Powers of the Capital Market Authority
The CMA Law replaces the former Securities and Commodities Authority (“SCA”) with the Capital Market Authority (“CMA”), a federal public authority with legal personality, financial and administrative independence, and broad executive and regulatory powers, reporting directly to the UAE Cabinet. The CMA is the legal successor to the SCA, and has assumed all rights, obligations, and contracts of the SCA, with all references to the “Securities and Commodities Authority” in current legislation are now deemed references to the “Capital Market Authority”.
Beyond the institutional change of name, the CMA has been given:
- a clearer mandate focused on, among other objectives, protecting the integrity and efficiency of the capital market; developing and regulating the UAE capital market; and developing the UAE as a competitive, internationally reputable financial centre; and
- significantly broader regulatory, supervisory and enforcements powers to regulate and monitor the UAE capital market, including:
- issuing subordinate legislation;
- regulating financial activities, including any transactions in the UAE involving foreign issuers and foreign securities;
- conducting inspections, investigations, and imposing administrative sanctions; and
- facilitating a “Regulatory Sandbox” framework, allowing innovative financial products or services to be tested in a controlled environment under CMA supervision before being subject to full regulatory requirements.
II. Expanded Scope of Application
The Capital Market Law applies broadly to financial products and financial activities conducted within onshore UAE, including dealings involving foreign issuers and foreign securities. It also expressly captures financial activities carried out from outside the UAE or from a freezone, such as the DIFC and ADGM, where those activities target clients inside onshore UAE, giving the CMA broader oversight over cross-border offerings and services that reach onshore investors. While certain exclusions apply, such as government issued securities or funds (unless publicly offered or listed), and financial activities which are supervised by or to persons licensed by the UAE Central Bank, these carve‑outs do not detract from the wide application of the new law across the onshore UAE market. The scope is intentionally comprehensive, ensuring the CMA can regulate the substance of market activity regardless of where the activity originates.
The Capital Market Law also sets out a wide range of financial activities that fall within the CMA’s remit, which together with an expanded definition of financial products, gives the CMA broad reach over capital markets activity. These regulated activities include:
- establishment and operation of any market licensed by the CMA for trading in securities;
- trading platforms;
- central clearing;
- central depository;
- brokerage;
- general clearing;
- activities and services related to the establishment and management of investment funds;
- portfolio management; promotion;
- identification of financial activities;
- activities and services related to securitization;
- underwriting;
- financial advisory;
- custody services and activities related to custody;
- issuance management; and
- activities and services related to virtual assets and investment-based crowdfunding.
The CMA may also bring additional activities within scope by board resolution, allowing it to adapt the ambit of regulated activities as the market evolves.
No person is permitted to engage in any regulated financial activity without first obtaining the requisite licence or approval from the CMA.
III. Offerings and Disclosure
Prospectus Liability Framework
The Capital Market Law introduces a unified statutory prospectus liability regime applicable to all issuers of securities. Article 29 imposes explicit statutory liability on the board of directors, executive management, and advisers of an issuer for any failure to provide information or for providing misleading or inaccurate information within the prospectus, each within the scope of their respective competencies. In addition to other enforcement tools (see below), the CMA has broad powers to suspend an issuance where it considers that an offer would breach the law, or otherwise where it deems appropriate. While this appears to be formalising previous uncodified practice, it remains to be seen whether this will have an impact on diligence standards and whether this is signalling a greater onus placed on issuers to provide accurate and complete disclosures.
Market Abuse and Insider Trading Prohibitions
The Capital Market Law also aligns the market‑conduct framework with international standards and practice. Article 37 of the Capital Market Law expressly prohibits certain unlawful practices, including:
- Trading with intent to deceive or mislead investors, create a false impression of active trading, or control or influence prices.
- Providing false or misleading data or spreading rumours affecting the reputation of the issuer, price of securities, or investor decisions.
- Trading based on inside information acquired by virtue of position, duties, or work, or disclosing such information to another person.
- Exploiting information related to investors' orders for personal benefit.
Statutory Price Stabilization Safe Harbor
Article 37(2) of the Capital Market Law codifies a safe harbor for price stabilization activities, stating that the exercise of price stabilization controls, procedures, or mechanisms for which controls have been issued by the CMA or Capital Market Institutions shall not constitute a violation of the Capital Market Law or the Commercial Companies Law provisions prohibiting influence over securities prices. This resolves a longstanding ambiguity that previously created theoretical risk that standard stabilization activities could be prosecuted as market manipulation.
Delayed Disclosure of Inside Information
Article 33(2) of the Capital Market Law permits an issuer to delay disclosure of inside information where it has reasonable grounds to believe that immediate disclosure would cause serious harm to its interests or those of its shareholders. The issuer must submit a justified written request to the CMA (for unlisted securities) or the relevant market (for listed securities), which may accept, reject, or subsequently amend or revoke its decision.
IV. Virtual Assets Regulation
The Capital Market Law integrates virtual assets regulation into the capital markets perimeter. Under Article 39, the CMA is responsible for regulating virtual asset trading, associated financial activities and services, and related functions. Trading of any virtual asset within the UAE is prohibited unless it has been approved on the official list maintained by a CMA-licensed virtual asset platform operator who is registered with the CMA.
