Securities and Commodities Authority Dubai – How Arnifi Helps You Become a Licensed Broker

The UAE’s financial markets are tightly regulated, and securing the Securities and Commodities Authority Dubai brokerage license is essential for operating legally. This article explains the SCA’s role, key licensing requirements, and how Arnifi streamlines the entire approval journey.

Introduction 

Securities and Commodities Authority Dubai (SCA) is the federal regulatory body responsible for supervising and regulating the UAE’s securities and commodities markets outside of free zones like DIFC. It protects investors, ensures market transparency, licenses brokerage firms, monitors compliance, and maintains market integrity. Arnifi provides expert guidance to businesses navigating the often complex SCA brokerage license process, making it easier for them to become fully licensed brokers and operate legally in Dubai.

What the Securities and Commodities Authority (SCA) Does

The Securities and Commodities Authority Dubai (SCA) is a well-integrated system that takes care of supervising and regulating the financial markets of the UAE. This includes the major stock exchanges, like the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX). The SCA is an independent operator working across the Mainland of the UAE. It takes responsibility for supervising the securities and commodities activities, which do not include the free zones, such as the DIFC.

Its purpose is mainly to protect the investors while keeping the market fair, transparent, and well-regulated. Monitoring of the brokers, handling licensing, financial intermediaries, and other market professionals is handled by the Securities and Commodities Authority Dubai (SCA) to ensure strict compliance while maintaining high standards. It also works actively towards protecting the investors by preventing insider trading, market manipulation, and other unlawful practices that could harm the market and investors. The SCA enforces that the investors receive accurate and reliable information, imposing strong disclosure requirements for the companies that are listed.

Brokerage Activities Regulated by SCA

SCA regulates several types of brokerage activities, including:

• Trading brokerage
  
• Clearance and settlement brokerage
  
• Margin trading
  
• Commodities and derivatives brokerage
  
• Financial advisory services relevant to securities trading.

Why is SCA Brokerage Licensing so Strict?

This sector is deliberately strict in licensing because it holds a crucial role in protecting the investors, preventing any kind of financial crime, and ensuring only the most trustworthy and capable businesses are allowed to operate in the market. It’s not about brokers just stepping into a financial space, but they will be entering into a well-regulated ecosystem, and each activity conducted here must mandatorily meet the highest standards and ensure transparency, accountability, and strength while operating. Therefore, it must have solid internal control, a reputable and strong governance structure, and compliance procedures that are clear and in place. These intense safeguards that help in maintaining the integrity of the market, build the confidence of the public, and it also creates an environment that is safe and fair, which helps both businesses and investors to operate securely.

SCA Licensing Requirements (Simplified)

Applicants must meet:

• Minimum capital and financial guarantees
  
• Fit-and-proper tests for shareholders and directors
  
• Physical office and robust technical infrastructure
  
• Professional indemnity insurance
  
• Cybersecurity and operational controls
  
• Dedicated compliance teams.
  

Step-by-Step Process for SCA Brokerage License in Dubai

1. Select brokerage activity
   
2. Prepare financial and corporate documents
   
3. Submit initial application to SCA
   
4. Complete fit-and-proper assessments
   
5. Set up compliance and internal control systems
   
6. Obtain final SCA approval and license issuance
   
7. Activate brokerage license with Dubai Financial Market (DFM) or NASDAQ Dubai.
   

How Arnifi Simplifies the Journey?

Arnifi helps by:

• Mapping appropriate brokerage activities for your business
  
• Preparing and structuring SCA application documents
  
• Guiding assessments for shareholders and directors
  
• Building compliance frameworks tailored to regulatory standards
  
• Liaising with banks, auditors, and the SCA
  
• Managing the entire licensing process until approval.
  

Estimated Costs Breakdown

• Application and Licensing Fees: These typically range from AED 20,000 to AED 50,000 depending on the license category. For example, advisory licenses are on the lower end, while exchange licenses attract higher fees due to increased regulatory scrutiny.
  
• Capital Requirements: VARA mandates capital thresholds that differ by license type. For instance, advisory services may require minimal capital (around AED 50,000), but exchanges or custody services could demand capital of AED 500,000 or more to ensure financial stability.
  
• Compliance and Legal Consultancy: Developing robust AML/KYC policies, cybersecurity frameworks, and transparent tokenomics requires expert consultancy, typically costing between AED 50,000 to AED 150,000 based on business complexity.
  
• Technology and Cybersecurity Infrastructure: Depending on the brokerage’s tech stack, digital security setup costs can range from AED 100,000 to over AED 300,000 to meet VARA’s stringent requirements, including third-party audits.
  
• Ongoing Supervision and Reporting Fees: After licensing, annual supervision fees and audit costs can add AED 30,000 to AED 100,000 to operational expenditures.
  

Timeline Impact

• Simple licenses (Advisory, Broker-Dealer without custody): Roughly 3 months from application to issuance if compliance documents and tech reviews are complete.
  
• Complex licenses (Exchange, Custody, Lending): 4 to 6 months or longer due to higher capital scrutiny, detailed tech audits, and regulatory assessments.
  

FAQs

How long does it take? 
Typically, several months, depending on the complexity of your business and documentation.

Can foreign investors apply? 
Yes, subject to fit-and-proper criteria.

Is physical presence mandatory?
Typically, yes, a local office is required.

Capital requirements? 
Vary by brokerage type, often substantial.

Do I need a compliance officer? 
Yes, to maintain ongoing regulatory compliance.

With Arnifi’s support, navigating the Securities and Commodities Authority Dubai licensing process becomes structured and manageable, enabling businesses to focus on growth while ensuring full regulatory compliance.

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