How the Securities and Commodities Authority Shapes Licensing in UAE 

Any firm that wants to trade or advise on listed securities in the UAE is supposed to meet Securities and Commodities Authority Dubai rules. At the federal level, it sets the framework for licensing, supervision and enforcement in onshore capital markets.

The law that created the securities and commodities authority dates back to Federal Law No. 4 of 2000. It gave the authority legal personality and independence plus powers to supervise markets and licensed firms.

For brokers, advisers and fund managers, licensing is not a formality. It shapes capital needs and even business models. Understanding how the authority views licensing and supervision helps companies plan entry into UAE markets.

What is the Role of SCA in UAE Licensing?

The Securities and Commodities Authority UAE is the financial regulator for securities business in the onshore UAE. It supervises exchanges such as the Dubai Financial Market and the Abu Dhabi Securities Exchange.

SCA approves rulebooks, oversees trading systems and sets conduct standards. Markets confirm that their operations must comply with SCA regulations as a condition for listing and trading.

The authority also coordinates with the Central Bank and free zone regulators to keep rules aligned and avoid overlaps.

Who Needs an SCA Licence in UAE Markets?

SCA licensing rules apply to a wide group of firms and individuals that carry out regulated activities in or into UAE onshore markets. This regime ensures licensing and compliance for UAE capital market players. Firms that misjudge the scope risk unlicensed activity and enforcement action. Here’s who must opt for SCA Licence in UAE:

• Brokers that execute trades on an onshore market or deal as principal in listed instruments.
• Portfolio managers, fund managers and some advisers who manage or market securities on a professional basis.
• Custody providers and service firms that hold client assets linked to securities business.
• Branches or cross border firms that conduct activity in or out of the UAE under the consolidated rulebook.

Key Steps in the Licensing Process

The licensing process under SCA’s rulebook is detailed yet follows a clear sequence.

• Identify financial services activities planning is required to carry out and match them to SCA licence categories and approved functions.
• Prepare constitutional documents, ownership charts and financial statements that show paid up capital and funding sources meet minimum thresholds.
• Build governance and control frameworks, including compliance, risk and internal audit functions with defined reporting lines.
• Submit the licence application package through SCA channels, then respond quickly to follow up questions and conditions.

Prudential and Conduct Expectations for Licensed Firms

Once a licence is granted, obligations increase. Prudential rules set capital and liquidity floors and may tie them to the scale of activity. Conduct rules shape how clients are treated and how markets remain fair. A firm cannot treat the licence as a static asset. It must stay in the rulebook each trading day.

Key expectations include:

• Maintaining minimum capital, sometimes backed by bank guarantees, and reporting any shortfalls quickly.
• Segregating client assets and keeping accurate books that support reconciliations and investor claims.
• Following conduct of business rules that cover suitability, disclosure and conflicts of interest.
• Installing systems that record orders and trades so surveillance teams can reconstruct events during investigations.

Prudential rules only work when capital figures and client money records are reliable. Arnifi’s accounting and bookkeeping services in the UAE keep ledgers, reconciliations and capital reports aligned with Securities and Commodities Authority Dubai expectations, so licensed firms show control in numbers, not only in policies.

Emirates Securities and Commodities Authority and Market Law

The law often called Emirates Securities and Commodities Authority Law sets the foundation. Federal Law No. 4 of 2000 created the authority as a public body with financial and administrative independence plus executive powers to supervise markets.

The law states that markets for trading in securities and commodities must be licensed by SCA. It also gives the authority power to impose fines, suspend brokers and halt trading in certain situations to protect investors.

Later amendments and the consolidated rulebook added modern prudential and conduct standards and extended SCA reach to areas such as virtual assets, in coordination with other bodies.

How SCA Interacts With Markets and Other Regulators

Onshore exchanges underline in their own rulebooks that they are regulated by SCA. Dubai Financial Market notes that its trading system and market rules sit within SCA regulations.

Abu Dhabi Depository also states that it is regulated by SCA and directs users to the authority site for rulebooks. SCA signs cooperation agreements with free zone regulators such as the DFSA to coordinate oversight of auditors and cross border issues.

Internationally, SCA engages with IOSCO and similar bodies and joins investor protection campaigns such as World Investor Week.

These links help UAE markets remain attractive for cross border listings and investment flows. They also support cooperation when misconduct crosses borders, for example in insider dealing or mis-selling cases.

Common Licensing Challenges And Practical Tips

Firms often struggle less with law and more with implementation. A practical response is to map each business line to specific rulebook modules, assign owners and run a short gap review before filing any licence or variation.

• Underestimating time needed to align governance, systems and staffing with licence categories and permitted activities, which delays application review.
• Treating new cross border business as unregulated because activity appears offshore, even though SCA rulebook captures services carried out in or out of the UAE.
• Missing conduct rules for new products such as virtual assets or complex derivatives and relying on generic policies instead of updated ones.
• Weak training for approved persons, even though SCA and CISI exams set clear knowledge expectations for licensed staff.

Final Advice

Licensing under SCA shapes capital, controls and growth options for any firm that wants to work in onshore markets. To enter or expand in UAE securities business, invest time in understanding licence categories, rulebook modules and supervision style, then build a steady compliance rhythm that fits those expectations.

To avoid penalties and risk, hire Arnifi’s accounting and bookkeeping services in UAE. We help firms keep daily books, reconciliations and reports in the right order, so the relationship with the Securities and Commodities Authority Dubai stays steady as the business scales.

FAQs

Q1. What is the main role of SCA in UAE licensing?

SCA acts as the main regulator for securities business in onshore UAE. It licenses brokers, managers and other intermediaries, approves market rules and enforces conduct, prudential and disclosure standards that protect investors and support fair trading.

Q2. Do all financial services firms in Dubai need an SCA licence?

No. SCA focuses on securities and related activities in onshore UAE. Banks and some payment activities fall under Central Bank rules. DIFC and ADGM have their own regulators. Firms must map each service line to the correct regulator before deciding licence needs.

Q3. How long does SCA licensing usually take?

Timelines vary with category and application quality. The new rulebook gave existing licensees a one year upgrade window and expects new applicants to file complete packages that meet updated standards. Well prepared firms see smoother reviews than those that submit partial information.

Q4. What happens if a firm carries out regulated activity without SCA approval?

Carrying out regulated activity without a licence can trigger enforcement. SCA has powers under Federal Law No. 4 of 2000 to impose fines, suspend activity and, together with markets, halt trading in certain cases.

Q5. How can firms keep licences in good standing over time?

Firms should monitor capital, update policies when SCA issues new circulars, train approved persons and respond quickly to information requests. Regular internal audits against rulebook modules help catch gaps early and keep the relationship with the regulator constructive.