Key POINTS:
With effect from January 1, 2026, the United Arab Emirates (UAE) has implemented a material recalibration of its capital markets regime, principally through Federal Decree-Law No. 32 of 2025 (the CMA Establishment Law) and Federal Decree-Law No. 33 of 2025 (the CMA Regulatory Law). The new laws implement a number of updates to the UAE’s capital markets framework, including the renaming of the Securities and Commodities Authority (SCA) as the Capital Market Authority (CMA), which is underpinned by a significantly expanded statutory mandate.
The reconstitution of the SCA as the CMA is not merely a rebranding; it reflects a deliberate repositioning of the UAE’s capital markets regulator as a more comprehensive, internationally aligned authority with broader supervisory and enforcement powers, now anchored in UAE federal law.
The reforms represent a milestone in the evolution of the UAE’s capital markets regime, building on the momentum generated by sustained issuance activity across equity and debt markets and introducing several developments that issuers, underwriters, and other market participants are likely to welcome.
At a policy level, the reforms are intended to modernize the UAE’s financial services framework, reinforce market integrity and stability, and align the UAE more closely with international regulatory standards. By strengthening the underlying legal architecture, the UAE seeks to provide the certainty necessary to attract deeper pools of capital and facilitate increasingly complex cross-border transactions.
This Client Alert highlights aspects of the reforms that are of particular relevance to capital markets participants.
Consistent with the stated objective of enhancing market stability, the CMA Regulatory Law introduces an express statutory safe harbor for price stabilization activities. Price stabilization is a well-established feature of international capital markets practice, enabling a stabilization manager to intervene in the secondary market — within defined parameters and for a limited period following issuance — to mitigate short-term volatility, most commonly in the context of initial public offerings.
Historically, Article 355 of Federal Decree-Law No. 32 of 2021 criminalized “activities or transactions intended to influence the prices of securities” without an express carveout for stabilization. This created a degree of legal tension, despite the fact that both the Abu Dhabi Securities Exchange and the Dubai Financial Market had adopted exchange-level frameworks expressly contemplating stabilization activities.
In practice, market participants took the pragmatic view that Article 355 was not intended to capture properly conducted stabilization. Nevertheless, the absence of a clear statutory exclusion resulted in structural workarounds, including the frequent appointment of independent third-party stabilization managers, in order to mitigate perceived liability risk for underwriting banks.
The CMA Regulatory Law resolves this uncertainty by expressly excluding prescribed stabilization activities from the scope of federal market manipulation offenses. By elevating stabilization from exchange rules to federal statute, the new regime materially reduces execution risk and aligns UAE practice more closely with established international norms, which may enable underwriters to assume the stabilization role directly.
The CMA Regulatory Law sharpens the focus on responsibility for prospectus disclosure, with potential implications for diligence standards across UAE securities offerings.
As under the prior regime, public offerings of securities in the UAE remain subject to prior regulatory approval. However, the CMA Regulatory Law clarifies that the concept of “issuer” extends to foreign issuers, including entities established in UAE free zones, where securities are offered into the UAE.
More significantly, the CMA Regulatory Law expressly attributes liability to members of the issuer’s board, executive management, and advisers for failures to provide required information or for the inclusion of misleading or inaccurate disclosures in the prospectus. These obligations are now codified in federal statute and are supported by an enhanced sanctions framework.
In practical terms, this development reinforces the importance of a rigorous verification process. Underwriters should seek to ensure that diligence records and verification materials are sufficiently robust to support available defenses. Boards and senior management should likewise review internal disclosure controls to ensure they are comfortable standing fully behind the prospectus at approval and publication.
The CMA Regulatory Law materially expands the CMA’s jurisdiction, both in terms of product scope and geographic reach.
First, the definition of regulated financial products has been expanded to include virtual assets, bringing cryptoassets and related service providers squarely within the CMA’s capital markets perimeter. Participants active in this sector should review their operating and licensing arrangements to ensure compliance across all relevant business lines.
Second, the CMA’s jurisdiction now expressly extends beyond onshore UAE activities to encompass financial activities conducted in free zones (including the Abu Dhabi Global Market and the Dubai International Financial Centre) as well as activities conducted “abroad” where a sufficient UAE nexus exists. This signals an intention to assert extraterritorial regulatory authority over cross-border activities that touch the UAE markets or investor base.
While market participants benefit from a transitional period until January 1, 2027, to ensure compliance, firms with a UAE nexus should begin reviewing cross-border marketing, solicitation, and distribution practices without delay in order to mitigate inadvertent regulatory exposure.
The CMA Regulatory Law introduces a more nuanced enforcement regime, including the availability of pre-prosecution settlement mechanisms.
Under the prior framework, regulatory breaches frequently carried the immediate risk of referral for criminal prosecution. The CMA Regulatory Law now expressly authorizes the CMA to initiate reconciliation procedures for certain offenses prior to the commencement of criminal proceedings. While discretionary, this mechanism provides a pathway to resolve regulatory issues without the uncertainty and reputational impact associated with criminal litigation.
This increased flexibility is counterbalanced by a substantially enhanced sanctions regime. The CMA is now empowered to impose administrative fines of up to AED200 million for serious violations, in addition to measures such as license suspension or revocation. These penalties represent a material increase from prior limits (e.g., fines capped at AED1 million for disclosure-related breaches), bringing the UAE enforcement framework closer to those of established international regulators.
While the new laws are now in force, the transition from the SCA to the CMA remains ongoing, both operationally and in terms of regulatory substance. Further implementing regulations and supervisory guidance should be expected as the CMA begins to exercise its expanded mandate and test the boundaries of its newly conferred powers.
Notwithstanding the availability of a transitional grace period, the direction of travel is clear. The reforms reflect a deliberate shift toward a more assertive, comprehensive, and internationally aligned regulatory regime, with materially enhanced expectations around disclosure, governance, and compliance, along with a strengthened enforcement toolkit.
Capital markets participants should therefore treat the coming period not as a passive transition phase, but as an opportunity to reassess existing structures, practices, and risk appetites. In particular, firms with a UAE nexus should proactively review cross-border offering structures, marketing and solicitation arrangements, prospectus verification processes, and internal escalation protocols to ensure they are aligned with the CMA’s broadened jurisdiction and enforcement posture.