UAE Capital Markets Overhaul: What Advisers and Firms Must Change in 2026

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UAE capital markets overhaul takes effect - what advisers and firms must change in licensing, marketing, and product governance.

The UAE replaced the Securities and Commodities Authority with the new Capital Market Authority on 1 January 2026, under two Federal Decree-Laws issued in 2025.
Regulated firms and individuals have until 1 January 2027 to regularise their status under the new CMA framework.
The CMA's jurisdiction is broader than the SCA's, covering digital assets, alternative finance, and cross-border activities with a UAE market nexus.
Administrative sanctions reach up to AED 200 million, and court-imposed criminal fines up to AED 250 million, for serious market misconduct.
Firms must conduct a permissions gap analysis, update product governance, and review all marketing content for CMA compliance.
The DIFC and ADGM free zone regimes, regulated by the DFSA and FSRA respectively, remain fully separate and are unaffected by the onshore overhaul.

Federal Decree-Law Framework Marks a New Chapter for UAE Onshore Capital Markets

The UAE's onshore capital markets are now governed by two Federal Decree-Laws - No. 32 and No. 33 of 2025 - that came into force on 1 January 2026. Together they establish the Capital Market Authority (CMA) and a consolidated statutory regime, replacing the Securities and Commodities Authority (SCA) framework in place since 2000. For advisory firms and regulated intermediaries, this is not a cosmetic change: it carries material consequences for the UAE investment licensing framework, product governance, marketing standards, and individual accountability.

The reform covers UAE onshore capital markets only. The Dubai International Financial Centre (DIFC), regulated by the Dubai Financial Services Authority (DFSA), and the Abu Dhabi Global Market (ADGM), regulated by the Financial Services Regulatory Authority (FSRA), retain their own independent capital markets frameworks. Firms operating across jurisdictions should verify clearly which regime governs each part of their activities. The overhaul reflects the UAE's response to increasingly complex financial markets and a policy intent to raise investor protection standards to international benchmarks.

From SCA to CMA - More Than a Rebrand

The CMA is the legal successor to the SCA and assumes all its rights, obligations, assets, and contracts. Law firms including Dechert and Cleary Gottlieb describe the change as a formal elevation and modernisation rather than a simple rebranding. The CMA reports directly to the UAE Cabinet and holds broader statutory powers to license, supervise, investigate, and sanction regulated entities and individuals - powers that go well beyond the prior SCA mandate.

The CMA's stated objectives include developing UAE capital markets, enhancing investor protection, promoting market integrity, and encouraging innovation within a controlled regulatory environment. It is explicitly empowered to issue regulations and decisions, cooperate with foreign regulators, and intervene in the governance of systemically important regulated firms. A new recovery and resolution regime - with no equivalent under the SCA - enables the CMA to require recovery plans and coordinate with other UAE authorities in stress scenarios.

Expanded Regulatory Perimeter

The Capital Markets Law broadens the range of instruments and activities within the CMA's jurisdiction. Regulated instruments now include shares, bonds, sukuk (Islamic bonds), units in collective investment schemes (funds), structured products, derivatives, securitised instruments, depository receipts, and certain digital or virtual asset-linked securities. Regulated activities requiring a licence include brokerage, dealing, asset management, investment advisory, portfolio management, custody, underwriting, clearing, and certain alternative finance and crowdfunding platforms.

A significant innovation, highlighted by Latham and Watkins, is the extension of CMA jurisdiction to activities conducted outside the UAE where those activities materially affect UAE markets or investors. Cross-border operations, regional booking models, and international client bases all carry higher compliance exposure under this broadened perimeter. Firms with any offshore or digital distribution component should assess carefully whether those activities fall within the new scope.

Licensing Impact for Advisory Firms and Individuals

Under the new framework, investment advisory and portfolio management are classified as distinct regulated activities, each requiring specific CMA permissions. This is more granular than the previous SCA approach. Firms that promote or distribute collective investment schemes - particularly to retail investors - face additional licensing requirements for those distribution and marketing activities.

Cross-border advisory also comes under closer scrutiny. UAE-based firms advising foreign clients on securities that have a UAE market impact may require new or amended CMA licences, even where the underlying securities are foreign instruments. Legal advisers recommend completing a permissions gap analysis - a structured review mapping existing SCA licences against the new CMA activity categories - and seeking licence variations where gaps are identified.

For individuals, the CMA will register and license "approved persons" in roles such as senior managers, compliance officers, and directors. These individuals must meet fit-and-proper criteria covering integrity, competence, and financial soundness. Firms must notify the CMA of appointments, resignations, and material changes affecting such individuals.

Product Governance, Marketing and Conduct Standards

The new framework introduces more rigorous product governance requirements. Fund sponsors, product manufacturers, and issuers must implement pre-launch approval processes, document target markets, and maintain governance arrangements across the product life-cycle. Al Tamimi and Company note that fund sponsors and issuers should revisit offering documents, distribution arrangements, and fund governance policies to align with CMA expectations.

Marketing and promotions face tighter controls. The CMA can regulate and block misleading investment advertisements, and certain public marketing campaigns - particularly those targeting retail investors or involving novel products - may require prior CMA approval or notification. Controls on digital channels are expected to extend to financial influencers and social media platforms disseminating investment content. Advisory firms must review website content, digital campaigns, and client communications, and implement new internal sign-off procedures and front-office training programmes.

Market conduct provisions have been substantially strengthened, with updated offences around insider dealing, market manipulation, misleading statements, and disclosure breaches. The policy intent is to deter abuse and align the UAE regime with international standards.

Enforcement - Significantly Higher Stakes

The enforcement architecture has been materially strengthened. Licensed exchanges can impose administrative fines of up to AED 1 million per violation. The CMA itself can impose administrative sanctions of up to AED 200 million for certain breaches, alongside licence suspensions, individual bans, and mandatory remediation orders. Court-imposed criminal fines can reach AED 250 million, with custodial sentences available for serious misconduct such as deliberate market manipulation or fraud.

Firms should also anticipate more intensive, risk-based supervision under the CMA - including periodic reporting, thematic reviews, on-site inspections, and heightened scrutiny of governance, compliance, risk management, and technology resilience. Industry commentary from Salvus Funds and others encourages firms to prepare for greater data requests and more proactive supervisory engagement than was typical under the SCA.

Transition Period and Practical Next Steps

Regulated entities have until 1 January 2027 to regularise their status under the new framework, subject to any extension granted by the CMA's board of directors. During this period, existing SCA resolutions and Cabinet decisions continue to apply to the extent they do not conflict with the new Decree-Laws. Several international law firms, including King and Spalding, recommend that firms establish internal project teams or steering committees to manage the transition systematically.

Key priorities for advisory firms include: completing a licensing gap analysis; updating product governance frameworks, offering documents, and fund governance policies; reviewing all marketing content for CMA compliance; refreshing client suitability, KYC, and client classification processes; and strengthening governance and compliance functions. Firms using tokenised securities, distributed ledger platforms, or fintech-based distribution models should specifically assess whether those activities require CMA licensing under the expanded regulatory perimeter.