V. Investor Protection Mechanisms
The Capital Market Law provides for two key investor protection mechanisms:
- Investor Protection Fund: Article 44 requires the CMA to establish an Investor Protection Fund with independent legal personality, the purpose of which is to protect investors' funds against risks determined by the CMA.
- Settlement Guarantee Fund: Article 45 permits the Central Clearing to establish a Settlement Guarantee Fund with independent legal personality to guarantee the settlement of transactions executed on the Market, subject to CMA-approved controls.
- Whistle-Blower Protections: Article 60 of the Capital Market Law introduces robust whistle-blower protections. Any person may report suspected violations to the CMA, any Capital Market Institution, their employer, the compliance officer of their employer, or judicial authorities. Reporting persons are afforded immunity from criminal, civil, and contractual liability arising from the report, as well as protection from compensation claims and adverse employment actions.
VI. Enhanced Enforcement Framework
The Capital Market Law substantially strengthens both administrative and criminal enforcement mechanisms.
Administrative Sanctions
Article 65 empowers the CMA to impose a broad range of administrative sanctions and measures, including:
- Formal notices and warnings.
- Financial fines up to AED 200 million, or up to ten times the profit achieved or loss avoided.
- Suspension of the violator from trading through their own account or for others for up to three years.
- Suspension of board members, executive management, or employees for up to one year.
- License revocation or prohibition of employment.
Capital Market Institutions may also impose administrative fines of up to AED 1 million per violation on their members, employees, or persons violating their regulations.
Criminal Sanctions
Article 71 prescribes criminal penalties including imprisonment of not less than one year and fines ranging from AED 1 million to AED 250 million for offences such as:
- Practicing financial activities without a license.
- Intentionally inserting false or misleading data in offering documents.
- Broadcasting false information affecting market integrity.
- Trading on inside information; and providing false information to the CMA.
The courts may impose supplementary penalties including disqualification from board membership for up to five years, permanent license revocation, and confiscation of funds.
VII. Recovery and Resolution Regime for Systemically Important Licensees
The Capital Market Law introduces a recovery and resolution regime for CMA-regulated entities designated as systemically important, an area without equivalent under the prior SCA framework.
- Designation: Under Article 52, the CMA may designate any licensed person as systemically important.
- Recovery Plans: Designated persons must prepare and maintain recovery plans, to be reviewed and updated annually, upon material change, or at the CMA's request.
- Early Intervention Powers: Under Article 54, if a systemically important licensee breaches or is likely to breach capital or liquidity requirements, the CMA may require implementation of recovery plan measures, additional financial resources, liquidity requirements, changes to business strategy or structure, or may order mergers or acquisitions.
- Resolution Powers: Article 55 grants the CMA broad resolution powers including removing or appointing management, terminating or assigning contracts, writing down or converting debt, transferring assets and liabilities to third parties or bridge entities, imposing temporary stays on termination rights, and conducting orderly wind-downs with a statutory hierarchy of claims.
VII. Criminal Settlement Mechanism
Article 75 introduces a criminal settlement mechanism. Prior to initiating criminal proceedings, the CMA may settle with violators in respect of crimes under the Capital Market Law, subject to controls issued by Cabinet decision. If settlement is not achieved or the violator rejects its terms, the CMA must refer the matter to the public prosecution. The public prosecution may also settle after proceedings commence but before final judgment.
IX. Transitional Provisions
The Decree-Laws entered into force on January 1, 2026. Federal Law No. 4 of 2000 concerning the Emirates Securities and Commodities Authority and Market has been repealed. Resolutions issued by the Cabinet and the Authority prior to the effective date remain in force to the extent they do not conflict with the new legislation, until new implementing resolutions are issued.
All entities and persons subject to the Capital Markets Law must regularise their status within one year from 1 January 2026, extendable by the CMA. Existing Cabinet and Authority decisions remain in force to the extent they do not conflict with the new legislation until replaced. Federal Decree‑Law No. 22 of 2020 on the distribution of competencies between the regulator and licensed markets remains in force.
Key Takeaways
The new CMA Law and Capital Market Law represent a substantial modernization of the UAE's federal securities law framework, marking a structural shift from a rulebook-driven and interpretive regime to one that is statutory, consolidated, and enforcement-oriented. Market participants should consider the following:
- Licensed Persons: Review existing licenses, compliance frameworks, and governance arrangements against the new requirements.
- Issuers and Advisers: Take note of the enhanced statutory prospectus liability regime and disclosure obligations.
- Investment Banks and Stabilization Managers: The statutory price stabilization safe harbor provides welcomed legal certainty for IPO support activities.
- Systemically Important Entities: Prepare for potential designation and the associated recovery planning requirements.
- Virtual Asset Operators: Ensure registration with the CMA and approval on licensed platform operators' official lists.
- All Participants: Be aware of the significantly enhanced administrative and criminal penalty regime.
For further information, please contact:
James Stull, Matt Hartsuyker, Mohammed Basama, Aaron Ohm and Luna Shehayeb
This client alert is provided for informational purposes only and does not constitute legal advice.